Sirius Real Estate shares fell 3% to 107.2p in early morning trading on Monday, despite a 73.1% growth in annualised rent roll to €167 million in FY 2022 compared to €96.5 million in FY 2021.
Sirius Real Estate highlighted growth across its UK and German assets, with a 7.6% increase in like-for-like annualised rent roll in the group’s 4.5 month term ownership of Bizspace, which it acquired for cash consideration of approximately £245 million based on an enterprise value £380 million, representing a net initial yield of 7.1%.
The group also noted a like-for-like annualised rent roll uptick of 6.4% in its German portfolio in the firm’s eighth consecutive year of rent roll growth over 5%, with €201.9 million in acquisitions completed or notarised in 10 sites across the country. Sirius Real Estate drew attention to the blend of income and value-add opportunity for its portfolio in the region.
Sirius Real Estate mentioned a pre-tax profit rise of 3.2% to €168.9 million against €163.7 million year-on-year, and a funds from operations climb of 22.5% to €74.6 million from €60.9 million.
The company also completed two strategic disposals which provided €30 million in capital to recycle into the business completed or expected to complete after the period end.
“Against an ongoing period of challenging market conditions, Sirius has delivered another very positive set of annual results leading to a 20% total accounting return including a 16.1% increase in dividend for shareholders,” said Sirius Real Estate CEO Andrew Coombs.
“This strong operating performance was underpinned by continued demand and asset management led rental growth across both our German and UK platforms.”
“The Company grew acquisitively through the commitment of over €200 million into acquisitions in Germany, as well as the acquisition of BizSpace in November 2021 for £380 million.”
Sirius Real Estate said its outlook highlighted post-year end trading which fell in line with market expectations, reportedly driven by continued strong occupier demand, investment and consistent on-shoring of production and supply chains by UK and German manufacturers.
The company remarked that the positive impacts of its FY 2022 acquisitions were expected to be more evident in FY 2023, and the firm said it was actively assessing new opportunities for growth across the UK and Germany.
Sirius Real Estate added that it remained well-placed to deliver attractive returns for shareholders, despite the volatile geopolitical environment for the coming months.
“We remain focused on driving property returns through the capability of our internal operating platforms and, despite the inflationary environment and the uncertainty created by the situation in Ukraine, are confident that we can continue to deliver attractive risk-adjusted returns through active asset management,” said Coombs.
“Looking ahead, we expect the ten assets acquired or notarised in Germany during the period to have a greater impact on earnings in FY23 compared to FY22, whilst the encouraging operating performance of BizSpace provides further income growth opportunities.”
“Against an ongoing period of challenging market conditions, Sirius has delivered another very positive set of annual results leading to a 20% total accounting return including a 16.1% increase in dividend for shareholders,” said Sirius Real Estate CEO Andrew Coombs.
Sirius Real Estate noted a total dividend rise of 16.1% for the financial year to 4.4c per share compared to 3.8c the year before, with an unchanged payout ratio of 65% of the group’s funds from operations and a total shareholder accounting return of 20% against 19.5% the last year.