Final Results, 7 Jun 2021 07:00

07 June 2021, 07:00

Source - LSE Regulatory

RNS Number : 9508A

Sirius Real Estate Limited

07 June 2021

7 June 2021

Sirius Real Estate Limited

("Sirius Real Estate", "Sirius" or the "Company")

Results for the year ended 31 March 2021

STRONG PROFITS AS ASSET MANAGEMENT CONTINUES TO DRIVE RENTAL AND VALUATION GROWTH

Sirius Real Estate (LSE/JSE: SRE), the leading operator of branded business and industrial parks providing conventional space and flexible workspace in Germany, today announces condensed consolidated financial results for the twelve months ended 31 March 2021.

Commenting on the results Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: "Against the challenging backdrop of the pandemic, Sirius has delivered a set of strong results providing a clear demonstration of our ability to utilise our operating platform in all market conditions to increase income and capital values. Our diverse €1.3 billion portfolio of business and industrial parks located in and around Germany's main cities offers a flexible range of uses that continue to be attractive to our broad occupier base which comprises both large domestic and international businesses, as well as the SMEs that are the engine room of the German economy. This is evidenced clearly by the rental increases we achieved this year, which have contributed to the strong growth in profitability and FFO we have reported today."

"Despite the continued degree of market uncertainty as a result of the pandemic, more confidence is breathed into the market every day as the vaccine is rolled out successfully in Germany and across Europe. We have ended the year with a strong balance sheet which will allow us to take advantage of acquisition opportunities as they arise and continue to grow income and capital values through selective investment."

Operating platform driving rental growth, FFO and dividend

• Profit before tax of €163.7 million, representing a 47.7% year-on-year increase (2020: €110.8 million), including €103.9 million of gains from property revaluations (2020: €59.7 million)*

• Total shareholder accounting return of 19.5% (2020: 13.1%) generated from a 15.0% increase in adjusted net asset value and 3.62c dividends paid in the year (2020: 3.50c)

• Annualised rent roll increased 7.6% to €97.2 million (2020: €90.3 million) as a result of organic growth and net effect of acquisitions and disposals

• 5.2% increase in like-for-like annualised rent roll reflecting the seventh consecutive year of like-for-like rent roll growth exceeding 5.0%

• 9.3% increase in funds from operations ("FFO") to €60.9 million (2020: €55.7 million)

• 10.0% increase in second half dividend per share to 1.98c, leading to a 6.4% increase in the full year dividend to 3.80c (2020: 3.57c) based on 65% of FFO in line with Sirius's stated dividend policy

Organic growth, robust trading and cash collection

• Like-for-like average rental rates increased 3.5% to €6.17 per sqm with the total average portfolio rate growing 3.2% to €6.17 (2020: €5.96 and €5.98 per sqm, respectively)

• Occupancy up to 87.0% (2020: 85.3%), with like-for-like occupancy increasing to 86.9% (2020: 85.2%), providing further scope to grow income through asset management initiatives

• 18.5% increase in enquiries and 13% sales conversion rate in the period, driven by the Company's specialist sales and marketing platform

• Strong cash collection rate of 98.2% for the twelve-month period to 31 March 2021, reflecting Sirius' tenant diversification and resilience of its portfolio

• Awarded AA MSCI ESG Rating in October 2020 (previous A status) in recognition of sustainability focus

Strong balance sheet

• 11.5% or €135.7 million increase in like-for-like investment property book value to €1.31 billion (2020: €1.18 billion) led by asset management initiatives, €4.8 million rent roll growth and yield compression of 42 bps

• Gross yield of the portfolio of 7.2% (2020: 7.6%) with 59% of the portfolio representing value add assets at a gross yield of 7.6% and the remaining 41% representing mature assets at a gross yield of 6.6%

• NAV per share increased by 14.2% to 88.31c (2020: 77.35c) with adjusted NAV increasing by 15.0% to 93.79c (2020: 81.54c) and EPRA NTA per share increasing by 14.7% to 92.29c (2020: 80.44c)

• Total cash balance of €65.7 million at year end, of which €49.3 million is unrestricted

• Net LTV of 31.4% as at 31 March 2021 (2020: 32.8%), comfortably within our stated maximum of 40%

• Sirius did not apply for or receive any state financial assistance in connection with the Covid-19 crisis or otherwise

Return to acquisitive growth in the second half with €125.8 million of acquisitions

• Five on balance sheet asset acquisitions completed or notarised during the year for €45.9 million, providing a mix of stable income and value add opportunity

• €79.9 million acquisition in Augsburg notarised in the period as part of the Titanium venture with AXA IM Alts

• One €10.1 million asset disposal completed that was notarised for sale in the prior year

* excluding movements relating to leased investment properties in accordance with IFRS 16

CONFERENCE CALL

Webcast Conference

There will be an audio webcast presentation for analysts at 09.00am BST/ 10.00am SAST today, hosted by Andrew Coombs, Chief Executive Officer of Sirius Real Estate.

If you would like to join the webcast please use the registration link below:

https://webcasting.brrmedia.co.uk/broadcast/60a29a498d9817323e2fcac8

For further information:

Sirius Real Estate

Andrew Coombs, CEO

Alistair Marks, CFO

+49 (0) 30 285010110

FTI Consulting (Financial PR)

Richard Sunderland / Claire Turvey / James McEwan / Talia Jessener

+44 (0) 20 3727 1000

SiriusRealEstate@fticonsulting.com

NOTES TO EDITORS

About Sirius Real Estate

Sirius is a property company listed on the main market and premium segment of the London Stock Exchange and the main board of the JSE Limited. It is a leading operator of branded business parks providing conventional space and flexible workspace in Germany. The Company's purpose is to create and manage optimal workspaces that empower small and medium-sized businesses to grow, evolve and thrive. Sirius seeks to unlock the potential of its people, its properties, and the communities in which it operates, so that together we can create sustainable impact, and long-term financial and social value.

The Company's core strategy is the acquisition of business parks at 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 upgrade of existing and vacant space to appeal to the local market, through intensive asset management and investment. The Company's strategy aims to deliver attractive returns for shareholders by increasing rental income and improving cost recoveries and capital values, as well as by enhancing those returns through financing its assets on favourable terms. Once sites are mature and net income and values have been optimised, the Company may take the opportunity to refinance the sites to release capital for investment in new sites or consider the disposal of sites in order to recycle equity into assets which present greater opportunity for the asset management skills of the Company's team.

Sirius also has a venture with clients represented by AXA IM Alts. Titanium was formed through the acquisition by AXA IM Alts, on behalf of its clients, from Sirius, of a 65% stake in five business parks across Germany. Sirius retained the remaining 35%. The venture seeks to grow primarily through the acquisition of larger stabilised business park assets and portfolios of assets with strong tenant profiles and occupancy. As well as its equity interest, Sirius acts as operator of the assets in the venture, on a fee basis. Sirius will continue to grow its wholly owned portfolio through acquisitions of more opportunistic assets, where it can capitalise on its asset management expertise to maximise utilisation of the space, grow occupancy and improve quality of the tenants. The strategies have been clearly defined so that the venture does not conflict with Sirius's existing business.

For more information, please visit: www.sirius-real-estate.com

LEI: 213800NURUF5W8QSK566

JSE Sponsor: PSG Capital

Sirius Real Estate Limited

Chairman's statement

Delivery of growth in pandemic, commitment to sustainability

In Summary

• Period of operational and strategic success for the business against a backdrop of unprecedented disruption and challenges.

• Operating in a sustainable way and creating long-term social and financial value are at the heart of Sirius' purpose.

• We recognise the property sector has an important role to play in addressing environmental challenges, particularly those related to climate change.

"Operating in a sustainable way and creating long-term social and financial value are at the heart of Sirius' purpose."

Overview

This is my third Annual Report as Chairman and I am delighted to be able to record another period of operational and strategic success for the business against a backdrop of unprecedented disruption and challenges.

Sirius performed well throughout the pandemic. Significant efforts from management and employees ensured continuity of service to tenants and high levels of cash collection whilst continuing to execute on our strategy. I would like to express my gratitude to our employees and tenants who have demonstrated such resilience in difficult circumstances.

As we enter a new financial year and look towards a more normal operating environment, Sirius is well placed to keep delivering on our growth strategy. We will continue to help our tenants drive Germany's economy and to deliver attractive and sustainable returns for shareholders.

Executing the strategy

Our core strategy continues to focus on the acquisition of business parks in Germany which have either attractive yields, value-add potential or both. Sirius transforms these business parks into higher-quality assets through investment and intensive asset management. When sites are mature and net income and values have been optimised, Sirius may refinance the sites to release capital for investment in new sites or consider the disposal of sites in order to recycle equity into assets which present greater opportunity to deploy the asset management capabilities of the Company's internal operating platform. The capex investment programmes upgrade and transform space that would often be considered as structurally void and, in doing so, aim to deliver excellent returns by growing income and capital values.

The primary focus remains on Germany's seven largest cities: Berlin, Hamburg, Düsseldorf, Cologne, Frankfurt, Stuttgart and Munich, with a secondary focus on a selection of key border towns such as Aachen, Saarbrücken and Freiburg. Sirius seeks mixed-use properties, primarily light industrial units, business parks or office buildings outside city centres or on the edge of towns where there is a high density of commercial and industrial activity and good transport links. The Company has approximately 5,600 tenants across the 60 properties that it owns and approximately a further 500 tenants in the 6 business parks owned by Titanium, a venture with AXA IM Alts where Sirius holds a 35% equity share and which are managed by Sirius.

Shareholder returns

The Company's stated policy is to pay out 65% of the Group's funds from operations ("FFO") to shareholders as dividends although, as has happened previously, the Board will consider higher pay-out ratios in order to maintain the positive dividend growth that would have been achieved had it not been for particular phases of the asset recycling or equity raising activities. Consequently, the Board has authorised a dividend in respect of the second half of the financial year ended 31 March 2021 of 1.98c per share representing 65% of FFO, an increase of 10.0% on the 1.80c dividend for the equivalent dividend last year. The total dividend for the year is 3.80c compared to 3.57c for the year ended 31 March 2020. The Group has not received any state financial assistance in connection with the Covid-19 crisis.

The Sirius business model continues to deliver not only progressive income returns but also attractive capital growth as measured by adjusted net asset value ("adjusted NAV") per share. Combining the growth in adjusted NAV and taking into account dividends paid in the period, the Company has delivered a record total shareholder accounting return of 19.5% for the year to 31 March 2021. While dividend distributions have typically contributed approximately 30% and adjusted NAV growth 70% of returns, it is pleasing to note that the valuation movement of our investment properties continues to be derived predominantly from organic increases in income rather than yield movement. This focus on growing income at property level is a core strategy and positions the Company well for the future.

Sustainability

Operating in a sustainable way and creating long-term social and financial value are at the heart of Sirius' purpose. Both the Board and Senior Management Team know that to achieve this we need to unlock the potential of our people, our properties and the communities in which we operate and engage closely with our tenants. We know that long-term economic success complements having a positive impact socially, environmentally and ethically. With this in mind, we were delighted to promote Kremena Wissel to the newly created executive role of Chief Marketing and Impact Officer to spearhead our efforts to embed our ESG responsibilities across our business.

As a real estate company with a large physical footprint, we recognise the property sector has an important role to play in addressing environmental challenges, particularly those related to climate change. I have been pleased to see that our progress has been recognised by MSCI, which upgraded the business' ESG rating from A to AA in November 2020. We know we have more to do having recently completed an ESG materiality assessment exercise. The results of this exercise will direct our efforts in the new financial year as we further develop our sustainability framework and chart our future direction and focus. As part of this, we are also in the process of implementing the Task Force on Climate-Related Financial Disclosures ("TCFD") recommendations, which will further integrate environmental considerations into our strategic planning. This also extends to our resource footprint and we are pleased that we supply 100% certified green energy to over 99% of our portfolio. This is the first year that we have published our Scope 1, 2 and 3 emissions, which can be found later in this report. Fundamentally, our business is built on the recycling of working spaces. By refurbishing and revitalising older buildings to fit modern needs, we can play a role in generating fewer emissions. In the new financial year, we will begin planning our carbon emissions reduction strategy and we look forward to sharing this with shareholders.

Coupled with our commitment to sustainable spaces, I am also proud that the Company truly puts people at the heart of its operations. Our employees have been exceptional throughout this extraordinary year and I believe this is as a result of their dedication to the business, the culture that we have built over the years and the support structure that the Senior Management Team has put in place. I would also like to make a particular mention of our tenants. We have always said that Sirius epitomises what can be achieved when people meet property. I have been impressed with the continual interaction and mutual support that existed between our people and our tenants throughout the year.

Governance and culture

On 1 June 2020, we welcomed Caroline Britton and Kelly Cleveland to the Board as independent Non-Executive Directors. Caroline and Kelly have brought a wealth of real estate and financial experience to the Sirius Board and have provided valuable contributions throughout the year. Further information relating to these Board changes is provided in the Corporate governance report on page 53 and in the Nomination Committee report on page 70.

The Board is fully committed to compliance with the UK Corporate Governance Code (the "2018 Code") as published in July 2018 by the Financial Reporting Council. Under a dispensation issued by the Johannesburg Stock Exchange, the Company is not required to apply the King IV Code on Governance™ for South Africa 2016. A detailed description of our governance and leadership arrangements and how we have complied with the principles and provisions of the 2018 Code is provided in the Corporate Governance report on page 54. This includes an explanation of the link between the Board's decision-making and the Group's purpose and strategy. It also details how stakeholder interests and the other matters set out in Section 172 of the UK Companies Act 2006 have been considered in the Board's discussions and decision making.

Information on the Group's culture can be found on page 55 of the Corporate governance report.

Outlook

On behalf of the Board I would like to thank all those connected with Sirius for their hard work which has allowed the Company to record another fantastic year, with the business weathering the challenges of the pandemic and emerging stronger than ever. The tremendous efforts of the leadership team in managing the business during unprecedented times have been truly remarkable. As we enter the next period, Sirius is in a strong position to execute on our ambitious growth strategy and to continue to leverage our resilient business model.

Daniel Kitchen

Chairman

4 June 2021

Asset management review

Active asset management

Introduction

Sirius owns and manages business parks and industrial estates in and around the top seven cities in Germany. By utilising the asset management expertise of its internal operating platform it aims to increase occupancy, net operating income and capital values. The Company currently owns a total of 60 mixed-use industrial, warehouse and office properties whilst managing an additional eight (six of which it holds a 35% interest in through the Titanium venture with AXA IM Alts). The Company provides over 1.5 million sqm of lettable production, storage and office space, most of which is offered on a conventional basis with approximately 6% of space converted into Sirius' unique and highly effective Smartspace products which are offered on a more flexible basis with a range of services. Smartspace products include serviced offices, self-storage and workboxes and are usually created from excess office space, basements and redundant halls which most of Sirius' competitors would leave as structural vacancy. Key to providing such a wide range of options to its tenants is the Company's internal operating platform and sophisticated online marketing and IT infrastructure which it has developed over the last 14 years.

Sirius has approximately 5,600 tenants, 40% of the annualised rent roll is attributable to the Company's top 50 tenants which are generally large multi-national businesses and 53% to around 2,800 SME tenants who form the backbone of the German economy. The Company derives the remaining 7% of its annualised rent roll from the 2,750 micro-SMEs and individual tenants which rent space through the Company's Smartspace range of products where they benefit from cost certainty and maximum flexibility. A total of 7.9% of the Company's annualised rent roll relates to entities affiliated with the German government.

The Company's ability to provide a mix of conventional and flexible space significantly enhances the returns and sustainability of income that can be generated from German light industrial and office assets. This has been proven by the Company's track record of being able to deliver significant organic increases in net income in all market conditions in Germany over the last 14 years.

€97.2m

total annualised rent roll*

€6.17 per sqm

average rate

98.2%

cash collection rate

€45.9m

of new on balance sheet acquisitions completed or notarised in the period

* Annualised rent roll €96.5 million when excluding the large expected move-out in the first half of the March 2022 financial year relating to the Fellbach II acquisition which completed in March 2021.

Financial year overview

Sirius has successfully navigated through a year of unprecedented challenges relating to the Covid-19 pandemic. Like-for-like annualised rent roll growth has continued in line with prior years, rent collections have been affected only marginally and acquisitions have continued after a short pause in the first half of the year and profits and asset values have grown both organically and acquisitively. The Company's Senior Management Team has long considered the Sirius business model to be one with strong adaptive qualities which can deliver in both strong and weak economic environments. Against the backdrop of the pandemic the Company's performance provides clear evidence of its resilience and continued growth potential.

Lettings and rental growth

The Company recorded a like-for-like increase in annualised rent roll of 5.2% to €94.3 million (31 March 2020: €89.6 million) despite the impact of large, expected move-outs in recently acquired sites that occurred in the first half of the year and the impact of Covid-19. This is now the seventh successive year that Sirius has recorded an increase in like-for-like annualised rent roll in excess of 5.0% highlighting the consistency of performance and the ability of the Company to deliver strong results, even in challenging market conditions.

Encouragingly, while an improvement in occupancy from 85.2% to 87.0% did contribute to the like-for-like annualised rent roll growth, the main driver was a 3.5% increase in like for like average rental rates to €6.17 per sqm from €5.96 per sqm. Increasing occupancy in such a challenging year is a testament to the abilities of the Company's sales and marketing teams as well as the wide range of products it offers. On a total portfolio basis, including the acquisitions in the year, the average rental rate increased by 3.2% to €6.17 per sqm.

The positive net take-up of space in the period can be broken down into move-outs of 134,752 sqm that were generating €10.3 million of annualised rent roll at an average rate of €6.39 per sqm being offset by move-ins of 157,313 sqm generating €13.3 million of annualised rent roll at an average rate of €7.06 per sqm. Additionally, contracted rental increases and uplifts on renewals added a further €1.8 million to the annualised rent roll at the period end. The acquisitions that completed in the second half have added €2.8 million of annualised rent roll which has more than offset the €0.7 million that was lost from the sale of the Weilimdorf asset at the start of the year.

Total annualised rent roll at 31 March 2021 amounted to €97.2 million, compared to €90.3 million a year earlier.

The movement in annualised rent roll is illustrated in the table below:

	€m
Annualised rent roll 31 March 2020	90.3
Move-outs	(10.3)
Move-ins	13.3
Contracted uplifts	1.8
Disposals	(0.7)
Acquisitions	2.8
Annualised rent roll 31 March 2021	97.2 *

Underpinning the strong increase in rent roll in the year was an 18.5% increase in the number of enquiries generated compared to the previous year while a conversion rate of 13% remained in line with the 14% conversion rate for the prior year. A month-by-month comparison of enquiries generated over the last two years is set out in the table below:

Table 3: Enquiries comparison FY21 to FY20

	No. of enquiries FY 2021	No. of enquiries FY 2020	Change %
April	1,202	1,100	9.3%
May	1,248	1,188	5.1%
June	1,368	1,184	15.5%
July	1,367	1,392	(1.8)%
August	1,477	1,243	18.8%
September	1,622	1,294	25.3%
October	1,577	1,201	31.3%
November	1,591	1,255	26.8%
December	1,235	1,045	18.2%
January	1,627	1,417	14.8%
February	1,506	1,307	15.2%
March	1,716	1,169	46.8%
Total	17,536	14,795	18.5%

Against the backdrop of the pandemic the Company adopted a highly progressive and flexible approach to marketing, making specific changes to its strategies during the year in order to address emerging drivers of demand and maintain the number of enquiries generated.

Several marketing initiatives were launched based on data generated from detailed analysis of online search patterns. As expected in difficult economic times, flexibility and competitive pricing were increasingly desirable whilst demand for storage and secondary office space also increased. As a result of having direct line of sight into the marketplace the Company was able to refocus its marketing strategies towards spaces and products that met the changing demand dynamics which resulted in an increase in the number of enquiries compared with the prior year. Whilst the Company closed a greater number of deals in the period compared to the prior year, the average deal size reduced modestly from 76 sqm to 72 sqm.

Details of the month-by-month lettings performance and square metre volumes compared to the same period in the previous year are set out in the table below:

Table 4: Lettings comparison FY21 to FY20

	New deals twelve months to March 2021	New deals twelve months to March 2020	Total sqm let twelve months to March 2021	Total sqm let twelve months to March 2020	Average sqm per deal twelve months to March 2021	Average sqm per deal twelve months to March 2020
April	115	87	8,025	11,468	70	132
May	130	174	11,282	10,550	87	61
June	165	201	11,242	12,450	68	62
July	215	224	13,170	10,787	61	48
August	259	127	15,324	16,065	59	126
September	226	222	15,052	18,361	67	83
October	220	203	12,371	14,282	56	70
November	192	169	14,193	11,306	74	67
December	168	165	12,327	13,573	73	82
January	215	198	13,248	19,383	62	98
February	197	206	14,502	13,867	74	67
March	143	159	20,329	10,515	142	66
Total	2,245	2,135	161,065	162,607	72	76

Tenant retention in the period was encouraging with 72% by square metre up for renewal in the period being successfully extended (2020: 77%). Overall, the marketing, lettings and renewals performance in the year is a clear demonstration of the ability of the Company to adapt rapidly to changing market dynamics and in doing so not only sustain but grow income.

The marketing and sales capabilities within the operating platform is one of a number of asset management disciplines that provide the Company with a significant competitive advantage over other owners of light industrial and business park assets in Germany. Being able to create and offer a wide variety of spaces and products from assets that the Company can acquire at well below replacement cost differentiates Sirius and positions the Company well to continue to grow in all market conditions going forward.

Cash collection

Having visibility and close control of cash collection has long been considered an advantage of having an internal operating platform. However, the discipline has taken on additional significance as a result of the pandemic. Through a combination of close collaboration between the experienced cash collection team and on-site staff the Company was able to work closely with its tenants in assisting them access state support and support business continuity whilst ensuring contractual obligations continued to be met. The Group collected 98.2% of all rent and service charge prepayments (excluding VAT) invoiced for the year to 31 March 2021 with the month-by-month results detailed in Table 5 on the right.

Table 5: Cash collection

	Invoiced €000	Outstanding €000	Collection %
April	11,621	106	99.1%
May	11,635	235	98.0%
June	11,716	223	98.1%
July	11,676	107	99.1%
August	11,883	128	98.9%
September	12,015	137	98.9%
October	12,026	168	98.6%
November	12,083	151	98.8%
December	12,054	254	97.9%
January	12,158	292	97.6%
February	12,374	342	97.2%
March	12,579	537	95.7%
Total	143,820	2,680	98.2%

From total net of VAT billing amounting to €143.8 million, uncollected debt for the year amounted to €2.7 million representing a cash collection rate of 98.2% with outstanding rent of €1.9 million and service charge prepayments of €0.8 million. From a tenant base of approximately 5,600 tenants the Group issued 13 deferred payment plans to tenants adversely impacted by Covid-19 which accounted for €0.3 million of the outstanding amount whilst total write-offs amounted to €151,000. The deferred payment plans spread the payment of rent and service charge prepayments over an average of eight months and as at the period end all plans were being fully complied with. The Company expects to collect the majority of the outstanding debt for the period over the next twelve months through its regular debt collection activities.

Acquisitions and disposals

Sirius returned to acquisitive growth during the second half of the year after holding back to assess the impact of Covid-19 in the first six months. The Company invested or committed to invest €45.9 million into five on balance sheet acquisitions using existing cash resources that offer an attractive mix of stable income and opportunity in locations where Sirius already has a strong presence. Three of the five assets are industrial business parks whereas two of the acquisitions are smaller office buildings attached to existing sites owned by the Company. In addition Sirius will own 35% of the Augsburg business park which Titanium notarised for €79.9 million.

A summary of the acquisitions that completed or were notarised in the year are detailed in the table below:

	Total investment (incl. acquisition costs) €000	Total acquisition sqm	Acquisition occupancy %	Acquisition vacant sqm	Annualised acquisition rent roll * €000	Acquisition non-recoverable service charge costs €000	Acquisition maintenance costs €000	Annualised acquisition NOI * €	EPRA net initial yield *(1) %
Sirius
Norderstedt	9,059	12,626	100	-	783	(85)	(5)	693	7.7
Nuremberg	13,701	13,562	91	1,193	1,093	(102)	(12)	979	7.2
Mannheim III	3,169	2,962	93	200	235	(26)	-	208	6.8
Fellbach II	9,228	8,796	95	475	730	(157)	(16)	557	6.0
Subtotal	35,157	37,946	95	1,868	2,841	(370)	(33)	2,437	6.9
Notarised
Essen**	10,706	14,711	80	2,897	829	(125)	(13)	691	6.5
Subtotal	45,863	52,657	91	4,765	3,670	(495)	(46)	3,128	6.8
Titanium
Notarised
Augsburg**	79,896	112,784	90	11,300	5,426	(569)	(71)	4,786	6.0
Subtotal	79,896	112,784	90	11,300	5,426	(569)	(71)	4,786	6.0
Total	125,759	165,441	90	16,065	9,096	(1,064)	(117)	7,914	6.3

(1) Includes purchaser costs.

* See the Glossary section of the Annual Report and Accounts 2021.

** Completed post year end.

With 52,657 sqm of lettable space and blended occupancy of 90% the five on balance sheet acquisitions provide strong day one cash flow with the potential to increase rental and capital values through investment into vacant space or space that is expected to be vacated after completion. A summary of the opportunities and characteristics of each asset acquired in the period is detailed below:

• The acquisition of a business park in Norderstedt, just north of Hamburg around 15 km from the city centre, adds to the cluster of properties that Sirius has established in this desirable area. The transaction is a sale and leaseback with a family-owned textile company which is expected to move out of most of the space within three years. The deal provides attractive and stable income for the initial period with an opportunity to invest and capture reversionary value following the expected move-out.

• The Nuremberg property is a high-quality mixed-use business park situated in a well-developed commercial area of Nuremberg close to the city centre and benefiting from close motorway access. The property provides quality, stable income with some uplift potential from vacant space. The property is currently let to a mix of SME tenants and located in a market of which Sirius has deep knowledge through its ownership of an asset in the city for over ten years.

