Sirius Real Estate Limited · LSE:SRE
Sirius Real Estate — H1 FY2025 Earnings Presentation
60 slides from Sirius Real Estate's earnings presentation, September 2024
Slide 1: September 24
September 24 OBERHAUSEN, GERMANY
Slide 2: GÖPPINGEN, GERMANY BOCHUM,
GÖPPINGEN, BOCHUM, GERMANY GERMANY
Slide 3: Germany and UK portfolio overview
▪ 70 sites, clustered around the edge of all 7 major cities ▪ Occupancy of 83.8% ▪ 6,124 tenants across those sites ▪ Valued at a 6.8% net yield ▪ Ranging from blue chips to 100‘s of SME's ▪ Organic growth centred on ▪ asset management ▪ €1.8bn gross asset value ▪ recycling capital into new acquisit
Slide 4: Group operational and financial performance
FFO: €60.7m | +14.5% (2023: €53.0m) Adjusted NAV per share: 112.49c | +1.2% (Mar 2024: 111.12c) GROUP YoY OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE RESILIENCE Annualised LFL Rent Roll Growth FFO per share: 4.29c Group Net Yield 7.4% 5.5%* YoY Group: 5.5% Germany: 6.8% UK: 9.3% Germany: 5.8% UK:
Slide 5: FFO and earnings summary
SEP 24 SEP 23 MOVEMENT €m €m % €m 104.5 89.1 +17.3% 15.4 Titanium income 4.3 3.5 0.8 Service charge irrecoverable costs (11.5) (6.0) (5.5) Non-recoverable maintenance (3.7) (3.5) (0.2) 93.6 83.1 +12.6% 10.5 Corporate costs and overheads (24.8) (21.3) (3.5) 68.8 61.8 +11.3% 7.0 Bank interest (6.3) (5
Slide 6: 22nd consecutive increase in dividend
– 22nd Consecutive increase in dividend paid by the company . . (1.7) . Cents per share . (0.6) . (0.1) . (0.2) .0 . .0 . verhea s nterest an usting items uste Earnings E R E R Earnings ivi en er Share current ta after a a usting items ( 1 of Note: All items in the chart above are calculated on the
Slide 7: Summary balance sheet and NAV
SEP 24 MAR 24 MOVEMENT €m €m % €m Investment properties (owned assets) 2,349.0 2,186.7 7% 162.3 Investment properties (leased assets) *23.6 *23.9 (1%) (0.3) Investment in associate 70.0 70.3 (0%) (0.3) Plant and equipment 18.3 11.1 65% 7.2 Trade and other receivables 54.5 59.0 (8%) (4.5) Cash and ca
Slide 8: NAV per share movement
11 1.11 1.15.62 0. 11 .0 (0. 11 (0. . 11 11 . 0 (. Cents per share 0. 1. 0 111.1 111 110. (1. 10 . 10 10 10 ER per share E R ustments . per share . items Recurring ER aluation gain ER . after ER Recurring aluation loss . after Capital Raise ivi en . per share E R ustments ER per share Mar Mar Sep Se
Slide 9: Germany operational performance
SITE SEP 24 SEP 23 CHANGE €135.3m €125.5m 7.8% Annualised Rent Roll Annualised Rent Roll (LFL) €129.6m €122.5m 5.8% Occupancy (LFL) 83.6% 83.3% 0.3% Rate psm (LFL) €7.39 €7.08 4.4% Move-Ins* 108,809sqm 79,683sqm 36.6% Move-Ins Rate psqm* €8.05 €8.71 (7.6)% Move-Outs Rate psm* €7.57 €7.67 (1.3)% Move
Slide 10: Germany LFL rent roll increase
Annualised LFL Rent Roll increased 5.8% driven by an increase in Rate and Occupancy m€ 1 0.0 . 1 . 1 .0 1 0.0 . 1 . 1 . 0. 1 .0 1 . ( .0 1 0.0 11 .0 110.0 10 .0 (1 . 100.0 otal Sep isposal Sep Move outs Move ins Contracte uplifts Sep c uisitions otal Sep
Slide 11: Germany portfolio valuation increases
LFL PORTFOLIO VALUATION INCREASES LIKE FOR LIKE ASSETS 1 00 As at 31 Mar 2024: Gross Yield = 7.5% 1 00 . 1,790.6 0. .0 1 . Net Yield = 6.8% 1 . Capital value psm = € 1 00 As at 30 Sep 2024: 1 00 Gross Yield = 7.5% Net Yield = 6.7% 1 00 Capital value psm = € €’m 1 00 ACQUISITIONS VALUATION INCREASES
