Sirius Expects to Meet Market Expectations for FY2023

Sirius Real Estate Limited has released a trading update for its financial year ending 31st March 2023. The company reported a strong operational performance despite challenging market conditions. The following are the key takeaways from the update:

Rent Roll Growth: Sirius Real Estate achieved an 8.1% increase in overall rent roll (7.7% on a like-for-like basis) in the financial year 2023, reflecting management's ability to capture rental growth in the current inflationary environment. For the ninth consecutive year, the company has achieved like-for-like rent roll growth in excess of 5%. The growth in rental rates was largely in-line with the growth in rent roll in Germany, reflecting stable occupancy rates in the country.

Acquisitions and Disposals: The acquisitions and disposals strategy of the company remained opportunistic and focused on non-core or mature assets with little upside. The company achieved returns in excess of book value on six disposals completed during the last 12 months, demonstrating efficient recycling of capital, which will continue to be a mainstay of Sirius' strategy.

Balance Sheet: Sirius' balance sheet remains strong with cash reserves of €123 million and around 90% of the Group's debt maturing in excess of three years. The company successfully re-financed its Berlin Hyp AG €170 million facility at a 4.26% interest rate for a 7-year term, which from commencement in November 2023 will take the overall weighted average group cost of debt to 1.9%.

Outlook: The company expects to deliver full-year results in-line with market expectations. The management is confident that the leverage levels will continue to have a positive overall effect on shareholder returns, given the relatively high yielding nature of the group's assets and the continued growth in the rent roll, which will help to offset future increases in financing costs.

In conclusion, Sirius Real Estate has delivered another period of strong operational performance despite challenging market conditions, reflecting its ability to capture rental growth in the current inflationary environment. The company's acquisitions and disposals strategy remained opportunistic and focused on non-core or mature assets with little upside, and its balance sheet remains strong. The company's strategy of recycling capital efficiently will continue to be a mainstay of its strategy. Sirius Real Estate's management is confident about the outlook, and the company expects to deliver full-year results in line with market expectations.