• The Mannheim III acquisition is of an office building located next to an existing business park in Mannheim which Sirius acquired in 2018. The building is 93% occupied providing immediate income and broadening the Company's range of asset management options more typically associated with a larger, combined asset.

• The Fellbach II acquisition complements the Fellbach I asset which Sirius acquired in 2018 where occupancy has increased to 90% following the completion of a range of asset management initiatives. The new asset comprises an office building with a warehouse area, which together provides 8,796 sqm of lettable space and is currently fully let to a single tenant which intends to move out of 6,700 sqm in the first few months of Sirius' ownership, providing the Company with the opportunity to upgrade and re-let the space in order to capture the reversionary potential.

• The Essen asset provides 14,711 sqm of lettable space in a location with which the Company has familiarity through the longstanding management of an office property in the city. The asset is 80% occupied with all tenants forming part of the ThyssenKrupp group with varying lease lengths. The Company's asset management plan will be focused on regearing existing leases or, in the event of move-outs, to re-let the space. Additionally, there is around 3,000 sqm of sub-optimal vacant space suitable for transformation as well as 8,400 sqm of land which can be developed. Located at the heart of one of Germany's leading production regions, Essen is considered an attractive market for Sirius' combination of conventional and flexible spaces and products.

The Augsburg property, acquired by Titanium post year end is located in one of the most well-known industrial areas in Bavaria and benefits from strong public transportation connections to the city centre. The asset provides stable day one cash flows through its 90% occupancy rate whilst providing opportunity for Sirius to add value through redevelopment and active asset management.

The equity investment required into Titanium by Sirius to complete this acquisition was reduced through the injection of the Augsburg and the recent Hilden acquisition into the existing loan facility with Helaba Bank which raised €66.4 million of extra debt, also post year end. The refinancing reduced the weighted average cost of debt from 1.32% to 1.20% whilst the remaining term of the loan was extended to 5.0 years from 3.3 years. Following the completion of the Augsburg transaction and related financing activity Titanium holds €324.2 million of property and €150.4 million of debt.

Capex investment programmes

The Group's capex investment programmes have historically been focused on the transformation of sub-optimal vacant space which was acquired through the Company's acquisition programme. This space is typically acquired for very little or no cost due to it being considered structurally void by former owners. To date approximately 356,000 sqm of space has been transformed with a total investment of €55.3 million and at the financial year end was generating €22.2 million of annualised rent roll at 75% occupancy. As occupancy increases to budgeted levels, an additional €1.6 million of annualised rent roll is expected to be generated from this space. The take-up of this space has resulted in significant improvements to service charge cost recovery and this programme has been one of the main drivers of the valuation increases the Company has seen over the last five years.

More detail on the capex investment programme to date is provided in the following table:

Combined capex investment programme progress	Sqm	Investment budgeted €m	Actual spend €m	Annualised rent roll * increase budgeted €m	Annualised rent roll * increase achieved to March 2021 €m	Occupancy budgeted %	Occupancy achieved to March 2021 %	Rate per sqm budgeted €	Rate per sqm achieved to March 2021 €
Completed	356,100	60.9	55.3	21.6	22.2	80%	75%	6.32	6.93
In progress	4,487	2.6	0.2	0.4	0.2	88%	-	8.44	-
To commence in next financial year	11,140	3.2	-	0.8	-	83%	-	7.21	-
Total	371,727	66.7	55.5	22.8	22.4	80%	-	6.39	-

* See the Glossary section of the Annual Report and Accounts 2021.

In addition to the space that has been completed and let or currently being marketed, a total of approximately 15,600 sqm of space is either in progress of transformation or awaiting approval to commence transformation. A further €5.6 million is expected to be invested into this space, on top of the €0.2 million already spent, and, based on achieving budgeted occupancy, incremental annualised rent roll in the region of €1.0 million is expected to be generated from this space in total.

Whilst the income returns expected to be achieved on the recent projects are less than those of the original programme, the extent of transformative work involved suggests the impact on valuations may be more pronounced. The capex investment programmes have been one of the key income and valuation growth drivers over the last few years and, as a result, the Company continues to seek to acquire assets with sub-optimal vacancy in order to refuel these highly accretive programmes.

In addition to the capex investment programmes, Sirius also looks for opportunities to upgrade recently vacated space that is returned each year as a result of move-outs. Within the existing vacancy as at 31 March 2021, the Company has identified approximately 23,000 sqm of recently vacated space that has potential to be upgraded. This space was generating €1.0 million in annualised rent roll from the existing tenants and can be upgraded with an investment of €5.8 million to generate €1.7 million in annualised rent roll when re-let. This selective investment into vacated space allows the Company to capture reversionary potential whilst significantly enhancing the desirability and value of lower quality space.

The Company's headline 87.0% occupancy rate means that in total 195,575 sqm of space is vacant as at the financial year end. When excluding the vacancy, which is subject to investment (3% of total space), and the structural vacancy, which is not economically viable to develop (2% of total space), the Company's occupancy rate based on space that is readily lettable is approximately 92%.

The analysis below details the sub-optimal space and vacancy at 31 March 2021 and highlights the opportunity from developing this space.

Vacancy analysis - March 2021
Total space (sqm)	1,507,069
Occupied space (sqm)	1,311,495
Vacant space (sqm)	195,574
Occupancy	87%

	% of total space	Sqm	Capex investment €m	ERV * (post investment)
Subject to capex investment programme	1%	14,774	(5.6)	1.0
Recently vacated space	2%	22,754	(5.8)	1.7
Total space subject to investment	3%	37,528	(11.4)	2.7
Lettable vacancy:
Structural vacancy	2%	38,115	-	-
Smartspace vacancy	2%	29,370	-	2.8
Other vacancy	6%	90,561	(1.1)	6.1
Total lettable space	8%	158,046	(1.1)	8.9
Total vacancy	13%	195,574	(12.5)	11.6

* See the Glossary section of the Annual Report and Accounts 2021.

The opportunity within the vacant space as at 31 March 2021 can be summarised as follows:

• 37,528 sqm of sub-optimal space, which requires €11.4 million of capex and will have an ERV of €2.7 million when completed; and

• 119,931 sqm of lettable space, which requires €1.1 million of capex and has an ERV of €8.9 million.

Whilst the capex programmes are a key part of Sirius' strategy, they represent one of several ways in which the Company can organically grow income and capital values. A wide range of asset management capabilities including the capturing of contractual rent increases, uplifts on renewals and the re-letting of space at higher rates are expected to make a strong contribution to the Company's annualised rent roll.

Sirius continues to focus on acquiring assets with vacancy with the funds that it has at its disposal as well as looking to recycle the equity within some mature assets into new acquisitions with greater opportunity. As a result, the Company can continue to refuel its capex investment programmes and continue its growth trajectory into the future. It should be noted that the Company will continue to hold a significant amount of core mature assets in order to maintain a balanced portfolio that provides a combination of stable, long-term bankable income with value-add assets with growth potential.

Well-diversified income and tenant base

Against the backdrop of the pandemic the benefit of having a well-diversified tenant base and wide range of products has proven its worth in terms of occupancy levels and income sustainability. Sirius' portfolio includes production, storage and out of town office space that caters to multiple usages and a range of sizes and types of tenants. The Company's business model is underpinned by a well-diversified tenant base which provides stability through its large long-term anchor tenants and opportunity through the SME and flexible individual tenants.

The Group's large anchor tenants are typically multinational corporations occupying production, storage and related office space whereas the SMEs and individual tenants occupy space on both a conventional and a flexible basis including space marketed under the Company's popular Smartspace brand which provides tenants with a fixed cost and maximum flexibility. The Company's largest single tenant contributes 2.5% of total annualised rent roll whilst 7.9% of its annualised rent roll comes from government tenants.

SMEs in Germany, the Mittelstand, are typically defined as companies with revenues of up to €50.0 million and up to 500 employees. SME tenants remain a key target group which the Company's internal operating platform has demonstrated an ability to attract in significant volumes as evidenced through the high number of enquiries that are generated each month, mainly through the Company's own marketing channels.

The wide range of tenants that the Sirius marketing and sales team is able to attract is a key competitive advantage for the Company and results in a significantly de-risked business model when compared to other owners of multi-tenanted light industrial and business park assets.

The table below illustrates the diverse nature of tenant mix within the Sirius portfolio at the end of the reporting period:

	No. of tenants as at 31 March 2021	Occupied sqm	% of occupied sqm	Annualised rent roll * €m	% of total annualised rent roll * %	Rate per sqm €
Top 50 anchor tenants(1)	50	580,846	44%	39,092,825	40%	5.61
Smartspace SME tenants(2)	2,796	64,942	5%	6,505,147	7%	8.35
Other SME tenants(3)	2,750	665,707	51%	51,564,308	53%	6.45
Total	5,596	1,311,495	100%	97,162,280	100%	6.17

(1) Mainly large national/international private and public tenants.

(2) Mainly small and medium-sized private and public tenants.

(3) Mainly small and medium-sized private and individual tenants.

* See the Glossary section of the Annual Report and Accounts 2021.

Smartspace and First Choice

Sirius' Smartspace products are designed with flexibility in mind with tenants benefiting from a fixed cost which has proven to be desirable in all market conditions. The majority of Smartspace has been developed from sub-optimal space or space considered by most light industrial real estate operators to be structurally void. Following conversion the space is transformed into space that can be let at significantly higher rents than the rest of the business park and, as a result, is highly accretive to value.

11,241 sqm of Smartspace was created in the year including 8,589 sqm of Smartspace storage product developed as a direct result of the increased demand in the period for storage space identified by the Company's sales and marketing teams. The Company was also able to capitalise on the changes in, and increased importance of, supply chains created by the pandemic by providing storage container space on previously non-income-producing land which, at 31 March 2021, was generating €168,000 in annualised rent roll.

The total amount of Smartspace in the portfolio at the year end stood at 93,706 sqm (31 March 2020: 80,041 sqm), generating €6.5 million (31 March 2020: €5.7 million) of annualised rent roll which equates to 6.7% of the Company's total annualised rent roll. Encouragingly, like-for-like average rate per sqm increased by 5.8% highlighting the importance of flexibility to tenants as well as the manner in which the Company can generate positive rate movements through its asset management efforts.

At the beginning of the financial year ended 31 March 2021 the Company opened its fourth First Choice Business Centre ("FCBC") in Hallbergmoos in close proximity to Munich airport. Due to the pandemic, airport traffic is materially down resulting in performance at Hallbergmoos being slower than expected. However, as travel returns an increase in demand for space is anticipated. Excluding the Hallbergmoos asset FCBC has performed well during the year with occupancy increasing to 90%.

The table below illustrates how Smartspace products contribute to the portfolio as a whole:

Smartspace product type	Total sqm	Occupied sqm	Occupancy %	Annualised rent roll * (excl. service charge) €	% of total Smartspace annualised rent roll * %	Rate * per sqm (excl. service charge) €
First Choice office	5,117	2,875	56%	664,000	10%	19.24
SMSP office	30,356	23,354	77%	2,534,000	39%	9.04
SMSP workbox	6,997	5,718	82%	381,000	6%	5.56
SMSP storage	44,225	30,659	69%	2,555,000	39%	6.94
SMSP container	N/A	N/A	N/A	168,000	3%	N/A
SMSP subtotal	86,695	62,606	72%	6,302,000	97%	8.39
SMSP FlexiLager	7,011	2,337	33%	204,000	3%	7.27
SMSP total	93,706	64,943	69%	6,506,000	100%	8.35

* See the Glossary section of the Annual Report and Accounts 2021.

Financial review

Strong profits and total shareholder accounting return despite the pandemic

Alistair Marks

Chief Financial Officer

"Sirius' operating platform has been the key enabler in continued delivery of organic and acquisitive growth amid challenging market conditions."

Strong trading despite the pandemic and return to acquisitive growth

The Company delivered profit before tax of €163.7 million for the year ended 31 March 2021 representing a 47.7% increase on the prior year. Despite unprecedented market conditions relating to the Covid-19 pandemic, the Company successfully grew both organically and acquisitively. The organic performance was highlighted by a 5.2% increase in like-for-like annualised rental income which contributed to a €135.9 million increase in the book value of investment property through capex investment and valuation uplifts. Operationally the Company grew year-on-year enquiry levels and posted a cash collected rate of 98.2%. Funds from operations(1) ("FFO") increased by 9.3% which drove a 10.0% increase in the dividend for the six months ended 31 March 2021. From a shareholder perspective a combination of the increase in adjusted net asset value2 and dividends paid in the period resulted in a total accounting return of 19.5%. Considering the restrictions and impact on the economy from the hard lockdowns in Germany, the results of the year are a testament to the quality of the Company's portfolio and tenant base as well as the asset management capabilities of its operating platform.

Return to acquisitions

After a quiet first half of the financial year whilst the Company monitored the market and assessed the impact of the pandemic, Sirius returned to acquisitive growth in the second half with the completion of four assets totalling €35.2 million and a further asset notarised for completion shortly after the year end for €10.7 million. The Company's balance sheet remains positive with €49.3 million of free cash as at 31 March 2021 along with €13.1 million of undrawn capex related facilities. Following the repayment of the Bayerische Landesbank facility in the year under review the Company has 19 unencumbered assets with a combined value of €245.5 million. In addition, Sirius was able to notarise the acquisition of an asset in Augsburg for €79.9 million for the Titanium venture with AXA IM Alts in which Sirius holds a 35% interest. The details of all acquisitions are provided in the Asset Management review section of this report.

Trading performance and earnings

As mentioned above, the Company reported a profit before tax in the year ended 31 March 2021 of €163.7 million (31 March 2020: €110.8 million), including €103.9 million (31 March 2020: €59.7 million) of gains from property revaluations (excluding movements relating to leased investment properties in accordance with IFRS 16) net of €31.7 million of capex and adjustments in respect of lease incentives and broker fees.

(1) Refer to note 28 in the Annual Report and Accounts 2021.

(2) Refer to Glossary of Terms of the Annual Report and Accounts 2021.

FFO, which is the key measure of operational performance, increased by 9.3% to €60.9 million (31 March 2020: €55.7 million) despite the impact of costs and additional tax relating to changes in tax legislation which impacted the last quarter of the financial year. The majority of the increase in FFO came from strong organic growth within the existing portfolio with a modest positive impact coming from the net impact of the acquisitions that completed in the final quarter of the financial year and loss of income from the disposal of the Weilimdorf asset at the start of the financial year. The organic growth came predominantly from another strong improvement in the Group's like-for-like annualised rent roll amounting to 5.2% which was partly supported by the capex investment programmes but was also derived from contracted escalations, uplifts on renewals and other asset management initiatives. When combined with the acquisitions in the period the Company starts the new financial year with annualised rent roll of €97.2 million.

On a per share basis, basic EPS showed a 48.3% increase to 14.16c per share, reflecting the strong valuation gains recorded in the year whilst adjusted EPS increased by 7.1% to 5.61c per share reflecting the positive operational performance in the year.

	Earnings €000		No. of shares	31 March 2021 cents per share	Earnings €000	No. of shares	31 March 2020 cents per share	Change %
Basic EPS		147,451	1,040,956,722	14.16	98,136	1,027,881,515	9.55	48.3
Diluted EPS		147,451	1,056,541,472	13.96	98,136	1,039,816,265	9.44	47.9
Adjusted EPS*		58,400	1,040,956,722	5.61	53,911	1,027,881,515	5.24	7.1
Basic EPRA EPS		58,633	1,040,956,722	5.63	55,882	1,027,881,515	5.44	3.5
Diluted EPRA EPS		58,633	1,056,541,722	5.55	55,882	1,039,816,265	5.37	3.4

* See note 11 and the Business analysis section of the Annual Report and Accounts 2021.

Total revenue, which comprises rent, fee income relating to Titanium, other income from investment properties, and service charge income, increased from €150.0 million to €165.4 million in the period. Total annualised rent roll at the end of the period increased by 7.6% from €90.3 million to €97.2 million with €2.1 million attributable to the net effect of acquisitions and disposals and €4.8 million to organic rent roll growth. Approximately €0.7 million of the rental income from acquisitions will be lost in Q1 of the new financial year due to the expected move-out of a large tenant in the newly acquired Fellbach II site.

Looking forward, notwithstanding the ongoing potential impact of Covid-19 and impact of the vacating tenant mentioned above, the Company is confident that through the continuation of its capex investment programmes and wide range of other intensive asset management initiatives, it can continue to grow FFO organically in the new financial year. Furthermore, the Company considers itself to have the financial capability to acquire more assets for both its own balance sheet and that relating to Titanium, as and when the right opportunities present themselves.

Portfolio valuation and net asset value

The portfolio of owned assets was independently valued at €1,350.8 million by Cushman & Wakefield LLP at 31 March 2021 (31 March 2020: €1,189.5 million), which converts to a book value of €1,347.2 million after the provision for lease incentives. Including investment property relating to leased assets the total investment property book value at 31 March 2021 was €1,362.2 million.

	Investment property - owned €000	Investment property - leased €000	Investment property - total €000
Investment properties at book value as at 31 March 2020*	1,186,183	17,832	1,204,015
Additions	35,484	-	35,484
Additions relating to leased investment properties	-	1,518	1,518
Capex investment and capitalised broker fees	31,720	-	31,720
Disposals	(10,130)	-	(10,130)
Surplus on revaluation above capex investment and broker fees	104,156	-	104,156
Deficit on revaluation relating to leased investment properties	-	(4,325)	(4,325)
Adjustment in respect of lease incentives	(246)	-	(246)
Investment properties at book value as at 31 March 2021	1,347,167	15,025	1,362,192

* Including assets held for sale.

The movement in owned investment property of €161.0 million was made up of €35.5 million of acquisitions, €10.1 million of disposals, a €135.9 million valuation uplift which includes capital expenditure of €31.7 million and a €0.2 million adjustment in respect of lease incentives.

In accordance with IFRS 16, the Group recognises lease liabilities of €15.0 million relating to leases on assets meeting the definition of investment property. Accordingly, an expense of €4.3 million representing the fair value adjustment in the year was recorded in the statement of comprehensive income. During the year under review the Group extended a lease on an asset meeting the definition of investment property resulting in a fair value adjustment of €1.5 million.

The valuation gain recorded in the consolidated statement of comprehensive income of €99.6 million includes movements relating to both owned and leased investment property and is stated net of capex investment, broker fees and adjustments in respect of lease incentives.

Focusing on the like-for-like portfolio that was owned for the full period, the book value of these assets increased by €135.7 million or 11.5% from €1,176.2 million to €1,311.9 million. The increase in book value for the period was driven by approximately 42 bps of yield compression and rent roll growth of €4.8 million. The assets that were acquired shortly before the year end were revalued at only €0.2 million below the total acquisition costs paid which is 6.3% above the property purchase prices paid.

The portfolio of owned properties, which excludes the assets within Titanium, comprised 60 assets at 31 March 2021 and the reconciliation of book value to the independent Cushman & Wakefield LLP valuation is as follows:

	31 March 2021 €m	31 March 2020 €m
Investment properties at market value	1,350.8	1,189.5 *
Uplift in respect of assets held for sale	-	-
Adjustment in respect of lease incentives	(3.6)	(3.3)
Book value as at 31 March 2021	1,347.2	1,186.2 *

* Including assets held for sale.

Over the last five years the value of the Company's owned investment property has nearly doubled. Of the €659.8 million increase in value €152.6 million has come from the net effect of acquisitions and disposals with €507.3 million coming from organic growth. The organic valuation growth has predominantly come from improving the quality of the assets and increasing income. Whilst the market has seen yields compress over this period, a significant portion of the valuation yield movement that the Sirius portfolio has seen reflects this improved quality, which itself is mainly the result of the Company's capex investment programmes. The development of Sirius' portfolio valuations and operating metrics over the last five years can be seen in the table below:

	March 2016	March 2017	March 2018	March 2019	March 2020	March 2021
Portfolio book valuation (€m)	687.4	823.3	967.3 (1)	1,132.5	1,186.2	1,347.2
Annualised rent roll* (€m)	60.5	71.0	79.5	87.8	90.3	97.2
Gross yield* (%)	8.8	8.6	8.2	7.8	7.6	7.2
Like-for-like annualised rent roll increase* (%)	5.9	5.1	6.2	7.1	6.1	5.2
Like-for-like valuation increase (%)	10.9	8.5	11.6	13.3	9.9	11.5
Occupancy* (%)	80.0	80.5	79.2	86.1	85.3	87.0
Rate* (€sqm)	5.1	5.3	5.5	5.8	6.0	6.2

(1) Including two acquisitions that completed 1 April 2018.

* See the Glossary section of the Annual Report and Accounts 2021.

The 31 March 2021 book value of owned properties of €1,347.2 million represents an average gross yield of 7.2% (31 March 2020: 7.6%), which translates to a net yield of 6.5% (31 March 2020: 6.8%) and an EPRA net yield (including estimated purchaser costs) of 6.1% (31 March 2020: 6.3%).

Despite yields on these assets continuing to tighten despite the pandemic, the average gross yield of the portfolio of 7.2% still appears conservative when compared to transactions that have completed over the last year in the industrial, logistics and office sectors in Germany. This is a key point to consider in addition to the value-add potential remaining within the Sirius portfolio when reviewing the strength of the Company's balance sheet and its ability to withstand any negative market movements in the future.

Of the total portfolio 59% relates to value-add assets which, with average occupancy of 82.8% and valued at a gross yield of 7.6%, provide significant opportunity for further earnings and value growth. The average occupancy of the mature assets has now increased to 95.4% and, at a gross yield of 6.6%, these are valued at a yield that is 100 bps lower than the value-add assets. As the transformation of the value-add assets continues, the yield gap between the mature and value-add assets is expected to reduce.

	Annualised rent roll €m	Book value €m	NOI €m	Capital value €m/sqm	Gross yield	Net yield	Vacant space sqm	Rate psqm €	Occupancy %
Value-add assets	60.7	795.4	53.9	766	7.6%	6.8%	172,681	6.07	82.8%
Mature assets	36.5	551.8	34.9	1,054	6.6%	6.3%	22,893	6.35	95.4%
Other	-	-	(1.1)	-	-	-	-	-	-
Total	97.2	1,347.2	87.7	863	7.2%	6.5%	195,574	6.17	87.0%

The average capital value per sqm of the entire portfolio of €863 (31 March 2020: €775) remains well below replacement cost and illustrates the excellent opportunity for further growth from upgrading and letting up the sub-optimal vacant space through the Company's capex investment programmes. This remains a major competitive advantage for Sirius and is one of the main reasons that its business model is able to produce higher returns with lower risk than the typical operator of light industrial and office business parks in Germany in all market conditions. The full details of the capex investment programmes are detailed in the Asset Management review section of this report.

The valuation increases along with profit retention resulted in an increase in net asset value per share to 88.31c at 31 March 2021, an uplift of 14.2% from 77.35c as at 31 March 2020. Similarly, the adjusted net asset value(1) per share increased to 93.79c at 31 March 2021, an uplift of 15.0% from 81.54c as at 31 March 2020. In addition, the Company has paid out 3.62c per share of dividends during the financial year which contributed to a total shareholder accounting return (adjusted NAV growth plus dividends paid) of 19.5% (31 March 2020: 13.1%). The movement in NAV per share is explained in the following table:

(1) Excludes the provisions for deferred tax and derivative financial instruments.

	Cents per share
NAV per share as at 31 March 2020	77.35
Recurring profit after tax	5.57
Surplus on revaluation	9.90
Deferred tax charge	(1.35)
Scrip and cash dividend paid	(3.38)
Share awards and adjusting items	0.22
NAV per share at 31 March 2021	88.31
Deferred tax and derivatives	5.48
Adjusted NAV per share at 31 March 2021(1)	93.79
EPRA adjustments(1)	(1.50)
EPRA NTA per share at 31 March 2021(1)	92.29

(1) See Annex 1 for further details.

The EPRA NTA per share, which, like adjusted NAV per share, excludes the provisions for deferred tax and fair value of derivative financial instruments but also includes the potential impact of shares issued in relation to the Company's long-term incentive programmes and excludes intangible assets, was 92.29c (31 March 2020: 80.44c).

Financing

The Company continues to seek ways to further optimise its financing structure which is why there was limited activity with regard to financing during the financial year. The Company completed the final drawdown of its unsecured Schuldschein loan amounting to €20.0 million and fully repaid upon maturity in October 2020 its Bayerische Landesbank facility.

As a result total debt decreased by €13.8 million in the period to €472.0 million (2020: €485.8 million) representing the net effect of the transactions outlined above and scheduled amortisation of €10.9 million repaid during the year. Details of movement in debt during the year are included in the table below:

	€000
Total debt as at 31 March 2020	485,755
Drawdown of Schuldschein	20,000
Repayment of Bayerische Landesbank facility	(22,845)
Scheduled amortisation	(10,878)
Total debt as at 31 March 2021	472,032

The Company's weighted average cost of debt remained stable at 1.5% (2020: 1.5%) whilst the number of unencumbered properties has increased from twelve to nineteen with a book value of €245.5 million.

As at 31 March 2021, Sirius had a net LTV of 31.4% which remains materially below the stated maximum of 40%. This calculation includes the unrestricted cash balances held by the Group of €49.3 million. The uplift in net operating income seen in the period, driven by the annualised rent roll growth and further improvements to service charge recovery, has increased the Group's interest cover from 11.0x to 12.5x in the period.

With a weighted average debt expiry of 2.7 years (2020: 3.6 years) it is an opportune time for the Company to assess its financing structure. As has been mentioned consistently over the last few years, the Sirius Board strongly believes in the benefits of unsecured debt and the completion of the Company's first unsecured facility in the form of the €50.0 million unsecured Schuldschein has been well received by its shareholders.

