Proactive Investors - Sirius Real Estate Limited (LON:SRET), owner and operator of business and industrial parks in Germany and the UK, has reported an 8.2% increase in its group rent roll for the financial year ending March 31.
This marks the tenth consecutive year of like-for-like rent roll growth exceeding 5%, demonstrating the company's resilience in challenging macroeconomic conditions.
The company’s effective management strategy has led to improved rates and occupancy across its properties, with rent roll growth of 7.2% on a like-for-like basis.
Sirius has maintained a strong cash collection rate above 98% over the past twelve months and anticipates that the full-year results will align with market expectations.
In Germany, the focus on selling vacant space and enhancing tenant retention has paid off, resulting in increased occupancy and an anticipated rise in the valuation of the German portfolio.
The UK operations have also seen rent increases above the rate of inflation and improvements in occupancy, particularly benefiting from recent strategic acquisitions that significantly boosted the rent roll.
Last November, Sirius completed a highly successful equity fundraising effort, bringing in €165 million to fund further acquisitions. The company has since notarised or acquired approximately €150 million worth of assets, with acquisitions in both its core territories. The new assets in the UK were acquired at an average net initial yield (NIY) of 8.9%, while German acquisitions showed a slightly higher NIY of 9.3%.
The group also reported disposals worth €51 million during the second half of the financial year, focusing on mature assets in Germany. These disposals, completed at or above book value, are part of Sirius's strategy of capital recycling to fuel further growth.
As of March 31, Sirius' free cash reserves were €220 million. The group has no significant debt maturities until June 2026, benefiting from a weighted average cost of debt at 2.1% due to successful refinancing efforts last year.
Despite anticipating higher future interest expenses, Sirius said it remains optimistic about its strategic positioning and the continued growth in rent roll, expected to offset the rising financing costs.
It also noted that the current high-interest rate environment has opened up attractive acquisition opportunities that are expected to enhance shareholder returns further.
Chief executive Andrew Coombs told investors: "Sirius has delivered another twelve months of strong operational performance, increasing rates and occupancy and quickly executing on our significant pipeline of acquisitions in both Germany and the UK, following our successful £147 million equity raise last November.
"Raising capital at that time has proved to be opportune, allowing us to acquire high-quality real estate on very attractive financial terms. Our acquisition pipeline remains strong and we believe there will continue to be opportunities to deploy our capital on an accretive basis in the coming year."