Sirius Real Estate has announced that it has notarised the acquisition of a business park in Essen, Germany for €10 710 000.
This transaction is by way of a sale and leaseback with Thyssenkrupp, the international industrial engineering and technology group, and it reflects an EPRA net initial yield of 6.5%. The purchase was sourced by Sirius’ acquisition team off-market and it will be funded from existing cash sources with completion expected during the second quarter of 2021.
Built between 1962 and 1963, the mixed-use business and industrial park offers 14 711m2 of gross lettable area of which 45% is warehouse, 42% is office and 13% production space. The park is situated on a 34 844m2 plot which includes a 4 450m2 parcel of land that offers the potential for development of additional warehouse and office space. The site currently has 190 parking spaces.
The business park is currently 80% let to six entities within Thyssenkrupp and it produces total annualised rental income of approximately €830 000 which reflects an average rent of €5.85 per square meter, including the parking lot.
The weighted average unexpired lease length is 1.4 years which presents Sirius with a range of asset management options and the opportunity to increase income through the reletting of vacated space and selective investment into the asset.
The site is in the south west of Essen, around 2km from the city centre and it is accessible by rail and car. Essen is the second largest city in the Ruhr, Germany’s most populous region and industrial heartland which is home to many of the country’s largest companies with Sirius already managing office space at Ruhrturm Essen, also located in the south of the city.
“The business park we are acquiring at Essen offers a good mix of warehouse and office space, as well as great potential for Sirius to use our asset management capability and local expertise to add value, improve rental tone and explore development of part of the site” comments Andrew Coombs, CEO of Sirius Real Estate.
“Essen is a city we know well and one we believe has strong long-term growth prospects. The asset is well positioned for the Autobahn and public transport and it will also complement the space we manage at Ruhrturm Essen”.
“We were able to proactively secure this high-yielding asset on an off-market basis from Thyssenkrupp directly, demonstrating the power of our local knowledge and network, and we see further opportunities to acquire assets from Germany’s manufacturing and industrial firms looking to free up capital. This presents a positive opportunity to strengthen our pipeline and source the most attractive deals”.
“This will be the fifth asset acquired by Sirius Real Estate in the second half of our financial year, bringing our total acquisitions to €46.2 million. Alongside our Titanium joint venture, Sirius has executed €125 million of transactions over this period, underlining our significant presence in the German industrial market” he concludes.