Sirius Real Estate plans acquisitions amid low financing costs
Business park owner expects a busy second half amid high demand for conventional and flexible space
Germany-focused business park owner Sirius Real Estate is planning further acquisitions during the second half of its year, seeking to take advantage of low financing costs and strong demand from tenants.
Investor interest in industrial and office parks in Germany is driving yields and valuations down, the company said on Monday, but added this was partially due to lower finance costs, which it said it is well-positioned to take advantage of.
The company owns or manages 60 business parks around Germany and its portfolio had a book value of €1.06bn (R17bn) at the end of its six months to end-September. This is an about 6% decline in the book value the prior half-year.
During the period under review, it completed acquisition of three sites for €21.9m, with two more assets notarised for €64.6m, and a further three in exclusivity for €57.8m. The company has further funds of about €80m for further acquisitions or other ventures.
“As such, the company is well positioned for a busy and progressive second half of the financial year and is trading in line with the board’s expectations,” Sirius said.
“Despite political uncertainty and economic headwinds, Sirius’s value-add business model continues to flourish due to the diversity that comes from intensive asset management and our wide range of products,” said CEO Andrew Coombs.
Pretax profit rose about 2% to €79.7m, while revenue rose 6.5% to €72.2m.
The company upped its interim dividend 8.6% to 1.77 euro cents.
The group’s share price was up 0.69% to R14.50 in morning trade on Monday, having risen 32.42% so far in 2019. This compares with a fall of 3.58% for the JSE property index in the year to date.