Good morning, everyone, and welcome to today's presentation of Sirius Real Estate's full-year results for the period ending March 31, 2024. My name is Andrew Coombs. I'm the Chief Executive Officer of the Sirius Group, and I'm joined this morning by Chris Bowman, who is the group's Chief Financial Officer. Together, we will take you through this morning's presentation. Let's start by turning to page two. As you all know, we are an on-balance sheet, best-in-class, owner and operator of mixed-use, light industrial business parks on the edge of key towns in Germany and the U.K. Please remember that Sirius operates in both the German and the U.K. markets under the brand of Sirius in Germany and BizSpace in the U.K. Turning to page three, the group currently operates over EUR 2.5 billion of property, 90% of which is owned by the Sirius Group.
This consists of 149 sites in total, 74 in the U.K., 68 in Germany, and seven within our Titanium joint venture with AXA. Turning to page four and looking at the highlights, you can see a story of continued FFO growth. In the year to March 2024, we achieved EUR 110 million of FFO. Now, if I look back at the previous year and the fact that we broke through the EUR 100 million FFO mark, which was our previously stated goal, it's easy to forget that in March 2020, as COVID was beginning to emerge, this business was generating FFO of EUR 55 million.
So in the last four years to March 2024, despite COVID, in spite of the gas crisis in Germany, in spite of the turmoil in markets and the increase in interest rates, this business has doubled its free flowing cash from EUR 55 million to EUR 110 million at the end of this period. That means we can today announce an H2 dividend of EUR 0.0305, and this will be our 21st consecutive increasing dividend payment to our shareholders. And remember, all of those 21 payments have been at least 1.4 times covered by earnings. And let's not forget that in this year, we have continued to recycle. We're big believers in recycling.
We believe that it proves the real value of our assets, and I'm happy to tell you that we've recycled EUR 60 million of assets in this period, and we've recycled those assets at an average premium to book value of 5%. So we've been busy. Let me now hand over to Chris, who will begin by talking you through our income statement.
Thank you, Andrew. Good morning, everyone. So on slide five, you can see here we have the detailed P&L. I'll just run through, pick out some of the highlights from here. Starting at the top, very pleased with the 10% increase in rental income. That's obviously. That's ahead of the like-for-like rent roll. We have been acquisitive in the period, so as we'll come on and see, the balance sheet has grown with new properties coming onto the balance sheet, hence the higher rental income growth. We have, we have suffered some increase in service charge irrecoverables, principally driven by increasing utility costs, some some irrecoverable business rates in the U.K. But those, certainly on the utility costs front, we are past the peak there. So, you will see that, we've talked in the past about our utility hedging.
We have been fully hedged in Germany up until the end of the last calendar year. We are now partially hedged going forwards in Germany. And again, in terms of pricing in the U.K., we've had a similar story as well. But what I would say is, that the utility costs, we have seen those peaks that came from the Ukraine conflict have really moved on now. We're back to a, what I'd call a more normal situation in terms of utility costs. So I would expect that irrecoverables to start to come back down, and that is really a peak point. That flows down. You can see that, as Andrew said, we have the FFO coming in at EUR 110 million. That was 8% ahead of last year.
Very pleased with that performance, driven by that rental income growth, driven by the operating platform. The cost base remained largely on track, so below rental income, 7% ahead of admin expenses. But yes, overall, a very pleasing performance. Running down below the PBT line, just some of the movements there. I'd just flag now, early on, that we've had growth at a group level in valuation. We take EUR 13.1 million of that through to the P&L. That's the net effect of Germany plus U.K., over and above what we spent on CapEx. So that's what you take to the P&L. If we flick over to slide six, just putting that into a per share basis, starting with the NOI of EUR 0.137 per share.
You have the overheads of the business, knock off EUR 0.035. You have the net interest, so that's we have benefited from interest income at a higher rate than we've seen in the past, given where interest rates are. So, the net effect of interest is EUR 0.0123, bringing you down to that FFO performance at EUR 0.0895 per share. Some of the smaller adjusting items principally relate to finance fees. In the year, we refinanced our secured lending. We put through those finance fees that are associated with that, below the FFO line, and as well as the EPRA adjusting items principally relate to deferred tax. That gets you down to EPRA earnings of EUR 0.0821. Dividend per share, again, growing dividend.
We've announced EUR 0.0305 per share this second half. Combine that with the first half of EUR 0.03, gets you to the full year of EUR 0.0605. That's a 68% payout on FFO. We've always said in the past that we have a policy of being at 65% of FFO. We do flex that policy to commit to a growing dividend. So, particularly post the fundraise that we did in November, there is some small cash drag that comes from the time that it takes to put those funds to work. So we have flexed that FFO payout ratio up to 68% to commit to the continuing growth in dividend. Flicking over to slide seven, just to take you through the balance sheet.
In simple terms, our balance sheet has grown by EUR 200 million. So you can see the net assets has gone from just under EUR 1.2 billion to just over EUR 1.4 billion. Very simply, we had the equity raise, with the net proceeds were EUR 160 million euros. We had the valuation increase that I've just mentioned of EUR 13 million. We had the CapEx, which went to the balance sheet of EUR 27 million across the group. And that, in total, all that add up, gets you to that EUR 200 million increase in the net assets. So beyond that, the balance sheet is very stable, very strong. We have ended up with a uplift in adjusted NAV per share of 2%.
Well, in fact, every NAV per share measure that we have is up 2%. But we focus on adjusted NAV per share, and we're at EUR 1.111. That move is principally driven by the valuation uplift that we achieve on the portfolio. We had small dilution that came from the fundraise. We've managed to offset that and more through the increase in the valuation of the portfolio. And then just taking that through on a waterfall per share, we go from the left-hand page, left-hand side of the page to the right-hand side. We take you from last year's EPRA NAV to this year's EPRA NAV.
