Sirius nets ‘encouraging’ organic rental growth

SIRIUS, the leading operator of branded business parks in Germany that is listed on the London Stock Exchange and the main board of the JSE, has reported an encouraging increase in organic rental growth in the six months to September.

It said yesterday that this growth had occurred despite some large expected move-outs at the start of the year, and was achieved on the back of strong occupier demand for its conventional and flexible space and positive letting activity in the six-month reporting period.

The company said it had also made significant progress in deploying the proceeds of its million (R681m) equity raise in March this year and had completed the acquisition of three investment properties totalling

before or immediately after the reporting period, with another

of property in exclusivity. Sirius said the company was trading in line with management’s expectations.

It said the main highlights for the reporting period included the 3 percent increase in total annualised rental income, including acquisitions and disposals within the period, to from and the 2.6 percent like-for-like annualised rental income growth to from despite the impact of several large expected move-outs at the start of the period.

Sirius added that organic growth in the period was driven by an average like-for-like rental rate increase of 2.5 percent, from to per square metre, while like-for-like occupancy was broadly flat at 81 percent.

It said growth through acquisitions and portfolio optimisation through asset recycling continued to be a focus for the company.

It acquired a combination of assets with stable income and higher value-add assets where its asset management initiatives could grow both income and capital values.

The company said it was also able to complete the sale of one noncore site, notarise the sale of the last remaining non-core site, and sell some non-income-producing land and a residential building.

Andrew Coombs, the chief executive of Sirius, said they had made excellent progress deploying the proceeds from the fund raise in March and recycling capital from the sale of the portfolio’s non-core assets into an attractive mix of stable income-producing assets and those with value-add opportunity.

Coombs said the new assets fitted well within their investment criteria and provided stability through well-covenanted long-term tenants and opportunity through sub-optimal vacancy and leases.

Transactions concluded in the reporting period included the acquisition in August of Sirius Business Park Friedrichsdorf near Frankfurt for

and Sirius Business Park Fellbach near Stuttgart for and the acquisition earlier this month of a second business park in Mannheim for

Sirius expects to publish its interim financial results next month.

Shares in Sirius rose 0.34 percent yesterday to close at R11.80.