Sirius Real Estate Ld Share Discussion Threads

[badtime] 22/8/2019 18:11

Nicely done

[topvest] 21/8/2019 12:25

This has hit my target price after holding for 10 years and doubling my money (before dividends). With Germany going into recession shortly thought it was an obvious exit. Share price will probably go higher in the short term! Good luck to those that remain. May buy back again one day.

[hpcg] 21/8/2019 10:53

Well a Euro based investor could always plump for a 30 year 0 coupon instead.

[hsduk101] 20/8/2019 17:00

Wow massive buy today 200k + of shares bought. Someones really interested in this one

[davebowler] 25/6/2019 14:06

Just posted this on PSDL

Miton Global Opportunities plc

Berlin – a microcosm for political polarity

June 2019


Berlin Residential Property has long been a theme in our portfolio however the developments of the past few weeks in the city have taken many by surprise. Anti-landlord rhetoric has been building for some time as rents have risen dramatically in the city but from an extraordinarily low base. Even today rents remain lower than any other major German city except Leipzig and are substantially lower than those in Munich. Despite this, there are many Berliner’s who yearn for the halcyon days of the 1990’s where rents were practically zero and there were a limited number of people moving to the city. They have been putting increasing pressure on the Berlin’s very left-wing coalition to step in. This culminated in June when it was announced that the local government were going to freeze rents for five years. Rent control would be a Federal, rather than Berlin, decision and the rest of Germany is unlikely to have much sympathy, nevertheless, the proposal will end up in the constitutional court and that will be a slow process leaving uncertainty to overshadow the market. Furthermore, it will not solve Berlin’s major issue; a housing shortage. As rents currently stand it is not economical to build new so there is very little supply coming on line whereas rising demand in the city is unlikely to abate. With rents capped this will not reverse, further exacerbating the problem. A good parallel would be Stockholm where similar regulation is already in place. As a result, there are very few properties on the rental market and any potential renters are compelled to buy. This increased the price of a property by three times and the wait for a rental apartment is now between nine and twenty years. We are hoping cool heads prevail in Berlin and they will not make a similar mistake as a continuation of such policies would result in a housing crisis. We believe that Phoenix Spree Deutschland (PSDL) remains a good investment and the de-rating of the shares are overdone. Rent roll is the key factor within their valuation methodology and although a rent freeze would not allow the trust to exploit the reversionary potential in the portfolio, it does mean the NAV is unlikely to fall. We predict that with the difficulties in the rental market, PSDL is likely to shift their business model into splitting up and selling off their assets into the private market. They have permissions to do this for around 60% of the portfolio which is likely to trigger a significant uplift. On the other hand, the other part of the portfolio is now very much stuck under the dead hand of regulation and we think it will be difficult to get permissions to convert the rest but management could develop their model from long-term leases to shorter, furnished leases, an area not subject to the same level of regulation. It would be reasonable to assume that given uncertainty combined with the adoption of an unproven model, that the market will place PSDL on a discount especially as uncertainty is more damaging to share prices than confirmed bad news which can then be priced in. Nevertheless, it should be remembered that PSDL shares had been de-rating for 18 months and that the trust owns scarce assets. This episode highlights that increasingly investors will have to face political uncertainty as the face of the politics in many areas of the world undergoes a dramatic shift. Populism has gradually been on the rise and established political parties are under increasing pressure from insurgent parties on both the extreme right and left. Many political certainties now lie in the past.

Regards,

Nick Greenwood Portfolio Manager

[blackpoolsteve] 22/6/2019 10:09

.....yes,ageed; but thats why SRE trades at a premium to NAV.
I first bought it for less than 30p in 2014-15,when it was traded on AIM,before its CAPEX work kicked in, and appeared to be in a similar position to PSDL now ?

[hpcg] 22/6/2019 09:28

How can SRE suffer from the residential rent freeze in Berlin? It has 4 business parks there.

[hpcg] 21/6/2019 12:41

Summit is almost impossible to buy in a nominee account it seems. None of my providers carry it. None of my spread bet providers carry it for that matter. I presume it is mostly held in Johburg?

PSDL is down on the Berlin rent freeze proposition and then ruling, nothing to do with Woodford. One has to have more skills than I to know if the discount is fair or not.

[blackpoolsteve] 19/6/2019 19:13

Also Phoenix (PSDL)coming into buying areas, as now on huge discount to NAV. Tarred with the Woodford brush,who sold out in late April.

I'll see if the price stabalises as THE AGM is due soon,and they look better value than SRE now

[davebowler] 19/6/2019 15:49

Just pointing out the disparity in the two discounts to NAV on SRE and SMTP.

''Summit's discount to NAV is 30 percentage points wider than the average for peers (Alstria, TLG Immobilien, Aroundtown SA, Dream Global Office REIT and SIRIUS REAL ESTATE)''

[hsduk101] 19/6/2019 15:47

Is this good news for Sirius? Looking at the share price, its had a slight downward turn

[davebowler] 19/6/2019 11:15

Liberum;
Event

Summit Properties has agreed the sale of a German office building for €225m representing a 7.9% premium to the book value at December 2018.

