Only slight drop in Sirius's April-June rent collection rate
CAPE TOWN – Sirius Real Estate, the operator of branded business parks in Germany, said on Thursday that its cash collection rate on rent and service charges through April to June was 95.9 percent, compared with 98.2 percent for the same period in the prior year.
Commercial property companies around the world have been struggling to collect rents during Covid-19 lockdowns, although rentals from industrial and storage properties have been less affected.
Sirius’ slightly lower collection rate resulted in uncollected rent and service charges for the period of €1.4 million (R28.75m), of which €212 000 related to insolvency cases, the company said in an update yesterday. Many of its tenants returned to work in June and July.
With its significant cash resources, Sirius was also actively seeking new acquisitions, said chief executive Andrew Coombs.
A third phase of Sirius’ Covid-19 response involved actively assisting tenants to operating on a business as usual basis, while working, where required, to adapt to changes in their space requirements.
The majority of the uncollected debt related to 41 tenants with outstanding rent and service charges totalling €0.9m out of a total tenant base of about 5 000.
Sirius expected to collect some €0.8m of the uncollected rent and service charges for April to June over 12 months through regular cash collection and the use of deferred payment plans.
There had also been an increase in inquiry levels for space of 6.7 percent between April 1 and July 31, compared to the same period in the prior year.
There had been a particular increase in the number of inquiries for storage, which makes up 35 percent of the company’s total lettable space, from new commercial and new self-storage customers.
The period April to June 2020 saw an 11 percent decrease in the number of new lettings and reduction in square metres let compared to the same period in the prior year.
The number of new lettings in July recovered to within 4 percent of the same month in the prior year and square metre volume represented a 16 percent increase.
New lettings for out-of-town conventional and flexible offices remained strong representing 45 percent of new lettings completed between March 1 and July 31.
As at July 31, the company held cash of €137m, of which €112.5m was unrestricted. This was before a second half dividend payment to be paid on August 20, which is expected to amount to €12.6m in cash.
Coombs said their business model was built on the breadth of offering to occupiers and the adaptability of the mix of accommodation, including commercial storage, self-storage, out- of-town conventional and flexible office, as well as manufacturing.
Sirius shares closed 0.12 percent higher at R16.65 on the JSE on Thursday.