Sirius Real Estate has exchanged contracts on the acquisition of Vantage Point Business Village, a multi-let business park in Gloucestershire, for a total acquisition cost of €56.4m, representing a net initial yield at the acquisition of 10.2%. The acquisition has been made using the proceeds of the Company’s €172m capital raise, achieved last November.
The 242,811m2 business park at Mitcheldean was renowned first for manufacturing Rank projection equipment and then as Rank Xerox’s manufacturing hub between 1961 and 2003. It is 81% occupied and offers a mixture of warehouse, production, storage, conventional and serviced office space to over 70 companies across 119 units.
As part of the acquisition, Sirius has also acquired a PV solar business from the vendor which currently supplies most of the electricity to the site from panels installed on certain buildings, providing energy security and an attractive income stream.
Situated in a highly desirable location on the edge of The Forest of Dean, and close to major cities including Bristol to the South, Gloucester to the East and Cardiff to the South West, the park benefits from good transport networks and connectivity to the national motorway network via the A40 and M50. Proximity to other Sirius sites, including Gloucester Barnwood and Gloucester Morelands, will enable the Company to leverage operational synergies alongside its local market expertise.
Separately, the Company has completed on the previously announced disposal of an industrial park in Maintal, Germany’s southwest Hesse region, for €40.1m, representing a net initial yield of 5.7%. The asset, which comprises 37,830m2 of logistics, office and industrial space, was sold at an approximate 6% premium to the last reported book value at the time of notarisation. The sale aligns well with Sirius’ strategy of recycling capital from mature assets into those where the Company believes it can grow income and value through its operating platform.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, commented: “This sizeable strategic acquisition is transformational for our U.K. BizSpace platform, and increases its portfolio by over 1.5 million sq ft. The 60-acre park generates strong day-one cash flow from a stable, diversified tenant base and offers various synergies with our existing assets in the local area. It also presents a number of value-creation opportunities by driving both occupancy and rental income. Additionally, the completion of the Maintal disposal at a premium to book value allows us to capitalise on demand for this high-quality property and continue to crystallise returns from our mature portfolio. It also provides us further flexibility to recycle capital into new opportunities within our existing portfolio, as well as into our pipeline of acquisitions, alongside the proceeds of November’s £147 million (€165 million) equity raise. We have now committed to over £135 million (€155 million) of acquisitions since November and are continuing to actively seek future opportunities where we see the chance to create value, leaving us well-placed to support the continued long-term growth of the Group.”
The Group looks forward to providing its customary year-end trading update on 15 April 2024, following the end of the Company’s financial year.
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