Sirius Real Estate (SRE) owns and operates German business parks offering offices, storage and production space on flexible leases to mainly smaller- and medium-sized companies. Business is developing nicely, not only thanks to Germany's growing economy but also due to the company's studious attention to detail, resulting in high customer satisfaction and success in converting enquiries into new business.
Trading in the year to March saw annualised rental income, excluding recent acquisitions, rise by nearly 6 per cent to €43.6m (£32m), with average rental rates per square metre up from €4.46 to €4.58. Including acquisitions, rental income is set to top €50m. Strong demand also helped to lift occupancy rates from 76 per cent to 78 per cent.
The company is progressing well with turning around 100,000 sq m of previously unlettable space. Around a third of this has been transformed already, and is generating about €1.4m of rental income on an occupancy rate of 64 per cent. Sirius's target is to lift this to 80 per cent.
The company remains on track to reduce the loan-to-value ratio to 40 per cent, although chief executive Andrew Coombs stressed that returns to shareholders will be boosted by the very low cost of debt. And steps are currently in place to put more of the current lending on to a 10-year fixed-rate basis, giving even more visibility on costs.
