German-branded business parks operator Sirius Real Estate has inked a deal to sell its Rupert Mayer Strasse business park in Munich for €85 mln to Fiduciary Capital, with an agreement to lease back and manage the asset for six years.
Rupert Mayer Strasse business park comprises 72,000 m2 of office and warehouse space and was acquired by Sirius in 2008.
'Rupert Mayer Strasse is an excellent example of the Sirius business model. We have successfully repositioned this site through the replacement of a single tenant with multiple tenants on higher rents, invested in transforming sub-optimal spaces, increased net operating income by 30% and now we have completed the sale at a 9% premium to book value,' commented Andrew Coombs, CEO Sirius Real Estate.
Sirius will pay Munich-based Ficuciary Capital €5 mln per annum in rent for the first five years and a sum equal to the net operating income of the site in the final year. The business park operator will continue to receive the net income of the site for the term of the lease which is currently at around €5.3 mln.
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 €100,000 per year for the term of the lease.
'We now have the opportunity to recycle this capital into higher opportunity assets where we can increase income levels and capital values and thereby increase total returns to shareholders,' concluded Coombs.
