Sirius Real Estate has completed the acquisition of a high-quality business park in Neckartenzlingen, south of Stuttgart, for a total cost of €34.5m. The transaction, which was notarized in September 2021, will be financed using existing cash resources and reflects an EPRA net initial yield of 5.6%. As a result of this transaction, Sirius has completed the acquisition of 254,100m² of business parks, industrial space, out of town office space and a land parcel across 9 assets in Germany this financial year, representing a total investment volume of €153.9m. In addition, Sirius entered the UK market in November with the acquisition of BizSpace, a leading provider of regional light industrial, workshop, studio and out of town office units to a wide range of businesses for an enterprise value of €447m (£380m).
The Neckartenzlingen business park asset comprises three mixed-use buildings, which Sirius is acquiring from two separate vendors, Hirschmann Electronics GmbH and Logwin Holding Immo Aschaffenburg GmbH. Built between 1955 and 1991 and previously held as one combined asset, the property has 54,515m² of gross lettable area and primarily comprises production space (36%), warehouse space (30%) and out of town offices (27%) as well as other uses (7%). There are 893 car parking spaces on site. The business park is currently 80% let to two tenants in the electronics and communications sectors, at an average rent of €3.84 per m² . The asset produces a total annualised rental income of circa €2.2m and has a WALE (weighted average lease expiry) of 8.1 years, providing stable, long term cashflows with the opportunity to grow income through a range of asset management opportunities, including the leasing of the remaining circa 10,700m² of vacant space. Neckartenzlingen is an industrial town close to Stuttgart. It lies around 16 km south of Stuttgart’s airport and benefits from easy access to public transport and the B312 and B297 highways.
Commenting on the acquisition, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: "This is a well-located asset acquired at an attractive price point and underpinned by a long WALE, providing a stable income from day one. At the same time, it is in line with our usual strategy of acquiring assets where there is an opportunity for us to add value through our platform-driven asset management initiatives, such as reducing vacancy, while also benefiting from potential redevelopment opportunities. This will be the 9th German asset, including a land parcel, acquired by Sirius Real Estate in this financial year, bringing our total deployment to €153.9m, following an extremely active period for the business as we continue to build momentum across our key investment markets, while also extending our reach into the UK following our recent acquisition of the BizSpace platform. Following the success of two oversubscribed bond issuances and an equity capital raise in the last six months, Sirius’ balance sheet remains strong and we are well positioned to continue to source attractive investment opportunities.”