Sirius Real Estate has completed the acquisition of a business park in Bochum in the Ruhr region of Germany, for a total consideration of €25.7m, equating to an EPRA net initial yield of 8.9%. The vendor is a fund managed by DOBA-Grund Beteiligungs. The purchase has been funded using a combination of capital raised from the placing in March 2018 and a part of a €56m five-year debt facility with a total all-in fixed interest rate of 1.4%, from pbbDeutsche Pfandbriefbank.
The business park consists of approximately 56,000m² of mixed-use lettable space of which 65% is a warehouse, 29% is office and 6% is other space. The site will 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.
Bochum is located midway between Dortmund and Essen, in North Rhine-Westphalia, the third-largest urban area in the European Union. The property is well situated in Bochum-Hofstede, north of the city centre and within walking distance of a U-Bahn with easy access to the A40 and A43 motorways.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: “This acquisition is our first foothold in the important Ruhr area which is one the major industrial regions of Germany. With relatively low site density, a flexible multi-tenant structure, the opportunity to replace the existing 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. This acquisition plays to the strengths of our 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.”