Slide 12: Germany enquiries, viewings and sales conversion
INCREASED CONVERSION RATES ON HIGHER ENQUIRY LEVELS MONTHLY AVERAGES Apr 24 – Sep 24 Apr 23 – Sep 23 ENQUIRIES/VIEWINGS/SALES Enquiries 1,344 1,317 1,800 250 Viewing 940 1,023 1,600 Sales 172 162 1,400 200 Enquiries Viewings 69.9% 77.6% 1,200 Enquiries Sales 12.8% 12.3% 150 1,000 ▪ Over 1,300 averag
Slide 13: Organic growth plan: value-add assets
Organic growth plan focused on investment into Value-Add Assets BOOK VALUE RENT ROLL NOI GROSS YIELD NET YIELD CAPITAL VALUE OCCUPANCY RATE PSM VACANT SPACE SEPT-24* €m €m €m psm € € sqm Value-Add 1,135.5 90.0 79.3 7.9% 7.0% 850 79.8% 7.20 263,461 Mature 655.1 45.3 43.2 6.9% 6.6% 1,218 93.9% 7.76 31
Slide 14: Capex programme: budget and achieved to date
BUDGET ACHIEVED TO DATE Investment Invest Rent Improvement Rate Occupancy Investment Invest Rent Improvement Rate Occupancy RETURNS Sqm €m psm € €m € €m psm € €m € Completed 244,465 49.8 204 18.2 7.32 85% 46.2 189 16.7 7.81 73% 36% In Progress 32,910 5.3 165 2.5 6.88 91% - - - - - 46% Next Phase* 11
Slide 15: UK operational performance
SITE SEP 24 SEP 23 CHANGE Annualised Rent Roll £65.7m £50.7m 29.6% Annualised Rent Roll (LFL) £51.6m £49.2m 4.9% Occupancy (LFL) 86.6% 88.3% (1.7)% Rate psqft (LFL) £14.78 £13.81 7.0% Move-Ins* 326,665sqft** 330,852sqft** (1.3)% Move-Ins Rate psqft £17.91** £15.58** 15.0% Move-Outs Rate psqft £15.21
Slide 16: UK rent roll movement
UK £M 0 1 . .1 0 0. . 1. 0 . 1 . (1. 0 0 (1 . 0 10 0 otal Sep isposal Sep Move outs Move ins plifts Sep c uisitions otal Sep Note, the chart excludes Cardiff which is being managed for sale.
Slide 17: UK portfolio valuation increases
PORTFOLIO VALUATION INCREASES LIKE FOR LIKE ASSETS As at Mar 2024: 00 Gross Yield = 14.0% 0 Net Yield = 9.3% . . Capital Value per sqft = £92 0 As at Sep 2024: 0 Gross Yield = 14.3% 0 Net Yield = 9.4% Capital Value per sqft = £92 £'m 00 . . 1. .0 Net Yield shift of 10 bps (1. (1. 0 TOTAL ASSETS 0 0
Slide 18: UK enquiries, viewings and sales
Enquiries Viewings Sales MONTHLY AVERAGES 1,600 140 Apr 24 – Sep 24 Apr 23 – Sep 23 Enquiries 1,246 1,476 1,400 120 Viewing 348 370 Sales 102 103 1,200 Enquiries Viewings 27.9% 25.1% 100 Enquiries Sales 8.1% 6.9% 1,000 80 ▪ Over 1,200 average enquiries per month. 800 60 ▪ An average of 100 deals per
Slide 19: Three UK assets acquired
£40.4m (€47.9m) in three UK assets acquired during or shortly after the first six months of the financial year: 19 BANBURY WEMBLEY CARNFORTH Acquisition Price: £25.0m Acquisition Price: £6.3m Acquisition Price: £9.1m Date of Acquisition: Jun 2024 Date of Acquisition: Jun 2024 Date of Acquisition: Oc
Slide 20: Disposals and acquisitions at or above book value
Five disposals all completed at or above book value at a total collective premium to book value of >5%, with proceeds recycled into the acquisition of twelve sites offering significant opportunities for value creation from 34,000 sqm of vacant space DATE TOTAL SALES PRICE SQM ANNUALISED RENTAL INCOM
Slide 21: Increase FFO to €135m in sight