Again, it's the EPRA adjustments principally relate to tax-related items to take you from last year's 108.1 to the adjusted NAV last year of 109.2. Those adjustments principally are deferred tax that is reversed. To give you then the journey, we achieved around EUR 80 million of recurring profit after tax in Germany. That equates to around EUR 0.06. We had the increase of EUR 0.031 on the portfolio. That's a combination of capitalized investment, plus the increase in valuation over and above that, gets you to the adjusted NAV after Germany of 118.7. Add on, again, the same for the U.K. of EUR 0.02 per share, which equates to around EUR 26 million of recurring profit after tax.
We did suffer a negative movement in valuation in the U.K., both even after the rental income increases we'll come on and talk about, but roughly EUR 28 million down in the U.K. The yield shift there is 60 basis points. Unfortunately, we were not able to outrun, but at a group level, we were. Takes you to the adjusted NAV after U.K. of 118.6. The fees that I mentioned earlier on the capital raise and dilution, EUR 0.018, we offset at the group level. The dividend, as I say, we, we are committed to continuing to grow. We've paid out about EUR 72 million in the year or will have paid out when, when we pay the final, of EUR 72 million.
Takes you to the adjusted NAV of EUR 111.1 I mentioned earlier, and again, the EPRA adjustments relate to tax. I will hand back to Andrew to take you further.
Thanks, Chris. So what we see on this page is we see a summary of the organic growth in Germany. Just before we go through these, let's just cast our mind back, because when we were sitting here a year ago and talking about results to March 2023, we were in a world of rapidly rising prices. We were in a world whereby inflation was increasing, not decreasing. And one of the things that I was saying to people is: we were in a price-led strategy. You have to be. You have to have that pricing power when inflation is high. You have to make sure you capture and capitalize on the increased price before that period of inflation diminishes.
What we've seen in this last year, what we've seen in the period we're talking about, is we've seen inflation diminish, and therefore, it is logical that within that period of diminishing inflation, we would have flipped from a price-led strategy to an occupancy-led strategy. And that's exactly why, when you look on these pages, you see that occupancy has increased from 83.3% on a like-for-like basis to 85.2%. It's also why you see that rate has increased by 4.8%, unlike the 8%+ increase that you would have seen a year ago. What you're witnessing here is our strategy playing out, and what you're seeing is a shift away from pricing and towards occupancy, and that is in line with what is happening in the economy in Germany.
Inflation is falling off rapidly in Germany, and you have to go with the flow of that economy. Now is not the time to be looking for double-digit price increases if you want to hold on to your customers. So what you've seen is you've seen us move with the macro. You've seen when the macro was all about rising prices, us capturing pricing in excess of 8% in Germany. What you're now seeing, as inflation comes off, is that we're still able to get circa 5%. That's still, we think, good. However, it is not the same as it was, and in that process, what you will see is you will see us improve our occupancy. Now, one of the numbers that I always compare in these presentations is the move-in rates and the move-in rates from this year to the previous year.
What you will see is, in March 2023, we recorded 8.98 as the average move-in rate, and what we're recording now is 8.81. This business is subject to mix and timing, and what I'd like to reassure you of is we are not concerned about that small EUR 0.10 difference, because we can account for that in various different one-off effects, and timing and mix effects. What you are not seeing here is our move-in rate peak. What you are not seeing here is a ceiling that we've reached. What you are seeing is a timing issue that is actually very small, but in this case, makes it look like the overall move-in rate in the business is going down, not up.
What I'll draw your attention to is the like-for-like rate per square meter, which is at EUR 7.23, off a previous level of EUR 6.9. As long as that rate is going up, that's what we're concerned about because the new business and move-in ratio is a function to get to that outcome, the outcome being a 4.8% increase in underlying rate for like-for-like rate. And then, if you look at the move-out ratio at or the move-out price, EUR 8.20, compared to move-in at EUR 8.81, you can see why that EUR 6.90 is going up to EUR 7.23. These are still very, very healthy dynamics within the business. I would caution you around just being drawn to one single number when there's a logical explanation to that number.
The overall trend is that while we are focusing on occupancy, we are still moving price. We're just not moving it at the same level as we were when the economy was in much higher inflation. If we go across to page 10, what you can see is the waterfall effect here, where we start with EUR 123 million of rent in Germany on a like-for-like basis. You see that we sell three assets, Wuppertal, Kassel, and Maintal, for EUR 56 million, and in doing so, we lose EUR 3.6 million of rent. What we then do is we experience move-outs. In this year, 137,000 square meters of move-outs, which compares to 164,000 of move-outs the previous year, and that loses us EUR 13.6 million in rent.
We replace that with EUR 17.9 million of move-ins, and then we add the contracted uplifts that are baked into our contracts. That's worth just over 3% of the rent roll, amounting to EUR 4.2 million. We then get to a EUR 128 million rent roll, and then we go and make the acquisitions of Cologne, Göppingen, and Klipphausen. We experience EUR 1.7 million of rent on those three acquisitions this year. Of course, that's not the full year effect. The full year effect is closer to EUR 6 million, and we will see that full year effect in this current year that we're now in.
That takes the rent roll to just short of 130 million, and what you will see is that if you convert the U.K. rent roll into euros, that we're about EUR 195 million of rent roll in this business. So I would say in the coming months, we are going to break through the 200 million mark. Very easy to forget that we also have somewhere in the region of EUR 70 million of service charge reconciliations in this business. So what you're beginning to see is you're beginning to see a business that's approaching the EUR 300 million per annum turnover. 10 years ago, this business was less than EUR 50 million turnover. Turning across to page 11, I'm now going to hand over to Chris.
