Sirius Real Estate (SRE), which operates business parks providing conventional and flexible workspace across Germany, has completed the acquisition of two business parks for total of €33.4m.
The company has bought Neuss II, a business park near Düsseldorf, and Neuruppin business park, in the Brandenburg region, reflecting an aggregate EPRA net initial yield of 6.8%.
Originally constructed in 1987 and since expanded, Neuss ll provides a total of 34,000 sqm of net lettable space (21,900 sqm of warehouse/production, 11,700 sqm of office and 400 sqm of other space), together with 371 parking spaces, on a total plot size of 58,800 sqm. The property is located on Fuggerstrasse in Neuss, 9.5 km south of Düsseldorf city centre. SRE already owns an 18,000 sqm office building in Neuss and two other business parks in Düsseldorf.
SRE notes that the asset is 81.5% let to sixteen tenants, producing an annual rental income of €1.3m, reflecting an average rate of €3.84 per sqm, and has a remaining WALT of 4.4 years. Tenants include Max Mothes GmbH, global specialists in the production and logistics of high-performance connecting technology, Steep GmbH, DINAX GmbH and FEAG GmbH, service providers in power generation and distribution.
The property has been acquired from a regional family real estate office for €19.1m (including acquisition costs), reflecting an EPRA net initial yield of 5.4%.
Originally constructed in 1992 and since expanded, Neuruppin business park, provides 22,400 sqm of net lettable space (12,600 sqm of production space, 7,200 sqm of warehouse space and 2,600 sqm of offices), together with 169 parking spaces on a total plot size of 108,200 sqm. The property is located 4.3 km south of Neuruppin city centre, 75 km north west of Berlin. Neuruppin is likely to benefit from a €1.4 billion road infrastructure expansion project on the main highway between Berlin and Hamburg, anticipated to complete in 2022.
The park is 100% let to a single tenant, ESE GmbH, Europe’s leading manufacturer of temporary storage systems for waste and recyclables, on a lease with 5.5 years to run, at a current annual rent of €1.3 million, reflecting a rate € 4.97 per sqm. The property has been acquired from Otto Immobilien GmbH & Co. KG for €14.3m (including acquisition costs), reflecting an EPRA net initial yield of 8.6%.
Nearly €100m worth of deals completed
SRE says it has now completed €98m of the €170m in acquisition capability that was set out in its Interim Results announced on 25 November 2019. These acquisitions provide a total of 136,000 sqm lettable area, with 14% vacancy, producing a current annual rent of €7.7 million, reflecting a blended EPRA net initial yield of 6.5%. Additionally, Sirius is reviewing a number of potential acquisitions for investment of its remaining designated acquisitions capital.
Commenting on these acquisitions, Andrew Coombs, CEO of SRE, said: “The last month has been particularly successful on the acquisitions front providing us with some great assets which have good value add potential that can be realised next year and beyond.
“Neuss ll fits well with our strategy of buying assets at low capital values, with low average rents compared to the local market and located around key German cities. It offers us a good opportunity to add significant value by playing to the strengths of our integrated business model and track record of maximising occupation and growing rental levels.
“The Neuruppin property, which is 100% let to a tenant with a strong covenant with a WALE of 5.5 years and an EPRA net initial yield of 8.6%, is a very good acquisition, particularly when you take into account the tenant’s potential plans to expand in the area as well as the further opportunity to develop vacant parcels of land within the site.”
SRE: Sirius Real Estate adds two more German business parks for €33.4m