SIRIUS REAL ESTATE LIMITED - Proposed capital raise of c. 75m to execute on near term acquisition pipeline

Evidence from the filing

• The Company is executing a significant growth strategy by proposing a capital raise of approximately £75m to fund two attractive, near-term defence-related acquisition opportunities in Germany with an estimated total value of approximately €130m, indicating a strong M&A pipeline.

  “Sirius Real Estate Limited ("Sirius" or the "Company" and together with its subsidiaries, the "Group"), a leading owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany and the United Kingdom ("UK"), announces its intention to conduct a non-pre-emptive placing of new ordinary shares in the Company ("Ordinary Shares") to raise gross proceeds of approximately £75m, representing approximately 5% of the Company's issued share capital and a separate retail offer of approximately £2m (the "Capital Raise") to enable the Company to execute on two attractive acquisition opportunities in Germany with a particular focus on defence-related assets and tenants in the near term, with an estimated total value of approximately €130m (£113m).”

• The identified acquisitions are financially attractive, with a blended EPRA net initial yield of 7.6% from primarily production sites with stable, defence-related, and government-backed tenants, ensuring day one income and high occupancy.

  “The identified assets have a blended EPRA net initial yield of 7.6%. Both sites are primarily production sites with significant defence-related tenants. One would be a sale and long-term leaseback on a production site in south west Germany and the other a multi-tenanted site in northern Germany. The Company will make appropriate announcements once the assets have been notarised.”

• The capital raise and associated acquisitions are expected to be accretive to Funds From Operations (FFO) per share in the next financial year and contribute to the Group's increased mid-term ambition to grow FFO to €175m per annum, signalling strong financial upside.

  “The execution of the identified acquisition opportunities utilising the net proceeds of the Capital Raise (and associated leverage) will contribute to the Group achieving its recently increased mid-term ambition to grow funds from operations ("FFO") to €175m per annum, as well as being accretive to FFO per share in the next financial year.”

• The Group intends to maintain its progressive dividend policy and keep its net loan-to-value (LTV) below the targeted 40% level, demonstrating a commitment to shareholder returns and prudent financial management amidst an active growth phase.

  “The Company's net loan-to-value ("LTV") is expected to remain below the targeted 40% target level. The Group also intends to maintain the progressive dividend policy which has delivered over the last 12 years, with 24 consecutive half yearly dividend increases since its first dividend in 2014.”

• The strategic focus on German defence-related assets is well-timed to capitalise on Germany's estimated €1 trillion fiscal stimulus package for infrastructure and defence spending, which is anticipated to drive increased occupier demand for industrial space.

  “Furthermore, Germany's fiscal stimulus package enacted in 2025, estimated to be worth approximately €1 trillion and directed at infrastructure and defence spending, is expected to result in increased occupier demand for industrial space which, coupled with a noticeable uptick in transaction volumes, provide a further tailwind to the sector.”

• The non-pre-emptive capital raise of approximately £75m, representing around 5% of the Company's issued share capital, will lead to material dilution for existing shareholders who do not participate, impacting their proportionate ownership and share of future earnings.

  “announces its intention to conduct a non-pre-emptive placing of new ordinary shares in the Company ("Ordinary Shares") to raise gross proceeds of approximately £75m, representing approximately 5% of the Company's issued share capital”

• The acquisition pipeline will be funded by both the capital raise and "associated leverage", indicating an increase in the company's debt burden. While the net loan-to-value is expected to remain below 40%, any increase in leverage heightens financial risk, especially in a tightening credit environment or if new asset performance falters.

  “The net proceeds of the capital raise, together with associated leverage, is expected to be substantially deployed by the end of Q2 2026. The Company's net loan-to-value ("LTV") is expected to remain below the targeted 40% target level.”

• A stated "particular focus on defence-related assets and tenants" introduces a new and potentially volatile concentration risk. Reliance on government spending and geopolitical stability for a portion of the portfolio exposes the company to unpredictable shifts in policy, budgets, and conflicts, which could negatively impact asset values and occupier demand.

  “execute on two attractive acquisition opportunities in Germany with a particular focus on defence-related assets and tenants in the near term”

• The capital raise is being conducted to fund acquisitions that are still "subject to finalising due diligence" and only "expected to be notarised in the coming weeks". This creates a timing risk where capital is raised pre-emptively for deals that are not yet legally binding and could still face unforeseen challenges or changes during the final due diligence phase.

  “The Company is currently in exclusivity and which are expected to be notarised in the coming weeks and completed in Q2 2026, subject to finalising due diligence.”

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