Thank you, Andrew. So slide 11, really the key message on slide 11 is to try and to show what's the underlying movement in the portfolio valuation, how that has actually come about. The EUR 116 million increase that you see in valuation, based on the like-for-like rent increase, that's taking last year's gross yield of 7.3% and applying that to the increase in rent roll that we've achieved over the year of EUR 8.5 million on a like-for-like basis. So if yields had stayed stable, the value of our portfolio would have gone up EUR 116 million. Clearly, yields have not stayed stable. They've moved out 20 basis points. Hence, we have the like-for-like yield shift running against us of EUR 48 million.
But in the future, should yields stay stable, then you will start to see quite a meaningful impact in terms of our uplift in valuation on the portfolio. I'd highlight down the right-hand side, our gross yields and net yields on our German portfolio, we don't believe are demanding. We have 7.5% gross yield, 6.8% net yield. So I think I'd just leave you with that point, that if yields stabilize, then you'll start to see that portfolio valuation will no longer have that, the effect of the yield shift going against us, and quite meaningful movements in the portfolio valuation that we're driving from rent roll. Page 12, how are we actually driving these rent roll growths? Well, we talk a lot about our platform.
Well, here's some data that just that, that shows you the actual results of our platform. We control our own marketing efforts. In fact, the majority of our leasing events are sourced, originated through our own efforts. This just demonstrates month-on-month, through the year, where we are where we are getting to in terms of month-on-month inquiries, how our marketing spend is generating those inquiries. Our marketing spend has stayed relatively flat year-on-year. So we are continually being more and more effective with our spend. I think that's something that intangible asset of our IP, our data, our ability to understand our local markets, get right down to ground level, what's going on in local markets, has driven. Is partially certainly what drives our rent roll performance.
Very proud of the inquiries to sales numbers, getting that from 11.5% to 13.5%, year-on-year, is a fantastic result, and again, shows the effectiveness of that marketing platform and how that data, that knowledge, is only making us stronger year-on-year. So I think that platform, we can't underestimate the value of that. Moving on to slide 13. Slide 13 is trying to demonstrate, really, this is the Sirius business model on a page. It's about taking assets from the value add line and putting them into the mature line. So we buy assets typically that have work to do. They have vacancy, they have service charge leakage, they need reconfiguring in terms of spaces. This is the business model.
The business model is buy the assets, acquire the assets into the value add line, spend some sensible CapEx, put it into our operating management platform, work out where the demand lies, what the demand for a local market space is, and match that demand, match that demand with supply of space. So if the demand in a local area, for instance, Klipphausen, that we've bought, we'll come on and talk about, it's currently one very large single unit. We will subdivide that space into smaller units. We will match that with the demand that we already see. It's in the Dresden area, that we already see from our existing site there. What does that mean in numbers?
Well, as we work on these assets and essentially turn them into mature assets, not only do we get the benefit of rate and rental income, we get the benefit of valuation through tighter yield. So the value has give us more benefit, and the market gives us benefit because we effectively turn these assets into institutional quality assets. So we take them from gross yields of typically 8% in the value add, to mature yields of 6.8%. So you get the double effect of not only better income, but also better value. We will continue to do that. And one of the ways we do that, flipping over to the next slide, is through the CapEx program.
So we have several CapEx programs, but specifically our acquisitions CapEx program, which is very relevant at the moment, given we are in acquiring mode. Over recent years, we have spent EUR 50.1 million in this program. In return, in return for which, we've generated a rental improvement of just under EUR 17 million. So we're achieving ROIs of 36% on that CapEx. So that's taking often what others would consider structurally vacant space, under-rented space, space which doesn't match the market demand, and aligning that space with opportunity. So that might be taking space in a basement, which someone else treats as structural vacancy, turning it into self-storage. That might be as simple as taking a very large production hall and dividing it into smaller units.
It's all about matching supply with demand, and we do that with relatively low-risk CapEx. We are not typically building from the ground up. We do some small-scale development on existing sites where we have surplus land, but we're not typically going. We don't do greenfield development of sites. We're not buying fields and going and getting planning, et cetera. We are taking existing sites and matching the space to the demand by subdivision, by simple improvement in aesthetics. This is low-risk CapEx. Now, there is more to come. So in progress and with current acquisitions that we've made recently, there's another EUR 6 million that we expect to spend in the short term. We will generate just under EUR 3 million of income from those. Again, the returns are very attractive.
Overall, around 40% ROI on those, on the return on that CapEx. That's what, that's part of what drives the returns under the rent roll, and also what drives the increases in our valuation going forward. So it's critical to the business model of Sirius. I'll hand back to Andrew just to run through some of those recent acquisitions.
Okay, so still on Germany, we look at the three acquisitions that we made in the period, namely Cologne, Göppingen, and Klipphausen. As Chris has explained, Klipphausen is in the Dresden area, where we own two sites right next door to the airport, as well as Bosch's new chip manufacturing site in Dresden. Göppingen is near Stuttgart, home of the famous Jürgen Klinsmann, if you're into your football. Germans call him the Kaiser, but his hometown is Göppingen, near Stuttgart. And then, of course, Cologne is an area where we've owned sites for nearly 15 years. And if I start with Cologne, you know, the story there is very, very simple. This is, you know, a very poorly managed, under-rented site.
We think that there is 20% upside in this, you know, just through the very basic line-by-line, day-to-day asset management of a business park. The thing that takes lots of skill, lots of very boring detail, lots of very skilled people, which have not been applied to this site over the last 10 years. Which is why we think it's a good acquisition with lots and lots of opportunity in a market we know extremely well. If you look at Göppingen, that is a similar story. We know Stuttgart and Swabia very well as a region, but Göppingen is a town that's a new market entry for us. But again, at circa EUR 20 million, we think there's very good upside in the under-renting of this site. Klipphausen is a very different proposition, and it's a proposition that, you know, really excites us.
