Acquires two business parks and pipeline update
1 August 2018
Sirius Real Estate Limited
("Sirius Real Estate" or the "Company")
Acquisition of two business parks for €29.8 million and update on the pipeline
Sirius Real Estate, the leading operator of branded business parks providing conventional space and flexible workspace in Germany, announces that it has completed the acquisition of two business parks in Friedrichsdorf, near Frankfurt, and in Fellbach, close to Stuttgart, for a total of €29.8 million (including acquisition costs).
The acquisitions have been funded using a combination of capital raised from the placing in March 2018 and proceeds from asset disposals. In addition to completing the purchase of the Friedrichsdorf and Fellbach sites, the Company has notarised the acquisition of a business park asset located in Mannheim for €9.6 million, which is expected to complete in October.
The Company is also in exclusivity to acquire another €33.0 million asset and is therefore well advanced in the deployment of the €100 million of acquisition capability it communicated to shareholders in its year end results, announced on the 4 June 2018.
The property in Friedrichsdorf is a mixed-use business park comprising multi-let office and warehouse space constructed in the 1980s and 1990s and is located 20km from Frankfurt. It has been acquired from a consortium of private investors for a total consideration of €17.8 million, reflecting an EPRA net initial yield of 7.1%. The 18,000 sqm site offers around 17,300 sqm of lettable space comprising 8,200 sqm of offices, 8,100 sqm of warehouse space and 1,000 sqm of other space.
The asset is currently 91.8% let to 18 tenants producing an annual rental income of €1.36 million, equivalent to an average rent of €6.65 per sqm with a weighted average unexpired lease length (WAULT) of 2.2 years. The attractive and well covenanted tenant base includes Axicorp, Bose and Peiker.
The property in Fellbach is a mixed-use business park comprising multi-let office and warehouse space built between the 1960s and 1980s. It has been acquired from an institutional investor for a total consideration of €12.1 million, reflecting an EPRA net initial yield of 7.3%. The 20,300 sqm site provides around 25,500 sqm of lettable space, comprising 2,100 sqm of offices, 15,100 sqm of warehouse space and 8,300 sqm of other commercial space.
The asset is currently 79.0 % let to 19 tenants, including Daimler AG, Deutsche Post and Landesbank Baden-Württemberg and located 8km from Stuttgart. We believe there is significant potential to increase occupancy and rental levels across the site through our asset management process.
As Sirius Real Estate already operates five business parks around Stuttgart and eight around Frankfurt, the new assets are expected to benefit from operational synergies with the wider group.
Andrew Coombs Chief Executive Officer of Sirius Real Estate, said: "Located in the Frankfurt and Stuttgart areas, two of the commercial markets where we have extensive experience, the Friedrichsdorf and Fellbach assets provide plenty of opportunities to enhance income and capital value through our unique approach to asset management, which includes marketing space directly to businesses actively looking for space.
"These acquisitions were funded using a combination of capital raised from a placing earlier this year and proceeds from asset disposals. We continue to have significant financial resources at our disposal to pursue further earnings accretive targets."
For further information:
Sirius Real Estate
Andrew Coombs, CEO
Alistair Marks, CFO
+49 (0)30 285010110
Tavistock (financial PR)
Jeremy Carey
James Verstringhe
+44 (0)20 7920 3150
siriusrealestate@tavistock.co.uk
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 Johannesburg Stock Exchange. It is a leading operator of branded business parks providing conventional space and flexible workspace in Germany. 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.
For more information, please visit: www.sirius-real-estate.com
Follow us on LinkedIn at https://www.linkedin.com/company/siriusrealestate/
Follow us on Twitter at @SiriusRE
LEI: 213800NURUF5W8QSK566
JSE Sponsor
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