Sirius acquires two business parks for EUR33.4m
Sirius Real Estate, an operator of branded business parks providing conventional space and flexible workspace in Germany, has completed the acquisitions of Neuss II, a business park near Düsseldorf, and Neuruppin Business Park, in the Brandenburg region, for a combined total of EUR33.4 million, reflecting an aggregate EPRA net initial yield of 6.8 per cent.
Originally constructed in 1987 and since expanded, Neuss ll provides a total of 34,000 sq m of net lettable space (21,900 sq m of warehouse/production, 11,700 sq m of office and 400 sq m of other space), together with 371 parking spaces, on a total plot size of 58,800 sq m. The property is located on Fuggerstrasse in Neuss, 9.5 km south of Düsseldorf city centre. Sirius already owns an 18,000 sq m office building in Neuss and two other business parks in Düsseldorf.
The asset is 81.5 per cent let to sixteen tenants, producing an annual rental income of EUR1.3 million, reflecting an average rate of EUR3.84 per sq m, and has a remaining WALT of 4.4 years. Tenants include Max Mothes GmbH, global specialists in the production and logistics of high-performance connecting technology, Steep GmbH, DINAX GmbH and FEAG GmbH, service providers in power generation and distribution.
The property has been acquired from a regional family real estate office for EUR19.1 million (including acquisition costs), reflecting an EPRA net initial yield of 5.4 per cent.
Originally constructed in 1992 and since expanded, Neuruppin Business Park, provides 22,400 sq m of net lettable space (12,600 sq m of production space, 7,200 sq m of warehouse space and 2,600 sq m of offices), together with 169 parking spaces on a total plot size of 108,200 sq m. The property is located 4.3 km south of Neuruppin city centre, 75 km north west of Berlin. Neuruppin is likely to benefit from a EUR1.4 billion road infrastructure expansion project on the main highway between Berlin and Hamburg, anticipated to complete in 2022.
The asset is 100 per cent let to a single tenant, ESE GmbH, Europe's leading manufacturer of temporary storage systems for waste and recyclables, on a lease with 5.5 years to run, at a current annual rent of EUR1.3 million, reflecting a rate EUR 4.97 per sq m. The property has been acquired from Otto Immobilien GmbH & Co KG for EUR14.3 million, reflecting an EPRA net initial yield of 8.6 per cent.
The Company has now completed EUR98 million of the EUR170 million in acquisition capability that was set out in its Interim Results announced on 25 November 2019. These acquisitions provide a total of 136,000 sq m lettable area, with 14 per cent vacancy, producing a current annual rent of EUR7.7 million, reflecting a blended EPRA net initial yield of 6.5 per cent. Additionally, Sirius is reviewing a number of potential acquisitions for investment of its remaining designated acquisitions capital.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, says: “The last month has been particularly successful on the acquisitions front providing us with some great assets which have good value add potential that can be realised next year and beyond.
“Neuss ll fits well with our strategy of buying assets at low capital values, with low average rents compared to the local market and located around key German cities. It offers us a good opportunity to add significant value by playing to the strengths of our integrated business model and track record of maximising occupation and growing rental levels.
“The Neuruppin property, which is 100 per cent let to a tenant with a strong covenant with a WALE of 5.5 years and an EPRA net initial yield of 8.6 per cent, is a very good acquisition, particularly when you take into account the tenant’s potential plans to expand in the area as well as the further opportunity to develop vacant parcels of land within the site.”