Sirius Real Estate, the Guernsey-incorporated property group listed on the London and Johannesburg stock exchanges, has reported an 11.3% year-on-year increase in overall rent roll for the six months ended Sept. 30, 2026, driven by organic property management and acquisitions targeting European defense infrastructure.

The company reported 5.1% like-for-like rent roll growth, with Germany and the U.K. delivering broadly similar gains, according to a trading update published on Mondaay. Sirius also maintained more than €250 million ($280.1 million) of liquidity to pursue selective investment opportunities in both markets.

Germany posted higher occupancy and rental rates during the seasonally softer first half, helped by rent increases on renewals, new tenant demand and tighter control of tenant turnover. In the U.K., tenant enquiries and sales remained resilient as small and medium-sized businesses sought affordable workspace.

Acquisitions sharpen Germany focus

Sirius deployed about €150 million ($168 million) on acquisitions during the period, securing gross yields above 8% and directing most of the capital toward Germany. Management emphasized properties occupied by defense-related businesses, increasing exposure to industrial demand linked to Europe’s rearmament plans and higher military spending.

The acquisitions included business parks in Kiel and Fulda. The Kiel property houses Rheinmetall’s land vehicle electrical systems testing business, while the Fulda site is occupied by a major European manufacturer of ballistic protection products. The assets give Sirius exposure to industrial locations positioned to benefit from rising defense and infrastructure investment.

Germany plans to increase military spending from €54 billion (60.5 billion), or 1.5% of gross domestic product, in 2022 to €180 billion ($201.6 billion), or 3.5% of GDP, by 2030. The country has also established a €500 billion ($560.2 billion) 10-year infrastructure fund, supporting industrial demand.

Self-storage opens new runway

Sirius is expanding its German self-storage operations, acquiring land beside its existing Potsdam property near Berlin. Construction is also underway on its first standalone self-storage facility at Berlin Gartenfeld and a low-cost industrial storage concept at its Hanover property, creating new development options.

Those projects will turn vacant land that currently produces no income into potential sources of future revenue, reducing Sirius’ reliance on acquisitions alone. In the U.K., management plans to continue selling smaller, mature properties and redirecting proceeds toward larger assets where active management can unlock additional value.

Funding remains a key advantage

Sirius said its acquisition pipeline remains strong but that capital would be deployed selectively, with investments expected to meet its double-digit return targets. Management expects elevated U.K. energy costs to ease in early 2027, potentially improving the operating backdrop from fiscal 2028.

The group repaid a €400 million ($448.1 million) corporate bond at maturity in June and completed €185.1 million ($207.4 million) of taps across its 2028 and 2032 bonds. Each issue reached €500 million ($560.2 million) benchmark size, strengthening Sirius’ funding flexibility as it evaluates new investments.

Andrew Coombs, CEO of Sirius Real Estate, said the double-digit rent roll increase showed the resilience of the company’s operating model, with acquisitions complementing organic rental growth. Sirius has a net portfolio yield above 7% and a weighted average cost of debt of 3.5%, supporting its long-term investment strategy.

Sirius expands its property portfolio

Sirius is a property company listed on the equity shares (commercial companies) category of the London Stock Exchange and the premium segment of the main board of the JSE Limited. It is a leading owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany and the U.K.

As of March 31, 2026, Sirius owned 145 properties occupied by 10,477 tenants, with a portfolio book value of about €3 billion ($3.36 billion) and annualized rent roll of €258.6 million ($289.8 million). The company also owns a 35% stake in Titanium, a German-focused joint venture with BNP Paribas Asset Management Alts valued at more than €350 million ($392.2 million).