Dawnay, Day Sirius Ltd, the real estate company established to acquire large mixed-use commercial real estate in Germany for upgrading to flexible workspaces, has announced that it has agreed to acquire five freehold business parks for a combined total of €102.9 million. The acquisitions provide an average net initial yield of 7.66%, off passing rents ranging from €2.36/m² to €4.92/m², at an average capital value of €475.4/m².
The company has now invested €336.1 million, representing approximately half of investible funds, since its admission to AIM in May 2007.
In line with the company's strategy, the five sites being acquired are well suited for rebranding under the distinctive Sirius branding and upgrading into modern flexible workspaces to be leased predominantly to small and medium sized enterprises (SMEs). With all five sites, the company intends, where appropriate, to upgrade and sub-divide vacant space into smaller units to meet local tenant demand from SME's for light industrial and office space. The company believes the benefit of modernising and transforming these sites will be reflected in an uplift in rental and capital values.
Neuaubing: A business park in Neuaubing, purchased for €51 million, located west of Munich city center. The site consists of offices, production and warehouse facilities and open storage spaces with a total lettable area of 97,700 m². There is approximately 27,290 m² of vacant space. The occupancy rate is currently 72% and tenants include GKN Aerospace GmbH. The net rental income is approximately €3.58 million with a net initial yield of 7.02%. The average rent on the let space is €4.24/m²/month.
Nabern: Acquired for €32 million from the same vendor as Neuaubing. The business park in Nabern is located 25km from Stuttgart. The site consists of offices, production and warehouse facilities with a total lettable area of 54,803 m². There is approximately 13,914 m² of vacant space. Currently the site is 75% occupied with Daimler Chrysler AG as one of the cornerstone tenants. The net rental income is approximately 2.6 million with a net initial yield of 7.17%. The buildings are of good quality and the average passing rent on the let properties is around 5.30 psm/month.
Bayreuth: Acquisition of a business park located in Bayreuth, in Northern Bavaria, for €10.6 million, which includes a separate development site of 2,466 m². The site consists of offices, production facilities, warehouses and open storage spaces with a total lettable space of 21,825 m². There is approximately 4,696 m² of vacant warehouse, office and ancillary space. The occupancy rate is currently 78% and tenants include Grundig Business Systems GmbH and BAT. The net rental income is approximately €0.72 million with a net initial yield of 6.82%.
Wuppertal: Came as a package with Solingen (see below). A business park located in Wuppertal bought for €5.1 million, which consists of offices, production facilities, warehouses and storage spaces with a total lettable space of 13,856 m². The current occupancy rate is 78.17% and tenants include Lambda GmbH and Delta Industrietechnik GmbH. There is approximately 3,025 m² of vacant space. The net rental income is approximately €0.42 million with a net initial yield of 8.25%.
Solingen: Acquisition of a business park located in Solingen for €4.2 million, which consists of production facilities, offices and residential houses with a total lettable space of 14,441 m². Solingen is located in the Ruhr. The site is located in the triangle between Dusseldorf, Cologne/Bonn and Wuppertal and provides easy access to the motorway.
Completion of the acquisitions will take place following satisfaction of standard administrative conditions.
Kevin Oppenheim of the Asset Manager said, "These five acquisitions are strong additions to our portfolio and are in line with our strategy. Each site provides