Sirius Real Estate sells business park to Siemens for €85m

It has agreed to lease back and manage the asset for six years after the sale. The company has also made progress towards the completion of two other disposals for €7.4m as well as the acquisition of four further business parks for €34.9m.

Since the Rupert Mayer Street site was acquired the company’s asset management activity has increased net operating income from €4.4m to €5.3m with the value of the asset increasing by 48% from the €57.5m it cost to acquire.

Siemens occupied 100% of the site when acquired and have subsequently vacated the site since. The Sirius management team has successfully filled the site with a mixture of conventional and flexible workspace leases and is now 88% occupied.

The sale price represents a 9% premium to the company's book value of €78.1m as at 30 September 2016. The purchaser, Munich based Fiduciary Capital, has an initial European Public Real Estate Association (EPRA) net yield of 5.7%.

The sale has been structured as a sale and leaseback with a lease of six years and rent of around €5m per annum for the first five years and a cost equal to the net operating income of the site in the final year.

In September 2016, the company also disposed of Merseburg for €5.9m, due to be complete by March 2017, and 8,155 square metres of land at its CöllnParc site for €1.5m, completed at the end of November 2016.

In December 2016 the group purchased an asset in Frankfurt for €4.5m and in November 2016 it purchased an asset in Cologne for €22.9m.

As previously announced, in November 2016 the group also purchased an office building in Dreieich for €4.6m and in October 2016 it bought an asset in Krefeld for €2.9m.

Following the above transactions, the group has around €70m from existing cash resources and debt facilities for further acquisitions.

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.

“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."

Coombs believes the company is making good progress towards moving up to the main markets of both the London and Johannesburg Stock Exchanges and expects to complete these moves in or just before March 2017.

The share price rose 1.88% to 0.539p at 1021 GMT on Friday.