Sirius Real Estate rolls out capital expenditure programme after strong results

Posted On Friday, 27 November 2015 13:28 Published by
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Sirius Real Estate’s self-storage business performs strongly this year‚ supported by demand for space from consumers.

Andrew Coombs

Germany-focused business park owner Sirius Real Estate’s self-storage business has performed strongly this year‚ supported by demand for space from consumers and small businesses in Europe’s biggest economy.

Speaking after the release of half-year results to September yesterday‚ CEO Andrew Coombs said Sirius was rolling out a capital expenditure (capex) programme and that storage was a major component.

“The most significant element of our capex investment initiatives is the transformation of difficult space into our Smartspace products‚” he said.

Sirius’s Smartspace offering includes storage facilities and specialist office space for small businesses.

As at the end of September‚ 74‚235m ² or 6.7% of the lettable space of the total portfolio‚ had been converted into Smartspace‚ said Mr Coombs. “We would expect this to increase to closer to 8% after the completion of the capex investment initiatives.”

He said rental rates achieved on Smartspace offices and Smartspace storage in the group’s core locations were particularly encouraging and generally exceeded €9 per m ².

“The demand for both these offerings is very pleasing and‚ generally 12 months after the space becomes ready to let‚ we are consistently seeing these become more than 90% occupied in our core locations‚” said Mr Coombs.

The company reported yesterday that Sirius’ adjusted net asset value per share had increased 5.5% to €50.13 at the end of September compared with €47.51 at the end of March. The group declared a dividend of €0.92‚ up on €0.84 declared at the end of March.

The self-storage concept has grown aggressively in Europe and the US.

Last Monday‚ Stor-Age Property Reit became the first South African storage specialist to list on the JSE in anticipation of increasing demand for storage facilities in SA.

Portfolio manager at Ivy Asset Management‚ Chris Segar‚ said that Sirius’s results were pleasing.

“The successful roll-out of the capex programme and their ability to let unlet space‚ should manifest in enhanced rental income in the latter half of their financial year‚” he said.

“In addition‚ a further driver of income can be expected from the reduction in the cost of debt to 3.3% from 4.3%.”

source BDpro

Last modified on Friday, 27 November 2015 13:43

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