REAL ESTATE STOCKS
Sirius shines brightly with record-breaking income growth
The only Germany-focused property stock listed on the JSE delivers a 17% total return in the year to March
German business park owner Sirius Real Estate’s 2018 financial year has been its best since it listed in 2014, with record-breaking income growth and the acquisition of 13 new assets in Europe’s largest economy.
Sirius, the only Germany-focused property stock listed on the JSE, delivered a 17% total return in the year to March, making it one of the best performing real estate stocks on the bourse.
CEO Andrew Coombs said Sirius had managed to harness value from cost-effective flexible offices, which served small and medium enterprises and were located on main arterial nodes — areas just outside central business districts, but with easy access.
“A record 6.2% increase in like-for-like annualised rental growth, the highest performance in the group’s history, in a period when our key focus was on recycling and reinvesting, is an exceptional performance and reflects well on the strength of our in-house sales and marketing platform,” said Coombs.
An analyst said Sirius’s ability to recycle assets had helped drive its exceptional performance and it still had the financial capacity to buy more than €100m in assets (about R1.471bn) in the next 12 months.
“The investment theme of recycling assets and selling mature assets to purchase properties with good growth potential is working well,” said Chris Segar of Ivy Asset Management.
“The organic rental growth and increase in occupancies is evidence that the vertically integrated leasing division remains effective,” he said.
Sirius achieved full-year dividend growth of 8.2%. “The gross yield of the portfolio, of above 8%, is most compelling in an environment of low inflation and low growth,” said Segar.