Trading Statement

 

TIDMSRE TIDMPCX 
 
RNS Number : 9154G 
Sirius Real Estate Limited 
10 February 2010 
 

 
 
                           Sirius Real Estate Limited 
 
                                 Trading Update 
Sirius Real Estate Limited (the "Company" or "Sirius"), the real estate company 
established to acquire large mixed-use commercial sites for upgrading to 
flexible workspaces in Germany, today provides an update on the Company's latest 
position ahead of its results for the year ended 31 March 2010. 
 
The Company has experienced some large tenant move outs at two of its 38 sites 
since the last reported results as at September 2009. While new lettings 
enquiries have increased substantially, the Board anticipate these move outs 
will affect the Company's profits for the current financial year ending 31 March 
2010 and as a consequence the Company's trading performance could be 
significantly below current market expectations. 
 
These two sites are within the RBS loan facility and as a consequence the 
Company's interest cover ratio ("ICR") for this facility has declined since the 
last covenant test.  The impact of the tenant move outs is not only on rents but 
also on the associated irrecoverable service charge costs of these sites.  The 
ICR cover as tested in January remained above the covenanted level of 125% but 
fell below the 'cash trap' level of 130%.  The Company is currently in 
discussions with RBS as to whether the cash trap will be enforced. 
 
The Board is monitoring the situation closely and expect that the cash trap will 
have a limited impact on Sirius.  Should the interest cover within this facility 
fall further, the Company has surplus cash and uncharged properties to cure a 
potential covenant breach and therefore the Board is confident that it has 
flexibility to manage the Company's financial position. 
 
As stated previously the Company has a programme in place to significantly 
reduce its direct and non-recoverable costs which is progressing well and is 
expected to start taking effect in the next financial year.  It continues to 
experience a high level of new enquiries which reached a record 650 in January 
2010 and lettings of circa 10,000 sqm, with substantial further deals in 
negotiation. 
 
New Appointment 
The Board is also pleased to announce the appointment of Andrew Coombs as Chief 
Executive Officer of Sirius Facilities GmbH, the German operating business of 
the asset manager of Sirius.  Andrew has significant experience in the "flexible 
workspace" industry, most recently at MWB Business Exchange as Director and 
General Manager, and  as Sales Director at Regus.  He will be responsible for 
the day to day operations of the German property management.  This will allow 
Ingo Spangenberg to focus on new lettings and the key tenant renewals of the 
business. 
 
Kevin Oppenheim, Chief Executive Officer of Principle Capital Sirius Real Estate 
Asset Management Limited, said: "That these move outs occurred at a similar time 
is unfortunate and has had a magnified impact on the business. We are confident, 
given continuing demand from our core SME market, of re-letting the vacated 
space in due course. From a financial position, the Company has sufficient cash 
and uncharged properties to ensure we remain within our banking covenants. 
 
Looking further ahead, we expect to benefit from our cost savings initiatives 
and we are excited about the opportunities our significantly expanded pipeline 
of new lettings represents. I would also like to welcome Andrew Coombs who will 
play a key role in implementing our strategy in Germany." 
 
 
Enquiries: 
 
Principle Capital Sirius Real Estate Asset Management Limited 
Kevin Oppenheim, CEO    07973 821 008 
Alistair Marks, CFO 020 76324130 
 
J. P. Morgan Cazenove 
Robert Fowlds    020 7588 2828 
Bronson Albery 
 
Cardew Group 
Tim Robertson    020 7930 0777 
Catherine Maitland 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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