The property had a passing rent of €4.6m, reflecting a gross passing yield of 2.1%.

Liberum view

The office property was one Summit's largest, accounting for 14% of the overall portfolio value. We calculate the sale will add 3.6 cents or 1.8% to NAV. We believe the property that was sold is the Osramhöfe office asset in Berlin. The property has experienced material valuation uplifts in recent years due to rental growth potential. The property offered considerable remaining upside but would require quite a high level of capex in order to drive further growth. The sale enables the company to crystallise gains and recycle the capital into higher yielding assets. The disposal demonstrates the depth of investment demand for German office properties and the quality of the assets in the portfolio.

Summit's discount to NAV is 30 percentage points wider than the average for peers (Alstria, TLG Immobilien, Aroundtown SA, Dream Global Office REIT and SIRIUS REAL ESTATE). We believe this is highly attractive given the quality of the portfolio and the sustainability of double-digit NAV returns over the medium-term driven by stable recurring income, asset management potential (reversionary upside, low capital values) and positive market fundamentals.

[hsduk101] 11/6/2019 16:19

Steady riser this one. (Not ramping this) On current chart form this could hit 72 by the end of the year. A solid 10% gain

[topvest] 05/6/2019 20:05

£100m valuation gain included within those results though.

[hsduk101] 05/6/2019 12:24

Just noticed something on this. The Market cap sits at 654m whilst the business now generates 100m+ profit. This puts its favourably in the category of a potential investment or takeover

[hsduk101] 03/6/2019 16:21

Good results on this. Profit up 60%+

They have some good decision makers there, who quickly sell of under performing assets. I can see this one doing well.

[nimbo1] 03/6/2019 10:04

Yes I hold this alongside regional reit - they are doing the same thing in different countries and the returns on offer look good relative to a lot of other areas of the market imo.

[hpcg] 03/6/2019 09:31

Absolutely cracking results. Dividend up but down as a proportion of FFO. Excellent rotation of assets. Loan to value well down, completely safe one would think. World economy looks iffy so might not be so easy for the next few years but will almost certainly beat cash on an absolute return basis IMO.

[davebowler] 03/6/2019 09:03

Liberum;
22% NAV TR in FY2019

Mkt Cap £652m | Prem/(disc) -3.6% | Div yield 4.5%

Event

Sirius Real Estate's EPRA NAV at 31 March 2019 was €0.7482 per share which represents a 21.6% NAV total return in the year.

The NAV performance was driven by a 13.3% like-for-like revaluation gain over the 12-month period. The valuation uplift is due to a combination of yield shift (38 bps of yield compression) and organic rental growth. The gross yield of the portfolio is still relatively high at 7.8%. Performance in the year also benefited from the formation of a JV with AXA in February through the sale of 65% of its holdings in five mature assets. The sale price of €168m for the five assets implies a 6.2% gross yield and a 19.1% premium book value.

Organic rental growth was also a key driver of the valuation uplift. Annualised rental income rose by 7.1% on a like-for-like basis over the period despite a number of large move-outs. Like-for-like occupancy increased from 83.7% to 85.8%.

Adjusted EPS rose 16% in the year to 4.58 cents per share. The dividend has increased 6.3% in FY2019 to 3.36 cents per share. As expected, the payout ratio reduced from 75% to 70% in the year. The company expects to revert to a 65% payout ratio over the longer term.

The valuation gain has helped to reduce the net LTV ratio to 32.4% (target of 40%).

Liberum view

Sirius has generated a NAV total return in excess of 15% for four consecutive years. Today's results demonstrate continued strong performance with operational gains in addition to an uplift from yield compression. The company's capex investment programme is delivering significant gains and there is considerable scope to increase this across the portfolio. Approximately half of the vacant space in the portfolio is going through the capex investment programme.

The occupational market has improved over the past three years which has enabled the company to generate a material increase in both portfolio occupancy and the average rate per sqm over that period. The price achieved for the asset sales to the JV demonstrates the level of investment demand for commercial assets in Germany. Sirius remains well-placed to maintain its strong NAV performance with rising rental growth in addition to potential yield compression.

[davebowler] 30/5/2019 09:16

''Summit's discount to NAV is over 30 percentage points wider than the average for peers (Alstria, TLG Immobilien, Aroundtown SA, Dream Global Office REIT and Sirius Real Estate).''






Liberum;
Summit Properties

Earnings on track for 20%+ uplift in 2019

Mkt Cap £506m | Prem/(disc) -34.6% | Div yield n/a

Event

Summit Properties' NAV at 31 March 2019 was €1.92 per per share, representing a 1.7% return for the period. The return was driven by recurring earnings as there was a marginal revaluation loss of €1.2m in the quarter (we believe this relates to capex spend in the period).

