Sirius Real Estate plc (LON:SRE), the leading operator of branded business and industrial parks providing conventional space and flexible workspace in Germany, today announced condensed consolidated financial results for the twelve months ended 31 March 2021.
Commenting on the results Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: “Against the challenging backdrop of the pandemic, Sirius has delivered a set of strong results providing a clear demonstration of our ability to utilise our operating platform in all market conditions to increase income and capital values. Our diverse €1.3 billion portfolio of business and industrial parks located in and around Germany’s main cities offers a flexible range of uses that continue to be attractive to our broad occupier base which comprises both large domestic and international businesses, as well as the SMEs that are the engine room of the German economy. This is evidenced clearly by the rental increases we achieved this year, which have contributed to the strong growth in profitability and FFO we have reported today.”
“Despite the continued degree of market uncertainty as a result of the pandemic, more confidence is breathed into the market every day as the vaccine is rolled out successfully in Germany and across Europe. We have ended the year with a strong balance sheet which will allow us to take advantage of acquisition opportunities as they arise and continue to grow income and capital values through selective investment.”
Operating platform driving rental growth, FFO and dividend
• Profit before tax of €163.7 million, representing a 47.7% year-on-year increase (2020: €110.8 million), including €103.9 million of gains from property revaluations (2020: €59.7 million)*
• Total shareholder accounting return of 19.5% (2020: 13.1%) generated from a 15.0% increase in adjusted net asset value and 3.62c dividends paid in the year (2020: 3.50c)
• Annualised rent roll increased 7.6% to €97.2 million (2020: €90.3 million) as a result of organic growth and net effect of acquisitions and disposals
• 5.2% increase in like-for-like annualised rent roll reflecting the seventh consecutive year of like-for-like rent roll growth exceeding 5.0%
• 9.3% increase in funds from operations (“FFO”) to €60.9 million (2020: €55.7 million)
• 10.0% increase in second half dividend per share to 1.98c, leading to a 6.4% increase in the full year dividend to 3.80c (2020: 3.57c) based on 65% of FFO in line with Sirius’s stated dividend policy
Organic growth, robust trading and cash collection
• Like-for-like average rental rates increased 3.5% to €6.17 per sqm with the total average portfolio rate growing 3.2% to €6.17 (2020: €5.96 and €5.98 per sqm, respectively)
• Occupancy up to 87.0% (2020: 85.3%), with like-for-like occupancy increasing to 86.9% (2020: 85.2%), providing further scope to grow income through asset management initiatives
• 18.5% increase in enquiries and 13% sales conversion rate in the period, driven by the Company’s specialist sales and marketing platform
• Strong cash collection rate of 98.2% for the twelve-month period to 31 March 2021, reflecting Sirius’ tenant diversification and resilience of its portfolio
• Awarded AA MSCI ESG Rating in October 2020 (previous A status) in recognition of sustainability focus
Strong balance sheet
• 11.5% or €135.7 million increase in like-for-like investment property book value to €1.31 billion (2020: €1.18 billion) led by asset management initiatives, €4.8 million rent roll growth and yield compression of 42 bps
• Gross yield of the portfolio of 7.2% (2020: 7.6%) with 59% of the portfolio representing value add assets at a gross yield of 7.6% and the remaining 41% representing mature assets at a gross yield of 6.6%
• NAV per share increased by 14.2% to 88.31c (2020: 77.35c) with adjusted NAV increasing by 15.0% to 93.79c (2020: 81.54c) and EPRA NTA per share increasing by 14.7% to 92.29c (2020: 80.44c)
• Total cash balance of €65.7 million at year end, of which €49.3 million is unrestricted
• Net LTV of 31.4% as at 31 March 2021 (2020: 32.8%), comfortably within our stated maximum of 40%
• Sirius did not apply for or receive any state financial assistance in connection with the Covid-19 crisis or otherwise
Return to acquisitive growth in the second half with €125.8 million of acquisitions
• Five on balance sheet asset acquisitions completed or notarised during the year for €45.9 million, providing a mix of stable income and value add opportunity
• €79.9 million acquisition in Augsburg notarised in the period as part of the Titanium venture with AXA IM Alts
• One €10.1 million asset disposal completed that was notarised for sale in the prior year
* excluding movements relating to leased investment properties in accordance with IFRS 16