Dividend

The Board has authorised a dividend in respect of the second half of the financial year ended 31 March 2021 of 1.98c per share representing a pay-out of 65% of FFO, an increase of 10.0% on the equivalent dividend last year which was also based on 65% of FFO. The total dividend for the year is 3.80c, an increase of 6.4% on the 3.57c total dividend for the year ended 31 March 2020. It should be noted that the Group has not received any state financial assistance in connection with the Covid-19 crisis or otherwise.

The table below shows the dividends paid and full year pay-out ratios over the last five years demonstrating the manner in which the Board chose to increase the dividend pay-out ratio in previous years in order to maintain positive dividend trajectory whilst the proceeds of asset disposals were invested.

	First half dividend per share (cents)	Second half dividend per share (cents)	Total dividend per share (cents)	Blended pay-out ratio (% of FFO)
Year ended March 2017	1.39	1.53	2.92	65%
Year ended March 2018	1.56	1.60	3.16	75%
Year ended March 2019	1.63	1.73	3.36	70%
Year ended March 2020*	1.77	1.80	3.57	66%
Year ended March 2021	1.82	1.98	3.80	65%

* First half 67%, second half 65% of FFO.

It is expected that, for the dividend authorised in respect of the six month period ended 31 March 2021, the ex-dividend date will be 7 July 2021 for shareholders on the South African register and 8 July 2021 for shareholders on the UK register. It is further expected that for shareholders on both registers the record date will be 9 July 2021 and the dividend will be paid on 19 August 2021. A detailed dividend announcement will be made on 14 June 2021, including details of a scrip dividend alternative.

Outlook

Despite the impact of the pandemic over the last year, Sirius has been able to produce a number of record results in the period. A combination of the effectiveness and adaptability of its operating platform, its range of products and its well diversified tenant base enabled the Company to increase income and valuations across the portfolio whilst maintaining high cash collection rates. The organic growth in annualised rent roll combined with further improvements to service charge recovery were the primary drivers behind the Group's increase in FFO and hence dividend.

In challenging market conditions and with assets that meet the Company's return expectations increasingly harder to find, progress was also achieved on acquisitions through the completion or notarising of five acquisition assets totalling €45.9 million.

The Titanium venture increased in scale with the notarisation of the Augsburg asset for €79.9 million. Titanium continues to provide the Company with an excellent alternative income stream by way of its 35% ownership and income from its continued management of the assets.

Looking forward the focus remains on taking a well-balanced and measured approach to our business whilst trading through the pandemic to its conclusion. The comprehensive governmental response to the pandemic in Germany appears to have succeeded in maintaining employment and limiting the economic damage that many had predicted. Whilst there still remains some uncertainty as the roll out of vaccination programmes in Germany and across Europe continues, the Company's performance over the last year gives reason for cautious optimism going forward.

The Company will remain focused on maximising the capability of its internal operating platform to continue to deliver attractive risk-adjusted returns through its active asset management throughout the property cycle. With acquisition firepower available, further vacancy to develop and reversion potential to capture, the Company is well positioned to meet the challenges ahead and looks forward to continuing to deliver attractive and sustainable returns for shareholders in the future.

Alistair Marks

Chief Financial Officer

4 June 2021

Consolidated statement of comprehensive income

for the year ended 31 March 2021

	Notes	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Revenue	5	165,361	150,014
Direct costs	6	(71,541)	(64,672)
Net operating income		93,820	85,342
Gain on revaluation of investment properties	13	99,585	55,789
Gain on disposal of properties		54	86
Gain on loss of control of subsidiaries	6	65	6,323
Administrative expenses	6	(27,823)	(21,175)
Share of profit of associates	17	4,977	2,129
Operating profit		170,678	128,494
Finance income	9	2,712	1,031
Finance expense	9	(9,869)	(18,383)
Change in fair value of derivative financial instruments	9	136	(377)
Net finance costs		(7,021)	(17,729)
Profit before tax		163,657	110,765
Taxation	10	(16,097)	(12,620)
Profit and total comprehensive income for the year after tax		147,560	98,145
Profit and total comprehensive income attributable to:
Owners of the Company		147,451	98,136
Non-controlling interest		109	9
Total comprehensive income for the year after tax		147,560	98,145
Earnings per share
Basic earnings per share	11	14.16c	9.55c
Diluted earnings per share	11	13.96c	9.44c

All operations of the Group have been classified as continuing.

Consolidated statement of financial position

as at 31 March 2021

	Notes	31 March 2021 €000	31 March 2020 €000
Non-current assets
Investment properties	13	1,362,192	1,193,915
Plant and equipment	15	2,682	2,374
Intangible assets	19	6,568	5,724
Right of use assets	16	1,919	2,440
Other non-current assets	18	44,960	39,013
Investment in associates	17	17,202	12,306
Total non-current assets		1,435,523	1,255,772
Current assets
Trade and other receivables	20	18,731	15,048
Derivative financial instruments		70	89
Cash and cash equivalents	21	65,674	121,263
Total current assets		84,475	136,400
Assets held for sale	14	-	10,100
Total assets		1,519,998	1,402,272
Current liabilities
Trade and other payables	22	(50,527)	(56,780)
Interest-bearing loans and borrowings	23	(9,114)	(32,026)
Lease liabilities	16	(5,857)	(5,562)
Current tax liabilities		(2,063)	(779)
Derivative financial instruments		(414)	(412)
Total current liabilities		(67,975)	(95,559)
Non-current liabilities
Interest-bearing loans and borrowings	23	(458,940)	(448,202)
Lease liabilities	16	(9,130)	(13,588)
Derivative financial instruments		(797)	(956)
Deferred tax liabilities	10	(56,331)	(42,151)
Total non-current liabilities		(525,198)	(504,897)
Total liabilities		(593,173)	(600,456)
Net assets		926,825	801,816
Equity
Issued share capital	26	-	-
Other distributable reserve	27	449,051	470,151
Own shares held	26	(2,903)	(1,515)
Retained earnings		480,385	332,934
Total equity attributable to the owners of the Company		926,533	801,570
Non-controlling interest		292	246
Total equity		926,825	801,816

The financial statements on pages 112 to 115 were approved by the Board of Directors on 4 June 2021 and were signed on its behalf by:

Daniel Kitchen

Chairman

Company number: 46442

Consolidated statement of changes in equity

for the year ended 31 March 2021

	Notes	Issued share capital €000	Other distributable reserve €000	Own shares held €000	Retained earnings €000	Total equity attributable to the owners of the Company €000	Non- controlling interest €000	Total equity €000
As at 31 March 2019		-	491,010	-	234,798	725,808	237	726,045
Share-based payment transactions	8	-	1,985	-	-	1,985	-	1,985
Own shares purchased		-	-	(1,690)	-	(1,690)	-	(1,690)
Own shares allocated		-	-	175	-	175	-	175
Dividends paid*	28	-	(22,844)	-	-	(22,844)	-	(22,844)
Total comprehensive income for the year		-	-	-	98,136	98,136	9	98,145
As at 31 March 2020		-	470,151	(1,515)	332,934	801,570	246	801,816
Share-based payment transactions	8	-	3,148	-	-	3,148	-	3,148
Own shares purchased	26	-	-	(1,613)	-	(1,613)	-	(1,613)
Own shares allocated	26	-	-	225	-	225	-	225
Dividends paid	28	13,169	(37,417)	-	-	(24,248)	(63)	(24,311)
Transfer of share capital	28	(13,169)	13,169	-	-	-	-	-
Total comprehensive income for the year		-	-	-	147,451	147,451	109	147,560
As at 31 March 2021		-	449,051	(2,903)	480,385	926,533	292	926,825

* Ordinary shares of 16,228,946 with a value of €13,110,000 were issued pursuant to scrip dividend offerings on 22 August 2019, 8 January 2020 and 17 January 2020 (refer to note 26). The value of €13,110,000 has been subsequently transferred to other distributable reserves in accordance with Companies (Guernsey) Law, 2008.

Consolidated statement of cash flows

for the year ended 31 March 2021

	Notes	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Operating activities
Profit for the year after tax		147,560	98,145
Taxation	10	16,097	12,620
Gain on disposal of properties		(54)	(86)
Gain on loss of control of subsidiaries		(65)	(6,323)
Share-based payments	8	3,148	1,985
Gain on revaluation of investment properties	13	(99,585)	(55,789)
Change in fair value of derivative financial instruments	9	(136)	377
Depreciation of property, plant and equipment	15	669	662
Amortisation of intangible assets	19	897	914
Depreciation of right of use assets	16	521	522
Share of profit of associates	17	(4,977)	(2,129)
Finance income	9	(2,712)	(1,031)
Finance expense	9	9,869	9,276
Exit fees/prepayment of financing penalties	9	-	9,107
Changes in working capital
Increase in trade and other receivables		(2,518)	(5,530)
Increase in trade and other payables		2,913	10,080
Taxation paid		(632)	(1,460)
Cash flows from operating activities		70,995	71,340
Investing activities
Purchase of investment properties		(35,484)	(120,434)
Proceeds from loss on control of subsidiaries (net of cash disposed)		65	14,348
Proceeds from sale of loans to associates		-	29,280
Capital expenditure on investment properties		(31,104)	(31,620)
Purchase of plant and equipment and intangible assets		(2,718)	(2,684)
Proceeds on disposal of properties (including held for sale)	13, 14	30	9,090
Proceeds on disposal of plant and equipment		-	185
Increase in loans receivable		(5,950)	(21,438)
Interest received		1,627	1,031
Cash flows used in investing activities		(73,534)	(122,242)
Financing activities
Shares purchased		(1,613)	(406)
Dividends paid to owners of the Company	28	(24,248)	(22,844)
Dividends paid to non-controlling interest		(63)	-
Payment of principal portion of lease liabilities		(5,681)	(5,559)
Proceeds from loans		20,000	187,451
Repayment of loans		(33,753)	(15,050)
Exit fees/prepayment of financing penalties		-	(525)
Finance charges paid		(7,692)*	(11,184)*
Cash flows (used in)/from financing activities		(53,050)	131,883
(Decrease)/increase in cash and cash equivalents		(55,589)	80,981
Cash and cash equivalents as at the beginning of the year		121,263	40,282
Cash and cash equivalents as at the year end	21	65,674	121,263

* Including capitalised loan issue cost of €134,000 (2020: €2,402,000).

Notes to the financial statements

for the year ended 31 March 2021

1. General information

Sirius Real Estate Limited (the "Company") is a company incorporated in Guernsey and resident in the United Kingdom for tax purposes, whose shares are publicly traded on the Main Market of the London Stock Exchange ("LSE") (primary listing) and the Main Board of the Johannesburg Stock Exchange ("JSE") (primary listing).

The consolidated financial information of the Company comprises that of the Company and its subsidiaries (together referred to as the "Group") for the year ended 31 March 2021.

The principal activity of the Group is the investment in, and development of, commercial property to provide conventional and flexible workspace in Germany.

2. Significant accounting policies

(a) Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for investment properties, investment properties held for sale and derivative financial instruments, which have been measured at fair value. The consolidated financial information is presented in euros and all values are rounded to the nearest thousand (€000), except where otherwise indicated.

The Company has chosen to prepare its annual consolidated financial statements in accordance with International Financial Reporting Standards as issued by the IASB ("IFRS") as a result of the primary listing on the JSE.

As at 31 March 2021 the Group's consolidated financial statements reflect consistent accounting policies and methods of computation as used in the previous financial year, except for the changes in the application of accounting policies as described in note 2(b).

(b) Changes in accounting policies

There were several new and amendments to standards and interpretations which are applicable for the first time for the Group from 1 April 2020. The applicable new and amendments to standards for the Group are disclosed below. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. See note 2(aa).

Amendments to IFRS 3: Definition of a Business

The amendments to IFRS 3 Business Combinations clarify that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that, together, significantly contribute to the ability to create output. Furthermore, they clarify that a business can exist without including all of the inputs and processes needed to create outputs.

The other key amendments include:

• removal of the assessment of whether market participants are capable of replacing any missing inputs or processes and continuing to produce outputs;

• adding guidance and illustrative examples to help entities assess whether a substantive process has been acquired;

• narrowing the definitions of business and outputs by focusing on goods or services provided to customers and by removing the reference to an ability to reduce costs; and

• adding an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business.

The amendments must be applied to transactions that are either business combinations or asset acquisitions for which the acquisition date is on or after the first annual reporting period beginning on or after 1 January 2020. These amendments had no impact on the consolidated financial statements of the Group, but may impact future periods should the Group enter into any acquisition. The Group expects that the amendments will reduce the number of transactions that are accounted for as a business combination.

Amendments to IAS 1 and IAS 8 Definition of Material

The amendments provide a new definition of material that states, "information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity." The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the consolidated financial statements of, nor is there expected to be any future impact to the Group.

The consolidated financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the United Kingdom Financial Conduct Authority, IAS 34 - Interim Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the listing requirements of the JSE Limited, IFRS and Companies (Guernsey) Law. The consolidated financial statements have been prepared on the same basis as the accounting policies set out in the Group's annual financial statements for the year ended 31 March 2020, except for the changes in accounting policies as shown in note 2(b). All forward-looking information is the responsibility of the Board of Directors and has not been reviewed or reported on by the Group's auditors.

These condensed consolidated financial results for the twelve months ended 31 March 2021 are themselves not audited but are extracted from audited information. The audited Group annual financial statements were audited by Ernst & Young LLP, who expressed an unmodified opinion thereon. The audited Group annual financial statements and the auditor's report thereon are available for inspection on the Company's website and at the Company's registered office. The directors take full responsibility for the preparation of the condensed consolidated financial results and that the financial information has been correctly extracted from the underlying audit Group annual financial statements.

(d) Going concern

The Group has prepared its going concern assessment for the period to the end of June 2022 (the 'going concern period'). The Group's going concern assessment is based on the same financial model that supported the Group's going concern and viability statement detailed within its Annual Report and Accounts 2020, updated on the basis of the assumptions set out below. It considers the Group's Principal Risks and Uncertainties set out on pages 38 to 47 and is dependent on a number of factors including financial performance, continued access to lending facilities (see note 23) and the ability to continue to operate the Group's secured and unsecured debt structure within its financial covenants. The Group's secured debt typically contains soft covenants that result in operational restrictions through placing cash in restricted accounts, and hard covenants that, if breached, represent default events unless cured with partial loan repayments. The cash flow projections also made assumptions on future trading performance, capital expenditure, and potential valuation movements in order to estimate the level of headroom on facilities and covenants relating to loan to value and interest cover ratios.

In considering going concern, the Directors reviewed a detailed base case scenario and a severe but plausible downside scenario provided by Management which modelled the effects of severe and more realistic assumptions. These take into account a potential downturn in the Group's performance, including as a result of the potential impact of Covid-19 on the Group's financial position and future prospects.

The impact of Covid-19 on the business in the year to 31 March 2021 did not indicate a deterioration in the Group's income streams or falls in asset values, both of which increased in the period. The assumptions included in the severe but plausible downside scenario relating to the going concern period included:

• reduction in occupancy from 87% at March 2021 to 82% in March 2022 and further reduction to 81% occupancy from April 2022 to the end of the going concern period;

• reduction in service charge recovery from 90% at March 2021 to 85% in March 2022 and further reduction to 84% recovery from April 2022 to the end of the going concern period;

• reduction in investment property values by 5% in the going concern period;

• no acquisitions over and above those legally committed to;

• continuation of forecasted capex investment; and

• continuation of forecasted dividend payments.

The Group assessed the impact of the severe but plausible downside scenario on its loan covenant positions. The Group's loan to value covenants are tested based on the valuation relevant to the covenant test as set out in the respective loan agreements.

Based on unrestricted cash at 31 March 2021 amounting to €49.3 million and the results of the severe but plausible scenario analysed above, the Directors consider that the Group has sufficient cash resources to remedy any breaches of its loan covenants in the going concern period that arise under the assumptions made above. In addition, the Group has available a fully committed but as yet undrawn capex facility amounting to €13.1 million, flexibility in determining whether to make dividend payments and the possibility to restrict capital expenditure to that of a non-discretionary nature in the unlikely event mitigating actions are required within the going concern period. In addition, the Group has 19 unencumbered assets with a book value of €245.5 million as of 31 March 2021.

The Directors also evaluated potential events and conditions beyond 30 June 2022 that may cast significant doubt on the going concern assessment, specifically, the ability of the Group to refinance or extend the €51.0m SEB AG loan in September 2022. The Directors are of the view that they have a realistic prospect of securing this refinancing or an alternative source of secured or unsecured funding, a judgement which was informed by the Group's financial forecasts and their discussions with finance providers. Should the debt not be refinanced or extended alternative options could be considered, including the use of mitigating factors referred to above. The mitigating factors are within the control of the Directors and there is sufficient time for such mitigating factors to be implemented, if required.

Thus, the Directors have not identified any material uncertainties which would cast significant doubt on the Group's ability to continue as a going concern for the going concern period. After due consideration, the Board believes it is appropriate to adopt the going concern basis in preparing the financial statements.

(e) Basis of consolidation

The consolidated financial information comprises the financial information of the Group as at 31 March 2021. The financial information of the subsidiaries is prepared for the same reporting period as the Company, using consistent accounting policies.

All intra-group balances and transactions and any unrealised income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Non-controlling interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from the Company's shareholders' equity.

(f) Acquisitions

Where a property is acquired through the acquisition of corporate interests, management considers the substance of the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition of a business.

The Group accounts for an acquisition as a business combination where an integrated set of activities is acquired in addition to the property. More specifically, consideration is made of the extent to which substantive processes are acquired and, in particular, the extent of services provided by the subsidiary. IFRS 3 Business Combinations sets out an optional concentration test designed to simplify the evaluation of whether an acquired set of activities and assets is not a business. An acquired set of activities and assets is not a business if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

Where such acquisitions are not deemed to be an acquisition of a business, they are not treated as business combinations. Instead, they are treated as asset acquisitions, with the cost to acquire the corporate entity being allocated between the identifiable assets and liabilities of the entity based on their relative fair values on the acquisition date. Accordingly, no goodwill arises.

(g) Foreign currency translation

The consolidated financial information is presented in euros, which is the functional and presentational currency of all members of the Group.

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional currency at the exchange rate ruling at the statement of financial position date. All differences are taken to the statement of comprehensive income.

(h) Revenue recognition

Rental income

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which the benefit derived from the leased asset is diminished. Fixed or determinable rental increases, which can take the form of actual amounts or agreed percentages, are recognised on a straight-line basis over the term of material leases. If the increases are related to a price index to cover inflationary cost increases, then the policy is not to spread the amount but to recognise them when the increase takes place.

The value of rent free periods and all similar lease incentives is spread on a straight-line basis over the term of material leases only. Where there is a reasonable expectation that the tenant will exercise break options, the value of rent free periods and all similar lease incentives is booked up to the break date.

Revenue from contracts with customers

Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

The Group mainly generates revenue from contracts with customers for services rendered to tenants including management charges and other expenses recoverable from tenants ("service charge income"). These services are specified in the lease agreements and separately invoiced. Service charge income is recognised as revenue when the performance obligations of the services specified in the lease agreements are met.

The individual activities vary significantly throughout the day and from day to day; however, the nature of the overall promise of providing property management service remains the same each day. Accordingly, the service performed each day is distinct and substantially the same. These services represent a series of daily services that are individually satisfied over time because the tenants simultaneously receive and consume the benefits provided by the Group. The actual service provided during each reporting period is determined using cost incurred as the input method.

Transaction prices are regularly updated and are estimated at the beginning of each year based on previous costs and estimated spend. Service charge budgets are prepared carefully to make sure that they are realistic and reasonable. Variable consideration is only included in the transaction price to the extent it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The variable consideration is allocated to each distinct period of service (i.e. each day) as it meets the variable consideration allocation exception criteria.

The Group acts as a principal in relation to these services, and records revenue on a gross basis, as it typically controls the specified goods or services before transferring them to tenants.

Where amounts invoiced to tenants are greater than the revenue recognised at the period end date, the difference is recognised as unearned revenue when the Group has unconditional right to consideration, even if the payments are non-refundable. Where amounts invoiced are less than the revenue recognised at the period end date, the difference is recognised as contract assets or, when the Group has a present right to payment, as receivables albeit unbilled.

Rental income, fee income and other income from managed properties

As the Group derives income and incurs expenses relating to properties it manages but does not own, such income and expense is disclosed separately within revenue and direct costs. Income relating to managed properties is accounted for according to revenue recognition accounting policies set out above.

Interest income

Interest income is recognised as it accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument).

(i) Leases

Group as lessor

Leases where the Group does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases.

Group as lessee

All contracts that give the Group the right to control the use of an identified asset over a certain period of time in return for consideration are considered leases within the meaning of IFRS 16 Leases (IFRS 16).

For all contracts that meet the definition of leases according to IFRS 16, the Group, at the commencement date of the lease (i.e. the date the underlying asset is available for use), recognises lease liabilities equal to the present value of the future lease payments, discounted to reflect the term-specific incremental borrowing rate if the interest rate implicit in the lease is not readily determinable. Lease liabilities are subsequently increased by the periodic interest expenses and reduced by the lease payments made during the financial year.

Correspondingly, right of use assets are initially recognised at cost under IFRS 16 which is the amount of the lease liabilities (plus any advance payments that have already been made or any initial direct costs). Subsequently, the right of use assets are generally measured at cost, taking depreciation (calculated straight line over the lease term) and impairments into account and are presented separately in the statement of financial position except for right of use assets that meet the definition of IAS 40 Investment Property (IAS 40) which are presented as investment property and subsequently measured at fair value in line with the measurement rules set out in IAS 40.

Periods resulting from extension or termination options granted on a unilateral basis are assessed on a case-by-case basis and are only taken into account if their use is sufficiently probable.

The Group utilises the recognition exemptions provided by IFRS 16 and does not apply IFRS 16 to leases with a contractual term of twelve months or less and to leases in which the underlying asset is of low value (on a case-by-case basis).

Lease payments associated with short-term leases and with leases of low-value assets are recognised as expenses on a straight-line basis over the lease term.

(j) Income tax

Current income tax

Current income tax assets and liabilities are measured at the reporting date at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Certain subsidiaries may be subject to foreign taxes in respect of foreign sources of income. Sirius Real Estate Limited is a UK resident for tax purposes.

Deferred income tax

Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements, with the following exceptions:

• where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;

• in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and

• deferred tax assets are only recognised to the extent that it is foreseeable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.

Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply in the year when the related asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

(k) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

• where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

(l) Investment properties

Investment properties are properties that are either owned by the Group or held under a lease which are held for long-term rental income and/or capital appreciation.

Investment properties owned by the Group are initially recognised at cost, including transaction costs when the control of the property is transferred. Where recognition criteria are met, the carrying amount includes subsequent costs to add to or replace part of an investment property. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in the statement of comprehensive income in the period in which they arise.

The fair value of the Group's owned investment properties at 31 March 2021 is based on a valuation carried out at that date by Cushman & Wakefield LLP (2020: Cushman & Wakefield LLP), an independent valuer, on the basis of highest and best use. The valuation is in accordance with standards complying with the Royal Institute of Chartered Surveyors' ("RICS's") approval and the conceptual framework that has been set by the International Valuation Standards Committee.

The Cushman & Wakefield LLP valuation is based upon assumptions including those relating to current rental rates, market rental rates, occupancy, gross initial yields, discount factors and void periods. The properties are valued on the basis of a ten to fourteen year discounted cash flow model supported by comparable evidence. The discounted cash flow calculation is a valuation of rental income considering non-recoverable costs and applying a discount rate for the current income risk over a ten to fourteen year period. After ten to fourteen years, a determining residual value (exit scenario) is calculated, discounted to present value.

Investment properties relating to leased assets were initially recognised on 1 April 2019 in accordance with IFRS 16 (see policy in note 2(i)). Subsequent to initial recognition, investment properties relating to leased assets are stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in the statement of comprehensive income in the period in which they arise.

The fair value of investment properties relating to leased assets at 31 March 2021 has been arrived at on the basis of a valuation carried out at that date by the Group. The valuation is based upon assumptions including future rental income and expenditure in accordance with the conditions of the related lease agreements. The properties are valued on the basis of a discounted cash flow model with the measurement period equal to the term of the lease agreements.

(m) Disposals of investment property

Investment property disposals are recognised when control of the property transfers to the buyer, which typically occurs on the date of completion. Profit or loss arising on disposal of investment properties is calculated by reference to the most recent carrying value of the asset adjusted for subsequent capital expenditure.

(n) Assets held for sale and disposal groups

(i) Investment properties held for sale

Investment properties held for sale are separately disclosed at the asset's fair value. In order for an investment property held for sale to be recognised, the following conditions must be met:

• the asset must be available for immediate sale in its present condition and location;

• the asset is being actively marketed;

• the asset's sale is expected to be completed within twelve months of classification as held for sale;

• there must be no expectation that the plan for selling the asset will be withdrawn or changed significantly; and

• the successful sale of the asset must be highly probable.

(ii) Disposal groups

The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of a disposal group, excluding finance costs and income tax expense.

The criteria for held-for-sale classification is regarded as met only when the sale is highly probable and the disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset with the sale expected to be completed within one year from the date of the classification.

Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.

Assets and liabilities classified as held for sale are presented separately in the statement of financial position.

Additional disclosures are provided in note 14.

(o) Plant and equipment

Recognition and measurement

Items of plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Depreciation

Where parts of an item of plant and equipment have different useful lives, they are accounted for as separate items of plant and equipment.

Depreciation is charged in the statement of comprehensive income on a straight-line basis over the estimated useful lives of each part of an item of the fixed assets. The estimated useful lives are as follows:

Plant and equipment three to ten years

Fixtures and fittings three to fifteen years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

(p) Intangible assets

The Group recognises only acquired intangible assets. These intangibles are valued at cost.

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Intangible assets with a definite useful life are amortised on a straight-line basis over their respective useful lives. Their useful lives are between three and five years. Any amortisation of these assets is recognised as such under administrative expenses in the consolidated statement of comprehensive income.