Because if we look at the Klipphausen site, this is not typically the kind of site that Sirius would buy. And the reason it's not the type of site that Sirius would buy is because we wouldn't get the opportunity to buy it, because it wouldn't come to market. This site, about seven years ago, was kitted out by an owner-operator with a business plan to manufacture in that site for the next 30 years. That's why they sunk so much CapEx into it. That's why it's so modern. That's why it's so well-equipped. So what went wrong? Well, the energy crisis went wrong, and that forced their cost of manufacturing up to such an extent their American parents said, "Doesn't matter what happens in Europe next year, the year after, or next five years, we're not having this risk again.
You close the factory down in Germany, and you sell it." So you want to talk about distress? This is macro distress. Now, it's not happening, you know, to every factory in Germany, but it is to some, and the some that we find can be the ones that we benefit from. Because we're buying this at a capital rate per square meter of less than 800 EUR per sq m . This stuff, to replace, is more than 2,000. This is less than 10 years into its life. We will be able to subdivide this and get eye-watering prices for it when we sublet it. We should never even be allowed near it.
The reason we are is because of that changing macro over the last couple of years, and that policy decision by a US-parented organization to say, "Look, if utilities can move in terms of that level of cost that quickly, you know, strategically, our site is in the wrong place. Get it out of there." So we are happy about that. You know, we're not seeing it as the overwhelming trend in Germany, but we are seeing pockets of it, and where we see those pockets, we're quite pleased. We should have inherited a site that's empty day one, but as part of the transaction, we actually said to the seller, "Do you know what? This kind of doesn't work for us.
You know, no income day one, it'll take a little bit of time to subdivide." So what happened is, we agreed that they would stay and pay us rent for 18 months. So not only is this a huge opportunity to completely reposition the site, we're doing this with the cooperation of the seller to help insulate our business model from lack of income early on. So if we go across the page, we start now to talk about the U.K. So we're switching our brains now from Germany to the U.K. And, you know, let's again start with the strategy in the U.K. This is now an occupancy-led strategy. Now, that's in spite of the fact that we've lifted rate in this period by just under 7%. Easy to forget. We were lifting it by 15%.
To go out and try and lift your rate now in the U.K., double-digit, you might get away with it for a few months. You will completely ruin your customer base. You will damage your brand. So again, as the macro changes, we need to flow with the changing world. 18 months ago in the U.K., we were pushing prices up by 15%. Today, as inflation comes down, we're pushing prices by somewhere between 6% and 7%. It's harder to move occupancy in the U.K. because typically the occupier is in smaller chunks, so it takes more physical effort to ramp that occupancy up. In Germany, you can move your occupancy quicker because the segment size of your tenant is generally larger.
But expect to see those price increases being single-digit in the U.K. going forward, and expect to see that occupancy like for like moving up. It's clearly already higher than Germany is, at 87%, but remember, when we bought this business, occupancy was nearly 90%. If you look at the move-in rates compared 2023 to 2024, we have a very similar issue to the issue we have in Germany. The number is potentially misleading. It's potentially misleading because what we're seeing is a change in mix. We're seeing in this period that we are selling a lot more warehouses in the north of England than we are industrial units in the south of England.
So typically, what we're seeing is people move out in the south at more than GBP 20 a sq ft, and we're replacing it in the north at typically around about GBP 17 a sq ft. That change in mix has skewed that number. It's a timing thing. What we will see going forward is a higher balance of sales in the south and a lower balance of sales in the in the north. It's just the yin and yang of our business. Again, I would draw your attention to the like-for-like rate per sq ft at GBP 14.39 versus GBP 13.49. That's a healthy increase that shows that the business is going in the right direction. What you will see in terms of the move-outs, at GBP 17.48, they are now GBP 0.08 ahead of the move-ins.
That is merely representative of us having cleaned through the portfolio, and instead of seeing very low move-outs or very low-priced move-outs, old customers who hadn't got the capacity to pay, you're now seeing churn, the more modern customers that were previously used to a 15% price increase. Again, we're not overly concerned about that. We're moving to an occupancy-led strategy. As long as we see that rate per square meter, like-for-like, in the whole of the portfolio moving up, and as long as we see positive rent roll growth of around about 7%, we think that that's a good business in the U.K. And a thought I'll leave you with, since owning the U.K. business in November 2021, we've lifted the rent roll by 35% in two and a half years.
So, you know, we are very pleased with this acquisition, and we think this business is ticking along quite nicely. If we go across the page, you can see the disposal of Stoke for GBP 3 million, that cost us GBP 300K off the rent roll. What you can see is you can see the move-outs against the move-ins, and you can see the like-for-like contracted uplifts. These represent nearly 8% of the total rent roll, GBP 4 million addition to the annualized rent roll. And then you can see the acquisitions. So you can see Gloucester, the London assets, Liverpool, Barnsley, adding GBP 3.7 million this year to the rent roll. Remember, the full year effect of those, which we'll get this year, is in excess of GBP 10 million.
So this business is in very good shape going forward, not just organically, but in terms of realizing the benefits of the hard work and yards that we've done on acquisitions over the last few months. This business is set up very well. If we go across to valuation, what you can see is you can see a GBP 11 million uplift based on the GBP 1 million pounds worth of rental increases. So, that being capitalized or the NOI being capitalized at 9.3%, you can see that that was not enough to offset the, GBP 25 million negative effect of yields moving out from 13.3 at gross level to 14.8. But what it did do is it lessened it from GBP 25 million to GBP 14 million. And it's quite interesting. Here we are at a gross yield of 14.8%.
