Sirius Real Estate, the German business park owner and operator, has acquired four assets and one land parcel for €84.8m.
The business parks are located in Oberhausen, Frankfurt, Heiligenhaus and Öhringen and provide over 150,000 sqm of lettable space. In addition, the company has acquired a land parcel adjacent to its existing asset in Neuruppin. The properties have been acquired using the group’s €400m corporate bond issuance that completed in June 2021.
Together the acquisitions generate day one net operating income of €3.4m per annum, representing a blended EPRA net initial yield of 4.1% at occupancy of 59%. With 62,000 sqm of vacant space, the assets provide an opportunity to grow income through the letting up of vacant space, accretive refurbishment and selective development.
Andrew Coombs, chief executive, said: “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.
“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.”
Asset details are as follows:
Oberhausen
Oberhausen Business Park will be acquired for €39.8m and is located 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 around 77,600 sqm of lettable space, comprising around 47,400 sqm of offices, 19,200 sqm of warehouse space, 4,600 sqm of storage and 6,400 sqm of other space.
The property generates €2.33m per annum, with an average rent of €3.29 per sqm, 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 to be in Q4 of calendar year 2021.
Frankfurt
The Frankfurt asset, an office tower which will be acquired for €21.2m, will become the group’s third in the city when the deal completes in Q4 this year. The deal represents 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 9,300 sqm of office and 900 sqm of storage space. The building generates €598,000 per annum at an average rent of €11.02 per sqm and has a remaining WALE of 2.9 years.
Key tenants 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 out of town office strategy that it expects to appeal to the local market.
Heiligenhaus
A multi-tenanted business park at Heiligenhaus, North Rhine-Westphalia, will be acquired for €14.2m. The property has a lettable area of 45,000 sqm, consisting of around 23,200 sqm of office space, 11,400 sqm of warehouse space, 7,800 sqm of production space and 2,600 sqm of other space.
The asset currently generates €1.12m per annum, with an average rent of €2.44 per sqm, representing an EPRA net initial yield of 7.9%. The asset is currently 77.2% let with a WALE of 3.7 years. Completion is expected to be in Q4 of calendar year 2021.
The company said it aims to increase operating income through the letting of vacant space and improving service charge collection.
Öhringen
Öhringen Business Park has been acquired for €9.02m. The asset offers a lettable area of 18,000 sqm comprising around 15,800 sqm of warehouse space, 1,500 sqm of office space and 700 sqm of other space, as well as a potential development land parcel of around 11,600 sqm.
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.
Neuruppin
Finally, the company will acquire a 16,000 sqm land parcel adjacent to its asset in Neuruppin for €0.5m. Sirius is engaged in negotiations with the current tenant regarding the extension and a possible new lease for the additional developed space.
SRE : Sirius Real Estate splashes €85m on four business parks