Sirius Real Estate has announced the completed acquisition of an office building adjacent to its Bochum Business Park, in Bochum, a city in the Ruhr region of Germany.
The property was bought for a total consideration of €6.7 million including acquisition costs reflecting an EPRA net initial yield of 5.5%. The acquisition, notarised in July 2019, was settled in cash and funded using proceeds from recent asset recycling activity. The vendor was Häusser-Bau GmbH.
The property, constructed in 1970, provides 4,200 sqm of lettable space (81% office space, 15% storage and 4% service space) and 71 parking spaces on a total plot size of circa 3,300 sqm. It is 100% let, producing an annual total income of circa €428,000 and annual net operating income of €370,000, reflecting a weighted average rent of €8.00 per/sqm with a remaining WALT of 2.2 years. The principal tenant is ThyssenKrupp Bilstein, a subsidiary of the giant ThyssenKrupp conglomerate which designs and manufactures shock absorbers.
The property is directly adjacent to the Company’s 56,000 sqm Bochum Business Park, which was acquired for €25.7 million in March 2019, together creating a combined value of more than €32.0 million. As a result of the proximity of the asset to this existing site, the Company benefits from a wider range of asset management options and operational synergies.
Bochum is located mid-way between Dortmund and Essen, in North Rhine-Westphalia, the third-largest urban area in the European Union. The property is well situated in Bochum-Hofstede, north of the city centre and within walking distance of a U-Bahn with easy access to the A40 and A43 motorways.
Commenting on the acquisition, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: “Acquiring this property was a logical next step following the success we have had with the Bochum Business Park since its acquisition in March this year. Not only does the acquisition of an adjacent property provide us with additional asset management possibilities, as well as the opportunity to realise operational synergies, but also offers us marriage value and helps deliver on our strategy to increase the average lot size of our assets. Following the completion of the acquisition of Alzenau, notarised at €44.5 million in July, we have already made a good start with this strategy“.