Sirius Real Estate (LON:SRE) – Resilience and growth

Sirius Real Estate recently released a trading update (April 12) for the year ended March 31, 2021, which confirmed the robust performance of the business. The company reported occupancy of 87.0% (2020: 85.3%) and cash collection of rent remaining strong at 98.2%. Encouragingly the company also reported the annualised rent roll grew by 7.6% (5.2% like-for-like) despite COVID. This reflects the company’s flexible internal operating platform, which has allowed Sirius to react quickly to changing occupier demands. Rental income growth is also used as a determinant for valuation uplifts and we expect this to be reflected in the year-end portfolio valuation, to be released alongside full-year results on June 7.

Sirius has been a stand-out performer within the UK listed commercial real estate sector over the last three years, delivering a total shareholder return of 98%. In our detailed initiation report “Great returns, solid foundations – Jan 20, 2021” we offer a detailed analysis of some of the drivers and the commercial property market in Germany (100% of Sirius’s portfolio). That report is available on the Proactive website. Some key attributes of Sirius as an investment include:

• A steadily growing dividend, currently offering a yield of 3.3%
• A strong record of capital gains on its property investments, driven by a property improvement strategy that continues to deliver results
• Sufficient balance sheet resources to sustain ongoing growth

We argue that Sirius has delivered a robust performance during the full-year (FY) March 2021 and is well-positioned for continued growth in earnings and dividends in the coming years.