Intangible assets with an indefinite useful life, particularly goodwill, are not amortised.

Goodwill arising on consolidation represents the excess of the cost of the purchase consideration over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition.

Goodwill is initially recognised at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill is tested annually for impairment, or more frequently when there is an indication that the business to which the goodwill applies may be impaired.

(q) Trade and other receivables

Rent and service charge receivables and any contract assets do not contain significant financing components and are measured at the transaction price. Other receivables are initially measured at fair value plus transaction costs. Subsequently, trade and other receivables are measured at amortised cost and are subject to impairment (see note 2(y)). The Group applies the simplified impairment model of IFRS 9 in order to determine expected credit losses in trade and other receivables, including lease incentives.

The Group assesses on a forward-looking basis the expected credit losses associated with its trade and other receivables. A provision for impairment is made for the lifetime expected credit losses on initial recognition of the receivable. If collection is expected in more than one year, the balance is presented within non-current assets.

(r) Treasury Shares and shares issued to the Employee Benefit Trust

Own equity instruments are deducted from equity. No gain or loss is recognised in the statement of comprehensive income on the purchase, sale, issue or cancellation of the Group's equity instruments.

(s) Share-based payments

The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards.

The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

(t) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, demand deposits and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

(u) Bank borrowings

Interest-bearing bank loans and borrowings are initially recorded at fair value net of directly attributable transaction costs.

Subsequent to initial recognition, interest-bearing loans and borrowings are measured at amortised cost using the effective interest rate method.

When debt refinancing exercises are carried out, existing liabilities will be treated as being extinguished when the new liability is substantially different from the existing liability. In making this assessment, the Group will consider the transaction as a whole, taking into account both qualitative and quantitative characteristics in order to make the assessment.

(v) Trade payables

Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method.

(w) Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

(x) Dividends

Dividend distributions to the Company's shareholders are recognised as a liability in the consolidated financial information in the period in which the dividends are approved by the shareholders in line with Guernsey law. The final dividend relating to the year ended 31 March 2021 will be approved and recognised in the financial year ending 31 March 2022.

(y) Impairment excluding investment properties

(i) Financial assets

A financial asset (excluding financial assets at fair value through profit and loss) is assessed at each reporting date to determine whether there is any impairment. The Group recognises an allowance for expected credit losses (ECLs) for all receivables and contract assets held by the Group. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms and that are not recognised separately by the Group.

For rent and other trade receivables and any contract assets, the Group applies a simplified approach in calculating ECLs. The Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date (i.e. a loss allowance for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default). In determining the ECLs the Group takes into account any recent payment behaviours and future expectations of likely default events (i.e. not making payment on the due date) based on individual customer credit ratings, actual or expected insolvency filings or Company voluntary arrangements and market expectations and trends in the wider macroeconomic environment in which our customers operate.

Impairment losses are recognised in profit or loss in the statement of comprehensive income. For more information refer to note 6. Trade and other receivables are written off once all avenues to recover the balances are exhausted and the lease has ended.

(ii) Non-financial assets

The carrying amounts of the Group's non-financial assets, other than investment property, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit").

An impairment loss is recognised if the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss of the statement of comprehensive income. Impairment losses recognised in profit or loss in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis.

(z) Current versus non-current classification

The Group presents assets and liabilities in the statement of financial position based on current/non-current classification, except for deferred tax assets and liabilities which are classified as non-current assets and liabilities. An asset is current when it is:

• expected to be realised or intended to be sold or consumed in the normal operating cycle;

• held primarily for the purpose of trading;

• expected to be realised within twelve months after the reporting period; or

• cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• it is expected to be settled in the normal operating cycle;

• it is held primarily for the purpose of trading;

• it is due to be settled within twelve months after the reporting period; or

• there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non-current.

(aa) Standards and interpretations in issue and not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are disclosed below, if they are expected to have an impact on the Group's financial statements. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

• what is meant by a right to defer settlement;

• that a right to defer must exist at the end of the reporting period;

• that classification is unaffected by the likelihood that an entity will exercise its deferral right; and

• that only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied retrospectively. The Group is currently assessing the impact the amendments will have on its current accounting policies.

IFRS 9 Financial Instruments - fees in the "10%" test for derecognition of financial liabilities

As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued an amendment to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is effective for annual reporting periods beginning on or after 1 January 2022, with earlier adoption permitted. The Group must apply the amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment.

The amendments are not expected to have a material impact on the Group.

(ab) Non-IFRS measures

The Directors have chosen to disclose EPRA earnings, which are widely used alternative metrics to their IFRS equivalents (further details on EPRA best practice recommendations can be found at www.epra.com). Note 11 to the financial statements includes a reconciliation of basic and diluted earnings to EPRA earnings.

EPRA introduced three new features of the net asset valuation metrics, which replace EPRA NAV for accounting periods commencing in January 2020: EPRA net reinstatement value, EPRA net tangible assets and EPRA net disposal value. The Directors have disclosed the three new EPRA measures in note 12 and disclose EPRA net tangible assets as the primary EPRA measure. For further explanation, please see note 12.

The Directors are required, as part of the JSE Listing Requirements, to disclose headline earnings; accordingly, headline earnings are calculated using basic earnings adjusted for revaluation gain net of related tax and gain/loss on sale of properties net of related tax. Note 11 to the financial statements includes a reconciliation between IFRS and headline earnings.

The Directors have chosen to disclose adjusted earnings in order to provide an alternative indication of the Group's underlying business performance; accordingly, it excludes the effect of adjusting items net of related tax. Note 11 to the financial statements includes a reconciliation of adjusting items included within adjusted earnings, with those adjusting items stated within administrative expenses in note 6.

The Directors have chosen to disclose adjusted profit before tax and funds from operations in order to provide an alternative indication of the Group's underlying business performance and to facilitate the calculation of its dividend pool; a reconciliation between profit before tax and funds from operations is included within note 28 to the financial statements. Within adjusted profit before tax are adjusting items as described above gross of related tax.

Further details on non-IFRS measures can be found in the Business analysis section of this document.

3. Significant accounting judgements, estimates and assumptions

Judgements

In the process of applying the Group's accounting policies, which are described in note 2, the Directors have made the following judgements that have the most significant effect on the amounts recognised in the financial information:

Acquisition and disposal of properties

Property transactions can be complex in nature and material to the financial statements. To determine when an acquisition or disposal should be recognised, management considers whether the Group assumes or relinquishes control of the property, and the point at which this is obtained or relinquished. Consideration is given to the terms of the acquisition or disposal contracts and any conditions that must be satisfied before the contract is fulfilled. In the case of an acquisition, management must also consider whether the transaction represents an asset acquisition or business combination.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Valuation of owned and leased investment properties (including those recognised within assets held for sale or a disposal group)

The fair value of the Group's owned investment properties was determined by Cushman & Wakefield LLP (2020: Cushman & Wakefield LLP), an independent valuer. After adjusting investment properties for lease incentive accounting, the book value of investment properties excluding assets held for sale is shown as €1,347.2 million (2020: €1,176.1 million) as disclosed in note 13.

The fair value of the Group's leased investment properties was determined by the Group. The book value of leased investment properties is shown as €15.0 million (2020: €17.8 million) as disclosed in note 13.

As a result of the level of judgement used in arriving at the market valuations, the amounts which may ultimately be realised in respect of any given property may differ from the valuations shown on the statement of financial position.

Assessment of uncertain tax positions

In the ordinary course of business, management makes judgements and estimates in relation to the tax treatment of certain transactions in advance of the ultimate tax determination being certain. This is due to the complexity of the Group's legal structure (including multiple legal entities), the number of tax jurisdictions in which the Group operates, the complexity of international tax legislation and the changing tax environment. Where the amount of tax payable or recoverable is uncertain, the Group makes an assessment based on the Management's judgement of the probable amount of the liability or expected amounts recoverable.

Deferred tax assets and liabilities require management judgement in determining the amounts, if any, to be recognised. In particular, judgement is required when assessing the extent to which deferred tax assets should be recognised, taking into account the expected timing and level of future taxable income. Deferred tax assets are only recognised when management believe they will be recovered against future taxable profits.

Service charge

Service charge expenses are based on actual costs incurred and invoiced together with an estimate of costs to be invoiced in future periods. The estimates are based on expected consumption rates and historical trends and take into account market conditions at the time of recording.

Service charge income is based on service charge expense and takes into account recovery rates which are largely derived from estimated occupancy levels.

Cash Flow and Covenant Compliance Forecasts

Cash flow forecasts and covenant compliance forecasts are prepared by management to assess the going concern assumption and viability of the Group. Estimations of future revenue and expenditure are made to determine the expected cash inflows and outflows, considering expectations for occupancy levels, forecast expenditure and the current market climate. The impact of the forecasted cash flows and underlying property valuations are considered when assessing forecast covenant compliance and anticipated levels of headroom on the Group's debt facilities.

Refer to note 2(d) for further details, which includes the assessment of forecasted cash flows and covenant compliance in Management's going concern assessment.

4. Operating segments

The Directors are of the opinion that the Group is engaged in a single segment of business, being property investment, and in one geographical area, Germany. All rental income is derived from operations in Germany. The majority of the Group's investment properties are multi-tenanted and mixed use and accordingly cannot be evaluated according to separate segments. There is no one tenant that represents more than 10% of Group revenues. The chief operating decision maker is considered to be the Senior Management Team, which is provided with consolidated IFRS information on a monthly basis.

5. Revenue

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Rental and other income from investment properties	95,288	89,132
Service charge income from investment properties	51,041	48,069
Rental and other income from managed properties	9,699	7,846
Service charge income from managed properties	9,333	4,967
Total revenue	165,361	150,014

Other income relates primarily to income associated with conferencing and catering of €2,314,000 (2020: €1,961,000) and fee income from managed properties of €7,338,000 (2020: €1,521,000).

6. Operating profit

The following items have been charged in arriving at operating profit:

Direct costs

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Service charge costs	56,184	55,557
Costs relating to managed properties	11,274	6,539
Non-recoverable maintenance	4,083	2,576
Direct costs	71,541	64,672

Gain on loss of control of subsidiaries

On 31 July 2019 the Company completed the Titanium venture with AXA IM Alts which included the sale of 65% of the Company's interest in five subsidiary companies holding business park assets located in Berlin, Nuremberg, Mainz and Bayreuth. As a result, a gain on loss of control of subsidiaries amounting to €6,323,000 was recognised in the statement of comprehensive income for the year ended 31 March 2020.

Administrative expenses

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Audit and non-audit fees to audit firm	683	560
Legal and professional fees	2,778	2,467
Expected credit loss provision (see note 24)	1,791	118
Other administration costs	2,781	1,018
LTIP and SIP	3,395	1,985
Employee costs	11,109	10,701
Director fees and expenses	493	379
Depreciation of plant and equipment (see note 15)	669	662
Amortisation of intangible assets (see note 19)	897	914
Depreciation of right of use assets (see note 16)	521	522
Marketing	2,009	1,889
Selling costs relating to assets held for sale	-	65
Exceptional items	697	(105)
Administrative expenses	27,823	21,175

Exceptional items relate to costs directly attributable to Covid-19 which are mainly costs for signage and hygiene products in amount of €200,000, an adjustment for a legal case in amount of €247,000 and costs for an internal restructuring in amount of €250,000 (2020: legal claim accrual release). Employee costs as stated above relate to costs which are not recovered through service charge.

The following services have been provided by the Group's auditor:

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Audit fees to audit firm:
Audit of consolidated financial statements	532	410
Audit of subsidiary undertakings	88	87
Non-audit fees to audit firm:
Other assurance services	63	63
Total fees	683	560

7. Employee costs and numbers

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Wages and salaries	19,013	15,977
Social security costs	2,925	2,671
Pension	253	212
Other employment costs	71	64
Total	22,262	18,924

Included in the costs related to wages and salaries for the year are expenses of €3,395,000 (2020: €1,985,000) relating to the granting or award of shares under LTIPs and SIPs (see note 8). The costs for all periods include those relating to Executive Directors.

All employees are employed directly by one of the following Group subsidiary companies: Sirius Facilities GmbH, Sirius Facilities (UK) Limited, Curris Facilities & Utilities Management GmbH, SFG NOVA GmbH, Sirius Finance (Guernsey) Limited and Sirius Corporate Services B.V. The average number of people employed by the Group during the year was 256 (2020: 244), expressed in full-time equivalents. In addition, the Board of Directors consists of five Non-Executive Directors (2020: five) and two Executive Directors as at 31 March 2021 (2020: two).

8. Employee schemes

Equity-settled share-based payments

2018 LTIP

The LTIP for the benefit of the Executive Directors and the Senior Management Team was approved in 2018 with three separate grant dates. Awards granted under the LTIP are made in the form of nil-cost options which vest after the three year performance period with vested awards being subject to a further holding period of two years. Awards are split between ordinary and outperformance awards. Ordinary awards carry both adjusted net asset value per share ("TNR") (two-thirds of award) and relative total shareholder return ("TSR") (one-third of award) performance conditions and outperformance awards carry a sole TNR performance condition. The employee's tax obligation will be determined upon the vesting date of the share issue.

June 2020 grant

3,600,000 ordinary share awards were granted under the scheme on 15 June 2020 with a total charge for the award of €2,265,552. Charges for the awards are based on fair values calculated at the grant date and expensed on a straight-line basis over the period that individuals are providing service to the Company in respect of the awards. For the 15 June 2020 LTIP grant an expense of €645,000 was recognised in the consolidated statement of comprehensive income to 31 March 2021.

The following assumptions were used in calculating the fair value per share for the TNR and TSR elements of the award that were granted on 15 June 2020:

	TNR	TSR
Valuation methodology	Black-Scholes	Monte-Carlo
Calculation for	2/3 ordinary award	1/3 ordinary award
Share price at grant date - €	0.84	0.84
Exercise price - €	nil	nil
Expected volatility - %	38.5	38.5
Performance projection period - years	2.79	2.67
Expected dividend yield - %	4.28	4.28
Risk-free rate based on European treasury bonds rate of return - %	(0.677) p.a.	(0.677) p.a.
Expected outcome of performance conditions - %	100	67.2
Fair value per share - €	0.745	0.564

The weighted average fair value of a share granted under the ordinary award in the year is €0.68.

Assumptions considered in this model include: expected volatility of the Company's share price, as determined by calculating the historical volatility of the Company's share price over the period immediately prior to the date of grant and commensurate with the expected life of the awards; dividend yield based on the actual dividend yield as a percentage of the share price at the date of grant; performance projection period; risk-free rate; and correlation between comparators.

June 2019 grant

3,760,000 ordinary share awards and 690,000 outperformance share awards were granted under the scheme on 16 June 2019 with a total charge for the awards of €2,145,511 over three years. Charges for the awards are based on fair values calculated at the grant date and expensed on a straight-line basis over the period that individuals are providing service to the Company in respect of the awards. For the 16 June 2019 LTIP grant an expense of €766,000 was recognised in the consolidated statement of comprehensive income to 31 March 2021. The fair value per share for the TNR and TSR elements of the award was determined using Black-Scholes and Monte-Carlo models respectively with the following assumptions used in the calculation:

	TNR	TSR
Valuation methodology	Black-Scholes	Monte-Carlo
Calculation for	2/3 ordinary award/ outperformance award	1/3 ordinary award
Share price at grant date - €	0.73	0.73
Exercise price - €	nil	nil
Expected volatility - %	23.8	23.8
Performance projection period - years	2.80	2.67
Expected dividend yield - %	4.56	4.56
Risk-free rate based on European treasury bonds rate of return - %	(0.695) p.a.	(0.695) p.a.
Expected outcome of performance conditions - %	100/24.5	46.6
Fair value per share - €	0.643	0.340

The weighted average fair value of a share granted under the ordinary award in the period is €0.54.

January 2019 grant

In addition, as disclosed in the 2019 Annual Report, 4,000,000 ordinary share awards and 700,000 outperformance share awards were previously granted under the scheme on 15 January 2019. The portion of the accounting charge recognised in the consolidated statement of comprehensive income to 31 March 2021 is based on the following adjustments to the fair value of the awards linked to the TNR performance condition:

1) the fair value was discounted at the rate of the dividend yield over the projection period in order to ensure consistent treatment for the awards linked to TSR and TNR performance conditions; and

2) the level of expected vesting of the TNR outperformance award has been adjusted in accordance with the Company's best estimate.

The fair value per share for the TNR and TSR elements of the award was determined using Black-Scholes and Monte-Carlo models respectively with the following assumptions used in the calculation:

	TNR	TSR
Valuation methodology	Black-Scholes	Monte-Carlo
Calculation for	2/3 ordinary award/ outperformance award	1/3 ordinary award
Share price at grant date - €	0.66	0.66
Exercise price - €	nil	nil
Expected volatility - %	23.3	23.3
Performance projection period - years	2.21	2.08
Expected dividend yield - %	4.86	4.86
Risk-free rate based on European treasury bonds rate of return - %	(0.63) p.a.	(0.63) p.a.
Expected outcome of performance conditions - %	100/23.9	44.7
Fair value per share - €	0.593	0.295

The weighted average fair value of a share granted under the ordinary award in the period is €0.49.

As a result, the adjusted total charge for the awards granted on 15 January 2019 is €2,111,000. An expense of €955,000 was recognised in the consolidated statement of comprehensive income to 31 March 2021 which represents the fair value charge for the year and an expense of €247,000 was recognised as a provision for the expected employer's cost in relation to the vesting in the next financial year.

2019 SIP

A share incentive plan ("SIP") for the benefit of senior employees of the Company was approved in August 2019. The fair value was based on the Company's estimate of the shares that will eventually vest. Under the SIP, the awards were granted in the form of whole shares at no cost to the participants. Shares will vest after a three year performance period followed by a holding period of twelve months. The performance conditions used to determine the vesting of the award were based on the adjusted net asset value including dividends paid. As a result, under the scheme in August 2019 2,774,750 shares were granted (with an additional 70,000 allocated in the current period), subject to performance criteria, and an expense including related costs of €679,000 was recognised in the consolidated statement of comprehensive income to 31 March 2021.

2020 SIP

During the period another share incentive plan ("SIP") for the benefit of senior employees of the Company was approved in July 2020. The fair value was based on the Company's estimate of the shares that will eventually vest. Under the SIP, the awards were granted in the form of whole shares at no cost to the participants. Shares will vest at the end of the financial year followed by a holding period of twelve months. The performance conditions used to determine the vesting of the award were based on the adjusted net asset value including dividends paid. As a result, under the scheme in July 2020 a maximum of 120,000 shares were granted, subject to performance criteria, and an expense including related costs of €103,000 was recognised in the consolidated statement of comprehensive income to 31 March 2021.

Movements in the number of awards outstanding are as follows:

	Year ended 31 March 2021		Year ended 31 March 2020
	Number of share awards	Weighted average exercise price €000	Number of share awards	Weighted average exercise price €000
Balance outstanding as at the beginning of the period (nil exercisable)	11,934,750	-	4,700,000	-
Maximum granted during the year	3,790,000	-	7,234,750	-
Forfeited during the year	(140,000)	-	-	-
Exercised during the year	-	-	-	-
Balance outstanding as at year end (nil exercisable)	15,584,750	-	11,934,750	-

Employee benefit schemes

A reconciliation of share-based payments and employee benefit schemes and their impact on the consolidated statement of changes in equity is as follows:

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Charge relating to 2018 LTIP - January 2019 grant	955	957
Charge relating to 2018 LTIP - June 2019 grant	766	613
Charge relating to 2018 LTIP - June 2020 grant	645	-
Charge relating to 2019 SIP - August 2019 grant	679	415
Charge relating to 2020 SIP - July 2020 grant	103	-
Share-based payment transactions as per consolidated statement of changes in equity	3,148	1,985

9. Finance income, finance expense and change in fair value of derivative financial instruments

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Bank interest income	38	54
Finance income from associates	2,674	977
Finance income	2,712	1,031
Bank loan interest expense	(7,402)	(7,234)
Interest expense related to lease liabilities (see note 16)	(349)	(423)
Bank charges and bank interest expense on deposits	(435)	(182)
Amortisation of capitalised finance costs	(1,683)	(1,437)
Refinancing costs, exit fees and prepayment penalties	-	(9,107)
Finance expense	(9,869)	(18,383)
Change in fair value of derivative financial instruments	136	(377)
Net finance expense	(7,021)	(17,729)

Included within refinancing costs, exit fees and prepayment penalties for the year ended 31 March 2020 were costs amounting to €6,025,000 that directly relate to the repayment of loan facilities secured by assets included within the Titanium venture with AXA IM Alts that completed on 31 July 2019. The residual amount of €3,082,000 were costs relating to the repayment of loan facilities secured by assets not included within the Titanium venture.

The change in fair value of derivative financial instruments in amount of €136,000 (2020: (€377,000)) reflects the change in the mark to market valuation of these financial instruments.

10. Taxation

Consolidated statement of comprehensive income

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Current income tax
Current income tax charge	(1,641)	(1,030)
Current income tax charge relating to disposals of investment properties	(87)	-
Adjustments in respect of prior periods	(189)	97
Total current income tax	(1,917)	(933)
Deferred tax
Relating to origination and reversal of temporary differences	(14,180)	(11,687)
Total deferred tax	(14,180)	(11,687)
Income tax charge reported in the statement of comprehensive income	(16,097)	(12,620)

The effective income tax rate for the period differs from the standard rate of corporation tax in Germany of 15.825% (2020: 15.825%). The differences are explained below:

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Profit before tax	163,657	110,765
Profit before tax multiplied by the rate of corporation tax in Germany of 15.825% (2020: 15.825%)	25,899	17,529
Effects of:
Deductible interest on internal financing	(7,207)	(6,891)
Tax exempt gain from selling of investments and dividends	(798)	(1,338)
Non-deductible expenses	290	68
Tax losses utilised	(2,498)	(1,611)
Property valuation movements due to differences in accounting treatments	(210)	4,847
Adjustments in respect of prior periods	189	(97)
Other	432	113
Total income tax charge in the statement of comprehensive income	16,097	12,620

Non-deductible expenses primarily relate to differences in the accounting and taxation treatment of share awards. Tax law provides for a straight-line depreciation of the buildings whereas any valuation results are not considered. This impact is considered within the property valuation movement item. As far as a tax rate other than the standard tax rate is to be applied to Group companies, this is shown in the position "Other".

Deferred income tax liability

	31 March 2021 €000	31 March 2020 €000
Balance as at the beginning of the year	(42,151)	(30,878)
Release due to disposals	483	414
Taxes on the revaluation of investment properties and derivative financial instruments	(14,663)	(11,687)
Balance as at year end	(56,331)	(42,151)

The Group is mainly subject to taxation in Germany with the income from the Germany-located rental business with a tax rate of 15.825%. It has tax losses of €325,257,000 (31 March 2020: €351,265,000) that are for an indefinite period of time available for offset against future profits of its subsidiaries in which the losses arose under the restrictions of the minimum taxation rule. Deferred tax assets have not been recognised in respect of the revaluation losses on investment properties, the valuation of the Company LTIP, interest rate swaps and in regard to IFRS 16 "Lease Contracts" as they may not be used to offset taxable profits elsewhere in the Group as realisation is not assured. However, the available losses have been considered in the calculation of the deferred tax liability in relation to the revaluation of investment properties.

11. Earnings per share

The calculations of the basic, EPRA, diluted, headline and adjusted earnings per share are based on the following data:

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Earnings attributable to the owners of the Company
Basic earnings	147,451	98,136
Diluted earnings	147,451	98,136
EPRA earnings	58,633	55,882
Diluted EPRA earnings	58,633	55,882
Headline earnings	58,848	46,398
Diluted headline earnings	58,848	46,398
Adjusted
Basic earnings	147,451	98,136
Deduct revaluation gain	(99,585)	(55,789)
Deduct gain on sale of properties	(54)	(86)
Deduct gain on loss of control of subsidiaries	(65)	(6,323)
Tax in relation to the revaluation gain and gain on sale of properties above	14,346	11,687
Non controlling interest (NCI) relating to revaluation, net of related tax	82	29
Deduct revaluation gain on investment property relating to associates	(4,199)	(1,687)
Tax in relation to the revaluation gain on investment property relating to associates above	872	431
Headline earnings after tax	58,848	46,398
(Deduct)/add change in fair value of derivative financial instruments, net of related tax and NCI	(215)	377
Deduct revaluation expense relating to leased investment properties	(4,325)	(3,916)
Add adjusting items, net of related tax and NCI(1)	4,092	11,052
Adjusted earnings after tax	58,400	53,911
Number of shares
Weighted average number of ordinary shares for the purpose of basic, headline, adjusted and basic EPRA earnings per share	1,040,956,722	1,027,881,515
Weighted average number of ordinary shares for the purpose of diluted earnings, diluted headline earnings, diluted adjusted earnings and diluted EPRA earnings per share	1,056,541,472	1,039,816,265
Basic earnings per share	14.16c	9.55c
Diluted earnings per share	13.96c	9.44c
Basic EPRA earnings per share	5.63c	5.44c
Diluted EPRA earnings per share	5.55c	5.37c
Headline earnings per share	5.65c	4.51c
Diluted headline earnings per share	5.57c	4.46c
Adjusted earnings per share	5.61c	5.24c
Adjusted diluted earnings per share	5.53c	5.18c

(1) See reconciliation between adjusting items as stated within earnings per share and those stated within administrative expenses in note 6 below.

	Notes	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Exceptional items	6	697	(105)
Refinancing costs, exit fees and prepayment penalties	9	-	9,107
Selling costs relating to assets held for sale	6	-	65
LTIP and SIP	6	3,395	1,985
Adjusting items as per note 11		4,092	11,052

EPRA earnings

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Basic and diluted earnings attributable to owners of the Company	147,451	98,136
Gain on revaluation of investment properties	(99,585)	(55,789)
Add loss/deduct gain on disposal of properties (including tax)	33	(86)
Deduct gain on loss of control of subsidiaries	(65)	(6,323)
Refinancing costs, exit fees and prepayment penalties	-	9,107
Change in fair value of derivative financial instruments	(136)	377
Deferred tax in respect of EPRA earnings adjustments	14,180	11,687
NCI in respect of the above	82	29
Deduct revaluation gain on investment property relating to associates	(4,199)	(1,687)
Tax in relation to the revaluation gain on investment property relating to associates	872	431
EPRA earnings	58,633	55,882

For more information on EPRA earnings refer to Annex 1.

