Owner and operator of branded business and industrial parks in Germany, Sirius Real Estate, has announced the completion of the acquisition of four business park assets and one land parcel for a total of approximately €84.8 million.
Located in Oberhausen, Frankfurt, Heiligenhaus, and Öhringen, the assets span 150 000m2 of lettable space (excluding the land parcel adjacent to its existing asset in Neuruppin). The properties were acquired using proceeds of the company’s inaugural €400 million corporate bond issuance that was successfully completed in June 2021.
Together, the acquisitions (excluding the land parcel) are forecasted to generate one net operating income of €3.4 million per annum, representing a blended Estimated Market Rental Value (EPRA) net initial yield of 4.1% at occupancy of 59%. With 62 000m2 of vacant space, the assets provide an opportunity for Sirius to grow income through the letting of the vacant space, accretive refurbishment, and selective development.
“With our strong cash position, Sirius continues to deliver on an attractive pipeline of opportunities generated by our in-house acquisitions team. The new assets provide a mix of warehouse, production, and office space that we know works well for our platform and our customers. The assets are in well-established locations that benefit from strong SME demand and growth potential, as well as synergies with existing Sirius business park sites” comments Andrew Coombs, CEO of Sirius Real Estate.
“Whilst the assets primarily represent an opportunity for the company to utilise its operating platform to drive the take up of lettable space and reduce service charge leakage, significant refurbishment and development opportunities also exist to provide further potential for value creation.”
Further details on the acquisitions are set out below:
The company has notarised the acquisition of Oberhausen Business Park for €39.8 million (total acquisition cost). The park is in a well-developed commercial area of the city of Oberhausen, in the northwest of Germany’s Ruhr region. The asset offers a mix of uses with approximately 77 600m2 of lettable space, comprising around 47 400m2 of offices, 19 200m2 of warehouse space,4 600m2 of storage and 6 400m2 of other space. The property generates NOI of €2.33 million per annum, with an average rent of €3.29 per sqm (excluding parking and other income), reflecting an EPRA Net Initial Yield of 5.9% at 63% occupancy. The asset has a remaining Weighted Average Lease Expiry (“WALE”) of 3.2 years. Completion is expected during the fourth quarter of 2021. Oberhausen Business Park offers attractive day one cash flow for Sirius, but also the potential to grow income by letting vacant space with the support of targeted investment and refurbishment.
The acquisition of its third asset in Frankfurt, Sirius purchased the property for €21.2 million (total acquisition cost), representing an EPRA Net Initial Yield of 2.8% with occupancy at 54%. The multi-tenanted office tower offers 15 floors of lettable space, comprising around 9 300m2 of office and 900m2 of storage space. The building generates NOI of €598 000 per annum at an average rent of €11.02 per sqm (excluding parking) and has a remaining WALE of 2.9 years. Completion has been scheduled during the last quarter of 2021. Key tenants of the building include ENGIE, the international energy business. Located in the east of the city of Frankfurt, the building benefits from its location close to two of the city’s main Autobahns and supports the company’s strategy of providing a range of flexible out of town office products that it expects to appeal to the local market.
Sirius has notarised a multi-tenanted business park at Heiligenhaus, North Rhine-Westphalia, for €14.2 million (total acquisition cost). The property has a lettable area of approximately 45 000m2, consisting of around 23 200m2 of office space, 11 400m2 of warehouse space, 7 800m2 of production space and 2 600m2 of other space. The asset currently generates NOI of €1.12 million per annum, with an average rent of €2.44 per sqm (excluding parking and other income), representing an attractive EPRA Net Initial Yield of 7.9%. The asset is currently 77.2% let with a WALE of 3.7 years. Completion is expected during the fourth quarter of 2021. One of the key tenants is Kiekert Aktiengesellschaft, which provides safety systems for the automotive sector. Sirius aims to increase operating income through the letting of vacant space and improving service charge collection. Located to the west of the town of Heiligenhaus, the business park is situated between the cities of Essen, Duisburg, Dusseldorf, and Wuppertal, with strong Autobahn and public transport links. A new Autobahn connection is due to be created to connect Heiligenhaus and nearby Ratingen.
Öhringen Business Park was acquired for €9.02 million (total acquisition cost) on the 1st of August 2021. Located in the town of Öhringen in Baden-Württemberg, the business park is well-connected by road and public transport. The asset offers a lettable area of approximately 18 000m2 comprising around 15 800m2 of warehouse space, 1 500m2 of office space and 700m2 of other space, as well as a potential development land parcel of around 11 600m2. The asset has strong value-add potential, with vacant, marketable warehouse space, and provides a development opportunity for further light industrial space. The business park has been acquired with vacant possession, but with a new lease already agreed with Filtration Group GmbH, an international filtration systems business, which currently occupies an adjacent property. Filtration Group will take up approximately 50% of the vacant space on an initial five-year term generating an annual rent of €490,000 and an NOI of around €224,000.
Sirius has also completed the notarisation of an approximately 16 000m2 land parcel adjacent to its asset in Neuruppin for €0.5 million (total acquisition cost), to assist in its plans to expand and develop the existing property. Sirius is engaged in negotiations with the current tenant regarding the extension and a possible new lease for the additional developed space.