Sirius Real Estate Limited (LON:SRE), the leading owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany and the UK, has announced that it has completed the acquisition of a light-industrial business park in Fulda, north east of Frankfurt in the Hesse region, Germany, for total acquisition costs of €49.8 million.
The site comprises 57,771 sqm of lettable space on a 112,867 sqm plot and is fully let, currently generating annual rent roll of approximately €3.93 million, with a 5.1 year weighted average lease expiry. The purchase price (including acquisition costs) reflects an EPRA Net Initial Yield of 7.8%.
The asset is production-led, with a significant proportion of space utilised for manufacturing and warehousing, and is anchored by a leading European manufacturer of ballistic protection equipment (such as bullet proof vests) and protective systems serving military, police and law enforcement customers. The tenant has been based at the site since 2014 and is benefiting from increasing demand driven by structural growth in defence and security spending across Germany and Europe. The tenant is involved in a number of defence and security-related programmes, including the German Armed Forces’ MOBAST programme, under which more than 300,000 modular ballistic protection vest systems have been ordered, as well as follow-on supply arrangements for German Special Forces and other European military and law enforcement customers.
The scale of these programmes supports multi-year production visibility at the site and reinforces the strategic relevance of the asset. The acquisition is fully consistent with Sirius’ strategy of investing in well-located industrial and business park assets with strong occupier fundamentals, attractive day-one income and exposure to government-supported demand for mission-critical defence and security-related products.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, commented: “Completing the acquisition of this high-quality business park in Fulda, further strengthens our German portfolio. Considering the income quality, the acquisition yield offers a very attractive risk/return relationship and supports the prospect of continued dividend progression. The tenant has shown a long-term commitment to the site and has a clear runway of opportunity from increased government commitments to defence spending. We believe the opportunity to close this investment continues to highlight a first mover advantage that we are keen to capture from assets aligned with this secular growth sector.
“This acquisition is fully aligned with our strategy of acquiring well-located business and industrial parks at attractive yields, particularly where occupiers are supported by structural growth drivers and government-backed demand, and integrating them into our operating platform to create long-term value for shareholders.”