For the calculation of basic, headline, adjusted and diluted earnings per share, as at year end, the number of shares has been reduced by nil shares (2020: nil shares), which are held by the Company as Treasury Shares and by 3,684,608 own shares held (2020: 2,112,720 shares), which are held by an Employee Benefit Trust on behalf of the Group.

The weighted average number of shares for the purpose of diluted, EPRA diluted, headline diluted and adjusted diluted earnings per share is calculated as follows:

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Weighted average number of ordinary shares for the purpose of basic, basic EPRA, headline and adjusted earnings per share	1,040,956,722	1,027,881,515
Effect of grant of SIP shares	2,834,750	2,784,750
Effect of grant of LTIP shares	12,750,000	9,150,000
Weighted average number of ordinary shares for the purpose of diluted, diluted EPRA, diluted headline and adjusted diluted earnings per share	1,056,541,472	1,039,816,265

The Company has chosen to report EPRA earnings per share ("EPRA EPS"). EPRA EPS is a definition of earnings as set out by the European Public Real Estate Association. EPRA earnings represents earnings after adjusting for the revaluation of investment properties, changes in fair value of derivative financial instruments, gains and losses on disposals of properties (net of related tax), the gain on loss of control of subsidiaries (net of related tax), refinancing costs, exit fees and prepayment penalties (collectively the "EPRA earnings adjustments"), deferred tax in respect of the EPRA earnings adjustments, NCI relating to gain on revaluation and gain on sale of properties net of related tax, revaluation gain on investment property relating to associates and the related tax thereon.

12. Net asset value per share

	31 March 2021 €000	31 March 2020 €000
Net asset value
Net asset value for the purpose of assets per share (assets attributable to the owners of the Company)	926,533	801,570
Deferred tax arising on revaluation gain, derivative financial instruments and LTIP valuation	56,331	42,151
Derivative financial instruments at fair value	1,141	1,279
Adjusted net asset value attributable to the owners of the Company	984,005	845,000
Number of shares
Number of ordinary shares for the purpose of net asset value per share	1,049,132,259	1,036,257,101
Number of ordinary shares for the purpose of EPRA NTA per share	1,064,717,009	1,048,191,851
Net asset value per share	88.31c	77.35c
Adjusted net asset value per share	93.79c	81.54c
EPRA NTA per share	92.29c	80.44c
Net asset value as at year end (basic)	926,533	801,570
Derivative financial instruments at fair value	1,141	1,279
Deferred tax in respect of EPRA earnings adjustments	56,331	41,668
Goodwill as per note 19	(3,738)	(3,738)
Intangibles as per note 19	(2,830)	(1,986)
Deferred tax in respect of EPRA adjustments in relation to investment in associates	5,212	4,337
EPRA NTA	982,649	843,130

EPRA introduced three new features of the net asset valuation metrics, which replaced EPRA NAV for accounting periods commencing in January 2020. Companies are expected to provide a bridge between the previous EPRA NAV metrics and the new ones for both the current and comparative accounting period in order to assist the users of their financial statements.

	EPRA NRV	EPRA NTA	EPRA NDV	EPRA NAV
	New measures			Previous measure
	31 March 2021 €000	31 March 2021 €000	31 March 2021 €000	31 March 2021 €000
Net asset value as at year end (basic)	926,533	926,533	926,533	926,533
Diluted EPRA net asset value at fair value	926,533	926,533	926,533	926,533
Group
Derivative financial instruments at fair value	1,141	1,141	n/a	1,141
Deferred tax in respect of EPRA earnings adjustments	56,331	56,331*	n/a	56,331
Goodwill as per note 19	n/a	(3,738)	(3,738)	n/a
Intangibles as per note 19	n/a	(2,830)	n/a	n/a
Fair value of fixed interest rate debt	n/a	n/a	(3,485)	n/a
Real estate transfer tax	106,274	n/a	n/a	n/a
Investment in associate
Deferred tax in respect of EPRA earnings adjustments	5,212	5,212*	n/a	n/a**
Fair value of fixed interest rate debt	n/a	n/a	(1,772)	n/a
Real estate transfer tax	6,772	n/a	n/a	n/a
Total EPRA NRV, NTA, NDV and NAV	1,102,263	982,649	917,538	984,005
EPRA NRV, NTA, NDV and NAV per share	103.53c	92.29c	86.18c	92.42c

* The Company intends to hold and does not intend in the long term to sell any of the investment properties and has excluded such deferred taxes for the whole portfolio as at year end.

** While the previous definition of EPRA NAV included this adjustment, in prior periods it has not been considered sufficiently material to adjust. As the value of this difference is expected to become more material in future periods, the adjustment will now be included in the calculation of the EPRA measures where appropriate.

	EPRA NRV	EPRA NTA	EPRA NDV	EPRA NAV
	New measures			Previous measure
	31 March 2020 €000	31 March 2020 €000	31 March 2020 €000	31 March 2020 €000
Net asset value as at year end (basic)	801,570	801,570	801,570	801,570
Diluted EPRA net asset value at fair value	801,570	801,570	801,570	801,570
Group
Derivative financial instruments at fair value	1,279	1,279	n/a	1,279
Deferred tax in respect of EPRA earnings adjustments	42,151	41,668*	n/a	42,151
Goodwill as per note 19	n/a	(3,738)	(3,738)	n/a
Intangibles as per note 19	n/a	(1,986)	n/a	n/a
Fair value of fixed interest rate debt	n/a	n/a	(3,688)	n/a
Real estate transfer tax	93,810	n/a	n/a	n/a
Investment in associate
Deferred tax in respect of EPRA earnings adjustments	4,337	4,337 *	n/a	n/a **
Fair value of fixed interest rate debt	n/a	n/a	(2,385)	n/a
Real estate transfer tax	6,322	n/a	n/a	n/a
Total EPRA NRV, NTA, NDV and NAV	949,469	843,130	791,759	845,000
EPRA NRV, NTA, NDV and NAV per share	90.58c	80.44c	75.54c	80.62c

* The Company intends to hold and does not intend in the long term to sell any of the investment properties and has excluded such deferred taxes for the whole portfolio as at year end.

For more information on adjusted net asset value and EPRA NRV, NTA and NDV, refer to Annex 1.

The number of ordinary shares for the purpose of EPRA net asset value per share is calculated as follows:

	31 March 2021 €000	31 March 2020 €000
Number of ordinary shares for the purpose of net asset value per share	1,049,132,259	1,036,257,101
Effect of grant of SIP shares	2,834,750	2,784,750
Effect of grant of LTIP shares	12,750,000	9,150,000
Number of ordinary shares for the purpose of EPRA net asset value per share	1,064,717,009	1,048,191,851

The number of shares has been reduced by 3,684,608 own shares held (2020: 2,120,720 shares), which are held by an Employee Benefit Trust on behalf of the Group.

13. Investment properties

The movement in the book value of investment properties is as follows:

	31 March 2021 €000	31 March 2020 €000
Total investment properties at book value as at the beginning of the year(1)	1,193,915	993,916
Additions - owned investment properties	35,484	120,434
Additions - leased investment properties	1,518	699
Capital expenditure and broker fees	31,720	33,177
Disposals	(30)	-
Reclassified as investment properties held for sale (note 14)	-	(10,100)
Gain on revaluation above capex and broker fees	104,156	59,939
Adjustment in respect of lease incentives	(246)	(235)
Deficit on revaluation relating to leased investment properties	(4,325)	(3,915)
Total investment properties at book value as at year end(1)	1,362,192	1,193,915

The reconciliation of the valuation of owned investment properties carried out by the external valuer to the carrying values shown in the statement of financial position is as follows:

	31 March 2021 €000	31 March 2020 €000
Owned investment properties at market value per valuer's report(1)	1,350,770	1,179,440
Adjustment in respect of lease incentives	(3,603)	(3,357)
Leased investment property market value	15,025	17,832
Total investment properties at book value as at year end(1)	1,362,192	1,193,915

(1) Excluding assets held for sale.

The fair value of the Group's owned investment properties as at year end has been arrived at on the basis of a valuation carried out at that date by Cushman & Wakefield LLP (2020: Cushman & Wakefield LLP), an independent valuer accredited in terms of the RICS. The fee arrangement with Cushman & Wakefield LLP for the valuation of the Group's properties is fixed, subject to an adjustment for acquisitions and disposals.

The value of each of the properties has been assessed in accordance with the RICS valuation standards on the basis of market value. The methodology and assumptions used to determine the fair values of the properties is consistent with the previous year.

The weighted average lease expiry remaining across the owned portfolio as at year end was 2.9 years (2020: 2.9 years).

As a result of the level of judgement and estimations used in arriving at the market valuations, the amounts that may ultimately be realised in respect of any given property may differ from the valuations shown in the statement of financial position.

The fair value (market value) of the Group's leased investment properties as at year end has been arrived at on the basis of a valuation carried out by the Group using discounted cash flows similar to the approach of Cushman & Wakefield LLP.

The reconciliation of gain on revaluation above capex as per the statement of comprehensive income is as follows:

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Gain on revaluation above capex and broker fees	104,156	59,939
Adjustment in respect of lease incentives	(246)	(235)
Deficit on revaluation relating to leased investment properties	(4,325)	(3,915)
Gain on revaluation of investment properties reported in the statement of comprehensive income	99,585	55,789

Included in the gain on revaluation of investment properties reported in the statement of comprehensive income are gross gains of €106.4 million and gross losses of €6.8 million (2020: gross gains of €78.2 million and gross losses of €22.4 million).

Other than the capital commitments disclosed in note 30, the Group is under no contractual obligation to purchase, construct or develop any investment property. The Group is responsible for routine maintenance to the investment properties.

All investment properties are categorised as Level 3 fair values as they use significant unobservable inputs. There have not been any transfers between levels during the year. Investment properties have been classed according to their asset type. Information on these significant unobservable inputs per class of investment property is disclosed below (excluding leased investment properties).

The valuation for owned investment properties is (including assets classified as held for sale) performed on a lease-by-lease basis due to the mixed-use nature of the sites using the discounted cash flow technique. This gives rise to large ranges in the inputs.

31 March 2021

	Market value (€000)	Current rental rate per sqm (€)		Market rental rate per sqm (€)		Occupancy (%)		Gross initial yield (%)		Discount factor (%)		Void period (months)
	Market value (€000)	Low	High	Low	High	Low	High	Low	High	Low	High	Low	High
Traditional business parks
Mature	326,650	2.67	8.16	2.65	8.46	91.3	100.0	4.7	8.8	3.8	5.9	6	12
Value add	439,100	1.99	6.44	3.33	6.91	49.5	97.3	4.7	9.3	4.3	7.4	9	18
Total traditional business parks	765,750	1.99	8.16	2.65	8.46	49.5	100.0	4.7	9.3	3.8	7.4	6	18
Modern business parks
Mature	209,600	4.78	10.01	3.63	9.79	91.6	100.0	5.4	10.0	3.8	5.4	6	15
Value add	144,400	3.61	7.09	4.35	8.24	77.2	88.2	5.9	8.6	5.0	5.9	9	24
Total modern business parks	354,000	3.61	10.01	3.63	9.79	77.2	100.0	5.4	10.0	3.8	5.9	6	24
Office
Mature	17,080	7.81	9.70	9.19	9.21	91.6	94.0	4.7	6.9	4.6	4.8	9	9
Value add	213,940	3.93	11.35	6.02	10.30	57.9	99.5	2.6	10.4	4.9	6.9	9	15
Total office	231,020	3.93	11.35	6.02	10.30	57.9	99.5	2.6	10.4	4.6	6.9	9	15
Total	1,350,770	1.99	11.35	2.65	10.30	49.5	100.0	2.6	10.4	3.8	7.4	6	24

31 March 2020

	Market value (€000)	Current rental rate per sqm (€)		Market rental rate per sqm (€)		Occupancy (%)		Gross initial yield (%)		Discount factor (%)		Void period (months)
	Market value (€000)	Low	High	Low	High	Low	High	Low	High	Low	High	Low	High
Traditional business parks
Mature	308,380	2.67	8.13	2.65	8.46	92.2	100.0	4.6	10.5	4.0	6.0	6	12
Value add	366,600	0.74	6.49	3.12	6.58	16.8	97.2	2.6	11.1	4.2	7.8	9	24
Total traditional business parks	674,980	0.74	8.13	2.65	8.46	16.8	100.0	2.6	11.1	4.0	7.8	6	24
Modern business parks
Mature	175,520	4.78	9.70	3.60	9.61	91.8	100.0	6.0	10.8	4.0	6.0	9	18
Value add	138,310	3.31	6.48	4.25	8.24	71.1	92.4	5.2	10.2	5.4	6.5	9	24
Total modern business parks	313,830	3.31	9.70	3.60	9.61	71.1	100.0	5.2	10.8	4.0	6.5	9	24
Office
Mature	24,160	6.44	8.88	8.46	9.21	85.0	100.0	4.6	7.1	4.9	5.6	9	12
Value add	176,570	3.60	10.48	6.04	10.30	45.0	91.1	4.0	10.4	5.0	7.6	9	18
Total office	200,730	3.60	10.48	6.04	10.30	45.0	100.0	4.0	10.4	4.9	7.6	9	18
Total	1,189,540	0.74	10.48	2.65	10.30	16.8	100.0	2.6	11.1	4.0	7.8	6	24

As a result of the level of judgement and estimates used in arriving at the market valuations, the amounts which may ultimately be realised in respect of any given property may differ from valuations shown in the statement of financial position. Key inputs are considered to be inter-related whereby changes in one key input can result in changes in other key inputs. The impact of changes in relation to the key inputs is also shown in the table below:

31 March 2021

	Market value (€000)	Change of 5% in market rental rates (€000)		Change of 0.25% in discount rates (€000)		Change of 0.5% in gross initial yield (€000)
	Market value (€000)	Increase	Decrease	Increase	Decrease	Increase	Decrease
Total traditional business parks	765,750	38,310	(38,000)	(15,030)	15,950	(58,824)	69,947
Total modern business parks	354,000	17,350	(17,190)	(7,560)	7,960	(24,479)	28,561
Total office	231,020	11,680	(11,480)	(4,520)	4,850	(18,859)	23,308
Market value	1,350,770	67,340	(66,670)	(27,110)	28,760	(102,162)	121,816

31 March 2020

	Market value (€000)	Change of 5% in market rental rates (€000)		Change of 0.25% in discount rates (€000)		Change of 0.5% in gross initial yield (€000)
	Market value (€000)	Increase	Decrease	Increase	Decrease	Increase	Decrease
Total traditional business parks	674,980	33,400	(32,900)	(12,990)	13,670	(50,952)	60,702
Total modern business parks	313,830	15,050	(15,190)	(6,510)	6,610	(20,308)	23,472
Total office	200,730	10,050	(10,570)	(4,430)	4,280	(16,154)	19,635
Market value	1,189,540	58,500	(58,660)	(23,930)	24,560	(87,414)	103,809

14. Assets held for sale

Investment properties held for sale

	31 March 2021 €000	31 March 2020 €000
Weilimdorf	-	10,100
Balance as at year end	-	10,100

The disclosures regarding valuation in note 13 are also applicable to assets held for sale. An amount of €9,090,000 relating to the sale of the Weilimdorf asset was received prior to the completion date of 1 April 2020. As a result, an equal and opposite position within other payables was recognised. See note 22 for further details. An amount of €1,010,000 is still due to be received as at 31 March 2021.

15. Plant and equipment

	Plant and equipment €000	Fixtures and fittings €000	Total €000
Cost
As at 31 March 2020	716	5,394	6,110
Additions in year	319	658	977
Disposals in year	-	-	-
As at 31 March 2021	1,035	6,052	7,087
Depreciation
As at 31 March 2020	(615)	(3,121)	(3,736)
Charge for year	(76)	(593)	(669)
Disposals in year	-	-	-
As at 31 March 2021	(691)	(3,714)	(4,405)
Net book value as at 31 March 2021	344	2,338	2,682
Cost
As at 31 March 2019	7,938	4,157	12,095
Additions in year	217	1,237	1,454
Transfer to intangible assets (note 19)*	(4,878)	-	(4,878)
Disposals in year	(2,561)	-	(2,561)
As at 31 March 2020	716	5,394	6,110
Depreciation
As at 31 March 2019	(6,042)	(2,615)	(8,657)
Charge for year	(156)	(506)	(662)
Transfer to intangible assets (note 19)*	3,207	-	3,207
Disposals in year	2,376	-	2,376
As at 31 March 2020	(615)	(3,121)	(3,736)
Net book value as at 31 March 2020	101	2,273	2,374

* As of 31 March 2020, software and licences have been transferred from plant and equipment into intangible assets as the nature of these assets relate to intangible assets.

16. Right of use assets and lease liabilities

Set out below are the carrying amounts of right of use assets (excluding those disclosed under investment property) recognised and the movements during the year:

	Office €000	Total €000
As at 1 April 2019	2,962	2,962
Additions	-	-
Depreciation expense	(522)	(522)
As at 31 March 2020	2,440	2,440
Additions	-	-
Depreciation expense	(521)	(521)
As at 31 March 2021	1,919	1,919

In addition to office spaces the Group is also counterparty to long-term leasehold agreements and head leases relating to commercial property. Right of use assets amounting to €15,025,000 (2020: €17,832,000) are classified as investment properties of which €9,355,000 (2020: €12,031,000) relate to commercial property.

Set out below are the carrying amounts of lease liabilities and the movements during the year:

	31 March 2021 €000	31 March 2020 €000
Balance as at the beginning of the year	(19,150)	(24,010)
Accretion of interest	(349)	(423)
Additions	(1,518)	(699)
Payments	6,030	5,982
Balance as at year end	(14,987)	(19,150)
Current lease liabilities as at year end	(5,857)	(5,562)
Non-current lease liabilities as at year end	(9,130)	(13,588)

The following table sets out the carrying amount, by maturity, of the Group's lease liabilities:

31 March 2021	Within 1 year €000	1-5 years €000	5+ years €000	Total €000
Commercial property*	(5,208)	(1,364)	(776)	(7,348)
Long-term leasehold*	(133)	(560)	(4,977)	(5,670)
Office space	(516)	(1,453)	-	(1,969)
Total	(5,857)	(3,377)	(5,753)	(14,987)

31 March 2020	Within 1 year €000	1-5 years €000	5+ years €000	Total €000
Commercial property*	(5,003)	(5,875)	-	(10,878)
Long-term leasehold*	(111)	(569)	(5,121)	(5,801)
Office space	(448)	(1,997)	(26)	(2,471)
Total	(5,562)	(8,441)	(5,147)	(19,150)

* These lease liabilities relate to right of use assets recorded as investment properties.

Maturity analysis of lease liabilities using contractual undiscounted payments is disclosed in note 24.

The overall weighted average discount rate used for the year is 1.9% (2020: 1.9%).

During the year expenses paid for leases of low-value assets and short-term leases which are recognised straight line over the lease term (included in the administrative expenses) amounted to €379,000 (2020: €320,000).

In addition to leases of low-value assets and payments resulting from short-term leases, interest payments and repayments of lease liabilities totalling €6,030,000 (2020: €5,982,000) were incurred for the year and are included in the cash flow from financing activities.

17. Investment in associates

The principal activity of the associates is the investment in, and development of, commercial property located in Germany and to provide conventional and flexible workspace. Since the associates are individually immaterial the Group is disclosing aggregated information of the associates.

The following table illustrates the summarised financial information of the Group's investment in associates:

	31 March 2021 €000	31 March 2020 €000
Current assets	31,183	9,177
Non-current assets	244,289	228,687
Current liabilities	(10,224)	(5,180)
Non-current liabilities	(221,756)	(202,072)
Equity	43,492	30,612
Unrecognised accumulated losses	5,657	4,548
Subtotal	49,149	35,160
Group's share in equity - 35%	17,202	12,306

	31 March 2021 €000	31 March 2020 €000
Net operating income	14,063	6,797
Gain on revaluation of investment properties	12,693	682
Administrative expense	(1,976)	(1,158)
Operating profit	24,780	6,321
Net finance costs	(9,078)	(3,556)
Profit before tax	15,702	2,765
Taxation	(2,590)	(1,232)
Unrecognised losses	1,109	4,548
Total comprehensive income for the year after tax	14,221	6,082
Group's share of profit for the year - 35%	4,977	2,129

Included within the non-current liabilities are shareholder loans amounting to €123,296,000 (2020: €106,296,000). As at year end no contingent liabilities existed (2020: none). The associates had contracted capital expenditure for development and enhancements of €296,000 as at year end (2020: €1,306,000).

The following table illustrates the movement in investment in associates:

	31 March 2021 €000	31 March 2020 €000
Balance as at the beginning of the year	12,306	-
Additions	-	10,177
Disposals	-	-
Dividend received	(81)	-
Share of profit	4,977	2,129
Balance as at year end	17,202	12,306

18. Other non-current assets

	31 March 2021 €000	31 March 2020 €000
Guarantees and deposits	1,806	1,809
Loans to associates	43,154	37,204
Balance as at year end	44,960	39,013

Loans to associates relate to shareholder loans granted to associates by the Group. The loans terminate on 31 December 2024, are fully subordinated and are charged at a fixed interest rate.

19. Intangible assets

	Software €000	Licences with definite useful life €000	Goodwill €000	Total €000
Cost
As at 31 March 2020	5,876	231	3,738	9,845
Additions in year	1,741	-	-	1,741
Disposals in year	-	-	-	-
As at 31 March 2021	7,617	231	3,738	11,586
Amortisation
As at 31 March 2020	(4,050)	(71)	-	(4,121)
Charge for year	(851)	(46)	-	(897)
Disposals in year	-	-	-	-
As at 31 March 2021	(4,901)	(117)	-	(5,018)
Net book value as at 31 March 2021**	2,716	114	3,738	6,568
Cost
As at 31 March 2019	-	-	3,738	3,738
Transfer from plant and equipment (note 15)*	4,731	146	-	4,877
Additions in year	1,145	85	-	1,230
Disposals in year	-	-	-	-
As at 31 March 2020	5,876	231	3,738	9,845
Amortisation
As at 31 March 2019	-	-	-	-
Transfer from plant and equipment (note 15)*	(3,184)	(23)	-	(3,207)
Charge for year	(866)	(48)	-	(914)
Disposals in year	-	-	-	-
As at 31 March 2020	(4,050)	(71)	-	(4,121)
Net book value as at 31 March 2020	1,826	160	3,738	5,724

* As of 31 March 2020, software and licences have been transferred from plant and equipment into intangible assets due to the nature of the assets.

** Included in the net book value is an amount of €1,600,000 relating to intangible assets under development not yet amortised (2020: €616,000).

On 30 January 2012, a transaction was completed to internalise the Asset Management Agreement and, as a result of the consideration given exceeding the net assets acquired, goodwill of €3,738,000 was recognised. Current business plans indicate that the balance is unimpaired.

Goodwill is tested at least annually for impairment and whenever there are indications that goodwill might be impaired. The recoverable amount of a cash-generating unit is based on its value in use. Value in use is the present value of the projected cash flows of the cash-generating unit. The key assumptions regarding the value-in-use calculations were budgeted growth in revenue and the discount rate applied. Budgeted profit margins were estimated based on actual performance over the past two financial years and expected market changes. The discount rate used is a pre-tax rate and reflects the risks specific to the real estate industry. The Group prepares cash flow forecasts for 3 years based on the most recent financial information approved by management. Cash flows beyond this period are extrapolated to a period of five years using a revenue growth rate of 2.0% (2020: 2.0%), which is consistent with the long-term average growth rate for the real estate sector. A discount rate of 7.14% (2020: 6.81%) and terminal value of 5.14% (2020: 4.81%) were applied in the impairment review. A discount rate of 10.35% (2020: 9.78%) would be required for the carrying value of goodwill to be greater than the fair value. A negative revenue growth rate of -1.13% (2020: -0.90%) would be required for the carrying value of goodwill to be greater than the fair value.

20. Trade and other receivables

	31 March 2021 €000	31 March 2020 €000
Gross trade receivables	11,758	11,601
Expected credit loss provision	(5,431)	(3,640)
Net trade receivables	6,327	7,961
Other receivables	11,334	5,942
Prepayments	1,070	1,145
Balance as at year end	18,731	15,048

Other receivables include lease incentives of €3,603,000 (2020: €3,357,000).

21. Cash and cash equivalents

	31 March 2021 €000	31 March 2020 €000
Cash at bank	49,305	96,577
Restricted cash	16,369	24,686
Balance as at year end	65,674	121,263

Cash at bank earns interest at floating rates based on daily bank deposit rates. The fair value of cash as at year end is €65,674,000 (2020: €121,263,000).

As at year end, €16,369,000 (2020: €24,686,000) of cash is held in restricted accounts. €12,736,000 (2020: €10,927,000) relates to deposits received from tenants. An amount of €nil (2020: €3,500,000) is cash held in escrow in accordance with one of the Group's loan agreements and €131,000 (2020: €131,000) is held in restricted accounts for office rent deposits. An amount of €2,192,000 (2020: €4,294,000) relates to amounts reserved for future bank loan interest and amortisation payments of the Group's banking facilities. An amount of €1,310,000 (2020: €nil) is a cash deposit for bank guaranties. An amount of €nil (2020: €784,000) relates to amounts reserved for future capital expenditure. An amount of €nil (2020: €5,050,000) relates to disposal proceeds retained as security.

