Sirius Real Estate achieved a 14.9% increase in rent roll for the half-year, driven partly by its successful asset acquisition programme.
On a like-for-like basis, rent roll increased by 5.5%, reflecting the group’s ability to continue to drive organic growth across both Germany and the UK, it said in a statement on Monday.
The group, which owns and operates branded business and industrial parks providing conventional space and flexible workspace in Germany and the UK, remained on track to deliver full-year results in line with expectations, it said.
CEO Andrew Coombes said the group had performed well in the first six months, with the asset management team driving like-for-like rent roll growth well ahead of inflation.
“This organic growth alongside the rental contribution from the well-timed series of acquisitions we have made in recent months combined to drive an almost 15% increase in overall rent roll, underlining the continued demand for space within our portfolio,” he said.
“Bolstered by our successful bond issuance in May and equity raise in July, our balance sheet remains strong and we are well placed to continue to act on opportunities to make accretive acquisitions arising from the current market conditions.”
In Germany, which has marginally outperformed the UK, rent roll growth particularly benefited from stronger rates, despite expected regular move-outs at the beginning of the period which slowed growth in occupancy.
“We expect to see occupancy strengthen in line with seasonal trends in the second half of the company’s financial year,” the group said.
The group expects to see its property values increase in Germany in 2024 as the transactional market is notably more active and confidence in the real estate sector further improves.
In the UK, like-for-like rates continue to grow strongly, ahead of overall rent roll growth, but some seasonal move outs have affected occupancy, which is similar to what has been seen in Germany.
“We expect to see valuations stabilise, in contrast to recent periods, and believe the improving transactional market will build further confidence,” it said.
“Overall, we expect to announce a positive valuation movement at group level at the period end.”
In July, Sirius successfully completed an equity fundraising of €180m to provide funds to execute on a pipeline of attractive acquisition opportunities, after the successful deployment of the proceeds of its November 2023 fundraise.
“We are in exclusivity on several promising asset acquisitions in both Germany and the UK and we expect to notarise and/or complete on a number of those in the coming months,” the group said.
The group’s balance sheet remains strong with free cash reserves of about €297m at end-September and no significant debt maturities until June 2026.
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