TIDMSRE
RNS Number : 8242G
Sirius Real Estate Limited
01 June 2017
1 June 2017
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Update on Acquisitions and the Sale of Mature Assets
&
Results Date
Sirius Real Estate, a leading operator of branded business parks
providing conventional space and flexible workspace in Germany, is
pleased to announce the following update, regarding EUR18m of
disposals of mature assets and EUR66.4m of property acquisitions,
all progressed over the past six weeks, as follows:
-- Notarisation of the sale of a mature asset in Kiel for EUR7m;
-- Completion of the EUR11m Dusseldorf sale;
-- Notarisation of the acquisition of three sites with a combined value of EUR43.5m; and
-- Completion of the EUR22.9m Cologne acquisition.
The Company has been successfully pursuing its policy of
re-cycling capital into new assets with greater opportunities to
extract value through its asset management activities.
Disposals
On 21 April 2017, the Group notarised the sale of a mature asset
located in Kiel for EUR7.0m, in line with book value and
representing an EPRA net initial yield of 7.4% (including
acquisition costs). Since the acquisition of this mixed-use
business park in 2007 at less than half of the disposal price,
Sirius's asset management activity has increased net operating
income from a small loss to EUR0.56m and increased the occupancy
from 19% to 92% over a net lettable area of 10,000 sqm.
On 19 May 2017, the Group completed the sale of a mature asset
located in Dusseldorf for EUR11.0m, representing an EPRA net
initial yield of 7.2% (including acquisition costs). Since this
site was acquired in 2008, Sirius's asset management activity has
significantly improved the tenant mix and lease terms. The sale is
at a 25% premium to the site's book value of EUR8.7m as at 30
September 2016. The asset is a mixed-use business park generating
EUR0.85m of net operating income with occupancy of 96% over a net
lettable area of 16,600 sqm.
Acquisitions
On 3 May 2017, the Group notarised the acquisition of a property
in Grasbrunn, an area on the Munich ring road. The property is
located in a well-developed commercial area and is being purchased
for a total consideration of EUR18.1m. The property comprises four
office buildings and has a net lettable area of 14,791 sqm.
Currently the property is nearly fully vacant with an annual rental
income of EUR0.10m.
On 23 May 2017, the Group notarised the acquisition of a
property in Neuss for a total consideration of EUR15.8m. Neuss is
an active commercial centre, located on the west bank of the Rhine
opposite Dusseldorf. The property comprises one office building and
has a net lettable area of 18,258 sqm. The property is 38.3%
occupied and let to six tenants, producing an annual rental income
of EUR0.67m and having a remaining weighted average lease term of
5.1 years.
On 23 May 2017, the Group notarised the acquisition of a
property located in Neu-Isenburg for a total consideration of
EUR9.7m. Situated close to Frankfurt, Neu-Isenburg benefits from
excellent transport links and will combine well with the nearby
Sirius site in Dreieich. The property is a mixed-use business park
comprising office and warehouse space and has a net lettable area
of 7,996 sqm. The property is 41.3% occupied and let to three
tenants, producing an annual rental income of EUR0.47m and having a
remaining weighted average lease term of 1.5 years.
On 31 May 2017, the Group completed the purchase of an asset in
Cologne for a total consideration of EUR22.9m. The site offers
20,342 sqm of gross lettable space, of which 93.6% is office space,
and is currently 99% let to multi-tenants. The largest tenant
occupies over 50% of the gross lettable area and has 2.9 years
remaining on their lease. The total tenant base has a weighted
average lease length term of 2.4 years. The asset is being acquired
on an 8.1% EPRA net initial yield.
Final Results Date
The Company confirms that it will announce its final results for
the 12 months to 31 March 2017 on Monday 26 June 2017.
Andrew Coombs Chief Executive Officer of Sirius Real Estate,
said,
"This has been an active six weeks for Sirius during which we
have notarised a further EUR43.5m of acquisitions and completed the
Cologne acquisition for EUR22.9m. The three recently notarised
sites are currently underutilised and under occupied, however, all
are situated in good locations for our customer base.
We are confident therefore that we can significantly enhance the
appeal of each site we have acquired just as we have done in the
past with other similar assets. Our focus will be on rebranding,
re-configuring and introducing specialist SME workspace and storage
products to match demand in each local area. With the aim, as ever,
to increase rental income and market value of each site.
This, combined with the sales of mature assets all of which are
being transacted at prices in line with or above book value,
clearly demonstrates the Sirius business model working in
practice."
For further information, please contact:
Sirius Real Estate +49 (0)30 285010110
Andrew Coombs, CEO
Alistair Marks, CFO
Novella +44 (0)20 3151 7008
Tim Robertson
Toby Andrews
About Sirius Real Estate
Sirius is a property company listed on the main market and
premium segment of the London Stock Exchange and the main board of
the Johannesburg Stock Exchange. It is a leading operator of
branded business parks providing conventional space and flexible
workspace in Germany. The Company's core strategy is the
acquisition of business parks at attractive yields, the integration
of these business parks into its network of sites under the
Company's own name as well as offering a range of branded products
within those sites, and the reconfiguration and upgrade of existing
and vacant space to appeal to the local market, through intensive
asset management and investment. The Company's strategy aims to
deliver attractive risk adjusted returns for shareholders by
increasing rental income and improving cost recoveries and capital
values, as well as by enhancing those returns through financing its
assets on favourable terms. Once sites are mature and net income
and values have been optimised, Sirius may consider their disposal
in order to recycle equity into assets which present greater
opportunity for the Group's asset management skills.
For more information, please visit:
www.sirius-real-estate.com
This information is provided by RNS
The company news service from the London Stock Exchange
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