Operating exclusively in Germany, Sirius Real Estate (SRE) has avoided the problems facing UK real estate operators. A combination of higher rental income and further yield compression lifted adjusted net asset value per share by 4 per cent from the March year-end to 55.6¢.
Sirius provides workspace for small companies, as well as storage space. The restraints facing small companies in recent times - finding employees and finance - have eased considerably, and that has helped to push up demand for bespoke office accommodation.
Recurring pre-tax profits in the six months to September 2016 increased by 87 per cent to €16.1m. Three purchases were made during the period, and one after its end, costing €68.5m (£58.4m) in total. Whereas previously Sirius targeted properties with around 20 per cent vacancy rates, this has been widened to 30 per cent. Average occupancy in the new sites is 69 per cent, giving significant room for growth - average occupancy on the pre-existing portfolio stands at a record 81 per cent.
Funding has come through a private placement and loans and, with a new facility secured after the half-year, the average cost of debt is now below 2 per cent, with debt maturity of 6.2 years.
Analysts at Peel Hunt are forecasting adjusted net asset value at the March 2017 year-end of 58.8¢ a share (from 53.4¢ a year earlier).
| SIRIUS REAL ESTATE (SRE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 50.5¢ | MARKET VALUE: | €425m | |
| TOUCH: | 50-51¢ | 12-MONTH HIGH: | 55¢ | LOW: 42¢ |
| DIVIDEND YIELD: | 5.3% | TRADING PROP: | €5.9m | |
| DISCOUNT TO NAV: | 6% | |||
| INVESTMENT PROP: | 765m | NET DEBT: | 64% | |
| Half-year to 30 Sep | Net asset value (¢) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 48.6 | 28.3 | 4.0 | 0.92 |
| 2016 | 53.6 | 37.5 | 4.1 | 1.39 |
| % change | +10 | +33 | +3 | +51 |
Ex-div: 15 Dec Payment: 20 Jan £1=€1.17 | ||||
