STRONG IN-HOUSE MANAGEMENT
Rental income growth boosts Sirius dividend
Sirius Real Estate, the JSE-listed owner of German flexible office space and storage assets, grew its dividend 32% in the year to March due to strong in-house management and rental income growth.
The only pure German property play on the JSE has recently moved to the main board having grown quickly and attracted the interests of institutional investors during its time on AltX.
Sirius declared a dividend of 2.92c per share for the year, compared with 2.22c in 2016.
CEO Andrew Coombs said continued demand for flexible and conventional workspace "coupled with the ability to uncover value has led to a strong year with adjusted profit before tax up 54%".
"Total income increased 23% to €68.8m compared with 2016’s €55.8m," Coombs said.
Like-for-like annualised rental income increased 5.1% to €65.6m compared with €62.4m for the period to March 2016. There was a 34% increase in adjusted earnings per share to 4.25c from 3.16c.
Chris Segar of Ivy Asset Management said Sirius had delivered "a pleasing set of results and has managed to produce a slightly higher dividend than the consensus analyst predictions, 2.92c versus the consensus of 2.9c".
"The upward trajectory in overall occupancy and increases in like-for-like rental income and new lettings can be attributed to Sirius’s successful vertically integrated in-house leasing and property management capability," Segar said.
"The effectiveness of the in-house team has been the driver in effectively rolling out the capital expenditure programme and transforming vacant space, resulting in the successful delivery on their acquisitions and asset recycling mandate."
Sirius’ property portfolio has grown from €486m in 2012 to €823m.
"It is one thing for a management team to identify a niche, but another thing to implement and carry through on the delivery of their targets and mandate. During this financial period, Sirius were able to dispose of more than €100m in mature assets, so the management have been able to prove their capability of effectively recycling capital in full circle. This is evidenced by the Epra [European Public Real Estate Association] net asset value increase of 9.7% to 57.8c," Segar said.