Sirius Real Estate completes one disposal, two acquisitions

Branded business park operator Sirius Real Estate updated the market on Monday, on the completion of a €7m disposal of a “mature asset”, as well as two property acquisitions for €25.8m and its entry into the FTSE AllShare and SmallCap indices.

The AIM-traded firm completed the acquisition of a property in Neuss, just outside Duesseldorf, for total acquisition costs of €16.1m on 31 August.

Its board said that asset comprised two office buildings, which were 38.3% let with a net lettable area of 18,258sqm, thereby providing “significant income” and “value creation potential” through Sirius’ asset management platform.

On the same day, the company also completed the acquisition of a property in Neu-Isenburg, just outside Frankfurt, for total acquisition costs of €9.7m.

That asset comprised a single office building which was currently 41.3% let with a net lettable area of 7,996sqm.

“This also provides excellent scope as a property with great opportunity for significant asset management potential,” the Sirius Real Estate board explained.

Also on 31 August, the company completed the sale of a property in Kiel for €7.0m, representing an EPRA net initial yield of 7.4% including acquisition costs.

The board said the property was now considered “mature”, having been turned around from a loss-making position to generating €0.56m of net operating income, and consisted of a single office building plus a warehouse building with occupancy having increased under Sirius from 19% to 92% on a net lettable area of around 10,000 sqm.

Funding for the acquisitions would come from the proceeds of the company's disposals programme and the equity raise completed on 28 July, the board said.

In addition, Sirius Real Estate confirmed that it was included in the FTSE AllShare and SmallCap indices following the FTSE index series quarterly review which took place on 30 “These transactions are good examples of our strategy to recycle capital from mature assets like Kiel into opportunistic assets such as Neuss and Neu-Isenburg, which are secondary locations of Dusseldorf and Frankfurt, two markets we know well and where we are currently experiencing extremely high demand for office space,” said Sirius chief executive Andrew Coombs.

“We are confident that there is significant potential to increase the capital value and rental income streams from both of these sites over the next three years.

“Following on from our move up to the main market in March 2017, I am delighted that Sirius has qualified for the FTSE AllShare and SmallCap indices and look forward to seeing the benefits that come with these inclusions.”