Sirius Real Estate plc (LON:SRE), the leading owner and operator of branded business parks providing conventional space and flexible workspace in Germany, has announced 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.”