TIDMSRE
RNS Number : 6698R
Sirius Real Estate Limited
01 July 2020
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (EUR) Share Code: ESRE
LSE (GBP) Share Code: SRE
ISIN Code: ISIN GG00B1W3VF54
1 July 2020
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Business Update
Sirius Real Estate, the leading operator of branded business
parks providing conventional space and flexible workspace in
Germany, today provides an update on the business during June 2020
following the relaxation of Covid-19 restrictions in early May
2020. Less than 10% of Sirius' on-site business park employees are
now working remotely and staff at Head Office are working on a
rotational basis, in line with Government guidelines for social
distancing, with no more than 50% of Head Office staff present at
any one time.
Highlights
-- EUR20 million drawdown on unsecured Schuldschein loan due on
3 July 2020, giving EUR123 million of unrestricted cash and undrawn
facilities
-- June 2020 rent and service charge collection achieved 99.8% of normal levels
-- Average monthly enquiry levels above 1,200 for April, May and June 2020
-- 165 new lettings completed in June 2020 covering 11,242 sqm
(May 2020: 130 new lettings/11,282 sqm), generating EUR877,000 of
annualised rent roll
-- Like-for-like annualised rent roll as at end of June 2020 in
comparison to end of March 2020 has reduced by circa EUR478,000
(from EUR89.6 million at 31 March 2020)
-- Dividend of 1.80c per share representing 65% of Funds from
Operations (FFO) in respect of the second half of the financial
year ended 31 March 2020, to be paid on 20 August 2020 - the
ex-dividend date will be 8 July 2020
-- Conferencing income returned to normal monthly levels in June
2020, with a shortfall from March 2020 compared to the prior year
estimated at EUR200,000.
-- The RICS Material Valuation Uncertainty Leaders Forum (UK)
advised on 11 June 2020 that reporting 'material valuation
uncertainty' may no longer be appropriate for UK based industrial
and logistics assets. We await to see the position adopted in
Germany with regard to our next valuations in September 2020.
Balance Sheet
On 3 July 2020, the Company will draw down the final EUR20
million tranche of its EUR50 million unsecured Schuldschein loan,
announced on 5 March 2020. The unsecured Schuldschein loan was
structured in tranches with maturities of three and five years
(average maturity of 3.7 years) at a blended all-in interest rate
of 1.60% and is made up of both fixed and floating rates. There is
no amortisation.
This draw down further strengthens Sirius' balance sheet
increasing total cash balances to in excess of EUR135 million,
EUR110 million of which is unrestricted, with undrawn facilities of
EUR13 million also available. As at 31 March 2020, the Company's
net LTV stood at 32.8%, the weighted average cost of debt was 1.49%
and the interest cover on its debt was 11.0x.
Cash Collection
Following on from a strong cash collection performance compared
with the normal working pattern in April and May 2020 of over 98%,
cash collection for June 2020 achieved 99.8% of its normal working
pattern.
The consistency of cash collection is reflective of the
Company's breadth of tenant base, ability of its staff to engage
with and manage its tenants and the decisive manner in which the
Company has been managing throughout the crisis, as well as the
efficiency with which the German Government has acted to support
businesses.
A small number of tenants facing Covid-19 related financial
difficulties have requested deferral of rental and service charge
payments. These are being addressed on a case-by-case basis and
have had very limited impact on cashflow at this point.
Enquiries/New Lettings
Following a previously reported brief reduction in the run rate
of core enquiries at the end of March 2020 after making adjustments
to the marketing strategy, enquiry levels have returned to normal
levels of above 1,200 per month in April, May and June 2020.
These enquiry levels have led to 165 new lettings in June 2020
covering 11,242 sqm and generating EUR877,000 of annualised rental
roll compared with 130 new lettings/11,282 sqm in May 2020 and 115
new lettings/8,025 sqm in April 2020. Like-for-like annualised rent
roll as at end of June 2020 in comparison to end of March 2020 has
reduced by circa EUR478,000 (from EUR89.6 million at 31 March
2020).
The demand for space remains good with an increase in the demand
for storage space. However, it is encouraging that of the 30,549
sqm of new lettings that were completed in April, May and June
2020, 40% of those new lettings relate to out of town conventional
or flexible office space.