Increase FFO to €135m already in sight through existing initiatives ▪ €5.0m contribution relating to capex investment programmes in Germany 20 (4) 150 (13) ▪ €5.0m contribution from the let up of 135 140 vacant space in Germany 3 7 130 ▪ €10.0m of pricing initiatives in Germany 10 120 ▪ €7.0m of pri
Slide 22: Net LTV, cost of debt and debt expiry
Sep 24 30.5% Net LTV Unsecured Borrowings € . m Secured Borrowings € .0m €1,012.9M Net LTV* 30.5% 2.1% Average cost of debt Weighted average interest rate 2.1% Interest cover at EBITDA level 7.1x Weighted average debt expiry - years 3.5 Net Debt / EBITDA 4.9x 3.5 years Weighted average debt expiry *
Slide 23: Dividend cover and organic growth
▪ 71% FFO dividend payout ratio (1.4x covered) ▪ Remainder of FFO re-invested into organic growth ▪ 30%+ ROI on value-add capex ▪ Organic growth driving valuation gains ▪ Me ium term ambition to grow to €135m long term to €150m ▪ Active acquisition pipeline LUDWIGSBURG, GERMANY
Slide 24: Strong organic and dividend growth, strong balance sheet
STRONG ORGANIC & DIVIDEND GROWTH ▪ FFO growth of 14.5 to €60.7m compared to same period to Sept 23 ▪ 5.5%* increase in annualised YoY LFL Group rent roll (14.9%* Total Rent Roll) with Germany and the UK increasing by 5.8% and 4.9% respectively ▪ 2.0% increase in dividend to 3.06c STRONG BALANCE SHEE
Slide 25: Outlook
▪ The Group continues to trade in line with management expectations for the full year ▪ In Germany the strength of our operating platform continues to drive above inflationary rent roll growth in spite of economic headwinds ▪ Our UK portfolio has grown substantially through acquisitions providing th
Slide 26: Total return, dividends, rent roll and cash collection
TOTAL RETURN OVER THE PAST 10 YEARS DIVIDENDS – 22nd Consecutive increase in dividend paid by the company 1000 3.5 SRE UK line 2.98 3.00 3.05 3.06 3.0 2.70 800 2.37 FTSE 250 2.5 1.98 2.04 1.80 1.82 600 FTSE EPRA Developed Europe 2.0 1.53 1.56 1.60 1.63 1.73 1.77 1.5 1.30 1.39 400 1.0 0.77 0.84 0.84
Slide 27: Appendices
▪ Market Dynamics and Portfolio - Germany ▪ Titanium Appendix I (P. 29 - P. 34) Appendix VI (P. 47 - P. 51) ▪ Market Dynamics and Portfolio - UK ▪ otal investment property value of € . m Appendix II (P. 35 - P. 38) ▪ Financing ▪ Portfolio Growth Appendix VII (P. 52 - P.54) Appendix III (P. 39 - P. 4
Slide 28: Market dynamics and portfolio Germany
BS Ze MARKET DYNAMICS + PORTFOLIO GERMANY — APPEND
Slide 29: German economy and market
Economy spread across several large Well diversified economy The "Mittelstand" autonomous markets Machinery, automotive, chemical, medical, energy, The SME market makes up over 50% of the German Frankfurt, Berlin, Stuttgart, Cologne, Munich, Düsseldorf environmental, consumer & service. economy in t
Slide 30: German portfolio valuation and book value
Book Value Annualised Rent Roll NOI Net Capital Value Rate Vacant Space Sep-24 Gross Yield Occupancy €m €m €m Yield psm € psm € sqm Total Portfolio 1,790.6 135.3 122.6 7.6% 6.8% 956 83.8% 7.38 295,319 Other - - (1.4) - - - TOTAL 1,790.6 135.3 121.0 7.6% 6.8% 956 83.8% 7.38 295,319 VALUATION MOVEMENT
Slide 31: German tenants and usage split
USAGE SPLIT BY SQM TENANT SPLIT BY REVENUE 6,124 Tenants Storage 2.6yrs Portfolio WALT 31% 32% Top 50 Anchor Production 37% Tenants 56% Smartspace SmartSpace SME 7.2% Of total rent roll relate to Government Tenants Tenants Other 8% Other SME Tenants 5% 24% Office 7% 83.8% Occupancy NO. OF TENANTS OC
