Sirius Real Estate has notarised the acquisitions of two business parks, one in Koln (Cologne) and the other in Goppingen, for a total acquisition cost of c. €40m.
The business park in Koln, Germany’s fourth-largest city, in Nord-Rhein Westphalia, comprises 19,114m2 of principally light industrial space. The property has been notarised at €20m and currently generates a total rental income of €1.67m and an annualised net operating income of €1.56m, representing a gross yield at the acquisition of 8.4% and an EPRA net initial yield of 7.3%. The site has an occupancy rate of just over 89%, with a weighted average unexpired lease term (WAULT) of 2.4 years and a well-diversified, stable tenant structure.
In Goppingen, a city in the state of Baden-Wrttemberg, south-east of Stuttgart in southern Germany, Sirius is acquiring a multi-tenanted business park with a total lettable area of approximately 35,160m2 across primarily light industrial and production space. The acquisition has been notarised at €19.8m and generates a total rental income of €1.78m and an annualised net operating income of €1.47m, reflecting a gross yield of 9.0% and an EPRA net initial yield of 6.9%. With occupancy at around 86% and a WAULT of 2.8 years, the property offers the opportunity for Sirius to use its platform to improve occupancy, income, and service charge recovery.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, commented: “These acquisitions provide the Company with strong day-one cash flow from a stable, diversified tenant base and align well with our strategy of curating a range of flexible out-of-town light industrial products that we expect to appeal to the local market. Acquired at attractive yields, these sites offer under-rented space and an opportunity to reduce vacancy and improve cash flow, providing a range of avenues for Sirius to leverage its UK and German operating platforms to generate significant value creation and to grow net operating income over the medium term. We are making good progress on our pipeline of further acquisitions, with the benefit of a strong cash position following our well-supported £147m equity raise in November. We currently have €78m of proceeds committed to legally binding acquisitions, €38 million of which has already been completed. We are in an advanced stage of discussions with over €70m of additional opportunities across Germany and the U.K. and we expect to deploy the remaining fundraise proceeds in the coming months.”
Image provided by FTI Consulting.
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