Sirius in €65.1 million acquisition in a year
this sector nevertheless amounted to R12bn is indicative of some large companies that record substantial profit.”
He said small and medium enterprises were also under stress, with the poor economic climate coupled with high regulatory requirements and the outflow of high-earning professionals because of political and security reasons.
Wessels increase in also said a dramatic the administrative and regulatory burdens, with compliance for small firms constituting time and cost burdens, and undermining their sustainability.
“Top fund managers often complain about the 16-hour training that they should attend, but the remaining team members can continue to handle queries of investors and react to sudden market movements. The owner-manager of a small advisory firm simply loses in similar circumstances two productive days, having no access to high level support personnel,” he said.
Wessels also said more people were in search of prosperity and security outside South Africa.
“Not only have more than 400 000 high-income professionals emigrated since 1994, but millions of remaining individuals utilise the easing of forex controls to let their money emigrate,” he said. SIRIUS Real Estate, the listed operator of business parks that provides conventional and flexible workspace in Germany, deployed €65.1 million (R1.03 billion) in the year to March 3 from a €230m war-chest to acquire new properties.
The group said in a trading update yesterday ahead of its results to be published on June 3, that the amount was spent to buy four assets.
In addition, two properties totalling €15.2m had been notarised for completion, and three totalling €64.8m were in exclusivity (where a potential buyer has a period of time to investigate purchasing a specific property).
“Assuming these are all complete, the company will then have the capacity to invest a further €85m into acquisitions. About €70m of the equity used to fund these acquisitions will come from the proceeds of the sale to AXA IM – Real Assets in June,” the directors said. The strength of Sirius’ operating platform, with the selective asset recycling completed and the new partnership with AXA IM – Real Assets mean “the company is well placed for the new financial year”, directors said.
Over the past year rental income, including acquisitions, was expected to have increased by about €8.2m to €87.7m. Like-for-like rental was expected to have increased by more than 6.2 percent.
Lettings activity was “strong” with more than 170 000m² let, including with some well-covenanted tenants. A sale of three assets generated €25.6m.
In September 2018, Danny Kitchen, with more than 25 years of property and finance experience in both public and private markets, was appointed as chairperson. Sirius established a joint venture with AXA IM – Real Assets in February this year through the sale of 65 percent of its interests in five subsidiary companies to AXA IM – Real Assets. The transaction is expected to be complete at the end of June.
On March 22, the acquisition of two business park assets located in Freiburg and Hamburg were notarised.
The Freiburg property comprises a combination of office, storage and production space totalling 20 000m² of lettable space, which is currently 87.6 percent occupied.
The Hamburg property provides a combination of office, storage and production space totalling 28 500m² of lettable space, which is fully vacant.
Sirius’ shares closed 0.86 percent higher to close at R11.75 on the JSE yesterday.