Sirius Real Estate acquires defence-anchored Kiel business park for €93.4m as Germany ramps up military spending

Sirius Real Estate, the London and JSE-listed owner and operator of branded business and industrial parks in Germany and the UK, has notarised the acquisition of a business park in Kiel, northern Germany, for €93.4m including acquisition costs, adding a strategically significant defence-anchored asset to its growing portfolio.

The site sits on a 226,600 m² plot in Kiel, the capital of Schleswig-Holstein and one of Germany's primary naval and maritime defence hubs, offering a gross lettable area of 78,170 m² comprising production and warehouse, office, and laboratory space. The park is 98.5% occupied and generates annual rental income of €7.78m, reflecting an EPRA Net Initial Yield of 8.2% with a weighted average lease expiry (WALE) of 4.0 years. The dominant tenant is Rheinmetall, Germany's largest defence company, which conducts research and development of electrical systems for land vehicles at the site, with the second-largest occupier producing rail locomotives for European markets.

The acquisition also includes a 955 m² development on site due for completion in 2027, at which point an existing tenant specialising in systems automation and robotics integration will occupy a newly constructed building under a 10-year lease, further strengthening the rent roll and extending the asset's income duration. For investors and developers, this embedded development pipeline is a notable feature: an in-place, pre-let forward commitment within a portfolio asset means income growth without the typical speculative risk, an increasingly rare structure in the current lending environment and one that directly improves near-term WALE metrics without additional capital deployment.

"The acquisition of this multi-let business park delivers immediate income and offers further significant potential to improve rental tone, extend the WALE and drive further revenue growth through on-site development. This site is anchored by Rheinmetall, Germany's largest defence company and is strategically located close to one of Germany's major naval bases in Kiel. This acquisition also adds to our broader portfolio of defence-related properties, further positioning the business to support the projected increase in government investment into defence and the resulting growth in occupier demand across the sector." Andrew Coombs, Chief Executive Officer, Sirius Real Estate.

The Kiel acquisition forms part of a broader capital deployment exceeding €200m into defence-related assets across Germany and the UK over the past 12 months. Recent transactions include a business park in Feldkirchen, Munich, predominantly let to a laser-defence technology specialist, and a site in Bedford, UK, occupied by a manufacturer of electrical components for ejector seats in modern military jets. The consistency of this approach across two national markets points to a deliberate sub-sector thesis rather than opportunistic dealflow, one that aligns closely with accelerating NATO member commitments to raise defence spending toward 3% of GDP and the consequent surge in occupier demand from prime contractors and their supply chains.

As of 30 September 2025, Sirius held a portfolio of 153 assets let to 10,958 tenants with a total book value of €2.8bn and a rent roll of €242.5m, with a further 35% stake in Titanium, its €350m-plus German joint venture with clients of AXA IM Alts. The Group's year-end trading update is scheduled for release on Monday, 13 April 2026.