Sirius acquires 8,800 sq m Stuttgart business park for EUR9.2m
Sirius Real Estate has completed the acquisition of a 8,800 sq m mixed-use business park in Fellbach, near Stuttgart, for a total acquisition cost of EUR9.2 million, reflecting an EPRA net initial yield of 6.0 per cent.
This investment follows the Company’s acquisition in August 2018 of a business park located in Fellbach where, as a result of the application of a range of asset management initiatives, occupancy has increased to in excess of 90 per cent from 79 per cent when first acquired. The new asset sits immediately adjacent to the Company’s existing site, creating an enlarged business park comprising over 36,000 sq m of gross lettable area. Sirius acquired the business park from a local family office using existing cash resources.
The park is situated in a well-developed commercial area 7.8 km to the north-west of Stuttgart and benefits from easy access to public transport and the major B14 motorway. Built in the 1970’s, the new asset has 8,800 sq m of gross lettable area and 200 parking spaces, and comprises a range of uses including office space (62 per cent), warehouse/logistics (32 per cent) and other space (6 per cent).
The business park is currently 94.6 per cent let to Daimler AG as the single tenant, at an average rent of EUR7.04 per sq m, producing a total annualised rental income of approximately EUR730,000. Daimler is expected to vacate the office element of the property by the end of June 2021, and the warehouse element of the property by December 2021, after which Sirius will seek to implement a range of asset management initiatives including the upgrade of space in order to capture local market demand for office and warehouse space.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, says: “This high-quality asset deepens our exposure to a commercial market in which we already have extensive experience. The acquisition will provide a number of compelling operational synergies and widens our range of asset management options particularly when considered alongside our existing adjacent Fellbach business park. With the major tenant moving out shortly after completion our focus is on growing income through the capture of reversion and reduction in service charge leakage. We continue to benefit from a strong balance sheet allowing us to maintain our strategy of acquisitive growth in and around Germany's key cities.”