Sirius Real Estate has completed the acquisition of two business parks in Friedrichsdorf, near Frankfurt, and in Fellbach, close to Stuttgart, for a total of €29.8m (including acquisition costs). The acquisitions have been funded using a combination of capital raised from the placing in March 2018 and proceeds from asset disposals. In addition to completing the purchase of the Friedrichsdorf and Fellbach sites, the company has notarized the acquisition of a business park asset located in Mannheim for €9.6m. It also plans to acquire another €33m asset and is therefore well advanced in the deployment of the €100m of acquisition capability it communicated to shareholders in its year-end results, announced on the 4 June 2018.
The property in Friedrichsdorf is a mixed-use business park comprising multi-let office and warehouse space constructed in the 1980s and 1990s and is located 20km from Frankfurt. It has been acquired from a consortium of private investors for a total consideration of €17.8m, reflecting an EPRA net initial yield of 7.1%. The 18,000m² site offers around 17,300m² of lettable space comprising 8,200m² of offices, 8,100m² of warehouse space. The asset is currently 91.8% let to 18 tenants producing an annual rental income of €1.36m, equivalent to an average rent of €6.65 per m² with a weighted average unexpired lease length (WAULT) of 2.2 years. The attractive and well-covenanted tenant base includes Axicorp, Bose and Peiker.
The property in Fellbach is a mixed-use business park comprising multi-let office and warehouse space built between the 1960s and 1980s. It has been acquired from an institutional investor for a total consideration of €12.1m, reflecting an EPRA net initial yield of 7.3%. The 20,300m² site provides around 25,500m² of lettable space, comprising 2,100m² of offices, 15,100m² of warehouse space and 8,300m² of other commercial space. It is currently 79% let to 19 tenants, including Daimler AG, Deutsche Post and Landesbank Baden-Wurttemberg.
As Sirius Real Estate already operates five business parks around Stuttgart and eight around Frankfurt, the new assets are expected to benefit from operational synergies with the wider group.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: "Located in the Frankfurt and Stuttgart areas, two of the commercial markets where we have extensive experience, the Friedrichsdorf and Fellbach assets provide plenty of opportunities to enhance income and capital value through our unique approach to asset management, which includes marketing space directly to businesses actively looking for space. These acquisitions were funded using a combination of capital raised from a placing earlier this year and proceeds from asset disposals. We continue to have significant financial resources at our disposal to pursue further earnings accretive targets.”
