Dawnay Day Sirius
SPECULATIVE BUYGerman commercial property developer Dawnay Day Sirius has been taken in under the wing of activist investor Bryan Myerson after cutting ties with collapsing parent company Dawnay Day.
Myserson’s Principle Capital is buying the 48% stake in DDS’s asset manager that was formerly owned by investment group Dawnay Day, which is now in administration. Peter Klimt, one of the principles at Dawnay Day who was also a non-executive director of DDS has stepped down, with his place to be filled by South African Myerson.
DDS’ chief executive Kevin Oppenheim, who says his family has known Brian Myerson and his team for many years, is confident that Principle Capital brings ‘expertise and commitment’. For his part, Myerson confirmed that his commitment would for the long term, suggesting the initial investment in the asset manager will be followed by investment ‘directly into the fund’.
DDS’s strategy is to convert swathes of German office space into ‘flexible workspaces’ for small and medium enterprises (SMEs), known locally as Existenzgründungen. The company is already profitable, with €177m of bank debt on average interest rates of 5.5%, lower than the 6.5% average rental yield produced by the company’s 38 sites.
With investors shunning virtually all property stocks, Sirius, named after the ‘dog star’, has not been a stellar share price performer since raising €270m at €1 a share in May last year, its shares having fallen from €1 to €0.55. But with assets valued at €0.958 and Oppenheim stressing that plenty more value is to be extracted in the long term, the shares could prove an excellent, if contrarian, speculative buy.
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Market cap: 166m
PE Forecast: n/a
Share price: 0.55
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