COVID-19 HAS NO IMPACT ON TRADING, SAYS SIRIUS
SIRIUS Real Estate, the JSE-listed operator of branded business parks in Germany, said yesterday it did not expect any impact from the Covid-19 virus on its trading profit for the year ended March 31, 2020. The share price responded well to the announcement yesterday, rising 10.8 percent to R11.97 on the JSE, even though the price was still well below the more than R18 that it traded at the end of February 2020. Sirius provides many different workspace segments, including conventional office, flexible office, manufacturing, storage and self-storage. It is well diversified in its tenant base and geographically. The postponement of all meeting room and conference facility hire until the end of April would have a marginal impact on its revenues and cash flow. The other effect to date was a 50 percent reduction in the run rate of core enquiries for new tenants, “which we expect will translate into a 10 percent reduction in new lettings in March and a 35 to 40 percent reduction in monthly new lettings throughout April and into May”, directors said. On the positive side, the company was seeing an increase in demand for storage space from both new and existing commercial tenants. Storage makes up 35 percent of space in Sirius’s portfolio. “Although it is still early on in the spread of Covid-19 in Germany, to date there has been no increase in the level of contract terminations.”
Edward West