Sirius Real Estate (LSE:SRE) reported 11.3% growth in overall rent roll for the six months ended 30 September, driven by a combination of acquisitions and organic expansion.
The company, which owns and operates branded business and industrial parks offering conventional and flexible workspace across Germany and the UK, said like-for-like rent roll rose 5.1% year-on-year, with Germany and the UK delivering broadly similar organic growth rates.
Acquisitive growth was concentrated in Germany, where the company deployed approximately €150m into asset acquisitions during the period at gross yields of more than 8%. The purchases included business parks in Kiel and Fulda, home respectively to Rheinmetall's land vehicle electrical systems testing business and a leading European ballistic protection manufacturer.
Sirius said the deals extend its exposure to defence-related occupiers, which it called "a conviction sector" given rearmament programmes across Europe, citing Germany's plan to raise military spending from €54bn in 2022 to €180bn in 2030, alongside a €500bn ten-year infrastructure fund.
The Fulda park, acquired for total costs of €49.8m with a 7.8% EPRA net initial yield, is anchored by a tenant supplying the German Armed Forces' MOBAST programme, in occupation since 2014.
In the UK, Sirius continued portfolio rationalisation, disposing of two smaller sites in the Sheffield area, part of a stated strategy to recycle capital from smaller, mature assets into larger ones with greater value-add potential.
The group also acquired land adjacent to its existing Potsdam self-storage site near Berlin and is developing a standalone self-storage store at Berlin Gartenfeld alongside a low-cost industrial storage concept at its Hanover site.
Sirius confirmed it repaid its €400m corporate bond at maturity in June, following the completion of €185.1m of taps on its 2028 and 2032 corporate bonds, which took each series to €500m benchmark size.
The group said it retains more than €250m of liquidity to support future growth, with a net portfolio yield of over 7% against a weighted average cost of debt of 3.5%.
"Sirius has delivered a strong period of double-digit rent roll growth, nearly half of which has been organic, adding to the Group's exceptional long-term track record of delivering growing returns for shareholders at rates consistently and materially ahead of GDP and inflation," said chief executive Andrew Coombs.
Sirius said it expects the base effects of high UK energy prices to pass through in early 2027 and anticipates a more benign environment for its UK business heading into its 2028 financial year, barring further geopolitical shocks.
The company will report half-year results for the six months ended 30 September on 16 November.