CAPE TOWN – Sirius Real Estate, which owns business parks in Germany, declared a 2.8 percent higher dividend to 1.82 euro cents per share in the six months to September 30 due to its “extremely well diversified” operations in the face of the Covid-19 related challenges, chief executive Andrew Coombs said on Friday.
He said in an online presentation that being able to declare a higher dividend had demonstrated the resilience of the business model and of its operating platform in more than 60 locations.
He said the company had a great deal of diversity built into its business model. For instance its customers ranged from blue chip groups - which comprise some 44 percent of rental income, to one-man businesses and many other small and medium-sized businesses.
In addition, the company offered a range of properties to its customers, from factories to light manufacturing, from warehouse to out-of-town offices.
Sirius’ customers were also not exposed in any meaningful way to a single industry, while its operations reflected the regional diversity of industrial locations that was characteristic of the German landscape, he said.
The company, which has a secondary listing on the JSE, lifted net asset value per share by 5 percent to 81.18 euro cents. There was a 4.3 percent valuation increase in owned investment property to €1.23 billion. Revenue was up 9.8 percent to €79.3m.
The cash collection rate stood at 97.3 percent, with outstanding rent and service charge receivables for the six-month period of €1.9m. Total enquiries were up 17.4 percent on the same period last year, and sales conversion rate stood at 13.4 percent.
Loan to value stood at 31.6 percent, slightly lower than 32.8 percent at March 31, and well within the company policy cap of 40 percent. The cash balance stood at €128.4m, of which €112.4m was unrestricted.
The €9.1m acquisition of an asset in Norderstedt was due to complete in this month, while the disposal of the Weilimdorf asset had been completed.
With the formal announcement of the extension of Germany’s Covid-19 recovery stimulus to December 31, 2021, the message from the German government was that it was committed to supporting business for as long as necessary,” the group said in its results.
The volume of square metres added to the new acquisition capex investment programme in the six-month period was limited due to lack of acquisition activity, but the return of transactional activity with a focus on assets with sub-optimal vacancy was expected to provide opportunity to grow the capex programme going forward.
Value-add opportunities were being exploited by upgrading spaces returned each year as a result of move-outs. About 38 000m² of sub-optimal quality space had been identified, which was either vacated within the period or the previous financial year.
This upgrading was expected to require €9.9m investment and generate €2.9m in annualised rent roll, representing an uplift of about 20 percent on the rate at which the space was previously let.
The share price closed up 0.16 percent at R18.88 on the JSE on Friday.