Market's view on Sirius Real Estate

Published on April 2024

  • Sirius Real Estate has reported a strong trading update, continuing a trend of robust performance with like-for-like rent roll growth of 7.7%, stable occupancy in Germany and rental rate growth ahead of inflation.
  • The company’s recent acquisitions and disposals include two UK acquisitions yielding a 9.6% net initial yield and a disposal in Germany at a 6.0% NIY.
  • Sirius Real Estate has completed over €100 million of acquisitions but the share price remains unchanged, leading to discussions about its valuation.
  • The company plans to issue new shares aiming for €150 million, despite concerns from some stock watchers about its valuation being higher compared to other property companies.
  • There is a significant focus on the company’s dividend policy, with recent increases and a forward yield of approximately 6%, which is considered generous for the market.
  • Operational performance remains strong against a challenging market backdrop, marked by another period of strong performance and expectations to deliver year-end results in line with market forecasts.
  • Concerns are raised about the company’s safety and stability due to recent significant drops in share value.
  • Management, including the CEO, has been active in investing in the company, which some stock watchers see as a positive sign for potential future performance.
  • The company’s operational strategy includes significant focus on out-of-town offices and business parks in Germany, suggesting a need to compare it with similar German companies for an accurate valuation.
  • Stock watchers note the company’s well-managed debt and see it as a crucial factor for maintaining financial health and stability.
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