I'm quite pleased with that because I think at 14.8%, I mean, you know, maybe you go to 15 or 15.5. It doesn't make a great deal of difference. But I'll tell you what, you bring that 14.8 into single digits, it makes a huge difference. This business is brilliantly placed. You know, come and see the kind of stuff that we're buying in London and Gloucester. You know, for those of you who went on the tour of London, a few weeks ago with Peel Hunt, come to Gloucester in October to our capital markets day. See the kind of kit that we are buying. There's no way in a million years that's gonna be valued at 14.8% for forever. This business is set up really, really well from a valuation perspective.
Chris talked about the sales process and conversion ratios in Germany. Here's another area of great opportunity. We are increasing the level of inquiries. So this business was getting far less than 1,400 inquiries per month back in November 2021. They were conducting substantially less than 361 viewings. They weren't making circa 100 sales a month. However, the really interesting point for me is that we're still on a sales conversion of only 7%. In Germany, we're on 13%. Go back to Germany back in 2010, we were on 2.8% sales conversion. Today, we're on 13%. The efficiencies that we have got to drive through the U.K. business, the further development of the sales and marketing area, still has huge headroom.
Now, look, the U.K. market isn't the same as the German market, and we may never get to 13% in the U.K., but I'm pretty sure we're gonna get to 10%, and that's gonna increase the efficiency with which we can recruit new customers and retain them, and get them to pay more money for the, space they occupy and the value they receive... If we go across to-- oops, there we go. Got ahead of ourselves here. Go across to the overall, growth plan, you can see that since November 2021, we've increased by 35% where BizSpace is concerned. You can see that we've still got, more room to go in terms of implementing the marketing and the, sales, technique. We have fundamentally improved the quality of income, in the BizSpace portfolio.
You will see that continue not only with the acquisitions and with the recycling of customers, but you'll see it continue with the recycling of sites. You know, you saw us sell Stoke, you've seen us sell Norwich. You know, you'll see, I'm sorry, Ipswich. You'll see us sell some of the other sites in the portfolio, the sites that are lower grade, the sites that are not worthy of, you know, further investment for EPC purposes, and of course, the sites that inherently have the lower paying, lower sort of security of tenants inside them. So we will continue to improve the quality of income. Going forward, we're gonna target CapEx with the high returns that we traditionally see.
As I said, we're gonna dispose of some of those non-core acquisitions, and we will continue to seek out acquisitions in the U.K., like the Gloucester asset, that typically are bigger than GBP 20 million in size and that start to produce day one, 9%-10% returns. Now, something really interesting that I wanted to make clear there, because when we bought BizSpace, we thought the U.K. market was a market that you'd only be able to move forward in, in sort of five, six, seven, maybe 10 million chunks, if you were lucky. You know, we'd seen the history of Hansteen, we'd seen the history of Industrials. You know, we knew that we could move forward in Germany at 30, 40 million chunks. You know, we'd made that leap. But we didn't think we could do that in the U.K.
In this period, our thinking has changed. We proved that we are not stuck in the GBP sub-10 million acquisitive move. We've proved that with London, we can move forward with GBP 33 million. Gloucester, we can move forward with GBP 48 million. You will see in the coming weeks, more GBP 20 million U.K. acquisitions, GBP 20 million plus U.K. acquisitions. Don't underestimate this. For years in the U.K. market, players, and there've been lots of them, have struggled to be able to get scale quick enough. What you're seeing is you're seeing Sirius come into the U.K. market and being able to move forward with scale that has not been seen before. Sure, you can go and buy portfolios. There's risk in portfolios, but you've never seen an industrial player in the U.K. market being able to move, not just once, but move forward in GBP 20 million pound plus chunks.
That completely changes the scalability and the proposition where scale is concerned. Now, why can we do this? Well, again, I wish I could tell you that we were genius enough to have realized this in November 2021. We weren't. We've only just realized it in the last 12 months. It's because when you see, you know, a site like the Rank Xerox former headquarters, 60 acres, you know, in Gloucester, and you see the size of it. If you were a U.K. operator dealing with 10,000 sq ft, you would be absolutely petrified. If you're used to dealing with, you know, million sq ft industrial assets in Germany with 20-ton cranes and all the issues, this is business as usual. It's a different market, but it's business as usual. It's truly, properly industrial.
It's not just industrial on the wrapper, it's industrial inside, it's industrial at the source, it's industrial in terms of the issues that you have to be skilled in dealing with. Sirius, from its German experience, has the capability to do that. I would put it to you that never before has there been an operator in industrial in the U.K. market that's had those capabilities. You are now seeing those capabilities play out, and it gives a significant advantage, and that advantage is the speed at which you can scale. Add that to the fact that our debt is denominated in euros. U.K. has no debt in the business, so the ability to be able to access corporate debt at euro rates and come into the U.K. at scale in an industrial market, be very interesting to see how it plays out.
So on that point, I will turn across to the U.K. acquisitions. You know, Barnsley and Liverpool, two good acquisitions, gross yield of 12.4%. Remember, the U.K. business is very tax efficient. It's a REIT. Being able to get properties at 12.4% in such a tax-efficient way is great for the group. If we look at the North London portfolio, you'll remember these were the assets that were sold to private equity some four years ago for in excess of GBP 50 million. We picked them up at GBP 33 million. I've talked about the 60-acre site in Gloucester, the former European headquarters of Rank Xerox, where every photocopying machine that was distributed through U.K. and Europe in the eighties and nineties was made. Now, clearly a redundant site.
Rank Xerox are not in the same business they were in before, but you have a 60-acre massive site that we've been able to get, for what? A capital rate of 33 GBP per sq ft. The land value is worth more than that. We're very excited about this site, and we're looking forward to hosting investors there in October of this year. On that note, let me hand back to Chris.