Slide 32: German locations
LOCATIONS NO. OF TOTAL SQM RATE ANNUALISED RENT % OF PORTFOLIO BOOK VALUE SEP 24 OCCUPANCY GROSS YIELD PROPERTIES ‘000’s psm € €m BY RENT €m 4 Frankfurt 16 342 85.9% 7.92 27.9 21% 350.4 8.0% Berlin 4 107 95.1% 9.24 11.3 8% 178.6 6.3% 4 Stuttgart 10 368 86.8% 5.62 21.5 16% 277.1 7.8% 15 Cologne 8 147
Slide 33: SmartSpace
SMARTSPACE ANNUALISED % OF TOTAL RATE RENT ROLL SMARTSPACE TOTAL OCCUPIED OCCUPANCY ANNUALISED per sqm (excl. (ex. service PRODUCT TYPE sqm sqm % SMSP RENT service charge) ROLL charge € m€ SMSP Storage 54,887 38,864 71% 3.8 42% 8.25 SMSP Office 39,142 25,455 65% 3.1 35% 10.25 First Choice Office 7,0
Slide 34: German asset types
ASSETS Traditional Mixed Use Industrial Business Parks Modern Mixed Use Business Parks Out of Town Office Buildings Large scale Long-term lease lengths SME’s + Retail Customers Long & Short -term leases Multi-tenant SME’s + co- Conventional + Flexible workspace working office space 54% 29% 17%
Slide 35: Appendix II: Vantage Point, UK
APPENDIXII aS e 4 as -VANTAGE POINT, UK
Slide 36: UK market dynamics
Market synergies Strong rental growth potential New UK Government supports regional investment Industrial/out of town office market in the UK presents High levels of market fragmentation and structural supply The UK Government has set out plans to support regional economic growth similar characteris
Slide 37: UK tenants and usage split
USAGE SPLIT BY SQFT TENANT SPLIT BY REVENUE 3,901 Tenants 3% 1.3yrs Portfolio WALT Office Top 100 27% 32% 28% 3.9yrs Average Tenure Workshop Next 900 85.6% Occupancy 70% Other Remaining Clients 40% ▪ Structural shortage of our space NO. OF TENANTS OCCUPIED SQFT ANNUALISED RENT ROLL RATE PSFT TYPE OF
Slide 38: UK asset types
ASSETS Industrial Assets Office Buildings Mixed Use Assets SME’s & growing Large scale SME’s & growing Conventional & flexible SME’s & growing Conventional & flexible businesses workspace businesses office spaces businesses office spaces 71% 15% 14%
Slide 39: Appendix III: Klipphausen, Germany
APPENDIX I! a‘ : 2 KLIPPHAUSEN, GERMANY P.39
Slide 40: Germany track record
MAR-16 MAR-17 MAR-18^ MAR-19 MAR-20 MAR-21 MAR-22 MAR-23 MAR-24 SEP-24 ortfolio book value (€m 687.4 823.3 967.3 1,132.50 1,186.20 1,347.20 1,636.9 1,689.6 1,725.0 1,790.6 Rent roll (€m 60.5 71.0 79.5 87.8 90.3 97.2 113.7 123.1 129.7 135.3 (€m 52.5 61.4 66.4 76.7 78.0 87.7 101.5 108.6 117.1 121.1 (€
Slide 41: UK track record since acquisition
NOV-21 SEP-22 SEP-23 SEP-24 Portfolio book value (£m) 345.5 378.4 355.9 466.5 Rent Roll* (£m) 41.9 46.5 50.7 65.7 NOI (£m) 27.51 30.72 32.5 39.8 FFO (£m) 4.31 18.32 20.03 28.5 Gross yield 12.1% 12.3% 14.3% 14.1% Like-for-like Rent Roll increase - 11.2% 9.4% 4.9% Like-for-like valuation increase - 12
Slide 42: Düsseldorf, Germany
DÜSSELDORF, GERMANY
Slide 43: Income statement by segment
GERMANY GERMANY UK UK GROUP TOTAL GROUP TOTAL SEP 24 SEP 23 SEP 24 SEP 23 SEP 24 SEP 23 €m €m €m €m €m €m 68.6 63.0 35.9 26.1 104.5 89.1 Titanium income 4.3 3.5 - - 4.3 3.5 Service charge irrecoverable costs (4.0) (1.1) (7.5) (4.9) (11.5) (6.0) Non-recoverable maintenance (2.0) (2.1) (1.7) (1.4) (3.
