Sirius gets foot in Ruhr region with acquisition of Bochum business park
Germany-focussed business park operator Sirius Real Estate has completed the acquisition of a property in Bochum in the country's Ruhr region, for a total consideration of €25.7m, it announced on Thursday.
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The London-listed firm said that equated to an EPRA net initial yield of 8.9%.
It said the vendor was a fund managed by DOBA-Grund Beteiligungs - part of Doblinger Group, a German based development company.
The acquisition, notarised in November, was funded using a combination of capital raised from the company’s placing in March last year, and a part of a €56m, five-year debt facility with a total all-in fixed interest rate of 1.4%, from pbb Deutsche Pfandbriefbank.
Sirius said the business park consisted of around 56,000 square metres of mixed-use lettable space, of which 65% was warehouse, 29% was office and 6% was other space.
The site would initially generate €2.6m of gross rental income with 95% occupancy, let to 31 tenants including Pilkington - a subsidiary of the Japan-based NSG Group - and GfR, a telecommunication and call centre operator that is part of Thomas Cook Group.
It explained that the site was acquired with a high yield as Pilkington would be vacating the 26,600 square metres that it occupied at the end of its lease on 31 May.
However, the board said it had already signed a new lease starting on 1 June on 12,600 square metres of the space being vacated, at a higher rent per square metre and with fixed annual uplifts.
The new lease, which would terminate on 31 May 2026, was taken by the Eickhoff Group - a business which primarily manufactures machinery and gearing technology for the mining and wind turbine industries.
Eickhoff would be taking immediate occupation.
Sirius explained that Bochum is located about halfway between Dortmund and Essen, in North Rhine-Westphalia - the third-largest urban area in the European Union.
The property was “well situated” in Bochum-Hofstede, north of the city centre and within walking distance of a metro station, with easy access to the A40 and A43 motorways.
“This acquisition is our first foothold in the important Ruhr area which is one the major industrial regions of Germany,” said Sirius Real Estate chief executive officer Andrew Coombs.
“With relatively low site density, a flexible multi-tenant structure, the opportunity to replace the exiting major tenant and stabilise the rent roll in an area where take up is robust and rents are growing, this site is an exciting value-add opportunity for Sirius.”
Coombs said the acquisition played to the strengths of the company’s integrated business model and track record of generating tenant demand, maximising space usage and achieving management efficiencies.
“We have already generated strong interest in this park and believe re-letting of the balance of the Pilkington space will be achieved ahead of business plan.”