Thank you, Andrew. Just to wrap up on the acquisitions and disposals. So from a recycling perspective, during the year, we sold EUR 60 million of assets, and we bought EUR 170 million of assets. So we disposed of assets that had EUR 3.9 million of rental income attached to them. We've acquired EUR 16.6 million of rental income. So there is growth baked into our business now going forwards, and you'll see more acquisitions as well coming forward, going forwards as well, in coming weeks and months. But, but there's quite a step change in terms of rental income that we've got through that recycling. On the disposals, I'd probably just highlight Maintal, which is the largest there.
It's EUR 40.1 million, disposed of at 6% gross yield, so that's very typical of us. It's that, taking a mature asset, selling it at six, typically buying at high single digits, so eight, nine, 10. The Maintal, I'm gonna highlight as well because we sold it to a data center developer. I know that is a very sort of fashionable thing to talk about in the property world at the moment in London markets, but we've actually done it. So we've realized that value through to a data center developer. If you think of our sites, our sites are on the edge of major towns and cities, typically with very good access to power, because our sites are used for production, industrial uses.
That was exactly what appealed to the data center developer for Maintal. We'd been speaking to them for several years. I would expect you will see further activity in that space from us. We're not gonna turn into a data center developer, but we definitely have some hidden value within our portfolio, that will be attractive to those developers. On the acquisition side, Andrew's gone through each one in detail, so I'm not going to. I'd just highlight that overall, the average, gross yields there, just under 10%, 9.8%. These assets we're buying are assets that come with income and upside. So these are what I think of as relatively low risk, acquisitions. You know, there is work to do over coming years to really maximize and drive that income higher and also drive, valuation growth.
But on day one, we are generating over EUR 60 million of income from those sites. So really pleased with the acquisitions. Those acquisitions principally being made off the back of the equity raise. When we went out and raised that equity, we were guiding investors to the kind of yields that we were gonna achieve in the seven or eight level. We've gone out and bought at over nine, so really pleased.
Would you mind if I just said-
Yep.
Say something? So please don't underestimate what Chris is saying. You know, we talked when we raised capital about a once in a cycle opportunity. I draw your attention to Klipphausen at 16.4% gross yield. Now, some of the guys in this room covered Hansteen. I remember Hansteen, with Zeppelin Park at 15%. That is the best purchase I've ever seen anybody make, in this market in Germany. Zeppelin Park at 15%, must have been about 2014. 16.4%, to my mind, is the first time the Zeppelin Park record gets broken. But that's the asset where the people who thought they were gonna be there for 30 years decided to exit at five. We bought it at 16.4%. I think that's probably a new high, for the German industrial market. Sorry to interrupt, Chris.
Flicking over to slide 23. I mentioned earlier about growth going forwards and what's baked in. We also talk in our, in our results statement, we talk about many levers for growth going forwards. Just to give you that, that sense of where the growth comes from over the next two years. So over the next two years, we, we're showing a journey to EUR 128 million of FFO. We've already set out a longer term ambition to EUR 150 million of FFO, but I wanted to give you the kind of visibility on how we make that leap to a hundred and twenty-eight over the next two years. And it's, it's all the things we've talked about. It's, CapEx investment, in the German and U.K. portfolio.
It's continuing to drive occupancy up on the vacant space. There's pricing opportunity still in the U.K. and Germany, and also that baked in upside from acquisitions that we've made over recent months and will continue to make. We do have some headwinds. We have additional interest expense, the refinancing of our secured lending with Berlin Hyp and Deutsche PBB. That generates roughly around another extra EUR 8 million of cost. And also, we have the ongoing increase in the overheads as well, which we expect to be around inflation as well. But the journey towards that 128 from today's numbers, I think over the next two years, I feel very comfortable with the number of options we have to get there.
And I think as a team, we're very excited to keep on working on this and keep driving the platform. Over onto page 24, the balance sheet, just going into a little bit more detail on the financing side. So we ended March with EUR 955 million of total borrowings. Post the equity raise effect, that brought the LTV right down to 33.9%. We then subsequently completed on the acquisitions of Göppingen and Klipphausen and Gloucester immediately post-year end. So post-year end, the LTV now today sits around 36.5%. We are absolutely committed to staying within 40%. We will not go over 40% LTV and but obviously, I'm very comfortable with that level of gearing in the business that we're at now, and up to 40%.
We've shown that the continuing growth in the underlying rental income offsets any yield expansion, so we have consistently defended our values through the cycle. This is not a business where LTV blows out because values come under pressure. Our values are very sensible and conservative. Post year-end, you'll also have seen a few weeks ago that we tapped our 2028 bonds. So our 2028 bond is the EUR 300 million bond at 1.75%. I went and saw our credit investors earlier this year. The reception I got was incredibly positive. Off the back of those meetings, one of those investors approached us proactively and wanted to put more capital into the business. The opportunity to do so was therefore to do the tap of the 2028 bond.
So we've increased that from EUR 300 million to EUR 360 million. I think the support that we've got in the bond market is, is fantastic. I've had other incoming from credit investors wanting to give us support in that market. And that, when looking forward, the next major refinancing event is the 2026 bond of EUR 400 million. I feel very, very comfortable about the options that we're going to have for refinancing that. So you've seen the support we've had from the secured lending market this year. You've seen the support we've got from the credit market immediately post year-end. I think, you know, going forwards, I expect to tackle that 2026 bond in a, in a sensible timeframe before maturity comes in June 2026, but I, I certainly expect to have options to do so as well.
And then just, we're sort of getting over onto the back end of the presentation now, but just to reiterate some of the key items from an investment case perspective. So we are committed to a growing dividend. The policy is 65% FFO payout ratio. That's 1.5 times covered. We can and do flex that payout ratio to continue to provide the growth in the dividend. So for instance, when we've raised equity this year, as I say, we have flexed it up to 68% to continue growing the dividend. That dividend commitment to dividend is a fantastic discipline in the business. It's what ensures that day in, day out, we are focused on that rental income growth. It ensures that when we're acquiring, we're acquiring assets which have a balance of opportunity.