Slide 44: Statement of financial position by segment
GERMANY UK GROUP TOTAL SEP 24 MAR 24 SEP 24 MAR 24 SEP 24 Mar 24 €m €m €m €m €m €m Investment properties (owned assets) 1,790.6 1,725.2 558.4 461.5 2,349.0 2,186.7 Investment properties (leased assets) 9.2 9.8 14.4 14.1 *23.6 *23.9 Investment in associate 70.0 70.3 0.0 0.0 70.0 70.3 Plant and equipm
Slide 45: Dresden Klipphausen, Germany
DRESDEN KLIPPHAUSEN, GERMANY
Slide 46: Our ESG journey
▪ Continued focus on embedding ESG in strategy and operations, prioritising sustainable performance and economic viability. ▪ Advancing decarbonisation plans: - Continued confidence in net zero pathway for the Group assets by 2045 in Germany and 2050 in the UK - Refinement of short- and mid-term pat
Slide 47: Appendix VI: Berlin Tempelhof, Germany
APPENDIX VI > a 3, BERLIN TEMPELHOF, GERMANY 4
Slide 48: Titanium overview
▪ AXA IM Alts – trusted partner & 65% equity holder of Titanium ▪ Sirius Real Estate – asset manager & 35% equity holder of Titanium ▪ €168m seed portfolio sold into Titanium by Sirius in August 2019 ▪ argeting stabilise assets > €45.0m with attractive running yields ▪ €138.8m of acquisitions post s
Slide 49: Titanium performance
SITE SEP 24 SEP 23 CHANGE Rent Roll* €26.1m €24.4m 7.0% Occupancy* 89.3% 89.5% 0.2% Rate psm* €6.97 €6.58 5.9% *Based on Headlease level MAINZ, GERMANY
Slide 50: Titanium investment property and Sirius 35% share
TITANIUM €362.8m Investment property value SIRIUS 35% SHARE €m Investment property 127.0 Other assets 3.5 36.9% Net LTV* Cash 6.6 Total assets 137.1 Bank loans (52.3) 7 No. of assets Other liabilities (8.9) Deferred tax (7.5) Total liabilities (68.7) Net assets 68.4 €26.1m Annualised rent roll * Rat
Slide 51: Movement in Titanium NAV
SEP 24 ▪ Share of profit through 35% equity ownership Invested equity € .1m ▪ 0.3% decrease in NAV after payment of €1.5m dividend Profit after tax €0. m ▪ Management fees generated et management fees (inclu ing €1. m perf fee € . m from the provision of a range of property related services Total in
Slide 52: Financing
FINANCING — APPENDIX =| AY W cate ON ae Lea
Slide 53: Debt maturity
700.0 3.5 years Weighted average maturity 600.0 585 500.0 2.1% Average cost of debt 400.0 400 300.0 200.0 €28m Scheduled repayments within the next year 100.0 28 0 0 - < 12 months 13-24 months 25-36 months 37-48 months > 49 months €28m Maturing within the next year Excluding € . m Bon tap in May 0
Slide 54: Covenants
DSCR* DYR* LTV** DSCR DYR LTV Berlin Hyp AG 2.02 x n/a 43.4% 1.40x n/a 65.0% Oct-30 Sparkasse 3.94 x n/a n/a 2.00x n/a n/a Feb-25 Deutsche Pfandbriefbank AG n/a 16.4% 45.6% n/a 8.0% 50.0% Dec-30 Unencumbered Asset to Unencumbered Asset to Net LTV Secured net LTV FCCR Net LTV Secured LTV FCCR Unsecur
Slide 55: i = Sa
A= 80 y i = Sa
Slide 56: Germany platform: employees and functions
TOTAL NO. EMPLOYEES IN > 59 LOCATIONS 304 Acquisitions Team 4 Acquire assets Service Charge Team Marketing Team 12 8 Cost Recovery Lead generation Asset & Property Mgt. Sales Inbound Team 70 Finance, IT, People & 7 Strategic & operational Lead conversion to viewing 113 Talent, Legal, ESG Execution &
Slide 57: UK platform: employees and functions
TOTAL NO. EMPLOYEES IN > 75 LOCATIONS 177 Marketing Team Sales Inbound Team 1 6 Lead generation Lead conversion to viewing Finance, IT, People & 37 Talent, Legal, ESG Execution & support Asset & Property Mgt. National Sales Team 40 93 Strategic & operational Viewing & conversion to deals
Slide 58: Vantage Point, UK
Dvantage Point,UK
Slide 59: Share register: owners by sector and geography
SHARES (m) % HOLDING OWNER BY SECTOR BlackRock 159.2 10.5% Mutual Funds 12% abrdn 116.3 7.7% 4% Pensions 3% 38% Retail Public Investment Corporation (PIC) 81.6 5.4% 8% Inv Trusts Vanguard Group 81.0 5.4% ETF 53.8 3.6% 16% Truffle Asset Management Insurance 20% 53.7 3.6% Other Columbia Threadneedle I
Slide 60: Forward-looking statements disclaimer
This presentation may contain forward-looking statements with respect to the financial condition, performance and position, strategy results of operations an businesses of Sirius Real Estate imite (“Sirius” . Such statements and forecasts involve risk and uncertainty because they are based on curren