TIDMSRE
RNS Number : 4925T
Sirius Real Estate Limited
06 January 2017
The Company considers this announcement to contain inside
information which is disclosed in accordance with the Market Abuse
Regulation
6 January 2017
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Proposed EUR85m sale and leaseback of Munich business park
and
an update on four acquisitions and two disposals
Sirius Real Estate, the leading operator of branded business
parks providing conventional space and flexible workspace in
Germany, is pleased to announce the Company has notarised the sale
of its Rupert Mayer Str. business park in Munich for EUR85 million
and has agreed to lease back and manage the asset for six
years.
The Company also provides an update on progress being made
towards the completion of two further disposals for EUR7.4 million
as well as the acquisition of four further business parks for
EUR34.9 million.
Sale of Rupert Mayer Str.
The Company continually reviews its portfolio with a view to
disposing of mature and non-core assets and recycling equity into
assets with higher opportunities, in order to increase total
returns from the portfolio.
Over the eight years since the Rupert Mayer Str. site was
acquired, Sirius's asset management activity has increased net
operating income from EUR4.4 million to EUR5.3 million with the
value of the asset increasing by 48% from the EUR57.5 million it
cost to acquire.
The asset was purchased from Siemens who occupied almost 100% of
the site when acquired and subsequently completely vacated the
business park. The Sirius asset management team has successfully
filled the site with a mixture of conventional and flexible
workspace leases and it is now 88% occupied.
The sale price of EUR85.0 million represents a 9% premium to
Sirius's book value of EUR78.1 million as at 30 September 2016 and
an EPRA net initial yield for the purchaser of 5.7% (including
acquisition costs).
The purchaser is Fiduciary Capital based in Munich. The sale has
been structured as a sale and leaseback with a lease of six years,
with a rent of c. EUR5.0 million per annum for the first five years
and in the final year at a cost equal to the net operating income
of the site. Sirius will continue to receive the net income of the
site for the term of the lease which is currently at around EUR5.3
million.
There is a secured loan of around EUR42m outstanding on the
asset for which Sirius has the option of repaying with a small
penalty fee or substituting the Munich asset with other assets into
the facility.
The leaseback enables Sirius to retain the difference between
the rent it pays and the income from the site in addition to an
annual management fee of EUR100,000 per year for the term of the
lease. Completion is expected to be in April 2017.
Two further disposals
Previously announced:
In September 2016, the Group notarised the sale of one of its
non-core assets in Merseburg for EUR5.9 million and this is
progressing well with an expected completion date of March
2017.
In October 2016 the Group notarised the disposal of 8,155 square
metres of land at its CöllnParc site for EUR1.5 million which
represents a 41% uplift on the book value as at 30 September 2016.
The sale of this land was completed at the end of November
2016.
Four acquisitions
Previously announced:
In October 2016, the Group notarised the purchase of an asset
located in Krefeld for a total consideration of EUR2.9 million. It
is being acquired on a 13.1% EPRA net initial yield (equating to
EUR457 per sqm of capital value) and is expected to complete at the
end of January 2017.
In November 2016, the Group notarised the purchase of an office
building located in Dreieich for a total consideration of EUR4.6
million. The site contains significant under-utilised and vacant
space which represents an excellent development opportunity. It is
being acquired on a 0.9% EPRA net initial yield (equating to EUR355
per sqm of capital value) and is expected to complete in February
2017.
Being announced today:
In December 2016, the Group notarised the purchase of an asset
in Frankfurt for a total consideration of EUR4.5 million. This is a
multi-let office building providing office space with some
warehousing in the basement and is currently 28% occupied, is
producing annual income of EUR0.2 million and has a weighted
average lease term of 1.5 years. This is another site with
significant development opportunity and is being acquired on a 1%
EPRA net initial yield (equating to EUR1,107 per sqm of capital
value) and is expected to complete in March 2017.
In November 2016, the Group also notarised the purchase of an
asset in Cologne for a total consideration of EUR22.9 million. The
site offers 20,342 square metres 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 (equating to EUR1,126
per sqm of capital value) and is expected to complete in May
2017.
Funds available for investment
Following the completion of the above acquisitions and disposals
the Company should have approximately EUR70 million from existing
cash resources and debt facilities for further acquisitions whilst
maintaining the Company's stated LTV target. The Company continues
to see a healthy acquisition pipeline of assets on which it can use
its considerable asset management skills to drive value for
shareholders.
Andrew Coombs Chief Executive Officer of Sirius Real Estate,
said, "The sale of the Rupert Mayer Str. business park in Munich is
significant, as it is our first sale of a major mature core site
under our strategy to recycle capital into higher opportunity
assets where we can increase income levels and capital values and
thereby increase total returns to shareholders. It is particularly
encouraging to have achieved a sale price of 9% above book value
for this site. The four new acquisitions provide us with
significant value-add opportunities and we are looking forward to
incorporating these into our asset management and investment
activities and getting to work on deriving significant additional
value from them all.
As we have said, we are making good progress towards moving up
to the main markets of both the London and Johannesburg Stock
Exchanges and expect to complete these moves in or just before
March 2017."
Enquiries:
Sirius Real Estate +49 (0)30 285010110
Andrew Coombs, CEO
Alistair Marks, CFO
Peel Hunt +44 (0)20 7418 8900
Capel Irwin
Edward Fox
Canaccord Genuity Limited +44 (0)20 7523 8000
Bruce Garrow
Chris Connors
JSE Sponsor: PSG Capital +27 (0)21 887 9602
David Tosi
Willie Honeyball
Novella +44 (0)20 3151 7008
Tim Robertson
Toby Andrews
Background to Sirius Real Estate:
Established in February 2007, Sirius Real Estate is a leading
operator of branded business parks providing conventional space and
flexible workspace in Germany. The Group owns and operates a
portfolio of 43 business parks which together include over 400
buildings offering over 1.4 million square metres of gross lettable
space comprising mainly offices, production areas and storage
facilities. Sirius operates out of its head office in Berlin and
employs around 200 people in Germany. In December 2014, Sirius was
the first company to gain a secondary listing on the AltX of the
Johannesburg Stock Exchange under its fast track process, in
addition to its existing primary listing on the AIM market of the
London Stock Exchange.
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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