CAPE TOWN - Sirius Real Estate, the listed operator of business parks that provides conventional and flexible workspace in Germany, deployed 65.1million (R1.03billion) in the year to March 3 from a 230m war-chest to acquire new properties.
The group said in a trading update yesterday ahead of its results to be published on June 3, that the amount was spent to buy four assets.
In addition, two properties totalling 15.2m had been notarised for completion, and three totalling 64.8m were in exclusivity (where a potential buyer has a period of time to investigate purchasing a specific property).
“Assuming these are all complete, the company will then have the capacity to invest a further 85m into acquisitions. About 70m of the equity used to fund these acquisitions will come from the proceeds of the sale to AXA IM - Real Assets in June,” the directors said. The strength of Sirius’ operating platform, with the selective asset recycling completed and the new partnership with AXA IM - Real Assets mean “the company is well placed for the new financial year”, directors said.
Over the past year rental income, including acquisitions, was expected to have increased by about 8.2m to 87.7m. Like-for-like rental was expected to have increased by more than 6.2percent.
Lettings activity was “strong” with more than 170000m² let, including with some well-covenanted tenants. A sale of three assets generated 25.6m.
In September 2018, Danny Kitchen, with more than 25 years of property and finance experience in both public and private markets, was appointed as chairperson. Sirius established a joint venture with AXA IM - Real Assets in February this year through the sale of 65percent of its interests in five subsidiary companies to AXA IM - Real Assets. The transaction is expected to be complete at the end of June.
On March 22, the acquisition of two business park assets located in Freiburg and Hamburg were notarised.
The Freiburg property comprises a combination of office, storage and production space totalling 20000m² of lettable space, which is currently 87.6percent occupied.
The Hamburg property provides a combination of office, storage and production space totalling 28500m² of lettable space, which is fully vacant.
Sirius’ shares closed 0.86percent higher to close at R11.75 on the JSE yesterday.