Sirius Real Estate (LON: SRE) – Resilience and Growth
Sirius Real Estate recently released a business update (April 12) for the year ended March 31, 2021, which confirmed the strong performance of the business. The company reported an occupancy rate of 87.0% (2020: 85.3%) and a cash collection of the remaining rent of 98.2%. Encouragingly, the company also reported that annualized rent increased 7.6% (5.2% like-for-like) despite COVID. This reflects the company’s flexible internal operating platform, which has enabled Sirius to respond quickly to changing occupant demands. Rental income growth is also used as a determinant for valuation increases and we expect this to be reflected in the year-end portfolio valuation, which will be released along with the annual results on June 7.
Sirius has been an outstanding player in the UK listed commercial real estate industry for the past three years, delivering a total shareholder return of 98%. In our detailed launch report “Big Yields, Strong Foundation – January 20, 2021” we provide a detailed analysis of some of the drivers and market for commercial real estate in Germany (100% of Sirius portfolio). This report is available on the Proactive website. Some key attributes of Sirius as an investment include:
- A constantly growing dividend, currently offering a return of 3.3%
- A solid balance sheet of capital gains on its real estate investments, driven by a real estate improvement strategy which continues to bear fruit
- Sufficient balance sheet resources to support continued growth
We argue that Sirius had a strong performance over the full year (Fiscal Year) of March 2021 and is well positioned for continued earnings and dividend growth in the years to come.