German workspace operator Sirius says its bang on target

SIRIUS Real Estate, the operator of branded business parks providing conventional space and flexible workspace in Germany, has confirmed that it expected its financial performance for the year to March to be in line with expectations despite the disposal of €103 million (R1.52 billion) of mature assets.

The company said yesterday that total annualised rental income, including acquisitions within the period, increased by €4.8m, or 6.3 percent, to €75.8m in the year to March despite it losing €7.1m of annualised rental income from assets that were disposed of.

It said annualised rental income had subsequently increased further to in excess of €79m following the acquisitions completed at the beginning of this month.

Like-for-like annualised rental income increased by more than 5 percent.

Sirius said this growth was supported by continued occupier demand and organic rental income growth.

The company was involved in significant transactional activity in the year, with the proceeds of the sale of €103m of mature assets and two capital raises of €15m in March last year and €25m in July part funding the acquisition of 13 assets for €163.7m.

It said average occupancy of the acquired assets was about 58 percent, which provided new rental income and capital growth opportunities.

Chief executive Andrew Coombs said that given a key focus in the period was on recycling capital from mature assets into new opportunities with greater value add potential, it was pleasing to have sold and reinvested over €250m of property, while delivering increases in rental income on a total and like-for-like basis.

Coombs believed this reflected a number of key factors, including good occupational demand for Sirius’ workspace products from the large German small and medium enterprise sector. Sirius recently completed three acquisitions.

The acquisition of a business park with a warehouse, office and production space in Frickenhausen for €11.2m was completed at the end of last month and at the beginning of this month the purchase of a business park in Saarbrücken for €28.1m and a business park in Düsseldorf for €8.1m.

Sirius shares rose 0.10 percent on the JSE yesterday to close at R10.08.