They've got income opportunity, they've got valuation opportunity, but ultimately, we have that discipline of the dividend. We reinvest the remaining FFO, the remaining 30%-35% of FFO, into CapEx. You've got 10+ years track record now as doing that in a very, very highly accretive fashion. We're generating 25%-35% ROIs on our CapEx. All of that driving the rent roll growth has, has offset any yield expansion that, that we've, we've incurred. I've talked about the growth plan from here, both short term to EUR 128 million, but also as a team, we're committed to getting to EUR 150 million. What I haven't talked about so much is the pipeline going forwards, but we have a really strong acquisition pipeline.
As Andrew mentioned, you'll see some larger acquisitions in the U.K. coming through, hopefully in the coming weeks, but there's great opportunities as well in Germany that we're seeing, and we remain committed to allocating capital where the best opportunities are. I'm sure I'll get some questions about: How do you think about allocation of capital? We think about that on an opportunity by opportunity basis. So if the best returns in each market, we will weigh those up and allocate capital accordingly. Just finally, just on that, in terms of dry powder on acquisition pipeline, I'm sure you're gonna ask as well, and we have roughly EUR 100 million of dry powder post the bond tap to continue to put to work, and I'll hand back to Andrew.
Thanks, Chris. In terms of outlook, really three points I'd like to make. Firstly, we are trading in line with expectations in the two months post these results. Secondly, this will be another year that will involve recycling, a very important discipline that proves value. And of course, the metrics in terms of recycling cash into forward opportunities are particularly good. And let's not forget, you're gonna get the full effect of the acquisitions in this year. So, you know, as you go through this pack, just look at the yields and look at, even if we did nothing, how much our numbers are gonna go up by in this next twelve months.
We are, of course, gonna do a lot more than nothing, but it's nice to be in a position whereby you've got the operational momentum for your numbers to go in the right direction, as a result of your efforts on, in preceding years. If we go across to track record, I'm not gonna say much here 'cause the numbers speak for themselves. But I would ask you just to spend 10 seconds just considering this. And please don't forget, the 21st consecutive increasing dividend, never less than 1.4 times covered. I think that's one of the things that probably sets this company apart from others. You've heard what Chris says.
You know, as a relatively new CFO, you know, the discipline that goes throughout this business, based upon the commitment not just to grow value, but the commitment, whether it's COVID, whether it's the gas crisis in Germany, to deliver back to shareholders a level of dividend that they can depend upon. There we go. Okay, and finally, the summary. You can see that the strong organic growth is coming from the growth in FFO, the increase in rent roll, that's leading to the dividend. As Chris has explained, the balance sheet is strong. Net LTV at the moment, sub 35%. We will continue to keep that below 40%.
You know, we've got good debt at the moment, with four years expiry, and as things play out over the coming months and, and years, we will deal with that. I think we're all expecting a reduction by the ECB in terms of European lending rates this Thursday. We look forward to that. You know, we think that's the first initial move. Be interesting to see what the Fed do in September. Be interesting to see where the Bank of England go before the end of the year, but we expect to see the ECB mark, you know, the very start of interest rate reductions on Thursday of this week. And of course, that is particularly relevant to Sirius, who have no debt in sterling. All of our debt is euro-denominated debt. Thank you very much indeed for your time and attention this morning.
All that remains for Chris and I to do now is answer any questions you may have.
Thank you. Morning. Oh, crikey! It's Matthew Saperia from Peel Hunt. Two questions, if I may. The first one, you talked about the 200 basis point increase in the conversion rate in Germany. Is that sustainable? And then the follow-on to that is, obviously, you also then talked about, you know, driving better efficiencies around conversion in the U.K. Is that gonna come through scale? Is it the adoption of best practice? Is it technology? Is it something else?
So firstly, the objective that we're going for in Germany is 15% sales conversion. Now, we know that's possible because before COVID, we were hitting two to three-month clusters of consistent 15% conversion. What happened after COVID is conversion dropped to somewhere around 10%-11%, and we're in the process of building it back up again. And 13.5%, which is where we are at the moment, is the best we've seen for some while. But we've still got the challenge of how we get to 15. So, yes, I do think it's sustainable, and by the way, when we get to 15, we'll drive everybody mad by going for 20, because this is not a destination, this continues to be a journey.
You know, when we got to 5% conversion in Germany, and we asked for 7.5%, there was nearly rebellion. People said: "When is this ever gonna stop?" And my point is, you know, when you're at 15%, don't worry about the 15%, worry about the other 85%, because that's where the journey is, not in the celebration of what you've achieved, but in the loss of opportunity that has slipped you by. So yes, we believe it will be sustainable. Now, move to the U.K., where does it come from? Well, it does come in part from scale, because if you're talking to a customer and you've only got one site to sell them, you know, you've only got one thing to show them.
But if you've got six sites in the area, what you can do is you can keep them so busy, they haven't got time to see anybody else. All you've got to do is capture their attention. So scale does help. It gives you the ability to dominate pricing in a market. It gives you the ability to be able to capture the prospective tenant's attention for, for much longer. But technology plays a part as well. If I think about what are we doing in Germany now that we weren't doing 10 years ago, well, we're using WhatsApp, and we're using texting, and we're using messaging in between appointment and viewing to increase the customer's commitment to turn up, and therefore, the failed showing rates go down as a result of that. We are using.