22. Trade and other payables

	31 March 2021 €000	31 March 2020 €000
Trade payables	7,107	9,578
Accrued expenses	19,034	18,056
Interest and amortisation payable	489	333
Tenant deposits	12,736	10,927
Unearned revenue	4,642	4,001
Other payables	6,519	13,885
Balance as at year end	50,527	56,780

Accrued expenses include costs totalling €9,465,000 (2020: €10,280,000) relating to service charge costs that have not been invoiced to the Group.

Included within other payables are mainly credit balances due to tenants in relation to over collections of service charge in amount of €3,830,000 (2020: €3,149,000). As at 31 March 2020, other payables included €9,090,000 of proceeds relating to the sale of the Weilimdorf asset that is categorised as an asset held for sale at 31 March 2020 in advance of the completion date of 1 April 2020. See note 14 for details of assets held for sale.

Unearned revenue includes service charge amounts of €1,068,000 (2020: €459,000). Service charge income is only recognised as income when the performance obligations are met. All unearned revenue of the prior year was recognised as revenue in the current year.

23. Interest-bearing loans and borrowings

	Interest rate %	Loan maturity date	31 March 2021 €000	31 March 2020 €000
Current
Bayerische Landesbank
- hedged floating rate facility	Hedged(1)	19 October 2020	-	23,098
SEB AG
- fixed rate facility	1.84	1 September 2022	1,180	1,180
- hedged floating rate facility	Hedged(2)	30 October 2024	459	458
- capped floating rate facility	Capped(3)	25 March 2025	760	760
Berlin Hyp AG/Deutsche Pfandbriefbank AG
- fixed rate facility	1.66	27 April 2023	2,968	2,920
Berlin Hyp AG
- fixed rate facility	1.48	31 October 2023	1,881	1,853
- fixed rate facility	0.90	31 October 2023	1,467	1,454
Saarbrücken Sparkasse
- fixed rate facility	1.53	28 February 2025	760	748
Deutsche Pfandbriefbank AG
- hedged floating rate facility	Hedged(4)	31 December 2023	1,110	1,110
- floating rate facility	Floating(5)	31 December 2023	140	140
Capitalised finance charges on all loans			(1,611)	(1,695)
			9,114	32,026
Non-current
SEB AG
- fixed rate facility	1.84	1 September 2022	51,330	52,510
- hedged floating rate facility	Hedged(2)	30 October 2024	21,325	21,784
- floating rate facility	Floating(2)	30 October 2024	2,000	2,000
- capped floating rate facility	Capped(3)	25 March 2025	34,960	35,720
Berlin Hyp AG/Deutsche Pfandbriefbank AG
- fixed rate facility	1.66	27 April 2023	56,135	59,105
Berlin Hyp AG
- fixed rate facility	1.48	31 October 2023	60,137	62,018
- fixed rate facility	0.90	31 October 2023	111,843	113,310
Saarbrücken Sparkasse
- fixed rate facility	1.53	28 February 2025	15,030	15,789
Deutsche Pfandbriefbank AG
- hedged floating rate facility	Hedged(4)	31 December 2023	52,166	53,276
- floating rate facility	Floating(4)	31 December 2023	6,381	6,521
Schuldschein
- floating rate facility	Floating(5)	5 December 2022	5,000	5,000
- floating rate facility	Floating(5)	6 January 2023	10,000	10,000
- floating rate facility	Floating(5)	6 January 2025	5,000	5,000
- fixed rate facility	1.70	3 March 2025	10,000	10,000
- fixed rate facility	1.60	3 July 2023	20,000	-
Capitalised finance charges on all loans			(2,367)	(3,831)
			458,940	448,202
Total			468,054	480,228

(1) This facility was hedged with a swap charged at a rate of 1.66%. The facility was repaid in full upon maturity on 19 October 2020.

(2) Tranche 1 of this facility is fully hedged with a swap charged at a rate of 2.58%; tranche 2 of this facility is fully hedged with a swap charged at a rate of 2.56%. The capex facility is charged with a floating rate of 1.88% over six month EURIBOR (not less than 0%) for the full term of the loan.

(3) This facility is hedged with a cap rate at 0.75% and charged with a floating rate of 1.58% over six month EURIBOR (not less than 0%) for the full term of the loan.

(4) Tranche 1 of this facility is fully hedged with a swap charged at a rate of 1.40%; tranche 2 of this facility is fully hedged with a swap charged at a rate of 1.25%; and €19.1 million of tranche 3 of this facility is fully hedged with a swap charged at a rate of 0.91%, €6.5 million and the €0.5 million are charged with a floating rate of 1.20% over three month EURIBOR (not less than 0%).

(5) This unsecured facility has a floating rate of 1.50% over six month EURIBOR (not less than 0%) for the first two tranches and a floating rate of 1.70% over six month EURIBOR (not less than 0%) for tranche 3.

The borrowings (excluding capitalised loan issue cost) are repayable as follows:

	31 March 2021 €000	31 March 2020 €000
On demand or within one year	10,724	33,722
In the second year	75,977	10,724
In the third to tenth years inclusive	385,331	441,308
Total	472,032	485,754

The Group has pledged 42 (2020: 45) owned investment properties to secure several separate interest-bearing debt facilities granted to the Group. The 42 (2020: 45) owned properties had a combined valuation of €1,101,689,000 as at year end (2020: €1,067,650,000).

Bayerische Landesbank

On 20 October 2015, the Group agreed to a facility agreement with Bayerische Landesbank for €25.4 million. Amortisation was 2% per annum with the remainder due in the fourth year. The full facility had been hedged at a rate of 1.66% until 19 October 2020 by way of an interest rate swap. The facility was secured over four (later three) property assets and was subject to various covenants with which the Group has complied. The facility was repaid in full upon maturity on 19 October 2020.

SEB AG

On 2 September 2015, the Group agreed to a facility agreement with SEB AG for €59.0 million to refinance the two existing Macquarie loan facilities. The loan terminates on 1 September 2022. Amortisation is 2% per annum with the remainder due in the seventh year. The loan facility is charged at a fixed interest rate of 1.84%. This facility is secured over eleven property assets that were previously financed through the Macquarie loan facilities. The facility is subject to various covenants with which the Group has complied. No changes to the terms of the facility have occurred during the twelve month period ended 31 March 2021.

On 30 October 2017, the Group agreed to a second facility agreement with SEB AG for €22.9 million. Tranche 1, totalling €20.0 million, has been hedged at a rate of 2.58% until 30 October 2024 by way of an interest rate swap. Tranche 2, totalling €2.9 million, has been hedged at a rate of 2.56% until 30 October 2024 by way of an interest rate swap. The loan terminates on 30 October 2024. Amortisation is 2.0% per annum across the full facility with the remainder due in one instalment on the final maturity date. The facility is secured over three property assets and is subject to various covenants with which the Group has complied. No changes to the terms of the facility have occurred during the twelve month period ended 31 March 2021. In addition, the Group agreed a capex facility for €7.1 million until 30 October 2024. The capex facility is not subject to amortisation and the amount currently drawn down is charged with a floating interest rate of 1.88% over six month EURIBOR (not less than 0%) for the full term of the loan. As at 31 March 2021 a total of €2.0 million had been drawn down.

On 26 March 2018, the Group agreed to a third facility agreement with SEB AG for €38.0 million. The loan terminates on 25 March 2025. Amortisation is 2% per annum with the remainder due in one instalment on the final maturity date. The loan facility is charged with a floating rate of 1.58% over six month EURIBOR (not less than 0%) for the full term of the loan. In accordance with the requirements of the loan facility the Group hedged its exposure to floating interest rates by purchasing a cap in June 2018 which limits the Group's interest rate exposure on the facility to 2.33%. The facility is secured over six property assets and is subject to various covenants with which the Group has complied. No changes to the terms of the facility have occurred during the twelve month period ended 31 March 2021. In addition, the Group agreed a capex facility for €8.0 million until 25 March 2025. The capex facility is not subject to amortisation and is charged at an interest rate of 1.58%. As at 31 March 2021 the capex facility remained undrawn.

Berlin Hyp AG/Deutsche Pfandbriefbank AG

On 31 March 2014, the Group agreed to a facility agreement with Berlin Hyp AG and Deutsche Pfandbriefbank AG for €115.0 million. Amortisation is 2% p.a. for the first two years, 2.5% for the third year and 3.0% thereafter, with the remainder due in the fifth year. Half of the facility (€55.2 million) is charged interest at 3% plus three months' EURIBOR and is capped at 4.5%, and the other half (€55.2 million) has been hedged at a rate of 4.265% until 31 March 2019. This facility is secured over nine property assets and is subject to various covenants with which the Group has complied. On 28 April 2016, the Group agreed to refinance this facility which had an outstanding balance of €110.4 million at 31 March 2016. The new facility is split in two tranches totalling €137.0 million and terminates on 27 April 2023. Tranche 1, totalling €94.5 million, is charged at a fixed interest rate of 1.66% for the full term of the loan. Tranche 2, totalling €42.5 million, is charged with a floating rate of 1.57% over three month EURIBOR (not less than 0%) for the full term of the loan. Amortisation is set at 2.5% across the full facility with the remainder due in one instalment on the final maturity date. The facility is secured over eleven property assets and is subject to various covenants with which the Group has complied.

On 30 June 2017, the Group repaid a total of €5.8 million following the disposal of the Düsseldorf asset. On 30 September 2017, the Group repaid tranche 2 of the loan in full amounting to €40.9 million following the disposal of the Munich Rupert Mayer Strasse asset. The facility is now secured over nine property assets.

On 1 August 2019 the Group repaid a total of €16.8 million including €10.1 million recorded within liabilities directly associated with assets held for sale as of 31 March 2019, following the disposal of two assets that acted as security for the loan into the Titanium venture with AXA IM Alts. The remaining facility is now secured over seven property assets. No changes to the terms of the facility have occurred during the twelve month period ended 31 March 2021.

Berlin Hyp AG

On 20 October 2016, the Group concluded an agreement with Berlin Hyp AG to refinance and extend a facility which had an outstanding balance of €39.2 million at 30 September 2016. The new facility totals €70.0 million and terminates on 29 October 2023. Amortisation is 2.5% per annum with the remainder due at maturity. The facility is charged with an all-in fixed interest rate of 1.48% for the full term of the loan. On 13 September 2019 the facility was incorporated into the agreement as detailed below. As a result, the maturity date of the loan was extended to 31 October 2023 with all other conditions remaining unchanged.

On 13 September 2019, the Group agreed to a facility agreement with Berlin Hyp AG for €115.4 million. The loan terminates on 31 October 2023. Amortisation is 1.25% per annum with the remainder due in the fourth year. The loan facility is charged at a fixed interest rate of 0.90%. This facility is secured over nine property assets. The facility is subject to various covenants with which the Group has complied. No changes to the terms of the facility have occurred during the twelve month period ended 31 March 2021.

Saarbrücken Sparkasse

On 28 March 2018, the Group agreed to a facility agreement with Saarbrücken Sparkasse for €18.0 million. The loan terminates on 28 February 2025. Amortisation is 4.0% per annum with the remainder due in one instalment on the final maturity date. The facility is charged with an all-in fixed interest rate of 1.53% for the full term of the loan. The facility is secured over one property asset and is subject to various covenants with which the Group has complied. No changes to the terms of the facility have occurred during the twelve month period ended 31 March 2021.

Deutsche Pfandbriefbank AG

On 19 January 2019, the Group agreed to a facility agreement with Deutsche Pfandbriefbank AG for €56.0 million. Tranche 1, totalling €21.6 million, has been hedged at a rate of 1.40% until 31 December 2023 by way of an interest rate swap. A first drawdown of tranche 3 totalling €0.5 million is charged at a fixed interest rate of 1.20%. On 3 April 2019 tranche 2 was drawn down, totalling €14.8 million, and has been hedged at a rate of 1.25% until 31 December 2023 by way of an interest rate swap. On 28 June 2019 tranche 3 has been drawn down, totalling €19.1 million. Tranche 3 has been hedged at a rate of 0.91% until 31 December 2023 by way of an interest rate swap. The facility is secured over five property assets and is subject to various covenants with which the Group has complied.

On 19 February 2020, the Group agreed to extend tranche 3 of its existing facility by €6.5 million. The loan is coterminous with the existing facility maturing in December 2023. The loan has been treated as a new loan and is charged with a floating interest rate of 1.20% plus three month EURIBOR (floored at zero). Amortisation is 2% per annum with the remainder due in one instalment on the final maturity date. No changes to the terms of the facility have occurred during the twelve month period ended 31 March 2021.

Schuldschein

On 2 December 2019, the Group agreed to new loan facilities in the form of unsecured Schuldschein for €20.0 million. On 25 February 2020 the Group agreed new loan facilities in the form of unsecured Schuldschein for €30.0 million. In total the unsecured facility amounts to €50.0 million spread over five tranches and is charged at a blended interest rate of 1.60% and average maturity of 2.6 years with no amortisation. As at 31 March 2021 the whole loan of €50.0 million had been drawn down. No changes to the terms of the facility have occurred during the twelve month period ended 31 March 2021.

A summary of the Group's debt covenants is set out below:

	31 March 2021 €000	31 March 2020 €000
Carrying amount of interest-bearing loans and borrowings (note 23)	468,054	480,228
Unamortised borrowing costs	3,978	5,526
Book value of owned investment properties*	1,347,167	1,186,183
Gross loan to value ratio	35.0%	41.0%

* Includes assets held for sale.

Banking covenants vary according to each loan agreement and typically include loan to value and income related covenants.

During the period, the Group did not breach any of its loan covenants, nor did it default on any of its obligations under its loan agreements.

Reconciliation of movements of liabilities arising from financing activities:

	31 March 2020 €000	Cash flows €000	New leases €000	Non-cash settlement €000	Changes in fair values €000	Other * €000	31 March 2021 €000
Interest-bearing loans and borrowings	480,228	(13,887)	-	-	-	1,713	468,054
Lease liabilities	19,150	(5,681)	1,518	-	-	-	14,987
Derivative financial instruments	1,368	-	-	-	(157)	-	1,211
Total	500,746	(19,568)	1,518	-	(157)	1,713	484,252

	31 March 2019 €000	Cash flows €000	New leases €000	Non-cash settlement ** €000	Changes in fair values €000	Other * €000	31 March 2020 €000
Interest-bearing loans and borrowings	331,461	172,447	-	(23,225)	-	(455)	480,228
Lease liabilities	-	(5,559)	24,709	-	-	-	19,150
Derivative financial instruments	1,152	-	-	-	216	-	1,368
Total	332,613	166,888	24,709	(23,225)	216	(455)	500,746

* Changes in the capitalised finance charges on all loans.

** See note 29 for further details relating to the non-cash settlement of interest-bearing loans and borrowings.

24. Financial risk management objectives and policies

The Group's principal financial liabilities comprise bank loans, derivative financial instruments and trade payables. The main purpose of these financial instruments is to raise finance for the Group's operations. The Group has various financial assets, such as trade receivables and cash, which arise directly from its operations.

The main risks arising from the Group's financial instruments are credit risk, liquidity risk, market risk and interest rate risk.

Credit risk

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the reporting date. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies. The risk management policies employed by the Group to manage these risks are discussed below.

In the event of a default by an occupational tenant, the Group will suffer a rental shortfall and incur additional costs, including expenses incurred to try and recover the defaulted amounts and legal expenses in maintaining, insuring and marketing the property until it is re-let. During the year, the Group monitored the tenants in order to anticipate and minimise the impact of defaults by occupational tenants, as well as to ensure that the Group has a diversified tenant base. The credit risk on tenants is also addressed through the performance of credit checks, collection of deposits and regular communication with the tenants.

Included in loans to associate are loans provided to associate entities from Group entities. During the year the Group assessed credit risk relating to loans to associate by reviewing business plans, monitoring cash collection rates and the operational performance of each associate in order to anticipate and minimise the impact of any impairment.

Included in other receivables are lease incentives. During the year the Group monitored tenants in order to anticipate and minimise the impact of defaults and move-outs from tenants which received lease incentives.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	31 March 2021 €000	31 March 2020 €000
Trade receivables	6,327	7,961
Other receivables	9,537	4,394
Loans to associates	43,154	37,204
Derivative financial instruments	70	89
Cash and cash equivalents	65,674	121,263
Total	124,762	170,911

The ageing of trade receivables at the statement of financial position date was:

	Gross 31 March 2021 €000	Impairment 31 March 2021 €000	Gross 31 March 2020 €000	Impairment 31 March 2020 €000
0-30 days	6,287	(1,936)	5,838	(878)
31-120 days (past due)	1,206	(585)	2,908	(778)
More than 120 days	4,265	(2,910)	2,855	(1,984)
Total	11,758	(5,431)	11,601	(3,640)

The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

	31 March 2021 €000	31 March 2020 €000
Balance as at the beginning of the year	(3,640)	(3,522)
Expected credit loss (recognised)/released	(1,791)	(118)
Balance as at year end	(5,431)	(3,640)

The allowance account for trade receivables is used to record impairment losses unless the Group believes that no recovery of the amount owing is possible; at that point the amounts considered irrecoverable are written off against the trade receivables directly. Historic write offs of €452,000 are still subject to enforcement activity.

Most trade receivables are generally due one month in advance. The exception is service charge balancing billing, which is due ten days after it has been invoiced. Included in the Group's trade receivables are debtors with carrying amounts of €6,327,000 (2020: €7,961,000) that are past due at the reporting date for which the Group has not provided significant impairment as there has not been a significant change in credit quality and the amounts are still considered recoverable.

No significant impairment has been recognised relating to non-current receivables in the period due to unchanged credit quality and the amounts are still considered recoverable.

Liquidity risk

Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability but can also increase the risk of losses. The Group has procedures with the objective of minimising such losses, such as maintaining sufficient cash and other highly liquid current assets and having available an adequate amount of committed credit facilities. The Group prepares cash flow forecasts and continually monitors its ongoing commitments compared to available cash. Cash and cash equivalents are placed with financial institutions on a short-term basis which allows immediate access. This reflects the Group's desire to maintain a high level of liquidity in order to meet any unexpected liabilities that may arise due to the current financial position. Similarly, accounts receivable are due either in advance (e.g. rents and recharges) or within ten days (e.g. service charge reconciliations), further bolstering the Group's management of liquidity risk.

The table below summarises the maturity profile of the Group's financial liabilities, based on contractual undiscounted payments:

Year ended 31 March 2021	Bank loans €000	Derivative financial instruments €000	Trade and other payables €000	Lease liabilities €000	Total €000
Undiscounted amounts payable in:
6 months or less	(8,755)	(220)	(26,851)	(3,047)	(38,873)
6 months to 1 year	(8,588)	(216)	-	(3,048)	(11,852)
1-2 years	(81,895)	(426)	-	(1,492)	(83,813)
2-5 years	(389,971)	(435)	-	(2,428)	(392,834)
5-10+ years	-	-	-	(7,223)	(7,223)
	(489,209)	(1,297)	(26,851)	(17,238)	(534,595)
Interest	17,177	1,297	-	2,251	20,725
	(472,032)	-	(26,851)	(14,987)	(513,870)

Year ended 31 March 2020	Bank loans €000	Derivative financial instruments €000	Trade and other payables €000	Lease liabilities €000	Total €000
Undiscounted amounts payable in:
6 months or less	(8,834)	(254)	(34,723)	(3,001)	(46,812)
6 months to 1 year	(31,473)	(178)	-	(3,001)	(34,652)
1-2 years	(17,024)	(336)	-	(6,016)	(23,376)
2-5 years	(451,226)	(693)	-	(2,891)	(454,810)
5-10+ years	-	-	-	(6,665)	(6,665)
	(508,557)	(1,461)	(34,723)	(21,574)	(566,315)
Interest	22,803	1,461	-	2,424	26,688
	(485,754)	-	(34,723)	(19,150)	(539,627)

Currency risk

There is no significant foreign currency risk as most of the assets and liabilities of the Group are maintained in euros. Small amounts of UK sterling and South African rand are held to ensure payments made in UK sterling and South African rand can be achieved at an effective rate.

Interest rate risk

The Group's exposure to interest rate risk relates primarily to the Group's long-term floating rate debt obligations. The Group's policy is to mitigate interest rate risk by ensuring that a minimum of 80% of its total borrowing is at fixed or capped interest rates by taking out fixed rate loans or derivative financial instruments to hedge interest rate exposure, or interest rate caps.

A change in interest will only have an impact on the floating loans capped due to the fact that the other loans have a general fixed interest rate or they are effectively fixed by a swap. An increase of 100 bps in interest rate would result in a decreased post-tax profit in the consolidated statement of comprehensive income of €562,000 (2020: €547,000) (excluding the movement on derivative financial instruments) and a decrease of 100 bps in interest rate would result in an increased post-tax profit in the consolidated statement of comprehensive income of €562,000 (2020: €547,000) (excluding the movement on derivative financial instruments).

The following table sets out the carrying amount, by maturity, of the Group's financial instruments that are exposed to interest rate risk:

31 March 2021	Within 1 year €000	1-2 years €000	2-3 years €000	3-4 years €000	4+ years €000	Total €000
SEB AG - capped	(760)	(760)	(760)	(33,440)	-	(35,720)
SEB AG - floating	-	-	-	(2,000)	-	(2,000)
Deutsche Pfandbriefbank AG	(140)	(140)	(6,241)	-	-	(6,521)
Schuldschein	-	(15,000)	-	(5,000)	-	(20,000)

31 March 2020	Within 1 year €000	1-2 years €000	2-3 years €000	3-4 years €000	4+ years €000	Total €000
SEB AG	(760)	(760)	(760)	(760)	(33,440)	(36,480)
Deutsche Pfandbriefbank AG	(140)	(140)	(140)	(6,241)	-	(6,661)
Schuldschein	-	-	(15,000)	-	(5,000)	(20,000)

The other financial instruments of the Group that are not included in the above tables are non-interest bearing or have fixed interest rates and are therefore not subject to interest rate risk.

Market risk

The Group's activities are within the real estate market, exposing it to very specific industry risks.

The yields available from investments in real estate depend primarily on the amount of revenue earned and capital appreciation generated by the relevant properties, as well as expenses incurred. If properties do not generate sufficient revenues to meet operating expenses, including debt service and capital expenditure, the Group's revenue will be adversely affected.

Revenues from properties may be adversely affected by: the general economic climate; local conditions, such as an oversupply of properties, or a reduction in demand for properties, in the market in which the Group operates; the attractiveness of the properties to the tenants; the quality of the management; competition from other available properties; and increased operating costs.

In addition, the Group's revenue would be adversely affected if a significant number of tenants were unable to pay rent or its properties could not be rented on favourable terms. Certain significant expenditures associated with each equity investment in real estate (such as external financing costs, real estate taxes and maintenance costs) are generally not reduced when circumstances cause a reduction in revenue from properties. By diversifying in product, risk categories and tenants, the Group expects to lower the risk profile of the portfolio.

Capital management

The Group seeks to enhance shareholder value both by investing in the business so as to improve the return on investment and by managing the capital structure.

The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, issue shares or undertake transactions, such as those that occurred with the internalisation of the Asset Management Agreement.

The Group is not subject to externally imposed capital requirements other than those related to the covenants of the bank loan facilities.

25. Financial instruments

Fair values

Set out below is a comparison by category of carrying amounts and fair values of all of the Group's financial instruments that are carried in the financial statements (excluding assets held for sale and liabilities directly associated with assets held for sale):

	Fair value hierarchy level	31 March 2021		31 March 2020
	Fair value hierarchy level	Carrying amount €000	Fair value €000	Carrying amount €000	Fair value €000
Financial assets
Cash and cash equivalents		65,674	65,674	121,263	121,263
Trade and other receivables		15,864	15,864	12,354	12,354
Loans to associates	2	43,154	43,154	37,204	35,948
Derivative financial instruments	2	70	70	89	89
Financial liabilities
Trade and other payables		26,851	26,851	34,723	34,723
Derivative financial instruments	2	1,211	1,211	1,368	1,368
Interest-bearing loans and borrowings(1)
Floating rate borrowings	2	28,521	28,521	28,661	28,661
Floating rate borrowings - hedged(2)	2	75,060	75,060	99,726	99,726
Floating rate borrowings - capped(2)	2	35,720	35,720	36,480	36,480
Fixed rate borrowings	2	332,731	336,216	320,887	323,319

(1) Excludes loan issue costs.

(2) The Group holds interest rate swap contracts and a cap contract designed to manage the interest rate and liquidity risks of expected cash flows of its borrowings with the variable rate facilities with SEB AG and Deutsche Pfandbriefbank AG. Please refer to note 23 for details of swap and cap contracts.

Fair value hierarchy

For financial assets or liabilities measured at amortised cost and whose carrying value is a reasonable approximation to fair value there is no requirement to analyse their value in the fair value hierarchy.

The table below analyses financial instruments measured at fair value into a fair value hierarchy based on the valuation technique used to determine fair value:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Group holds interest rate swap contracts and interest rate cap contracts. The interest rate swap contract is reset on a quarterly basis, the cap contract on a half-yearly basis. The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date. The average interest rate is based on the outstanding balances at the end of the reporting period. The interest rate swap is measured at fair value with changes recognised in profit or loss. The fair value of the interest rate cap reflects the mark to market valuation with changes recognised in the profit or loss. The fair values of the loans and borrowings have been calculated based on a discounted cash flow model using the prevailing market rates of interest.

26. Issued share capital

Authorised	Number of shares	Share capital €
Ordinary shares of no par value	Unlimited	-
As at 31 March 2021 and 31 March 2020	Unlimited	-

The number of ordinary shares of no par value as at 31 March 2021 was unlimited.

Issued and fully paid	Number of shares	Share capital €
As at 31 March 2019	1,022,140,875	-
Issued ordinary shares	16,228,946	-
Issued Treasury Shares	-	-
Shares issued to Employee Benefit Trust	(2,112,720)	-
As at 31 March 2020	1,036,257,101	-
Issued ordinary shares	14,447,046	13,169,000
Transfer of share capital to other distributable reserves	-	(13,169,000)
Issued Treasury Shares	-	-
Shares issued to Employee Benefit Trust	(1,883,980)	-
Shares allocated by the Employee Benefit Trust	312,092	-
As at 31 March 2021	1,049,132,259	-

Holders of the ordinary shares are entitled to receive dividends and other distributions and to attend and vote at any general meeting. Shares held in treasury are not entitled to receive dividends or to vote at general meetings.