Rental income received in the quarter of €20.3m was 28% ahead of Q1 2018. Funds from operations (FFO) have increased by 42.6% to €14.4m (Q1 2018: €10.1m) including €1.6m from residential development profits. This is in line with previous guidance of €51-56m of FFO for 2019.

Liberum view

Summit Properties' trading update for Q1 2019 has confirmed the company is on track to deliver a significant earnings uplift in FY2019. We calculate recurring earnings of 8.5 cents per share in FY2018 after stripping out residential development profits. The run-rate implied by Q1 2019 suggests Summit will increase recurring earnings by c.24% to 10.5 cents in 2019 (excluding residential development profits).

Market conditions in the German commercial real estate market remain favourable despite lower projected GDP growth. The export-orientated manufacturing sector has driven the slowdown in growth expectations. The services sector accounts for over 70% of GDP and employment and the performance of the services sector has remained resilient. Rising office-based employment continues to drive demand for space. Over the last decade, the number of office workers in the top 7 cities has risen by almost 25%, compared to an increase of just 6% for office space. The high level of demand, in combination with a lack of supply, has driven the average vacancy rate down to 3.5%.The majority of new supply in 2019 and 2020 has already been pre-let.


Summit's discount to NAV is over 30 percentage points wider than the average for peers (Alstria, TLG Immobilien, Aroundtown SA, Dream Global Office REIT and Sirius Real Estate). We believe this is highly attractive given the quality of the portfolio and the sustainability of double-digit NAV returns over the medium-term driven by stable recurring income, asset management potential (reversionary upside, low capital values) and positive market fundamentals.

[tomps2] 03/5/2019 08:15

Interesting investor presentation on the German commercial real estate market, in which SRE invests, by the CEO Andrew Coombs. Given at the May ShareSoc London event.

hxxps://www.piworld.co.uk/2019/04/24/sirius-real-estate-sre-investor-presentation-at-sharesoc-10th-april-2019/

[davebowler] 24/4/2019 10:47

Similar SMTP is at 35% discount to NAV
Liberum
Strong returns, further growth to come

Mkt Cap £460m | Prem/(disc) -38.6% | Div yield n/a

Event

Summit Properties’ 2018 results have confirmed a period of strong performance for the company. NAV per share rose by 53.8% in the year to €1.894 (December 2017: €1.231). NAV total return for the year was 56.3%, maintaining the company’s strong performance since IPO in 2013.

The principal reason for the large NAV uplift was a €297m revaluation gain over the period. We estimate a like-for-like portfolio revaluation gain of c.25% in the period as a result of yield shift and asset management activities. Operationally, the portfolio continues to perform well with a further reduction in EPRA vacancy to 7.3%. The average portfolio rent per sqm rose by 8.7% in 2018.


Cash generation from the portfolio is high with funds from operations of €44.3m in 2018, representing a 21.4% increase over the prior year. FFO per share was 9.5 cents and we calculate recurring EPS of 8.5 cents (24% increase) after stripping out gains from apartment disposals. Summit has completed over €200m of acquisitions since June (average yield of c.6.6%). We estimate these acquisitions could increase annual recurring earnings by c.20%.

Market conditions in the German commercial real estate market remain very favourable. Rising office-based employment is leading to increased demand for space. Over the last decade, the number of office workers in the top 7 cities has risen by almost 25%, compared to an increase of just 6% for office space. The high level of demand, in combination with a lack of supply, has driven the average vacancy rate down to 3.6%. The majority of new supply in 2019 and 2020 has already been pre-let. Investment demand for German commercial property remains high, aided by a supportive financing environment. Transaction volumes have exceeded €50bn for each of the past four years, and achieved a record €60bn in 2018 according to Savills data. Market forecasts indicate volumes will again exceed €50bn in 2019.


Liberum view

We note the confident outlook from the company regarding the potential for future growth. Rental growth is likely to continue due to a combination of ongoing asset management and positive market fundamentals, suggesting further increases in market rents. Even if there was no growth in market rents, there is still plenty of upside to aim for within the existing portfolio. The portfolio ERV is 28% above the current annualised rent roll.

Summit’s -38.6% discount to the December 2018 NAV is 36 percentage points wider than the -2.7% average for peers (Alstria, TLG Immobilien, Aroundtown SA, Dream Global Office REIT and Sirius Real Estate). This is despite Summit’s significantly stronger NAV performance since IPO in 2014. In our view, the outlook for sustainable double-digit NAV returns remains robust given the stable recurring income, asset management potential (reversionary upside, low capital values) and positive market fundamentals.
Submit

[sharesoc] 22/4/2019 14:39

The Sirius Real Estate company presentation from our London seminar on the 10th April is now available in our members area here:

[petewy] 08/4/2019 20:59

Sirius Real Estate (LON:SRE) had its price lifted by Berenberg Bank from 72p to 75p.

Threepence? Is that it?