International News

Sirius Real Estate records 20th progressive dividend payout

Andrew Coombs, CEO of Sirius Real Estate.
Andrew Coombs, CEO of Sirius Real Estate.

Sirius Real Estate Limited has published its results for the year ended March 2024, recording a 7.9% increase in funds from operations (FFO) to €110.2 million (FY2023: €102.1 million) and a 14.6% increase in adjusted profit before tax to €110 million (FY2023: €96 million).

The Group reported 7.2% like-for-like rent roll growth to €188.7 million (FY2023: €176 million) driven by continued organic growth and occupier demand for branded business and industrial parks in Germany and the UK.

Sirius has delivered another very positive set of annual results, with a strong operational performance driving FFO, valuation and dividend growth in what represents our tenth year of annualised rental growth above 5% and dividend increases. This is testament to our platform’s ability to drive substantial organic growth, which is underpinned by continued occupier demand for our high-quality and affordable products despite macro headwinds,” commented Sirius’ CEO, Andrew Coombs.

Its operating profit increased by 28.6% to €130.7 million (FY2023: €101.6 million) with profit before tax increasing by 32.4% to €115.2 million (FY2023: €87 million) primarily due to a €12.4 million valuation gain during the reporting period and compared to a €9.8 million deficit during the previous financial year.

Sirius reported a 2.4% increase in FFO per share to 8.95 cents (FY2023: 8.74 cents) with an 8.7% increase in EPRA EPS per share to 81.21 cents (FY2023: 7.55 cents).

Basic earnings per share increased by 28.3% to 8.75 cents (FY2023: 6.82 cents) while headline earnings per share increased by 6.6% to 8.12 cents (FY2023: 7.62 cents). (The variance between basic and headline earnings per share is attributable to the gain on the revaluation of investment assets being included in the calculation of basic earnings per share and excluded from headline earnings per share.)

The Group’s FFO growth supported its 20th progressive dividend payout with an H2 dividend of 3.05 cents per share (FY2023: 2.98 cents per share) and amounting to a 6.5% uplift in its total dividend for the financial year to 6.05 cents (FY2023: 5.68 cents).

Its investment portfolios were valued at €2.210.6 million (FY2023: €2.123 million) with a €12.4 million net portfolio valuation increase despite a valuation yield expansion. Its portfolio produced a gross yield of 7.5% in Germany (FY2023: 7.3%) with a net yield of 6.8% (FY2023: 6.5%) alongside a 14.1% gross yield (FY2023: 13.2%) and a net yield of 9.9% (FY2023: 9.3%) in the UK, on a like-for-like basis. EPRA NTA per share increased by 1.6% to 109.82 cents (FY2023: 108.11 cents) demonstrating the resilience of its portfolio. Adjusted net asset value (NAV) per share increased by 1.8% to 111.12 cents (FY2023: 109.21 cents).

The Group capitalised on significant market opportunity with €157.8 million of acquisitions and €59.7 million of disposals at a premium to book value, supported by a €165.3 million equity raise. Net of costs, Sirius notarised six UK assets amounting to £90 million and contributing net operating income (NOI) of £8.7 million at an average gross yield of 9.5% and an 8.1% occupancy.

In Germany, the Group notarised €53.6 million of acquisitions across three transactions at an average gross yield of 10.2% and 91% occupancy. €56.2 million of disposals in Germany with annualised NOI of €3.4 million were completed across three transactions, and one £3 million disposal in the UK with an annualised NOI of £0.2 million, all at premium to book value.

Following our oversubscribed equity fundraising of €165.3 million in November 2023, we have rapidly executed on our pipeline of attractive asset acquisitions in both Germany and the UK, taking advantage of market conditions with c. €160 million of assets bought in the past six months. At the same time, we have maintained a healthy net loan to value (LTV) ratio and have recycled capital with c. €60 million of disposals completed at a premium to book value, highlighting the business’ ability to crystallize returns from our mature assets and to drive value where we see strategic market opportunities,” notes Coombs.

Sirius’ strong balance sheet has capacity for acquisitions with only 2.9% of total debt expiring within two years and cash at bank of €215.5 million, providing capacity for further acquisitions and investment (FY2023: €99.2 million).

The Group’s net LTV currently sits at 33.9% (March 2023: 41.6%) with net debt to EBITDA of 5.6 times with the successful issuance of €59.9 million bonds post balance sheet, via a tap issue of its €300 million 1.75% notes due in 2028. Sirius has a €170 million facility with Berlin Hyp AG and a €58.3 million facility with Deutsche Pfandbriefbank which has been refinanced to 2030 at 4.26% and 4.25% respectively.

Looking ahead, our outlook remains positive: our active asset recycling programme, strong cash position and post balance sheet issuance of €59.9 million of debt means our balance sheet is in rude health. There remain many levers we can pull to unlock value and grow occupancy and rental income within our current portfolio through our successful asset management programme, and we remain well positioned to fuel our accretive pipeline, supporting our next phase of growth and deliver attractive returns for shareholders.”