Sirius Real Estate has continued its asset recycling programme with the sale of an industrial park in Maintal, in Germany’s southwest Hesse region, for €40.1m and acquisition of a portfolio of three business parks in North London for £33.5m.
The disposal price in Germany was at a net initial yield of 5.7% and was achieved at around 6% above the last reported book value. The company said Maintal industrial park offered little potential for further value creation.
Through its BizSpace subsidiary in the UK, the company bought the three assets in North London from a closed ended fund. Two of the assets are based in the Borough of Islington and one in the Borough of Camden.
The three assets have a combined area of 103,962 sq ft of primarily multi-let studio workspaces and occupancy rate of just under 70%, which the group views as providing significant potential for growth. The properties are let on flexible leases and have a WAULT of 3.1 years. The buildings have over 70 customers, the 10 largest of whom occupy over 50% of the occupied area.
The purchase price represents a net initial yield of 7.3% which through active asset management initiatives the company expects to generate a running yield in excess of 10% at maturity.
Andrew Coombs, chief executive, commented: “The Maintal disposal at a premium to book value has allowed us to capitalise on demand for this high quality property. The sale of this mature asset at a 5.7% NIY, coupled with the completion of our acquisition of the properties in London at a 7.3% NIY with only a 70% occupancy, represents a good example of our strategy of recycling capital from mature assets into those where we believe we can grow income and value through our operating platform.
“In the current market we are focused on improving rental levels and providing tenants with the flexibility and services they need. We are increasingly seeing attractive acquisition opportunities across both Germany and the U.K. and will continue to pursue our asset recycling activities to support the long term growth of the Group.”
SRE : Sirius Real Estate continue asset disposal programme