Pursuant to a scrip dividend offering on 8 June 2020, the Company issued 6,981,451 ordinary shares at an issue price of £0.76542 resulting in the Company's overall issued share capital being 1,045,351,272 ordinary shares.

Pursuant to a scrip dividend offering on 13 January 2021, the Company issued 7,465,595 ordinary shares at an issue price of £0.87443 resulting in the Company's overall issued share capital being 1,052,816,867 ordinary shares.

During the year 1,883,980 shares were acquired and 312,092 were allocated by the Employee Benefit Trust. A total of 3,684,608 shares purchased at an average share price of €0.7878 are held by the Employee Benefit Trust (2020: 2,112,720 shares purchased at an average share price of €0.7173). The total number of shares with voting rights was 1,052,816,867 (2020: 1,038,369,821). No votes are cast in respect of the shares held in the Employee Benefit Trust in connection with the Company's share plans and dividends paid and payable are subject to a standing waiver.

All shares issued in the year were issued under general authority. No shares were bought back in the year (2020: none).

27. Other reserves

Other distributable reserve

The other distributable reserve was created for the payment of dividends, share-based payment transactions and the buyback of shares and is €449,051,000 in total at year end (2020: €470,151,000).

28. Dividends

On 3 June 2019, the Company announced a dividend of 1.73c per share, with a record date of 12 July 2019 for UK and South African shareholders and payable on 22 August 2019. On the record date, 1,022,140,875 shares were in issue with none held in treasury and 1,022,140,875 were entitled to participate in the dividend. Holders of 355,791,416 shares elected to receive the dividend in ordinary shares under the scrip dividend alternative, representing a dividend of €6,147,000, while holders of 666,349,459 shares opted for a cash dividend with a value of €11,528,000. The Company's Employee Benefit Trust waived its rights to the dividend, reducing the cash payable to €11,503,000. The total dividend was €17,650,000.

On 25 November 2019, the Company announced a dividend of 1.77c per share, with a record date of 20 December 2019 for UK and South African shareholders and payable on 17 January 2020. On the record date, 1,030,915,243 shares were in issue. Since there were no shares held in treasury, 1,030,915,243 shares were entitled to participate in the dividend. Holders of 388,465,484 shares elected to receive the dividend in ordinary shares under the Scrip Dividend Alternative, representing a dividend of €6,851,000, while holders of 642,449,759 shares opted for a cash dividend with a value of €11,341,000. The Company's Employee Benefit Trust waived its rights to the dividend, reducing the cash payable to €11,341,000. The total dividend was €18,192,000.

On 1 June 2020, the Company announced a dividend of 1.80c per share, with a record date of 10 July 2020 for UK and South African shareholders and payable on 20 August 2020. On the record date, 1,038,369,821 shares were in issue with none held in treasury and 1,038,369,821 (including shares held by the EBT) were entitled to participate in the dividend. Holders of 335,705,489 shares elected to receive the dividend in ordinary shares under the scrip dividend alternative, representing a dividend of €6,043,000 (€5,830,000 as at settlement date), while holders of 700,213,704 shares opted for a cash dividend with a value of €12,603,000. The Company's Employee Benefit Trust waived its rights to the dividend, reducing the cash payable to €12,595,000 (€12,595,000 as at settlement date). The total dividend was €18,646,000.

On 30 November 2020, the Company announced a dividend of 1.82c per share, with a record date of 18 December 2020 for UK and South African shareholders and payable on 21 January 2021. On the record date, 1,045,351,272 shares were in issue. Since there were no shares held in treasury, 1,045,351,272 (including shares held by the EBT) shares were entitled to participate in the dividend. Holders of 403,075,659 shares elected to receive the dividend in ordinary shares under the Scrip Dividend Alternative, representing a dividend of €7,336,000 (€7,339,000 as at settlement date) while holders of 638,591,005 shares opted for a cash dividend with a value of €11,622,000. The Company's Employee Benefit Trust waived its rights to the dividend, reducing the cash payable to €11,555,000 (€11,653,000 as at settlement date). The total dividend was €18,958,000.

The Group's profit attributable to the equity holders of the Company for the year was €147.5 million (2020: €98.1 million). The Board has authorised a dividend in respect of the second half of the financial year ended 31 March 2021 of 1.98c per share representing 65% of FFO, an increase of 10.0% on the equivalent dividend last year, which represented 65% of FFO(1). The total dividend for the year is 3.80c, an increase of 6.4% on the 3.57c total dividend for the year ended 31 March 2020.

It is expected that, for the dividend authorised in respect of the six month period ended 31 March 2021, the ex-dividend date will be 7 July 2021 for shareholders on the South African register and 8 July 2021 for shareholders on the UK register. It is further expected that for shareholders on both registers the record date will be 9 July 2021 and the dividend will be paid on 19 August 2021. A detailed dividend announcement was made on 14 June 2021, including details of a scrip dividend alternative.

The dividend paid per the statement of changes in equity is the value of the cash dividend.

(1) Adjusted profit before tax adjusted for depreciation and amortisation (excluding depreciation relating to IFRS 16), amortisation of financing fees, adjustments in respect to IFRS 16 and current tax receivable/incurred and current tax relating to disposals.

The dividend per share was calculated as follows:

	Year ended 31 March 2021 €m	Year ended 31 March 2020 €m
Reported profit before tax	163.7	110.8
Adjustments for:
Gain on revaluation of investment properties	(99.6)	(55.8)
Deficit on revaluation expense relating to leased investment properties	(4.3)	(3.9)
Gain of disposals of properties	(0.1)	(0.1)
Gain on loss of control of subsidiaries	(0.1)	(6.3)
Deduct revaluation gain on investment property from associates and related tax	(3.3)	(1.3)
Other adjusting items(1)	4.1	11.1
Change in fair value of financial derivatives	(0.1)	0.4
Adjusted profit before tax	60.3	54.9
Adjustments for:
Depreciation and amortisation (excluding depreciation relating to IFRS 16)	1.6	1.6
Amortisation of financing fees	1.7	1.4
Adjustment in respect of IFRS 16	(0.9)	(1.2)
Current taxes incurred (see note 10)	(1.9)	(0.9)
Add back current tax relating to disposals	0.1	(0.1)
Funds from operations, year ended 31 March	60.9	55.7
Funds from operations, 6 months ended 30 September	29.1	27.1
Funds from operations, 6 months ended 31 March	31.8	28.6
Dividend pool, 6 months ended 30 September	19.0	18.3
Dividend pool, 6 months ended 31 March(2)	20.7	18.7
Dividend per share, 6 months ended 30 September	1.82c	1.77c
Dividend per share, 6 months ended 31 March	1.98c	1.80c

(1) Includes the effect of exceptional items, refinancing activity, share awards and expected selling costs relating to assets held for sale. See note 11 for details.

(2) Calculated as 65% of FFO of 3.04c per share (2020: 2.77c per share using 65% of FFO) based on average number of shares outstanding of 1,044,538,046 (2020: 1,032,748,723).

For more information on adjusted profit before tax and funds from operations refer to Annex 1.

29. Related parties

Key management personnel compensation

Fees paid to people or entities considered to be key management personnel of the Group during the year include:

	Year ended 31 March 2021 €m	Year ended 31 March 2020 €m
Directors' fees	437	333
Salary and employee benefits	3,531	3,238
Share-based payments	2,623	613
Total	6,591	4,184

The share-based payments relating to key management personnel for the year include an expense of €2,623,000 (2020: €613,000) for the granting of shares under the LTIP (see note 8). Included within salary and employee benefits are pension contributions amounting to €146,000 (2020: €142,000).

Information on Directors' emoluments is given in the Remuneration report on pages 75 to 99. Related parties are defined as those persons and companies that control the Group, or that are controlled, jointly managed or subject to significant influence by the Group.

On 31 July 2019 the Group completed the sale of 65% of its interest in five subsidiary entities. The Group's remaining interest in those entities is considered an investment in associate. As part of the transaction, receivables from associates amounting to €28,619,000 were settled by way of a non-cash transaction in lieu of repayment of loan facilities including related breakage costs.

Related parties are defined as those persons and companies that control the Group, or that are controlled, jointly managed or subject to significant influence by the Group.

The following balances and transactions with associates exist as at the reporting date:

Consolidated statement of financial position	31 March 2021 €000	31 March 2020 €000
Loans to associates	43,154	37,204
Trade and other receivables	3,371	842
Total	46,525	38,046

Trade and other receivables relate to amounts owed from the services supplied to the associates and are due to be settled 14 days after being invoiced. As of 31 March 2021 a dividend receivable in amount of €50,000 is included in the trade and other receivables.

As a result of unchanged credit quality no material impairments have been recognised in the year.

Consolidated statement of comprehensive income	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Services supplied	7,338	1,521
Interest income	2,674	977
Total	10,012	2,498

Services provided to related parties primarily relate to the provision of property and asset management services. A performance fee arrangement is in a place between the associates and the Group. The performance fee was nil during the year.

30. Capital and other commitments

As at year end, the Group had contracted capital expenditure for development and enhancements on existing properties of €8,666,000 (2020: €12,085,000).

These were committed but not yet provided for in the financial statements.

31. Operating lease arrangements

Group as lessor

All properties leased by the Group are under operating leases and the future minimum lease payments receivable under non-cancellable leases are as follows:

	31 March 2021 €000	31 March 2020 €000
Less than 1 year	84,417	77,686
1-2 years	61,549	59,443
2-3 years	41,491	42,923
3-4 years	33,044	29,850
4-5 years	18,792	23,346
More than 5 years	35,211	30,312
Total	274,504	263,560

The Group leases out its investment properties under operating leases. Most operating leases are for terms of one to ten years.

32. List of subsidiary undertakings

The Group consists of 94 subsidiary companies. All subsidiaries are consolidated in full in accordance with IFRS. The principal activity of the subsidiaries is the investment in, and development of, commercial property to provide conventional and flexible workspace in Germany.

Company name	Country of incorporation	Ownership at 31 March 2021 %	Ownership at 31 March 2020 %
Curris Facilities & Utilities Management GmbH	Germany	100.00	100.00
DDS Aspen B.V.	Netherlands	100.00	100.00
DDS Bagnut B.V.	Netherlands	100.00	100.00
DDS Business Centers B.V.	Netherlands	100.00	100.00
DDS Coconut B.V.	Netherlands	100.00	n/a
DDS Conferencing & Catering GmbH	Germany	100.00	100.00
DDS Elm B.V.	Netherlands	100.00	100.00
DDS Fir B.V.	Netherlands	100.00	100.00
DDS Hawthorn B.V.	Netherlands	100.00	100.00
DDS Hazel B.V.	Netherlands	100.00	100.00
DDS Hyacinth B.V.	Netherlands	100.00	100.00
DDS Lark B.V.	Netherlands	100.00	100.00
DDS Mulberry B.V.	Netherlands	100.00	100.00
DDS Rose B.V.	Netherlands	100.00	100.00
DDS Walnut B.V.	Netherlands	100.00	100.00
DDS Yew B.V.	Netherlands	100.00	100.00
LB² Catering and Services GmbH	Germany	100.00	100.00
Marba Apple B.V.	Netherlands	100.00	n/a
Marba Bamboo B.V.	Netherlands	100.00	100.00
Marba Cherry B.V.	Netherlands	100.00	100.00
Marba Daffodil B.V.	Netherlands	100.00	100.00
Marba Grape B.V.	Netherlands	100.00	n/a
Marba Holland B.V.*	Netherlands	100.00	100.00
Marba Lavender B.V.	Netherlands	100.00	100.00
Marba Mango B.V.	Netherlands	100.00	n/a
Marba Olive B.V.	Netherlands	100.00	100.00
Marba Sunflower B.V.	Netherlands	100.00	100.00
Marba Violin B.V.	Netherlands	100.00	100.00
Marba Willstätt B.V.	Netherlands	100.00	100.00
SFG NOVA Construction and Services GmbH	Germany	100.00	100.00
Sirius Acerola GmbH & Co. KG	Germany	100.00	100.00
Sirius Alder B.V.	Netherlands	100.00	100.00
Sirius Aloe GmbH & Co. KG	Germany	100.00	100.00
Sirius Ash B.V.	Netherlands	100.00	100.00
Sirius Aster GmbH & Co. KG	Germany	100.00	100.00
Sirius Beech B.V.	Netherlands	100.00	100.00
Sirius Birch GmbH & Co. KG	Germany	100.00	100.00
Sirius Coöperatief U.A.*	Netherlands	100.00	100.00
Sirius Dahlia GmbH & Co. KG	Germany	100.00	100.00
Sirius Facilities (UK) Limited*	UK	100.00	100.00
Sirius Facilities GmbH	Germany	100.00	100.00
Sirius Finance (Guernsey) Ltd.*	Guernsey	100.00	100.00
Sirius Four B.V.	Netherlands	100.00	100.00
Sirius Frankfurt Erste GmbH & Co. KG	Germany	100.00	100.00
Sirius Gum B.V.	Netherlands	100.00	100.00
Sirius Ivy B.V.	Netherlands	100.00	100.00
Sirius Juniper B.V.	Netherlands	100.00	100.00
Sirius Krefeld Erste GmbH & Co. KG	Germany	100.00	100.00
Sirius Lily B.V.	Netherlands	100.00	100.00
Sirius Management One GmbH	Germany	100.00	100.00
Sirius Management Two GmbH	Germany	100.00	100.00
Sirius Management Three GmbH	Germany	100.00	100.00
Sirius Management Four GmbH	Germany	100.00	100.00
Sirius Management Five GmbH	Germany	100.00	100.00
Sirius Management Six GmbH	Germany	100.00	100.00
Sirius Management Seven GmbH	Germany	100.00	100.00
Sirius Management Eight GmbH	Germany	100.00	100.00
Sirius Management Nine GmbH	Germany	100.00	100.00
Sirius Management Ten GmbH	Germany	100.00	100.00
Sirius Mannheim B.V.	Netherlands	100.00	100.00
Sirius Oak B.V.	Netherlands	100.00	100.00
Sirius One B.V.	Netherlands	100.00	100.00
Sirius Orange B.V.	Netherlands	100.00	100.00
Sirius Pear B.V.	Netherlands	100.00	n/a
Sirius Pine B.V.	Netherlands	100.00	100.00
Sirius Tamarack B.V.	Netherlands	100.00	100.00
Sirius Three B.V.	Netherlands	100.00	100.00
Sirius Tulip B.V.	Netherlands	100.00	100.00
Sirius Two B.V.	Netherlands	100.00	100.00
Sirius Willow B.V.	Netherlands	100.00	100.00
Marba Bonn B.V.	Netherlands	99.73	99.73
Marba Bremen B.V.	Netherlands	99.73	99.73
Marba Brinkmann B.V.	Netherlands	99.73	99.73
Marba Catalpa B.V.	Netherlands	99.73	99.73
Marba Cedarwood B.V.	Netherlands	99.73	99.73
Marba Chestnut B.V.	Netherlands	99.73	99.73
Marba Dutch Holdings B.V.	Netherlands	99.73	99.73
Marba Foxglove B.V.	Netherlands	99.73	99.73
Marba HAG B.V.	Netherlands	99.73	99.73
Marba Hornbeam B.V.	Netherlands	99.73	99.73
Marba Königswinter B.V.	Netherlands	99.73	99.73
Marba Maintal B.V.	Netherlands	99.73	99.73
Marba Marigold B.V.	Netherlands	99.73	99.73
Marba Merseburg B.V.	Netherlands	99.73	99.73
Marba Mimosa B.V.	Netherlands	99.73	99.73
Marba Regensburg B.V.	Netherlands	99.73	99.73
Marba Saffron B.V.	Netherlands	99.73	99.73
Marba Troisdorf B.V.	Netherlands	99.73	99.73
Sirius Almond GmbH & Co. KG	Germany	99.73	99.73
Sirius Bluebell GmbH & Co. KG	Germany	99.73	99.73
Sirius Cypress GmbH & Co. KG	Germany	99.73	99.73
Sirius Administration One GmbH & Co KG	Germany	94.80	94.80
Sirius Administration Two GmbH & Co KG	Germany	94.80	94.80
Verwaltungsgesellschaft Gewerbepark Bilderstöckchen GmbH	Germany	94.15	94.15

* Subsidiary company directly held by the parent entity, Sirius Real Estate Limited.

In the period Marba Dandelion B.V. and Sirius Corporate Services B.V. acquired 100% of the share capital of Marba Bonn B.V. and Sirius Coöperatief U.A. respectively.

Investment in associates which are accounted for with the equity method:

Company name	Country of incorporation	Ownership at 31 March 2021 %	Ownership at 31 March 2020 %
DDS Daisy B.V.	Netherlands	35.00	35.00
DDS Edelweiss B.V.	Netherlands	35.00	35.00
DDS Lime B.V.	Netherlands	35.00	35.00
DDS Maple B.V.	Netherlands	35.00	35.00
Sirius Boxwood B.V.	Netherlands	35.00	100.00
Sirius Laburnum B.V.	Netherlands	35.00	35.00
Sirius Orchid B.V.	Netherlands	35.00	35.00

33. Post balance sheet events

On 30 April 2021, the Group completed the acquisition of a business park located in Essen. Total acquisition costs amounted to €10.7 million. The property is a mixed-use business park and has a net lettable area of 14,711 sqm. The property is 80% occupied and let to six tenants, producing an annual income of €0.8 million and having a remaining weighted average lease term of 1.4 years.

On 28 April 2021, the Group notarised for the acquisition of a business park located in Öhringen. The total acquisition costs amount to €9.0 million. The business park comprises over 18,000 sqm of gross lettable area, primarily across warehouse and production space. The transaction is expected to complete in the first half of the new financial year.

On 1 April 2021 the Company agreed a €100.0 million bridge facility with a syndicate of banks including HSBC Trinkhaus & Burkhardt AG, Morgan Stanley Bank International Limited and Deutsche Bank Luxembourg S.A. The loan facility is charged with a floating interest rate of 1.50% (for the first interest period) over EURIBOR and ends with a margin of 3.50% for the last interest period. Termination date of the facility falls 364 days after the first utilisation date. At the approval date of the Annual Report, no drawdowns on this facility have been made.

Business analysis (Unaudited Information)

Non-IFRS measures

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
Total comprehensive income for the year attributable to the owners of the Company	147,451	98,136
Gain on revaluation of investment properties	(99,585)	(55,789)
Loss/(gain) on disposal of properties (net of related tax)	33	(86)
Gain on loss of control of subsidiaries (net of related tax)	(65)	(6,323)
Add finance restructuring costs	-	9,107
Change in fair value of derivative financial instruments	(136)	377
Deferred tax in respect of EPRA earnings adjustments	14,180	11,687
NCI in respect of the above	82	29
Deduct revaluation surplus relating to investment in associates	(4,199)	(1,687)
Tax in relation to the above	872	431
EPRA earnings	58,633	55,882
Add change in deferred tax relating to derivative financial instruments	79	-
Add/(deduct) change in fair value of derivative financial instruments	136	(377)
Deduct finance restructuring costs	-	(9,107)
NCI in respect of the above	-	-
Headline earnings after tax	58,848	46,398
(Deduct)/add change in fair value of derivative financial instruments (net of related tax)	(215)	377
Deduct revaluation expense relating to leased investment properties	(4,325)	(3,916)
Add adjusting items(1) (net of related tax)	4,092	11,052
Adjusted earnings after tax	58,400	53,911

(1) See note 11 to the financial statements.

For more information on EPRA earnings refer to Annex 1.

	Year ended 31 March 2021 €000	Year ended 31 March 2020 €000
EPRA earnings	58,633	55,882
Weighted average number of ordinary shares	1,040,956,722	1,027,881,515
EPRA earnings per share (cents)	5.63	5.44
Headline earnings after tax	58,848	46,398
Weighted average number of ordinary shares	1,040,956,722	1,027,881,515
Headline earnings per share (cents)	5.65	4.51
Adjusted earnings after tax	58,400	53,911
Weighted average number of ordinary shares	1,040,956,722	1,027,881,515
Adjusted earnings per share (cents)	5.61	5.24

Geographical property analysis - owned investment properties

March 2021	No. of owned properties	Total sqm 000	Occupancy	Rate psqm €	Annualised rent roll €m	% of portfolio by annualised rent roll	Value €m(1)	Gross yield	WALE rent	WALE sqm
Frankfurt	15	362	88.9%	6.27	24.3	25%	315.8	7.6%	2.8	2.8
Berlin	4	103	98.0%	7.45	9.0	9%	144.4	6.3%	2.5	2.6
Stuttgart	7	261	90.4%	4.95	14.0	14%	184.3	7.6%	2.7	2.7
Cologne	7	127	89.2%	7.52	10.2	11%	145.8	7.0%	2.1	2.1
Munich	3	124	81.7%	7.61	9.2	10%	180.2	5.1%	2.7	3.0
Düsseldorf	11	197	89.3%	5.52	11.7	12%	153.2	7.6%	3.3	3.5
Hamburg	4	91	69.1%	5.05	3.8	4%	54.2	7.1%	2.6	2.5
Other	9	242	82.5%	6.27	15.0	15%	169.3	8.9%	3.8	3.5
Total	60	1,507	87.0%	6.17	97.2	100%	1,347.2	7.2%	2.9	2.9

Usage analysis

Usage	Total sqm	% of total sqm	Occupied sqm	% of occupied sqm	Annualised rent roll €m	% of annualised rent roll	Vacant sqm	Rate psqm €
Office	478,423	31.8%	407,595	31.0%	38.4	39.4%	70,828	7.82
Storage	489,964	32.5%	417,765	31.9%	22.4	23.1%	72,199	4.48
Production	324,222	21.5%	312,949	23.9%	17.3	17.8%	11,273	4.61
Smartspace	99,818	6.6%	70,449	5.4%	6.6	6.8%	29,369	7.85
Other(1)	114,642	7.6%	102,737	7.8%	12.5	12.9%	11,905	10.16
Total	1,507,069	100.0%	1,311,495	100.0%	97.2	100.0%	195,574	6.17

(1) Other includes: catering, other usage, residential, individual, technical space, land and car parking.

Lease expiry profile of future minimum lease payments receivable under non-cancellable leases by income

	Office €000	Production €000	Storage €000	Smartspace €000	Other €000	Adjustments in relation to lease incentives €000	Total €000
Less than 1 year	34,053	16,588	20,425	3,234	10,715	(598)	84,417
Between 1 and 5 years	59,721	38,453	36,430	1,056	19,458	(242)	154,876
More than 5 years	12,344	9,921	6,803	34	6,114	(5)	35,211
Total	106,118	64,962	63,658	4,324	36,287	(845)	274,504

Lease expiry profile by future minimum lease payments receivable under non-cancellable leases by sqm

	Office sqm	Production sqm	Storage sqm	Smartspace sqm	Other sqm	Total sqm
Less than 1 year	109,621	36,690	104,903	58,372	17,369	326,955
Between 1 and 5 years	255,308	220,281	239,098	11,828	71,645	798,160
More than 5 years	42,666	55,978	73,764	249	13,723	186,380
Total	407,595	312,949	417,765	70,449	102,737	1,311,495

Escalation profile per usage

The Group's primary source of revenue relates to leasing contracts with tenants. The Group realises escalations as a result of new sales, renewals, inflation linked indexations and contractually agreed uplifts. Approximately 33.8% of contracts in place at 31 March 2021 are subject to contractual uplifts. The average contractual uplift over the coming twelve months split by usage is detailed as follows:

Usage	Increase in %
Office	1.45%
Storage	2.72%
Production	1.80%
Smartspace	2.54%
Other(1)	7.16%
Total	2.13%

(1) Other includes: catering, other usage, residential, individual, technical space, land and car parking.

