Sirius Real Estate’s aggressive acquisition spree has begun to show results across its German and UK portfolios, with the group’s total income from rent up 15% in the six months ended September.
The group — listed in both London and Johannesburg — has leant into the economic recovery in Germany while navigating macroeconomic uncertainty in the UK.
It remained on track to meet full-year expectations, Sirius said in a trading update on Monday. “The combination of renewal-led growth, rising rates and selective deployment of capital is underpinning both performance and outlook, which is particularly encouraging given the seasonality of our first half, typically weaker due to move-outs and slower transactional activity.”
Acquisitions drive growth
According to the group, the 15.2% uplift in rent roll was partly driven by acquisitions completed since July 2024, which were specifically targeted to unlock longer-term value. Stripping out acquisitions, like-for-like rent roll increased by 5.2%, showing steady organic growth in a market where price, rather than volume, is doing the heavy lifting.
The acquisitions are not just about scale; they’re about opportunity.
— Sirius, n a trading update
In Germany, Sirius said the underlying rent roll grew above 5% year on year, underpinned by robust renewal activity and early signs of improved sentiment in the broader economy. The group expects stronger demand in the second half as economic confidence returns and the transactional market in industrial assets picks up steam.
Management anticipates that this rental growth will begin feeding into asset valuations in the months ahead, which was a factor in the group’s capital recycling and balance sheet strategy.
UK performance steady
In the UK, the group also recorded more than 5% like-for-like rent roll growth — a result it called “encouraging” given the economic backdrop. However, UK portfolio valuations remain under pressure, with Sirius guiding for flat valuation movements for the interim period.
The standout asset in the UK portfolio — Vantage Point in Gloucester — was excluded from the like-for-like numbers due to its unique profile.
Acquired in April 2024, the large-scale industrial park is undergoing an intensive turnaround plan after Sirius churned its anchor tenant and relet one-third of the space at higher rental rates. Refurbishment of the remaining vacancy is under way with the goal of materially lifting income over the next 12-18 months.
“If we included Vantage Point, like-for-like rent roll growth would be comfortably positive both in the UK and at group level,” Sirius said.
€300m expansion push
Sirius channelled nearly €300m (about R6bn) into acquisitions across Germany and the UK over the financial year, effectively exhausting the capital it raised in its oversubscribed July 2024 equity placement. The group believes the newly acquired assets are anchored by its dual-platform operational model out of London and Berlin.
Sirius also reported a strengthened balance sheet, with €400m in free cash reserves since September 30, supported by a €150m undrawn credit facility and a €105m bond tap. The group’s next major debt maturity is the €400m bond due in June 2026, which it expects to repay comfortably while continuing the acquisition programme.
“The acquisitions are not just about scale; they’re about opportunity,” the company said, pointing to initiatives under way to address service charge leakage and reconfigure layouts to meet tenant demand.
Looking ahead, Sirius expects the next wave of acquisitions to be heavily weighted towards Germany, where market conditions are showing signs of stabilising. The pipeline remains robust, it said.
“We’ve had a strong start to the year, deploying €300m into strategic acquisitions across Germany and the UK. The Hartlebury deal alone added 18% more space to our UK platform and is already accretive to income. These assets offer strong long-term value as we apply our proven asset management model,” said Sirius CEO Andrew Coombs.
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