Sirius Real Estate rent roll grows in first half

7th Oct 2024 10:15

(Sharecast News) - Germany and UK-focussed business park owner and operator Sirius Real Estate reported a 5.5% like-for-like increase in rent roll for the six months ended 30 September on Monday.

The FTSE 250 company said its total rent roll saw a 14.9% year-on-year increase, driven in part by its active asset acquisition programme.

It said it remained on track to meet full-year expectations.

In Germany, which slightly outperformed the UK, rent roll growth was supported by higher rates despite some expected move-outs early in the period that temporarily slowed occupancy growth.

The company said it expected occupancy to improve in the second half, in line with seasonal trends.

With inflation in Germany back to pre-Covid levels, Sirius said it had leveraged its in-house asset management platform to optimise returns, and anticipated property values to increase as confidence in the real estate sector grew.

In the UK, like-for-like rental rates continued to rise, but, as seen in Germany, seasonal move-outs impacted occupancy.

Sirius said it expected valuations in the UK to stabilise, and anticipated a positive valuation movement at the group level by the period end.

In July, Sirius successfully completed a €180m (£152.5m) equity raise, providing capital to pursue further acquisition opportunities.

The firm said it was currently in exclusivity on several assets in both Germany and the UK, with deals expected to be completed in the coming months.

Sirius said it maintained a strong balance sheet, with €297m in free cash as of 30 September and no significant debt maturities until June 2026.

The group's weighted average cost of debt was 2.1%, with a weighted average debt maturity of 3.5 years.

That followed the issue of €59.9m in bonds in May, which consolidated with an existing €300m bond due in November 2028.

"During the first half of our financial year we have continued to perform well, with our asset management team once again driving like-for-like rent roll growth well ahead of inflation," said chief executive officer Andrew Coombs.

"This organic growth alongside the rental contribution from the well timed series of acquisitions we have made in recent months combined to drive an almost 15% increase in overall rent roll, underlining the continued demand for space within our portfolio.

"Bolstered by our successful bond issuance in May and equity raise in July, our balance sheet remains strong and we are well placed to continue to act on opportunities to make accretive acquisitions arising from the current market conditions."

Sirius said it would announce results for the six months ended 30 September on 18 November.

At 0950 BST, shares in Sirius Real Estate were down 0.92% at 93.28p.

Reporting by Josh White for Sharecast.com.