Dividend
On 1 June 2020, the Company announced that the Board had
authorised a dividend in respect of the second half of the
financial year ended 31 March 2020 of 1.80c per share, representing
65% of FFO and bringing the total dividend payment for the year to
3.57c per share, an increase of 6.3% on the prior year dividend
payment. This dividend will be paid on 20 August 2020 and the
ex-dividend date will be 8 July 2020. A scrip dividend alternative
is being offered. A copy of the Company's scrip circular is
available on the website www.sirius-real-estate.com.
Conferencing
Following the suspension of business in March owing to Covid-19,
conferencing activity has successfully recommenced with positive
booking levels reported across all applicable sites. The shortfall
in revenue to the end of June 2020 compared to the prior year is
estimated at EUR200,000. The facilities are open in line with
Government social distancing guidelines and it is of note that some
clients have taken larger conferencing facilities to be able to
maintain those guidelines.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate,
commented: "Whilst the last few months have been a hugely
challenging time for people both personally and economically, we
have weathered the first phase of this crisis with relative
success. This is thanks both to the co-operation of our tenants and
the hard work and dedication of our staff."
"Our business model is built on the breadth of our offering to
occupiers and the adaptability of our mix of accommodation, ranging
across many different workspace segments, including out of town
conventional and flexible office, manufacturing, commercial storage
and self-storage. In addition, the portfolio is well diversified in
terms of both geography and tenant base."
"Looking ahead, we are well positioned with a strong balance
sheet to take advantage of opportunities in the market. We remain
focused on delivering attractive risk-adjusted returns by way of
active asset management throughout the economic and property cycles
and we have significant cash resources to make acquisitions as well
as further vacancy to develop and reversion potential to
capture."
S
For further information:
Sirius Real Estate
Andrew Coombs, CEO/Alistair Marks, CFO
Tel: +49 (0)30 285010110
Tavistock (Financial PR)
Jeremy Carey/James Verstringhe
Tel: +44 (0)20 7920 3150/+ 44 (0)7836 734 625
Email: siriusrealestate@tavistock.co.uk
NOTES TO EDITORS
About Sirius Real Estate
Sirius is a property company listed on the main market and
premium segment of the London Stock Exchange and the main board of
the Johannesburg Stock Exchange. It is a leading operator of
branded business parks providing conventional space and flexible
workspace in Germany. The Company's core strategy is the
acquisition of business parks at attractive yields, the integration
of these business parks into its network of sites under the
Company's own name as well as offering a range of branded products
within those sites, and the reconfiguration and upgrade of existing
and vacant space to appeal to the local market, through intensive
asset management and investment. The Company's strategy aims to
deliver attractive returns for shareholders by increasing rental
income and improving cost recoveries and capital values, as well as
by enhancing those returns through financing its assets on
favourable terms. Once sites are mature and net income and values
have been optimised, the Company may take the opportunity to
refinance the sites to release capital for investment in new sites
or consider the disposal of sites in order to recycle equity into
assets which present greater opportunity for the asset management
skills of the Company's team.
In July 2019, the Company completed the formation of its
Titanium real estate investment venture with clients represented by
AXA Investment Managers - Real Assets. Titanium was formed through
the acquisition by AXA IM - Real Assets, on behalf of its clients,
from Sirius, of a 65% stake in five business parks across Germany.
Sirius will retain the remaining 35% and will act as operator of
the assets, on a fee basis. Subject to suitable investment
opportunities, AXA IM - Real Assets and Sirius may consider
opportunities to grow Titanium's portfolio primarily through the
acquisition of larger stabilised business park assets and
portfolios of assets with strong tenant profiles and occupancy.
Sirius will continue to grow its wholly owned portfolio through
acquisitions of more opportunistic assets, where it can capitalise
on its asset management expertise to maximise utilisation of the
space, grow occupancy and improve quality of the tenants. The
strategies have been clearly defined so that the JV does not
conflict with Sirius's existing business.
For more information, please visit:
www.sirius-real-estate.com
Follow us on LinkedIn at
https://www.linkedin.com/company/siriusrealestate/
Follow us on Twitter at @SiriusRE
LEI: 213800NURUF5W8QSK566
JSE Sponsor: PSG Capital
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