Covid fallout less severe than expected in Germany, Sirius says

Sirius Real Estate, which manages a mix of office, factory, warehouse and storage spaces in Germany, said on Monday that the government response to Covid-19 pandemic in eurozone’s largest economy appears to have succeeded in limiting the economic damage that many had predicted.

“While there still remains some uncertainty as the rollout of vaccination programmes in Germany and across Europe continue, the company’s performance over the last year gives reason for cautious optimism going forward,” Sirius said in a statement

The fallout of Covid-19 has had a devastating effect on property sector in SA, in particular, but Sirius fared reasonably better in the year to end-March, with key performance indicators like the rental income rising 5.2% on a like-for-like basis.

Funds from operations (FFO), which is the key measure of operational performance, was up 9.3% to €60.9m (R998.1m).

CEO Andrew Coombs attributed the performance to the diversified nature of the portfolio that caters to SMEs, in particular, but it also rents out to multinational companies such as Daimler and Siemens.

“Our diverse €1.3bn (R21.3bn) portfolio of business and industrial parks located in and around Germany’s main cities offers a flexible range of uses that continue to be attractive to our broad occupier base, which comprises both large domestic and international businesses, as well as the SMEs that are the engine room of the German economy,” Coombs said.

“This is evidenced clearly by the rental increases we achieved this year, which have contributed to the strong growth in profitability and FFO we have reported today.”

Like-for-like average rental rates were up 3.5% to €6.17/m², with the total average portfolio rate growing 3.2% to €6.17. Occupancy rose to 87% from 85.3%, with like-for-like occupancy increasing to 86.9% from 85.2%.

The company declared a final dividend of €1.98 per share, which up 10% on the year-earlier period.