Join our community of smart investors

Sirius eyes forced asset sellers

The German commercial landlord hopes to use its Axa joint venture to take advantage of distressed sales
June 1, 2020

Sirius Real Estate’s (SRE) April and May rent collection was almost fully in line with historical norms, but the German commercial landlord anticipates more pressure on rental income later this year as tenants balance getting back to work with the loss of government subsidies.

IC TIP: Buy at 78p

However, chief executive Andrew Coombs said he hoped to use the Axa joint venture (JV) to take advantage of forced sellers of larger assets, while not placing strain on the group’s own balance sheet. “I’ll know they’ve got to move fast and I know there’s a level of distress in there so I can buy at a level that I know is good value,” he said. Sirius invested €20.6m (£18.6m) into the JV in March to fund its first acquisition.  

The group grew the annualised rental roll by 6 per cent during the year to March, benefiting from a 4 per cent rise in rental rates. That contributed to a 15 per cent increase in funds from operations and boosted the final dividend, given management’s policy of paying out 65 per cent of those funds. 

Panmure Gordon forecasts adjusted net asset value of 84¢ a share at the March 2021 financial year-end, rising to 90¢ the same time the following year. 

SIRIUS REAL ESTATE (SRE)   
ORD PRICE:78pMARKET VALUE:£811m
TOUCH:77.2-79.6p12-MONTH HIGH:94pLOW: 44p
DIVIDEND YIELD:4.2%TRADING PROPERTIES:€10m
PREMIUM TO NAV:1%NET DEBT:47%
INVESTMENT PROPERTIES:€1.19bn  
Year to 31 MarNet asset value (¢)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
201651.557.17.52.22
201756.476.48.12.92
201863.189.68.93.16
201971.014512.83.36
202077.01119.63.57
% change+8-23-25+6
Ex-div: 9 Jul   
Payment: 20 Aug   
£1=€1.10. *Includes lease liabilities of €19.2m.