Sirius Real Estate (LON:SRE), the leading operator of branded business parks providing conventional space and flexible workspace in Germany, has today announced that, further to its notarisation announcement on 26 July 2019, it has completed the acquisition of Alzenau Business Park, 34km east of Frankfurt am Main. The total purchase consideration of €44.5 million, including acquisition costs of €2.5 million, was acquired on an EPRA net initial yield of 7.9%. The acquisition will initially be funded using proceeds from recent asset recycling activity and will be injected into an existing facility in the near future.
The vendors are RWE Generation SE and GfV Gesellschaft für Vermögensverwaltung mbH represented by Innogy SE.
The business park comprises eleven buildings constructed between 1985 and 2002 providing a total of around 60,000 sqm of lettable space (47% warehouse/production space; 47% office space; and 6% other space) as well as 1,063 parking spaces on a total plot size of approximately 197,000 sqm.
The asset is 93.5% let to 16 tenants with an annual total income of €4.1 million and annual net operating income of €3.5 million as at July 2019.
The asset has a weighted average rent of €5.51 per sqm with a remaining WALT of 3.5 years. Tenants include Applied Materials, the global leader in materials engineering solutions for the semiconductor, flat panel display and solar photovoltaic industries; Bühler Alzenau GmbH, manufacturers of high-vacuum deposition equipment; and Nukem Technologies GmbH, operating in the management of radioactive and hazardous waste, decommissioning of nuclear facilities as well as engineering and consulting services. There is also an 8,200 sqm plot of land let to Aldi until 2048 producing an annual income of €101,000. Overall, the asset provides the Company with stable income from a well-diversified and covenanted tenant base.
Commenting on the acquisition, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: “Alzenau Business Park is the largest single acquisition since the current management took over at Sirius, reflecting our capacity to acquire larger lot sizes, of which we expect to do more both for our own portfolio and through our Titanium joint venture with AXA.
“This asset provides an attractive running yield, which will support our strategy to grow our funds from operations. Furthermore, there is a good mix of long-standing tenants with strong covenants.”
