Sirius Real Estate (LON:SRE) reported higher full-year funds from operations, rental income and dividends for the period ended March 31, 2026, as management said acquisitions and like-for-like rental roll growth offset macroeconomic pressure in the UK and Europe.
Group chief executive Andrew Coombs said the owner and operator of mixed-use light industrial parks achieved “another year of business as usual” despite “macroeconomic headwinds and political uncertainty”. Sirius operates over €3 billion of properties across more than 160 sites and almost 2,000 commercial buildings in Germany and the UK, holding 90% of the entire portfolio.
→ Salesforce Stock Finds Support as AI Momentum Gains
During the year, funds from operations increased 8.4% to €133.5 million, while FFO per share increased 4.5%. Rental income rose 11.4% to €239.8 million, and group finance director Chris Bowman said the company ended the year with rent “well above €250 million”, adding that “there is growth built into our portfolio for next year”.
The company declared a dividend in the second half of 0.0322 euros per share, which brings the total dividend for the year to 0.064 euros, 4.1% more than the previous year. Bowman said the increase marked the company’s 25th consecutive period of dividend growth.
Acquisitions drive rental growth
→ Apple’s agent AI plans could be its biggest growth yet
Sirius said the group’s like-for-like rent rose 6.4%, while total rent grew more than 11% as acquisitions contributed to the portfolio. Bowman said the company completed or notarized €513 million of acquisition activity during the period, generating €36 million of net operating income, only about half of which was reflected in the fiscal 2026 profit and loss statement.
“Basically, we’ve achieved growth coming from all that acquisition activity,” Bowman said. It added that the acquisitions were made with an average gross return of 8.2% and a net return of 7.6%, above the returns of the existing portfolio.
→ Gap Inc. cuts sales outlook after first-quarter flop, shares drop 17%
Investment properties increased by just over €500 million, reflecting approximately €400 million of completed acquisitions and a valuation increase of €110 million. Bowman said yields were “essentially stable” and the gain in valuation reflected management’s focus on boosting rental income. Profit before taxes increased by 5% to €211 million.
Corporate costs and overhead increased 3%, below the portfolio growth rate, which Bowman said demonstrated operating leverage. EBITDA increased by 11.6% to 158.3 million euros.
Financial expenses remained the company’s “biggest hurdle,” Bowman said, as Sirius moves from very low-cost debt to what he called “more normal levels.” It pointed to an incremental cost of debt of around 4%.
Germany overtakes UK amid weaker British demand
In Germany, annualized rent increased almost 18%, helped by acquisitions and comparable organic growth of 7.3%. Coombs said occupancy and rates were up, while new business sales volume was up 12% from a year ago. He warned, however, that the company “still had to work very hard” to keep entries, exits and expansions in balance.
German acquisitions highlighted by management included assets in Dresden, Geilenkirchen and Mönchengladbach, as well as defense-related properties in Feldkirchen, Kiel and Fulda.
In the UK, annualized rent rose almost 20%, although Coombs said the business was more reliant on acquisitions and working from a lower base than Germany. The UK comparable rental portfolio increased by 4.6% thanks to increases in rates and occupancy.
Coombs said the UK was the weaker of the two markets over the period, particularly in the fourth quarter of the last calendar year, when political uncertainty around the UK budget hit tenant demand. New business sales in the UK fell by 22,000 square meters year on year, but the company made up for this by managing attrition.
“The UK finished the financial year with strong momentum and I am pleased to report that momentum has continued into April and May,” Coombs said.
Self-storage and defense become broader strategic themes
Management reiterated its ambition to reach €150 million of FFO, which Coombs said should be less than a year from now, and then pursue a longer-term ambition of €175 million. It identified storage and defense-related properties as two key contributors to the next stage of growth.
Sirius currently operates its Smartspace self-storage product in over 30 locations in Germany, serving just over 4,000 customers, and four locations in the UK. Coombs said the company has started building its first self-storage store in Berlin and will soon begin converting a small number of sites in the United Kingdom into exclusive stores. He said Sirius can see a path to more than doubling storage revenues, which currently exceed €6 million.
During the Q&A session, Coombs said the self-storage offering is differentiated by its ability to serve commercial customers along a broader “storage journey,” from small boxes to larger containers and storage rooms. He said Sirius already owns land in locations where new residential developments are taking place, including Berlin-Gartenfeld and Chalcroft, which could support demand for additional storage.
On defence, Coombs said Sirius has acquired just over €200m of defense-related assets in the last 12 months with a gross return of almost 9%. The company’s ambition is to build a defense-related property portfolio of around €500 million before seeking third-party capital for a joint venture.
Coombs emphasized that defense would remain a minority part of the business. “Sirius will never be a predominantly defense-related real estate company,” he said, while adding that the opportunity in defense-related industrial property is greater than Sirius could capitalize on its own balance sheet alone.
Capital expenditure and balance sheet
Bowman said Sirius invested €48.8 million in capital expenditure during the year, about two-thirds in Germany and one-third in the UK. In Germany, the company continues to convert value-added assets into mature sites by renovating vacant spaces, reconfiguring units and improving profitability.
Over the past three years, Sirius has invested €29.2 million in value-added capital investments in Germany and achieved an average return on investment of 38%, according to Bowman. He said the company aims to renovate at least 100,000 square meters each year for the next three years and hopes to continue targeting returns of more than 30% on value-added spending.
Bowman also highlighted new construction projects, including three production halls in Gartenfeld that were fully leased immediately and achieved over-budget prices. Sirius targets internal rates of return of around 20% on selected new build opportunities.
At the end of the year, cash stood at €410 million, compared to €604 million allocated to capital assets. Coombs said the company had more than €700 million in undrawn credit lines and cash on its balance sheet. Bowman said a bond maturing in the short term had been effectively addressed through existing liquidity, and highlighted the company’s undrawn €300 million revolving credit facility as a source of flexibility for future refinancing.
Management also said it expects to continue recycling capital. Coombs said Sirius has typically recycled between €30 million and €50 million a year and expects to recycle more than that in the next 12 months, while avoiding pressure to sell fixed quantities. Bowman noted that the sale of Pfungstadt is expected to be completed during the summer for €30 million.
Looking ahead, Coombs said trading remained strong in both Germany and the United Kingdom during April and May, although he noted that the company is cautious about geopolitical developments, including developments in Iran. It said future growth should be supported by current operational momentum and the full-year contribution of more than €500 million from recently acquired properties.
About Sirius Real Estate (LON:SRE)
Sirius is a real estate company listed on the main market and premium segment of the London Stock Exchange and on the main board of the Johannesburg Stock Exchange. It is a leading operator of branded business parks offering conventional spaces and flexible workspaces in Germany. The Company’s primary strategy is the acquisition of business parks with attractive yields, the integration of these business parks into its network of sites under the Company’s own name, as well as offering a range of branded products within those sites, and the reconfiguration and improvement of existing and vacant space to appeal to the local market, through intensive asset and investment management.
This instant news alert was generated by narrative science technology and financial data from MarketBeat to provide readers with the fastest reporting and unbiased coverage. Send any questions or comments about this story to contact@marketbeat.com.
The article “Highlights from Sirius Real Estate’s Second Half Earnings Calls” was originally published by MarketBeat.
See MarketBeat’s top stocks for June 2026.
