Sirius Real Estate Limited Acquisition of business park in Bochum (7530S)
March 14 2019 - 3:00AM
UK Regulatory
TIDMSRE
RNS Number : 7530S
Sirius Real Estate Limited
14 March 2019
14 March 2019
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Sirius completes acquisition of business park in Bochum
Sirius Real Estate, the leading operator of branded business
parks providing conventional space and flexible workspace in
Germany, has completed the acquisition of a business park in Bochum
in the Ruhr region of Germany, for a total consideration of EUR25.7
million, equating to an EPRA net initial yield of 8.9%. The vendor
is a fund managed by DOBA-Grund Beteiligungs, Munich, part of
Doblinger Group, a German based development company. The
acquisition, notarised in November 2018, has been funded using a
combination of capital raised from the placing in March 2018 and a
part of a EUR56 million, five year debt facility with a total
all-in fixed interest rate of 1.4%, from pbb Deutsche
Pfandbriefbank.
The business park consists of approximately 56,000 sqm of mixed
use lettable space of which 65% is warehouse, 29% is office and 6%
is other space. The site will initially generate EUR2.6m of gross
rental income with 95% occupancy, let to 31 tenants including
Pilkington, a subsidiary of the Japan-based NSG Group; and GfR, a
telecommunication and call centre operator that is part of Thomas
Cook Group.
The site was acquired with a high yield because Pilkington will
be vacating the 26,600 sqm that it occupies at the end of its lease
on 31 May 2019. However, Sirius has already signed a new lease
commencing on 1 June 2019 on 12,600 sqm of the space being vacated,
at a higher rent per sqm and with fixed annual uplifts. The new
lease which terminates on 31 May 2026, has been taken by the
Eickhoff Group, a global, family owned business which mainly
manufactures machinery and gearing technology for the mining and
wind turbine industries. Eickhoff will be taking immediate
occupation.
Bochum is located mid way between Dortmund and Essen, in North
Rhine-Westphalia, the third-largest urban area in the European
Union. The property is well situated in Bochum-Hofstede, north of
the city centre and within walking distance of a U-Bahn with easy
access to the A40 and A43 motorways.
Andrew Coombs, Chief Executive Officer of Sirius Real Estate,
said: "This acquisition is our first foothold in the important Ruhr
area which is one the major industrial regions of Germany. With
relatively low site density, a flexible multi-tenant structure, the
opportunity to replace the exiting major tenant and stabilise the
rent roll in an area where take up is robust and rents are growing,
this site is an exciting value-add opportunity for Sirius.
"This acquisition plays to the strengths of our integrated
business model and track record of generating tenant demand,
maximising space usage and achieving management efficiencies.
"We have already generated strong interest in this park and
believe re-letting of the balance of the Pilkington space will be
achieved ahead of business plan."
For further information:
Sirius Real Estate
Andrew Coombs, CEO/Alistair Marks, CFO
Tel: +49 (0)30 285010110
Tavistock (Financial PR)
Jeremy Carey/James Verstringhe
Tel: +44 (0)20 7920 3150
Email: siriusrealestate@tavistock.co.uk
NOTES TO EDITORS
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 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, the Company may take the opportunity to
refinance the sites to release capital for investment in new sites
or consider the disposal of sites in order to recycle equity into
assets which present greater opportunity for the asset management
skills of the Company's team.
On 1 March 2019, Sirius announced that, in a transaction
anticipated to complete in June 2019, it had formed a real estate
investment joint venture with clients represented by AXA Investment
Managers - Real Assets in which AXA acting on behalf of its
clients, will own a 65% interest and Sirius will own the balance of
35%. The JV is called Titanium. The JV will initially be formed by
AXA acquiring, on behalf of its clients, from Sirius a 65% stake in
five 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.
For more information, please visit:
www.sirius-real-estate.com
Follow us on LinkedIn at
https://www.linkedin.com/company/siriusrealestate/
Follow us on Twitter at @SiriusRE
LEI: 213800NURUF5W8QSK566
JSE Sponsor
PSG Capital
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END
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