Sirius Real Estate upbeat after resilient first half

(Sharecast News) - Sirius Real Estate posted a jump in interim earnings on Monday, fuelled by strong demand for its properties and its ongoing acquisition programme. The FTSE 250 firm, which owns branded business and industrial parks in the UK and Germany, said the total rent roll grew by 15.2% in the six months to 30 September to €242.5m. Occupancy ticked up 0.6% on a like-for-like basis, to 85.1%.

Funds from operations (FFO), a key metric used to evaluate operating performance, rose 6.6% to €64.7m.

Pre-tax profits softened 6% to €57.5m, however, due on a net foreign exchange loss of €14.2m on sterling cash reserves.

In contrast, post-tax profits surged 56.8% to €87m, due in part to the release of deferred tax liabilities as Germany's government enacted an annual 1% reduction in the corporate tax rate, from 2028 to 2032.

The value of the owned investment property portfolio was up 12.2% at €2.77bn, boosted by €295m of acquisitions.

Andrew Coombs, chief executive, said: "Sirius has delivered another strong performance, demonstrating the platform's continued ability to asset manage value and drive rental income from the highly resilient portfolio.

"We have continued to make good progress in our acquisition programme.

"With the proceeds of our 2024 capital raise now fully investment and overall rent roll 15.2% ahead of the same period last year, we expect these well-timed acquisitions to begin to flow through to FFO and earnings growth on a per share basis in the second half and beyond."

Berenberg, which has a 'buy' rating on the stock, said: "Sirius Real Estate's interim results confirm it is on track to meet full-year expectations of FFO of around €133m.

"Sirius's German business has generated LFL rolling rent roll growth above 5% in its seasonally-weaker period, supported by increased renewal rates. Buoyed by economic confidence that it creating higher demand for Sirius's space, we also expect an acceleration of rent roll growth in the second half."

The broker added that the UK business remained "resilient".