Property profile March 2021*

Property and location	Total sqm	Office sqm	Storage sqm	Production sqm	Other sqm	Rate psqm €
Rostock	18,656	8,228	1,569	6,606	2,253	6.15
Hanover	22,717	8,911	3,943	6,239	3,624	5.60
Mahlsdorf	29,257	11,578	10,796	1,979	4,904	7.34
Mahlsdorf II	12,736	5,765	1,262	1,906	3,803	7.30
Magdeburg	30,022	10,732	9,784	4,209	5,297	5.04
Gartenfeld	25,379	4,996	11,019	3,351	6,013	7.99
Neuruppin	22,959	1,404	7,629	13,132	794	4.83
Potsdam	35,864	12,372	12,555	4,956	5,981	7.22
Schenefeld	40,252	10,264	26,528	1,959	1,501	4.36

Property profile March 2021* continued

Property and location	Total sqm	Office sqm	Storage sqm	Production sqm	Other sqm	Rate psqm €
Dresden	57,701	26,213	17,283	11,125	3,080	7.20
Hamburg Lademannbogen	10,485	7,756	1,295	-	1,434	9.60
Buxtehude	28,135	1,108	11,749	13,412	1,866	4.16
Norderstedt	12,627	3,052	7,508	172	1,895	5.16
Neuss	17,547	13,419	1,219	153	2,756	11.19
Bonn	10,586	4,531	2,412	477	3,166	7.51
Bonn - Dransdorf	19,055	5,364	6,888	1,665	5,138	6.39
Aachen I	24,201	12,622	2,324	5,510	3,745	8.72
Aachen II	9,750	1,452	6,570	1,534	194	5.58
Cologne	29,046	2,636	12,574	1,769	12,067	4.61
Wuppertal	14,601	855	5,589	3,614	4,543	4.34
Solingen	13,333	2,475	4,409	4,925	1,524	2.67
Düsseldorf - Sud	21,443	2,814	12,309	1,970	4,350	5.25
Cölln Parc	13,480	6,509	3,371	2,867	733	10.31
Krefeld III	9,671	4,833	3,430	924	484	7.72
Düsseldorf II	9,839	4,433	4,950	-	456	7.46
Krefeld II	6,101	2,893	325	2,171	712	7.27
Krefeld	11,319	7,450	2,545	592	732	8.28
Cologne Porz	21,087	15,675	2,416	279	2,717	10.44
Bochum	55,801	12,714	36,004	3,964	3,119	4.27
Bochum II	4,318	3,502	479	12	325	8.28
Neuss II	33,357	8,498	17,209	6,058	1,592	4.25
Mannheim II	14,593	6,597	4,149	586	3,261	5.68
Mannheim III	3,035	2,278	740	-	17	6.32
Neu-Isenburg	8,269	5,708	1,168	-	1,393	10.68
Mannheim	68,690	13,116	22,214	27,119	6,241	4.61
Maintal	37,056	7,224	14,779	8,390	6,663	6.19
Maintal Mitte	11,023	462	4,523	5,685	353	4.03
Offenbach I	15,044	3,641	2,414	2,351	6,638	6.26
Pfungstadt	32,662	6,707	11,406	9,786	4,763	4.68
Kassel	8,142	3,311	683	3,875	273	5.31
Offenbach Carl Legien-Strasse	45,190	10,010	9,340	17,625	8,215	5.18
Frankfurt Röntgenstraße	5,488	3,889	505	36	1,058	10.35
Saarbrücken	46,864	29,663	9,685	820	6,696	8.07
Alzenau	66,703	27,673	7,510	24,085	7,435	6.35
Friedrichsdorf	17,536	6,793	5,249	2,763	2,731	6.73
Dreieich	13,048	7,402	3,095	-	2,551	7.94
Frankfurt	4,288	2,260	485	68	1,475	10.11
Wiesbaden	18,364	14,334	1,369	-	2,661	13.57
Ludwigsburg	28,237	7,505	10,247	3,832	6,653	6.07
Nuremberg	14,100	2,323	3,144	7,628	1,005	7.42
Heidenheim	46,875	8,240	15,279	12,964	10,392	4.22
Stuttgart - Kirchheim	57,863	20,109	12,957	18,737	6,060	5.94
Munich - Neuaubing	91,231	16,221	31,677	29,614	13,719	7.06
Nabern II	5,578	1,620	491	2,376	1,091	7.22
Markgröningen	57,697	4,377	30,925	20,225	2,170	3.37
Fellbach	27,062	1,749	16,551	340	8,422	5.00
Fellbach II	9,801	6,131	822	27	2,821	6.90
Frickenhausen	27,933	6,540	7,062	12,182	2,149	5.02
Freiburg Teningen	20,778	7,151	6,037	5,578	2,012	3.92
Grasbrunn	14,272	7,882	4,127	-	2,263	10.71
Hallbergmoos	18,322	12,453	3,388	-	2,481	8.70
Total	1,507,069	478,423	489,964	324,222	214,460	6.17

* Excluding leased investment properties.

Annex 1- Non-IFRS Measures

Basis of preparation

The Directors of Sirius Real Estate Limited ("Sirius") have chosen to disclose additional non-IFRS measures; these include EPRA earnings, adjusted net asset value, EPRA net asset value, EPRA net reinstatement value, EPRA net tangible assets, EPRA net disposal value, adjusted profit before tax and funds from operations (collectively "Non-IFRS Financial Information").

The Directors have chosen to disclose:

• EPRA earnings in order to assist in comparisons with similar businesses in the real estate sector. EPRA earnings is a definition of earnings as set out by the European Public Real Estate Association. EPRA earnings represents earnings after adjusting for the revaluation of investment properties, changes in fair value of derivative financial instruments, gains and losses on disposals of properties (including tax), the gain on loss of control of subsidiaries, refinancing costs, exit fees and prepayment penalties (collectively the "EPRA earnings adjustments"), deferred tax in respect of the EPRA earnings adjustments, NCI relating to gain on revaluation and gain on sale of properties (including tax), revaluation gain on investment property relating to associates and the related tax thereon. The reconciliation between basic and diluted earnings and EPRA earnings is detailed in table A below.

• Adjusted net asset value in order to assist in comparisons with similar businesses. Adjusted net asset value represents net asset value after adjusting for derivative financial instruments at fair value and deferred tax relating to valuation movements, derivative financial instruments and LTIP valuation. The reconciliation for adjusted net asset value is detailed in table B below.

• EPRA net reinstatement value ("EPRA NRV") in order to assist in comparisons with similar businesses in the real estate sector. EPRA NRV is a definition of net asset value as set out by the European Public Real Estate Association. EPRA NRV represents net asset value after adjusting for derivative financial instruments at fair value, deferred tax relating to valuation movements and derivatives and real estate transfer tax presented in the Valuation Certificate (for the entire consolidated Group including wholly owned entities and investment in associates). The reconciliation for EPRA NRV is detailed in table C below.

• EPRA net tangible assets ("EPRA NTA") in order to assist in comparisons with similar businesses in the real estate sector. EPRA NTA is a definition of net asset value as set out by the European Public Real Estate Association. EPRA NTA represents net asset value after adjusting for derivative financial instruments at fair value, deferred tax relating to valuation movements (excluding that relating to assets held for sale) and derivatives, goodwill and intangible assets as per the note reference in the consolidated statement of financial position (for the entire consolidated Group including wholly owned entities and investment in associates). The reconciliation for EPRA NTA is detailed in table C below.

• EPRA net disposal value ("EPRA NDV") in order to assist in comparisons with similar businesses in the real estate sector. EPRA NDV is a definition of net asset value as set out by the European Public Real Estate Association. EPRA NDV represents net asset value after adjusting for goodwill as per the note reference in the consolidated statement of financial position and the fair value of fixed interest rate debt (for the entire consolidated Group including wholly owned entities and investment in associates). The reconciliation for EPRA NDV is detailed in table C below.

• EPRA net asset value ("EPRA NAV") in order to assist in comparisons with similar businesses in the real estate sector. EPRA NAV is a definition of net asset value as set out by the European Public Real Estate Association. EPRA NAV represents net asset value after adjusting for derivative financial instruments at fair value and deferred tax relating to valuation movements and derivatives. EPRA introduced three new features of the net asset valuation metrics, which replaced EPRA NAV for accounting periods commencing in January 2020. Companies are expected to provide a bridge between the previous EPRA NAV metrics and the new ones for both the current and comparative accounting period in order to assist the users of their financial statements. The reconciliation for EPRA NAV is detailed in table C below.

• Adjusted profit before tax in order to provide an alternative indication of Sirius Real Estate Limited and its subsidiaries' (the "Group") underlying business performance. Accordingly, it excludes the effect of the gain on revaluation of investment properties, other adjusting items, gains/losses on sale of properties, change in fair value of financial derivatives, gain on loss of control of subsidiaries, revaluation gain on investment property relating to associates and related tax and deficit on revaluation relating to leased investment properties. The reconciliation for adjusted profit before tax is detailed in table D below.

• Funds from operations in order to assist in comparisons with similar businesses and to facilitate the Group's dividend policy which is derived from funds from operations. Accordingly, funds from operations excludes depreciation and amortisation (excluding depreciation relating to IFRS 16), amortisation of financing fees, adjustment in respect of IFRS 16 and current tax excluding tax on disposals. The reconciliation for funds from operations is detailed in table D below.

The Non-IFRS Financial Information is presented in accordance with the JSE Listing Requirements and the guide on pro forma financial information issued by SAICA. The Non-IFRS Financial Information is the responsibility of the Directors. The Non-IFRS Financial Information has been presented for illustrative purposes and, due to its nature, may not fairly present the Group's financial position or result of operations.

Ernst & Young Inc have issued a reporting accountants' report on the Non-IFRS Financial Information for the year ended 31 March 2021 as contained in Annex 1 - Non-IFRS Measures to the Sirius Real Estate Limited Annual Report and Accounts 2021, which is available for inspection at the Group's registered office. The starting point for all the Non-IFRS Financial Information has been extracted from the Group's consolidated financial statements for the year ended 31 March 2021 ("consolidated financial statements").

Basis of preparation continued

Table A - EPRA earnings

	Year ended 31 March 2021	Year ended 31 March 2020
	€000	€000
Basic and diluted earnings attributable to owners of the Company(¹)	147,451	98,136
Gain on revaluation of investment properties(2)	(99,585)	(55,789)
Add loss/(deduct gain) on disposal of properties (including tax)(3)	33	(86)
Deduct gain on loss of control of subsidiaries(4)	(65)	(6,323)
Refinancing costs, exit fees and prepayment penalties(5)	-	9,107
Change in fair value of derivative financial instruments(6)	(136)	377
Deferred tax in respect of EPRA earnings adjustments(7)	14,180	11,687
NCI in respect of the above(8)	82	29
Deduct revaluation gain on investment property relating to associates(9)	(4,199)	(1,687)
Tax in relation to the revaluation gain on investment property relating to associates(10)	872	431
EPRA earnings(11)	58,633	55,882

Notes:

(1) Row 1 presents the profit and total comprehensive income attributable to owners of the Company which has been extracted from the consolidated statement of comprehensive income within the consolidated financial statements.

(2) Row 2 presents the gain on revaluation of investment properties which has been extracted from the consolidated statement of comprehensive income within the consolidated financial statements.

(3 Row 3 presents the gain or loss on disposal of properties (including tax) which has been extracted from note 11 within the consolidated financial statements.

(4) Row 4 presents the gain on loss of control of subsidiaries which has been extracted from the consolidated statement of comprehensive income within the consolidated financial statements.

(5) Row 5 presents the refinancing costs, exit fees and prepayment penalties which have been extracted from note 9 within the consolidated financial statements.

(6) Row 6 presents the change in fair value of derivative financial instruments which has been extracted from the consolidated statement of comprehensive income within the consolidated financial statements.

(7) Row 7 presents deferred tax relating to origination and reversal of temporary differences of the EPRA earnings adjustments which has been extracted from note 10 within the consolidated financial statements.

(8) Row 8 presents the non-controlling interest relating to gain on revaluation and gain or loss on disposal of properties (including tax) which has been extracted from note 11 within the consolidated financial statements.

(9) Row 9 presents the revaluation gain on investment property relating to associates which has been extracted from note 11 within the consolidated financial statements.

(10) Row 10 presents tax in relation to the revaluation gain on investment property relating to associates which has been extracted from note 11 within the consolidated financial statements.

(11) Row 11 presents the EPRA earnings for the year.

Table B - Adjusted net asset value

	31 March 2021	31 March 2020
	€000	€000
Net asset value
Net asset value for the purpose of assets per share (assets attributable to the owners of the Company)(1)	926,533	801,570
Deferred tax arising on revaluation gain, derivative financial instruments and LTIP valuation(2)	56,331	42,151
Derivative financial instruments at fair value(3)	1,141	1,279
Adjusted net asset value attributable to owners of the Company(4)	984,005	845,000

Notes:

(1) Row 1 presents the net assets value for the purpose of assets per share (assets attributable to the owners of the company) which has been extracted from the consolidated statement of financial position within the consolidated financial statements.

(2) Row 2 presents deferred tax expense arising on revaluation gains of €56,484,000 (2020: €42,225,000) and a credit of €153,000 (2020: €74,000) arising on derivative financial instruments which has been extracted from note 10 within the consolidated financial statements. There is no deferred tax on the LTIP valuation.

(3) Row 3 presents current derivative financial instrument assets of €70,000 (2020: €89,000) less current derivative financial instrument liabilities of €414,000 (2020: €412,000) less non-current derivative financial instrument liabilities of €797,000 (2020: €956,000) which have been extracted from the consolidated statement of financial position within the consolidated financial statements.

(4) Row 4 presents the adjusted net asset value attributable to the owners of the Company as at year end.

Basis of preparation continued

Table C - EPRA net asset measures

	EPRA NRV	EPRA NTA	EPRA NDV	EPRA NAV
	New measures			Previous measure
	31 March 2021 €000	31 March 2021 €000	31 March 2021 €000	31 March 2021 €000
Net asset value as at year end (basic)(1)	926,533	926,533	926,533	926,533
Diluted EPRA net asset value at fair value	926,533	926,533	926,533	926,533
Group
Derivative financial instruments at fair value(2)	1,141	1,141	n/a	1,141
Deferred tax in respect of EPRA earnings adjustments(3)	56,331	56,331 *	n/a	56,331
Goodwill as per note 19(4)	n/a	(3,738)	(3,738)	n/a
Intangibles as per note 19(5)	n/a	(2,830)	n/a	n/a
Fair value of fixed interest rate debt(6)	n/a	n/a	(3,556)	n/a
Real estate transfer tax(7)	106,274	n/a	n/a	n/a
Investment in associate
Deferred tax in respect of EPRA earnings adjustments(3)*	5,212	5,212 *	n/a	n/a **
Fair value of fixed interest rate debt(6)	n/a	n/a	(1,772)	n/a
Real estate transfer tax(7)	6,772	n/a	n/a	n/a
Total EPRA NRV, NTA, NDV and NAV(8)	1,102,263	982,649	917,467	984,005

	EPRA NRV	EPRA NTA	EPRA NDV	EPRA NAV
	New measures			Previous measure
	31 March 2020 €000	31 March 2020 €000	31 March 2020 €000	31 March 2020 €000
Net asset value as at year end (basic)(1)	801,570	801,570	801,570	801,570
Diluted EPRA net asset value at fair value	801,570	801,570	801,570	801,570
Group
Derivative financial instruments at fair value(2)	1,279	1,279	n/a	1,279
Deferred tax in respect of EPRA earnings adjustments(3)	42,151	41,668 *	n/a	42,151
Goodwill as per note 19(4)	n/a	(3,738)	(3,738)	n/a
Intangibles as per note 19(5)	n/a	(1,986)	n/a	n/a
Fair value of fixed interest rate debt(6)	n/a	n/a	(3,688)	n/a
Real estate transfer tax(7)	93,810	n/a	n/a	n/a
Investment in associate
Deferred tax in respect of EPRA earnings adjustments(3)*	4,337	4,337 *	n/a	n/a **
Fair value of fixed interest rate debt(6)	n/a	n/a	(2,385)	n/a
Real estate transfer tax(7)	6,322	n/a	n/a	n/a
Total EPRA NRV, NTA, NDV and NAV(8)	949,469	843,130	791,759	845,000

* The Company intends to hold and does not intend in the long term to sell any of the investment properties and has excluded such deferred taxes for the whole portfolio as at year end.

Notes:

(2) Row 2 presents current derivative financial instrument assets of €70,000 (2020: €89,000) less current derivative financial instrument liabilities of €414,000 (2020: €412,000) less non-current derivative financial instrument liabilities of €797,000 (2020: €956,000) which have been extracted from the consolidated statement of financial position within the consolidated financial statements.

(3) Row 3 presents for the Group the deferred tax expense arising on revaluation gains of €56,484,000 (2020: €42,225,000) and a credit of €153,000 (2020: €74,000) arising on derivative financial instruments which has been extracted from note 10 within the consolidated financial statements and for EPRA NTA only the additional credit adjustment for the deferred tax expense relating to assets held for sale of €nil (2020: €483,000). For investment in associates the deferred tax expense arising on revaluation gains amounted to €5,212,000 (2020: €4,337,000). There is no deferred tax on the LTIP valuation.

(4) Row 4 presents the net book value of goodwill which has been extracted from note 19 within the consolidated financial statements.

(5) Row 5 presents the net book value of software and licences with definite useful life which has been extracted from 19 within the consolidated financial statements.

(6) Row 6 presents the fair value of financial liabilities and assets on the statement of financial position, net of any related deferred tax.

(7) Row 7 presents the add-back of purchasers' costs in order to reflect the value prior to any deduction of purchasers' costs, as shown in the Valuation Certificate of Cushman & Wakefield LLP.

(8) Row 8 presents the EPRA NAV, EPRA NRV, EPRA NTA and EPRA NDV, respectively, as at year end. The EPRA NAV measurement is no longer recognised by EPRA guidelines from periods commencing in January 2020. The measurement has been retained to provide a bridge between the previous EPRA NAV metric and the new EPRA NRV, NTA and NDV metrics.

Basis of preparation continued

Table D - Adjusted profit before tax and funds from operations

	Year ended 31 March 2021	Year ended 31 March 2020
	€000	€000
Reported profit before tax(1)	163.7	110.8
Adjustments for:
Gain on revaluation of investment properties(2)	(99.6)	(55.8)
Deficit on revaluation relating to leased investment properties(3)	(4.3)	(3.9)
Gain on disposals of properties(4)	(0.1)	(0.1)
Gain on loss of control of subsidiaries(5)	(0.1)	(6.3)
Deduct revaluation gain on investment property from associates and related tax(6)	(3.3)	(1.3)
Other adjusting items(7)	4.1	11.1
Change in fair value of financial derivatives(8)	(0.1)	0.4
Adjusted profit before tax(9)	60.3	54.9
Adjustments for:
Depreciation and amortisation (excluding depreciation relating to IFRS 16)(10)	1.6	1.6
Amortisation of financing fees(11)	1.7	1.4
Adjustment in respect of IFRS 16(12)	(0.9)	(1.2)
Current taxes incurred (see note 10)(13)	(1.9)	(0.9)
Add back current tax relating to disposals(14)	0.1	(0.1)
Funds from operations(15)	60.9	55.7

Notes:

(1) Row 1 presents profit before tax which has been extracted from the consolidated statement of comprehensive income within the consolidated financial statements.

(2) Row 2 presents the gain on revaluation of investment properties which has been extracted from the consolidated statement of comprehensive income within the consolidated financial statements.

(3) Row 3 presents the deficit on revaluation relating to capitalised head leases which has been extracted from note 13 within the consolidated financial statements.

(4) Row 4 presents the gain or loss on disposal of properties which has been extracted from the consolidated statement of comprehensive income within the consolidated financial statements.

(5) Row 5 presents the gain on loss of control of subsidiaries which has been extracted from the consolidated statement of comprehensive income within the consolidated financial statements.

(6) Row 6 presents the revaluation gain on investment property relating to associates and related tax which has been extracted from note 11 within the consolidated financial statements.

(7) Row 7 presents the total adjusting items which has been extracted from note 11 within the consolidated financial statements.

(8) Row 8 presents the change in fair value of derivative financial instruments which has been extracted from the consolidated statement of comprehensive income within the consolidated financial statements.

(9) Row 9 presents the adjusted profit before tax for the year.

(10) Row 10 presents depreciation of plant and equipment and amortisation of intangible assets which has been extracted from note 6 within the consolidated financial statements.

(11) Row 11 presents amortisation of capitalised finance costs which has been extracted from note 9 within the consolidated financial statements.

(12) Row 12 presents the differential between the expense recorded in the consolidated statement of comprehensive income for the year relating to head leases in accordance with IFRS 16 amounting to €5.1 million (2020: €4.8 million) and the actual cash expense recorded in the consolidated statement of cash flow for the year amounting to €6.0 million (2020: €6.0 million).

(13) Row 13 presents the total current income tax which has been extracted from note 10 within the consolidated financial statements.

(14) Row 14 presents the current income tax charge relating to disposals of investment properties which has been extracted from note 10 within the consolidated financial statements.

(15) Row 15 presents the funds from operations for the year.

Glossary of terms

Adjusted earnings	is the earnings attributable to the owners of the Company, excluding the effect of adjusting items net of related tax, gains/losses on sale of properties net of related tax, the revaluation deficits/surpluses on the investment properties (also to associates) net of related tax, profits and losses on disposals of properties net of related tax, changes in fair value of derivative financial instruments net of related tax, gain on loss of control of subsidiaries net of related tax, finance restructuring costs net of related tax and adjustment on revaluation expense relating to leased investment properties
Adjusted net asset value	is the assets attributable to the equity owners of the Company adjusted for derivative financial instruments at fair value and deferred tax arising on revaluation gain, derivative financial instruments and LTIP valuation
Adjusted profit before tax	is the reported profit before tax adjusted for gain on revaluation of investment properties, gains/losses on sale of properties, changes in fair value of derivative financial instruments, other adjusting items, gain on loss of control of subsidiaries, revaluation gain on investment property relating to associates and related tax and deficit on revaluation relating to leased investment properties
Annualised acquisition net operating income	is the income generated by a property less directly attributable costs at the date of acquisition expressed in annual terms. Please see "annualised rent roll" definition below for further explanatory information
Annualised acquisition rent roll	is the contracted rental income of a property at the date of acquisition expressed in annual terms. Please see "annualised rent roll" definition below for further explanatory information
Annualised rent roll	is the contracted rental income of a property at a specific reporting date expressed in annual terms. Unless stated otherwise the reporting date is 31 March 2021. Annualised rent roll should not be interpreted nor used as a forecast or estimate. Annualised rent roll differs from rental income described in note 5 of the Annual Report and reported within revenue in the consolidated statement of comprehensive income for reasons including: annualised rent roll represents contracted rental income at a specific point in time expressed in annual terms; rental income as reported within revenue represents rental income recognised in the period under review; and rental income as reported within revenue includes accounting adjustments including those relating to lease incentives
Capital value	is the market value of a property divided by the total sqm of a property
Cumulative total return	is the return calculated by combining the movement in investment property value net of capex with the total net operating income less bank interest over a specified period of time
EPRA earnings	is earnings after adjusting the revaluation of investment properties, changes in fair value of derivative financial instruments, gains and losses on disposals of properties (net of related tax), the gain on loss of control of subsidiaries (net of related tax), refinancing costs, exit fees and prepayment penalties (collectively the "EPRA earnings adjustments"), deferred tax in respect of the EPRA earnings adjustments, NCI relating to gain on revaluation and gain on sale of properties net of related tax, revaluation gain on investment property relating to associates and the related tax thereon
EPRA net asset value	is the net asset value after adjusting for derivative financial instruments at fair value and deferred tax relating to valuation movements and derivatives
EPRA net reinstatement value	is the net asset value after adjusting for derivative financial instruments at fair value, deferred tax relating to valuation movements and derivatives and real estate transfer tax presented in the Valuation Certificate, including the amounts of the above related to the investment in associates
EPRA net tangible assets	is the net asset value after adjusting for derivative financial instruments at fair value, deferred tax relating to valuation movements (just for the part of the portfolio that the Company intends to hold should be excluded) and derivatives, goodwill and intangible assets as per the note reference in the consolidated statement of financial position, including the amounts of the above related to the investment in associates
EPRA net disposal value	is the net asset value after adjusting for goodwill as per the note reference in the consolidated statement of financial position and the fair value of fixed interest rate debt, including the amounts of the above related to the investment in associates
EPRA net initial yield	is the annualised rent roll based on the cash rents passing at the statement of financial position date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers' costs
EPRA net yield	is the net operating income generated by a property expressed as a percentage of its value plus purchase costs
Funds from operations	is adjusted profit before tax adjusted for depreciation and amortisation (excluding depreciation relating to IFRS 16), amortisation of financing fees, adjustment in respect to IFRS 16 and current tax excluding tax on disposals
Geared IRR	is an estimate of the rate of return taking into consideration debt
Gross loan to value ratio	is the ratio of principal value of total debt to the aggregated value of investment property
Like for like	refers to the manner in which metrics are subject to adjustment in order to make them directly comparable. Like-for-like adjustments are made in relation to annualised rent roll, rate and occupancy and eliminate the effect of asset acquisitions and disposals that occur in the reporting period
Net loan to value ratio	is the ratio of principal value of total debt less cash, excluding that which is restricted, to the aggregate value of investment property
Net operating income	is the rental and other income from investment properties generated by a property less directly attributable costs
Net yield	is the net operating income generated by a property expressed as a percentage of its value
Occupancy	is the percentage of total lettable space occupied as at reporting date
Operating cash flow on investment (geared)	is an estimate of the rate of return based on operating cash flows and taking into consideration debt
Operating cash flow on investment (ungeared)	is an estimate of the rate of return based on operating cash flows
Rate	is rental income per sqm expressed on a monthly basis as at a specific reporting date
Total debt	is the aggregate amount of the Company's interest-bearing loans and borrowings
Total shareholder accounting return	is the return obtained by a shareholder calculated by combining both movements in adjusted NAV per share plus dividends paid
Total return	is the return for a set period of time combining valuation movement and income generated
Ungeared IRR	is an estimate of the rate of return
Weighted average cost of debt	is the weighted effective rate of interest of loan facilities expressed as a percentage
Weighted average debt expiry	is the weighted average time to repayment of loan facilities expressed in years

Corporate directory

SIRIUS REAL ESTATE LIMITED

(Incorporated in Guernsey)
Company number: 46442
JSE Share Code: SRE
LSE (EUR) Share Code: ESRE
LSE (GBP) Share Code: SRE
ISIN Code: ISIN GG00B1W3VF54

Registered office

Trafalgar Court
2nd Floor
East Wing
Admiral Park
St Peter Port
Guernsey GY1 3EL
Channel Islands

Registered number

Incorporated in Guernsey under the Companies (Guernsey) Law, 2008, as amended, under number 46442

Company Secretary

A Gallagher

Sirius Real Estate Limited

Trafalgar Court
2nd Floor
East Wing
Admiral Park
St Peter Port
Guernsey GY1 3EL
Channel Islands

UK solicitors

Norton Rose Fulbright LLP

3 More London Riverside
London SE1 2AQ

Financial PR

FTI Consulting LLP

Aldersgate Street
London EC1A 4HD

JSE sponsor

PSG Capital Proprietary Limited

1st Floor, Ou Kollege
35 Kerk Street
Stellenbosch
7600
South Africa

Joint broker

Peel Hunt LLP

120 London Wall
London EC2Y 5ET

Joint broker

Berenberg

60 Threadneedle Street
London EC2R 8HP

Property valuer

Cushman & Wakefield LLP

Rathenauplatz 1
60313 Frankfurt am Main
Germany

Independent auditors

Ernst & Young LLP

1 More London Place
London SE1 2AF
United Kingdom

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