Sirius Real Estate Thrives: FFO Soars to €110.2m, Dividend Up, Balance Sheet Strong

  • Sirius Real Estate reports strong financial growth for FY 2024.
  • FFO and profit show notable increases, with a dividend rise.
  • Acquisitions, disposals, and a strong balance sheet drive positive outlook.

Sirius Real Estate Limited has announced its consolidated financial results for the year ended March 31, 2024. The company has achieved notable financial growth, driven by strong operational performance and continued occupier demand.

FFO and Profit Growth

Sirius Real Estate reported a 7.9% increase in Funds from Operations (FFO) to €110.2 million, up from €102.1 million in 2023. The adjusted profit before tax rose by 14.6% to €110.0 million, compared to €96.0 million in the previous year.

The operating profit saw a substantial increase of 28.6%, reaching €130.7 million, up from €101.6 million in 2023. Profit before tax surged by 32.4% to €115.2 million, primarily due to a €12.4 million valuation gain, compared to a €9.8 million deficit in the prior year.

Rental and Earnings Growth

Sirius Real Estate’s rent roll grew by 7.2% like-for-like, reaching €188.7 million, driven by strong organic growth and high occupier demand in Germany and the UK. The company’s FFO per share increased by 2.4% to 8.95 cents, while EPRA EPS rose by 8.7% to 8.21 cents. Basic earnings per share saw a significant increase of 28.3%, reaching 8.75 cents, and headline earnings per share increased by 6.6% to 8.12 cents.

Dividend Increase

The company announced a progressive second-half dividend of 3.05 cents per share, representing a 6.5% increase in the total dividend for the financial year to 6.05 cents per share.

Valuation Gains and Portfolio Performance

Sirius Real Estate’s investment properties were valued at €2.21 billion, up from €2.12 billion in 2023. The company achieved a net portfolio valuation increase of €12.4 million despite valuation yield expansion. The portfolio’s gross yield in Germany was 7.5%, with a net yield of 6.8%. In the UK, the gross yield was 14.1%, with a net yield of 9.9% on a like-for-like basis.

Table 1: Key Financial Metrics

Metric20242023Change (%)
FFO (€m)110.2102.17.9%
Adjusted Profit Before Tax (€m)110.096.014.6%
Operating Profit (€m)130.7101.628.6%
Profit Before Tax (€m)115.287.032.4%
FFO per Share (cents)8.958.742.4%
EPRA EPS (cents)8.217.558.7%
Basic EPS (cents)8.756.8228.3%
Headline EPS (cents)8.127.626.6%
Dividend per Share (cents)6.055.686.5%

Acquisitions and Disposals

Sirius Real Estate captured significant market opportunities with €157.8 million in acquisitions and €59.7 million in disposals. The company completed six UK acquisitions worth £90.0 million (€104.2 million) with an annualized NOI of £8.7 million (€10.1 million) at an average gross yield of 9.5%. In Germany, it completed €53.6 million in acquisitions across three transactions, with an average gross yield of 10.2%.

Disposals in Germany totaled €56.2 million, with an annualized NOI of €3.4 million. The company also completed a £3.0 million (€3.5 million) disposal in the UK, all at a premium to book value.

Strong Balance Sheet

Sirius Real Estate maintained a strong balance sheet with cash at bank of €214.5 million, up from €99.2 million in 2023. The company’s net loan-to-value (LTV) ratio improved to 33.9%, down from 41.6% in March 2023. Net Debt to EBITDA was 5.6x.

The company successfully issued €59.9 million in bonds post-balance sheet via a tap issue of its €300 million 1.75% notes due in 2028. Additionally, €170.0 million and €58.3 million facilities with Berlin Hyp AG and Deutsche Pfandbriefbank, respectively, were refinanced to 2030 at rates of 4.26% and 4.25%.

Table 2: Key Balance Sheet Metrics

Metric20242023
Cash at Bank (€m)214.599.2
Net LTV (%)33.9%41.6%
Net Debt to EBITDA (x)5.6xN/A
Post-Balance Sheet Bonds (€m)59.9N/A

Outlook

Sirius Real Estate is trading in line with management expectations for the new financial year. The company continues to explore growth options in both Germany and the UK, including recycling mature assets and reinvesting in value-add opportunities. Organic growth opportunities remain robust in both markets.

CEO Andrew Coombs stated, “Sirius has delivered another very positive set of annual results, with strong operational performance driving FFO, valuation, and dividend growth. This is testament to our platform’s ability to drive substantial organic growth, underpinned by continued occupier demand for our high-quality and affordable products despite macro headwinds.”

Continued Growth and Investment

Following an oversubscribed equity fundraising of €165.3 million in November 2023, Sirius Real Estate has executed its pipeline of attractive asset acquisitions in both Germany and the UK. The company bought approximately €160 million in assets over the past six months.

Sirius has maintained a healthy net LTV ratio and recycled capital with approximately €60 million in disposals completed at a premium to book value. This highlights the business’s ability to crystallize returns from mature assets and drive value where strategic market opportunities arise.

Positive Outlook for the Future

Looking ahead, Sirius Real Estate’s outlook remains positive. The company’s active asset recycling program, strong cash position, and recent issuance of €59.9 million in debt ensure a robust balance sheet. The company is well-positioned to unlock value, grow occupancy, and increase rental income within its current portfolio through its successful asset management program.

Dividend Details

The Board has authorized a dividend for the second six months of the financial year ended March 31, 2024, of 3.05 cents per share. This represents a payout of 69% of FFO, a 2.3% increase on the 2.98 cents per share dividend for the same period last year.

The total dividend for the year is 6.05 cents, an increase of 6.5% from the 5.68 cents total dividend for the year ended March 31, 2023. The ex-dividend date for shareholders on the SA register is expected to be June 26, 2024, and June 27, 2024, for shareholders on the UK register. The record date for both registers is June 28, 2024, with the dividend payable on July 25, 2024.

Conclusion

Sirius Real Estate has demonstrated strong financial and operational performance for the year ended March 31, 2024. The company continues to capitalize on market opportunities, maintain a robust balance sheet, and provide attractive returns for shareholders. The outlook remains positive as Sirius Real Estate navigates future growth and investment opportunities in Germany and the UK.


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