Sirius Real Estate, the German business park owner, is converting some of its offices so that it can meet staggering demand for storage space.
Many Germans have put their goods in storage so that they can house family members during the Covid-19 lockdown.
Companies that have been unable to export goods have also needed to store those products for longer. holidaymakers who have been unable to travel have had to store leisure equipment for longer.
CEO Andrew Coombs said on Tuesday, after a trading update for the year to March, that the company had managed to collect 90% of its expected rent by April 9 and that its balance sheet was in a stronger position than a year ago with dividend cover of 1.5 times earnings and €100m cash on hand.
This means the company is on track to assess in May if it will pay a dividend and how large that dividend will be as has been the case since it listed in 2014.
“Each year we make a dividend decision in May and then communicate that decision when we release financial results in June. We will do so again next month,” Coombs said.
The company reported in its trading update that it had collected most of its rent on time and received only a small number of requests from tenants to defer payments.
The group said it had collected more than three quarters of its April rent by April 9, representing about 90% of what is normally collected. It was addressing cases for the deferral of rent on a case-by-case basis. Sirius has more than 5,000 tenants.
“We are maintaining a close eye on the situation as it evolves daily with the welfare and interests of our staff and tenants very much in the forefronts of our minds,” said Coombs.
The company owns or manages business parks in Germany. Its portfolio had a book value of €1.06bn at the end of its six months to September 30.
Coombs said Sirius was in a healthy position and had been able to continue to excel as a property company while the Covid-19 pandemic swept the world.
“The last three years of my life have been spent by me explaining to staff what happens if the music stopped tomorrow. We had to be prepared for any black swan event which could happen in Germany or London. At the end of last year we looked at our business continuity programme. It was upgraded in a number of ways. We got more equipment for remote work and set up a data recovery suite,” he said.
Coombs said the group was planning a disaster-recovery exercise in June this year, “but then the coronavirus outbreak happened. I believe our systems have stood up well through it.”
Coombs said Sirius paid for its staff to use alternatives to public transport months ago. Other initiatives included employing different cleaning staff for different floors of its admin offices. To date, nobody employed by Sirius has tested positive for Covid-19.
He said Germany was likely to emerge best in Europe from the Covid-19 virus pandemic.
Germany has the largest medical helicopter fleet on the continent, more than 2,000 testing labs, compared with the UK which has about 200, and Germany has technology which enables it to treat patients from Spain and Italy without infecting its own citizens, Coombs said.
The share price of Sirius has fallen 2.69% so far in 2020, while the JSE property index has lost 42.88%. In 2019, Sirius was the best-performing JSE-listed property stock with a total return including dividend and share price growth of 52.2%.
With Karl Gernetzky
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