Demand for flexible and conventional workspace for small- and medium-sized companies remains strong in Germany, and in the six months to September Sirius Real Estate (SRE) managed to let out over 70,000 sq m of space at an average rate of €5.10 (£3.60) per sq m. However, vacations were much higher than usual at over 90,000 sq m, although this provides an opportunity to improve on the average €3.78 per sq m the former tenants were paying.
Sirius continues to make progress in re-using around 100,000 sq m of previously unlettable or underrented space. For an investment of €10m, this is expected to generate additional annual rental income of around €4m, and the group is already halfway towards achieving this.
Finances were put in order with the early repayment of two expensive loans to Macqurie Bank effected through a new €59m facility which will shave interest costs by around €2.6m a year, and bring the cost of debt down from 4.3 per cent to 3.3 per cent. A €50m placing in June has been used to buy five mixed-use business parks, and in October a further two acquisitions were secured together with a €25.4m five-year lending facility.
Analysts at Peel Hunt are forecasting adjusted net asset value of 54¢ at the end of March 2016, from 48¢ in 2015.
| SIRIUS REAL ESTATE (SRE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 52¢ | MARKET VALUE: | €388m | |
| TOUCH: | 51-53¢ | 12-MONTH HIGH: | 53¢ | LOW: 36¢ |
| DIVIDEND YIELD: | 3.4% | DEVELOPMENT PROPERTIES: | nil | |
| PREMIUM TO NAV: | 7% | NET DEBT: | 67% | |
| INVESTMENT PROPERTIES: | €610m | |||
| Half-year to 30 Sep | Net asset value (¢) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 45.6 | 15.3 | 2.4 | 0.77 |
| 2015 | 48.6 | 28.3 | 4.0 | 0.92 |
| % change | +7 | +86 | +63 | +19 |
Ex-div: tba Payment: tba £1=€1.41 | ||||
