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 exchanged contracts to dispose of two non-core U.K. assets and acquire three U.K. self storage opportunities.
In line with its strategy of recycling non-core U.K. assets, Sirius has exchanged contracts to dispose of two sub-scale multi-use business parks in the Sheffield area in the north of the U.K., for a combined consideration of £5.3 million, representing a 3% premium to book value. The Sheffield assets are being sold to a single purchaser with whom Sirius has previously transacted. Both sites are stable and well occupied but offer limited scope to drive further income or valuation growth.
Building on Sirius’s existing extensive framework of self storage offerings across Germany and the U.K., as well as its recently announced development on its existing site at Berlin Gartenfeld, Sirius has exchanged contracts to acquire and develop three digitally automated self storage opportunities, located in Leicestershire, Bedfordshire, and Merton (Greater London), all of which are subject to planning. The site acquisition costs total approximately £12.6 million which will be funded from the recycling of the Sheffield assets and the remaining £7.3 million from further disposals of non-core UK assets expected this calendar year.
All three sites benefit from excellent locations characterised by market undersupply alongside strong business and residential fundamentals. The Leicestershire and Bedfordshire assets will open in spring 2027, with the Merton site expected to complete in 2028. Each of these self storage development projects are forecast to generate double digit IRR’s in excess of our cost of capital.
These transactions are consistent with the Group’s strategy of recycling capital from mature, smaller assets into opportunities with stronger returns potential.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, commented: “The disposals, agreed at a premium to book value, demonstrate Sirius’s continued focus on disciplined capital recycling, crystallising value from smaller, mature assets where we see limited scope for further income or valuation growth and redeploying the proceeds into opportunities with stronger returns potential.
“The two self storage conversion sites in Leicestershire and Bedfordshire are expected to open early in the next financial year, with all three acquisition opportunities representing an exciting further step in our self storage strategy, as we expand on what is already an extensive, high-yielding and resilient part of our platform. These transactions are another example of the active asset management that underpins our ability to generate sustainable returns for shareholders.”
