SIRIUS ACQUIRES THREE BUSINESS PARKS FOR EUR26.0M
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LSE (EUR) Share Code: ESRE
ISIN Code: GG00B1W3VF54
4 January 2021
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
SIRIUS COMPLETES THE ACQUISITION OF THREE BUSINESS PARKS FOR €26.0M
Latest acquisition adds scale to existing business park at Mannheim
Sirius Real Estate, the leading owner and operator of branded business parks providing conventional space and flexible workspace in Germany, announces that it has completed three transactions totalling €26.0 million (including acquisition costs). These comprise two previously announced acquisitions (Norderstedt, Hamburg for €9.1 million and Nuremberg for €13.7 million), and a new acquisition for €3.2 million immediately adjacent to the Company's existing Mannheim II business park.
The acquisitions result in the Company starting the calendar year with three new cash-generative assets which have been acquired at an attractive blended EPRA net initial yield of 7.2% and generate in total €1.9 million of annualised net operating income. The assets provide a mix of approximately two-thirds production and storage space and one-third out-of-town office. The Company acquired them all on an unencumbered basis using existing cash resources. Sirius has significant finance available to acquire additional assets alongside seeking assets for its Titanium joint venture.
The new asset located in the Käfertal commercial area of Mannheim previously formed part of the Company's existing Mannheim II asset that it acquired in October 2018, with which it is now reunited. The acquisition totalling €3.2 million (including acquisition costs), reflects an EPRA net initial yield of 6.6% and creates a wider range of asset management options for the combined assets as well as the ability to benefit from operational synergies. The site comprises around 3,000 sqm of out-of-town office and storage space and is currently 93% occupied by a total of seven tenants with an average rent of €6.93 per sqm, and an annualised gross income of €235,226.
Commenting on the acquisitions, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: "Our most recent acquisitions at Mannheim, Norderstedt and Nuremberg see us drawing on Sirius's on the ground knowledge of local markets to acquire assets at attractive yields offering a combination of secure income and value-add potential.
"These business parks are immediately accretive to earnings and signal a return to acquisitive growth for the Company after holding back whilst assessing the impact of Covid-19 on the marketplace. Two thirds of the total space acquired relates to production and storage space whilst the remaining office space provides the Company with the opportunity to offer its high yielding out-of-town flexible office products.
"Our latest acquisition in Mannheim's Käfertal commercial area provides significant operational synergies and we believe there is potential to unlock value when we consider the asset alongside our existing adjacent business park, Mannheim II.
"As we enter the new year, we continue to benefit from a strong cash position and are focused on executing our healthy pipeline of further acquisitions."
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
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 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 Investment Managers - Real Assets. Titanium was formed through the acquisition by AXA Investment Managers - Real Assets, 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
Follow us on LinkedIn at https://www.linkedin.com/company/siriusrealestate/
Follow us on Twitter at @SiriusRE