In the sales presentation itself, you know, stuff that is far more visual than it was 10 years ago. We are now selling nearly one in 10% of our new customers in Germany through virtual sales. They don't actually come in and walk over the doorstep. We sell to people who never walk across the property. Now, you might think that's strange, but where you've got a large corporate, where the person buying isn't necessarily the end user, you try talking to a guy in Amsterdam, in the headquarters, about workers in Berlin. The guy in Amsterdam is the decision-maker. That's the person you've got to talk to. You can talk to the two users in Berlin for as long as you like. They haven't got the budget. You're selling through a third party.
So things like the use of virtual viewings and the ability to be able to sell out of country to people for in-country requirements, is a sophistication that if you have it, it will improve your sales conversion. We now have call center in Germany. You know, three years ago, we had a little room in Berlin with five people in it. We've now got a 35-seat call center that we can man 24/7. You know, we've got a much smaller setup in the U.K., but those two call centers can work together. So, you know, when one's off, the other one can be on. So this is about leveraging your scale. This is about using your technology, but it's also about applying process.
Applying process, not to third-party agents, but process to your own sales force that you train, that you manage, and that you incentivize. You know, one of the things I'm proud to tell you is over half of those people are not only employees, they're shareholders of the business. So they care about us like nobody else cares about us because they're business owners. So Matt, sir, I know that's a very, very comprehensive answer, but, you know, I think it's all of those things. Hopefully, I've given you an idea of how those things break down to provide various different component parts that get you to the goal. Perfect. Thank you, Andrew. And just one quick follow-on on the CapEx program. I noticed on, I think it was slide 14, the recent acquisitions, the return on investment there was nearly 50%.
Is there an outlier in there, or do you think there's an opportunity on upcoming acquisitions to target similar sorts of quantums of potential returns?
Yeah. Look, i s there an outlier in there? So the opportunity at Klipphausen is very significant. So, yes, there is an outlier in there, but I think we're still very comfortable that the sort of 25%-35% ROIs are absolutely achievable going forward. So yeah.
Thank you.
Miranda Cockburn from Berenberg. Just a question on the U.K. One of the thoughts when you bought into the U.K. was being able to, improve upon the service charge irrecoverables like you've done in Germany. How is that progressing?
Well, so the U.K. is a different model to Germany, 'cause obviously the U.K., typically our space in the U.K. is sold on an all-in basis. So actually, the service charge is never recovered. It's all about driving the top line, it's about driving the rental income. So, the focus on the U.K. is on trying to keep the cost line, you know, manage that cost line very proactively. But as I say, some things during the year for, particularly utilities, have been largely out of our control, but we're past the peak on. But it is. We show a service charge irrecoverable number in the U.K. In reality, that is, it is all irrecoverable, so.
Understood. And then just in terms of future acquisitions in the U.K., obviously, you've bought both sort of offices and industrial. Is there any sort of preferred area? Are you seeing-
Industrial.
Okay.
Industrial.
Still.
And-
Even though office values obviously-
Industrial
have fallen where they've got to.
And what's quite interesting is, you know, we're now proving that you can buy industrial in much bigger chunks in the U.K. than even we thought, you know? Now, look, that's not to say that you might not see the odd office creep in there 'cause it's next door to something we already own. But, you know, buying stuff like Vantage Point in Gloucester, buying stuff like the, you know, stuff that we bought, you know, in London, which, if you go and see it, you know, is typical ex-industrial property, you know, used as studios, et cetera. You know, it's not typical London offices. That really is where the decent return is. Now, that is not to say that if you were clever enough and brave enough to buy offices cheaply today, that you might not make a huge upturn.
That's not to say that if you've got a plan to buy an office and convert it into something else, like a self-storage center, that that's not good business. But what we are saying is, we are not in the U.K. here to try and take a bet on the office market, because we can take a much, much safer approach to the industrial and workshop, you know, or to buying something and converting it into, you know, industrial or warehouse.
But you will continue to see office be a portion of our portfolio, because on a mixed business park, having an element of office, say, 20%, 25%, is absolutely healthy because those occupiers who are taking production space, industrial space, they need some administrative space as well. So that. We will never be zero office. You know, there is actually a healthy percentage of office there.
Thanks. This is James Carswell from Peel Hunt. A couple of slides, you highlighted what the valuation uplift would have been had yields been stable.
Mm-hmm.
I'm just wondering, does it make any difference whether the gains in rental come from occupancy or rate growth? I mean, does the valuer treat those in different ways and how that might look going forward?
Do you want me to answer that?
Yeah, go on.
So where the rate comes in is, particularly in Germany, when they look at a discounted cash flow model, they have to make some assumptions in terms of what will happen with rental increases. And that's where, you know, if you're getting really good, strong year-on-year baked-in rental increases, that's where that number can be affected, but it's quite marginal.
Thanks.
Folks, thank you very much indeed. Thank you for your support.
Sorry, Andrew, we've just got-
Oh, we've got one more, have we?
Just-
Okay, go on.
Just one more question. I think you've answered this already, but I'll just let you reiterate the point. It says, just as in terms of capital allocations, what proportion of the planned acquisitions will be in Germany versus the U.K.?
I don't know. The reason I don't know is because, you know, it depends on the opportunities that we negotiate. Even if I just look at the portfolio of opportunities as it stands at the moment, we're still negotiating on it. We look at this on a deal-by-deal basis. Now, what I can tell you is, you know, we're not gonna try and make the U.K. the same size as Germany. We wanna grow things proportionally. It'll ebb and flow a little bit, but we want to be predominantly German. We will continue to be predominantly German. But, you know, we will assess the opportunity on a risk and return basis. Risk and return. And I, you know, we're in the business of putting the capital where it makes the best return at the lowest risk, and we'll continue to do that.
Chris, is there anything you'd add to that?
No, I think that's right. Absolutely right.
Okay. Folks, thank you very much indeed. Thank you for your time this morning. Look forward to talking to you again soon.
Thank you.