Sirius enters jv with Axa – Sirius Real Estate has formed a real estate investment joint venture with clients represented by AXA Investment Managers – Real Assets. AXA IM – Real Assets, acting on behalf of its clients, will own a 65% interest and Sirius will own the balance of 35%. The JV will be called Titanium.
The JV will be formed by Axa acquiring, on behalf of its clients, from Sirius a 65% stake in five single asset special purpose vehicles (“SPVs”) through which it currently owns two business parks located in Berlin (Berlin Borsig and Berlin Tempelhof) and one in each of Mainz, Nurnberg and Bayreuth. The business parks provide a combination of office, warehouse, industrial and storage space. The implied property value of EUR168 million equates to a gross yield for the portfolio of 6.2% and reflects a premium to the last reported book value as at 30 September 2018 which was EUR141.1 million. Total cash commitment from AXA IM – Real Assets amounts to EUR43.9 million. The transaction is expected to generate total cash proceeds of more than EUR70 million for Sirius after refinancing and expected related costs.
Sirius has signed an agreement to continue the operation of the assets, using its fully integrated operating platform, on a fee basis. The JV may seek to acquire further assets in Germany, with a clearly defined strategy that will not conflict with Sirius’s existing business.
Andrew Coombs, chief executive officer of Sirius Real Estate, said: “Sirius is delighted to be partnering with one of the world’s largest real asset managers and the fact that Sirius is going into partnership with such an important institution as AXA IM – Real Assets underlines the professionalism and expertise that has been developed within Sirius over the last five years in particular. The formation of this relationship represents an important opportunity for both parties and it will give Sirius key advantages in an increasingly competitive market and through the real estate cycle. This will increase the company’s ability to create value for both its investors and the JV from which the company will benefit as both the manager and as an equity partner“.
John O’Driscoll, European head of transactions at AXA IM – Real Assets, commented: “This transaction allows us to invest in an attractive portfolio of assets and provides us with immediate scale in this important asset class in Germany, a geography that we are actively growing in. This transaction also enables us to establish a long term joint venture with Sirius Real Estate, a leading operator and investor in branded business parks in Germany. We look forward to working with them on this portfolio and on future opportunities.”
The assets within the SPVs provide a total net lettable area of approximately 191,000 sqm and, as at 30 September 2018, produced EUR10.45 million of annualised rental income. Occupancy is 88%.
SRE : Sirius enters jv with Axa