Completes acquisition of 2nd Bochum property
02 September 2019
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Sirius completes acquisition of second Bochum property
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 an office building adjacent to its Bochum Business Park, in Bochum, a city in the Ruhr region of Germany. The property was bought for a total consideration of €6.7 million including acquisition costs reflecting an EPRA net initial yield of 5.5%. The acquisition, notarised in July 2019, was settled in cash and funded using proceeds from recent asset recycling activity. The vendor was Häusser-Bau GmbH.
The property, constructed in 1970, provides 4,200 sqm of lettable space (81% office space, 15% storage and 4% service space) and 71 parking spaces on a total plot size of circa 3,300 sqm. It is 100% let, producing an annual total income of circa €428,000 and annual net operating income of €370,000, reflecting a weighted average rent of €8.00 per/sqm with a remaining WALT of 2.2 years. The principal tenant is ThyssenKrupp Bilstein, a subsidiary of the giant ThyssenKrupp conglomerate which designs and manufactures shock absorbers.
The property is directly adjacent to the Company's 56,000 sqm Bochum Business Park, which was acquired for €25.7 million in March 2019, together creating a combined value of more than €32.0 million. As a result of the proximity of the asset to this existing site, the Company benefits from a wider range of asset management options and operational synergies.
Bochum is located mid-way between Dortmund and Essen, in North Rhine-Westphalia, the third-largest urban area in the European Union. The property is well situated in Bochum-Hofstede, north of the city centre and within walking distance of a U-Bahn with easy access to the A40 and A43 motorways.
Commenting on the acquisition, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: "Acquiring this property was a logical next step following the success we have had with the Bochum Business Park since its acquisition in March this year. Not only does the acquisition of an adjacent property provide us with additional asset management possibilities, as well as the opportunity to realise operational synergies, but also offers us marriage value and helps deliver on our strategy to increase the average lot size of our assets. Following the completion of the acquisition of Alzenau, notarised at €44.5 million in July, we have already made a good start with this strategy".
For further information:
Sirius Real Estate
Andrew Coombs, CEO/Alistair Marks, CFO
Tel: +49 (0)30 285010110
Tavistock (Financial PR)
Jeremy Carey/James Verstringhe
Tel: +44 (0)20 7920 3150
Email: 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.
In July 2019, Sirius completed on a joint venture with clients represented by AXA Investment Managers - Real Assets in which AXA acting on behalf of its clients, owns a 65% interest and Sirius owns the balance of 35%. The JV is called Titanium. The JV was initially formed by AXA acquiring, on behalf of its clients, from Sirius a 65% stake in five SPVs through which it currently owns two business parks located in Berlin (Berlin Borsig and Berlin Tempelhof) and one in each of Mainz, Nurnberg and Bayreuth. The business parks provide a combination of office, warehouse, industrial and storage space. The implied property value of €168 million equates to a gross yield for the portfolio of 6.2% and reflects a premium to the book value as at 30 September 2018 which was €141.1 million. Total cash commitment from AXA IM - Real Assets amounts to €43.9 million.
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
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