Sirius Real Estate has completed the disposals of two assets for a combined total of €12.2m. The most recent disposal, which completed on 1 April 2023, was achieved at a 5.3% premium to book value (30 September 2022: €8.3m) and comprised a 15,000m² mixed-use mature business park in Wuppertal, in North Rhine Westphalia, Germany. Originally acquired by Sirius in 2007 and sold for €8.8m, the property offered office, warehouse and production as well as workshop space and was approximately 80% let. This disposal follows the €3.4m sale at book value of a 7,620m² vacant office building in Ipswich, which completed in December 2022.
The company has also disposed of six assets in the last 12 months for a total sales price of €45.7m. Each disposal was achieved at or above book value, with the proceeds being invested in the acquisition of three new sites in Germany for a total consideration of €44.6m, of which €43.7m was transacted in the second half of 2022. The three new sites are now generating higher revenues than the income contributed by the assets disposed of earlier in the year. The new sites offer a number of value add accretive asset management opportunities for the company to unlock through its platform, in particular, the opportunity of leasing up empty space to increase rental income.
Commenting on the transactions, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: “The strategic disposal of these assets at or above book value during a challenging market underpins the strength of our portfolio. This is based on both the historically higher yields at which our portfolio is valued, relative to many other parts of the sector, which we believe provide it with a higher degree of insulation when real estate values come under pressure, as well as our ability to offset this further by driving inflationary income growth through our asset management platform. It also demonstrates our ability to crystallise returns from mature assets, which can then be recycled into investing into new opportunities within our portfolio where we see an opportunity to create value.”
