Branded business parks specialist Sirius Real Estate has acquired two business parks in Germany for around €40 mln.
The parks are situated in Köln (Cologne) and Göppingen, and were bought using the proceeds of November’s €165 mln capital raise.
The deals follow three UK acquisitions made in North London at the end of last year for £33.5 mln (€39 mln). The two recently notarised business parks in Germany add just under 55,000 m2 of primarily light industrial and production space to the group’s c. 1.9 million m2 German portfolio.
The business park in Köln, Germany’s fourth largest city, in Nord-Rhein Westphalia, comprises 19,114 m2 of principally light industrial space. The property has been notarised at a price of €20.0 mln and currently generates total rental income of €1.67 mln and an annualised net operating income of €1.56 mln, representing a gross yield at acquisition of 8.4% and an EPRA net initial yield of 7.3%.
The site has an occupancy rate of just over 89%, with a WAULT of 2.4 years and a well-diversified, stable tenant structure. The park offers a number of strong value add opportunities to drive rental growth, including accessible under-renting which Sirius has identified.
In Göppingen, a city in the state of Baden-Württemberg, south east of Stuggart in southern Germany, Sirius has acquired a multi-tenanted business park with a total lettable area of approximately 35,160 m2 across primarily light industrial and production space.
The acquisition has been notarised at €19.8 mln and generates total rental income of €1.78 mln and an annualised net operating income of €1.47 mln, reflecting a gross yield of 9.0% and an EPRA net initial yield of 6.9%.
With occupancy at around 86% and a WAULT of 2.8 years, the property offers the opportunity for Sirius to use its platform to improve occupancy, income and service charge recovery.
Both business parks are situated in highly desirable micro-locations within well established light industrial zones, and benefit from good transport networks and connectivity.
The Köln asset will be the fourth business park owned and operated by the Company on the edge of Köln and the Göppingen site will be the tenth asset in the area surrounding Stuttgart. The proximity to other Sirius sites will enable the Company to leverage a number of operational synergies alongside its local market expertise.
Andrew Coombs, CEO of Sirius Real Estate, commented: 'These acquisitions provide the Company with strong day one cash flow from a stable, diversified tenant base and align well with our strategy of curating a range of flexible out-of-town light industrial products that we expect to appeal to the local market.
'Acquired at attractive yields, these sites offer under-rented space and an opportunity to reduce vacancy and improve cashflow, providing a range of avenues for Sirius to leverage its UK and German operating platforms to generate significant value creation and to grow net operating income over the medium term.
'We are making good progress on our pipeline of further acquisitions, with the benefit of a strong cash position following our well supported £147 mln equity raise in November.
'We currently have €78 mln of proceeds committed to legally binding acquisitions, €38 mln of which has already been completed. We are in an advanced stage of discussions with over €70 mln of additional opportunities across Germany and the UK and we expect to deploy the remaining fundraise proceeds in the coming months.'
