TIDMSRE
RNS Number : 8990G
Sirius Real Estate Limited
26 July 2019
26 July 2019
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Sirius notarises two acquisitions totalling more than EUR50
million
Sirius Real Estate, the leading operator of branded business
parks providing conventional space and flexible workspace in
Germany, announces that it has notarised two acquisitions totalling
EUR51.7 million including acquisition costs.
Alzenau
In Alzenau, 34km east of Frankfurt am Main, Sirius has acquired
Alzenau Business Park for a total consideration of EUR44.5 million,
to be settled in cash on closing, including expected acquisition
costs of EUR2.5m which will produce an EPRA net initial yield of
7.9%. The acquisition will be funded using proceeds from recent
asset recycling activity. The vendors are RWE Generation SE and GfV
Gesellschaft für Vermögensverwaltung mbH represented by Innogy SE.
The asset provides the Company with stable income from a
well-diversified and covenanted tenant base.
The mixed-use property comprises eleven buildings constructed
between 1985 and 2002 providing a total of circa 60,000 sqm of
lettable space (47% warehouse/production space; 47% office space;
and 6% other space) as well as 1,063 parking spaces on a total plot
size of circa 197,000 sqm.
The asset is 93.5% let to 16 tenants with an annual total income
of EUR4.1 million and annual net operating income of EUR3.5 million
as at July 2019 based on figures made available by the vendor. The
Company is satisfied with the quality of the figures provided by
the vendor; however, shareholders are hereby informed that they are
unaudited.
The asset has a weighted average rent of EUR5.51 per/sqm with a
remaining WALT of 3.5 years. Tenants include Applied Materials, the
global leader in materials engineering solutions for the
semiconductor, flat panel display and solar photovoltaic
industries; Bühler Alzenau GmbH, manufacturers of high-vacuum
deposition equipment; and, Nukem Technologies GmbH, operating in
the management of radioactive and hazardous waste, decommissioning
of nuclear facilities as well as engineering and consulting
services. There is also an 8,200 sqm plot of land let to Aldi until
2048 producing an annual income of EUR101,000.
The consideration of EUR42.0 million (excluding acquisition
costs) payable in respect of the property is considered to be its
fair market value, as determined by the directors of the Company as
25 July 2019. The directors of the Company are not independent and
are not registered as professional valuers or as professional
associate valuers in terms of the Property Valuers Profession Act,
No. 47 of 2000.
Timetable
The transaction is expected to close and become effective after
the last of the closing conditions have been fulfilled, which is
anticipated in October 2019. The closing conditions are as
follows:
1. The priority notice of conveyance (Auflassungsvormerkung) for
the benefit of the Purchaser is registered in the land
register;
2. The notary is in possession of:
-- signed and sealed declarations by the authorities that
statutory pre-emption rights do not exist or are not exercised;
-- all other approvals, waivers or consents required for the
validity and execution of the SPA, with the exception of the tax
clearance certificate issued by the tax authorities;
-- all declarations and approvals which are required to delete
encumbrances in the land register which the Purchaser does not
assume and enter post-completion;
3. Only regarding plot no. 6413/101 which is encumbered with a
leasehold: The notary is in possession of a declaration by ALDI as
the beneficiary of the leasehold that it does not exercise its
registered right of first refusal to acquire this plot of land.
Bochum
In Bochum, a city in the Ruhr region of Germany, Sirius has
notarised the acquisition of an office building for EUR6.7 million
including expected acquisition costs of EUR0.6m reflecting an EPRA
net initial yield of 5.5%. The acquisition, which will be settled
in cash, will be funded using proceeds from recent asset recycling
activity. The property is directly adjacent to the Company's 56,000
sqm Bochum Business Park acquired for EUR25.7 million in March
2019. As a result of the proximity of the asset to an existing site
the Company benefits from a wider range of asset management options
and operational synergies. The vendor is Häusser-Bau GmbH and
completion is expected in September 2019.
The property, constructed in 1970, provides 4,200 sqm of
lettable space (81% office space, 15% storage and 4% service space)
and 71 parking spaces on a total plot size of circa 3,300 sqm. It
is 100% let, producing an annual total income circa EUR428,000 and
annual net operating income of EUR370,000 as of July 2019 based on
figures made available by the vendor which management is satisfied
with, reflecting a weighted average rent of EUR8.00 per/sqm with a
remaining WALT of 2.2 years. The principal tenant is ThyssenKrupp
Bilstein, a subsidiary of the giant ThyssenKrupp conglomerate which
designs and manufactures shock absorbers.
Bochum is located mid-way between Dortmund and Essen, in North
Rhine-Westphalia, the third-largest urban area in the European
Union. The property is well situated in Bochum-Hofstede, north of
the city centre and within walking distance of a U-Bahn with easy
access to the A40 and A43 motorways.
Commenting on the acquisitions, Andrew Coombs, Chief Executive
Officer of Sirius Real Estate, said: "The acquisition of Alzenau
Business Park is the largest single transaction since the current
management took over at Sirius, reflecting a broader range of asset
size as well as an increased strength in the pipeline since the
announcement of the Titanium JV.
"We were attracted to this acquisition because of the
opportunity to acquire it at an attractive running yield, which
will support our strategy to grow our funds from operations.
Furthermore, there is a good mix of long-standing tenants with
strong covenants.
"Following on from the success of the other larger Bochum
acquisition in March 2019, the acquisition of the adjacent property
provides us with additional asset management possibilities as well
as the opportunity to realise operational synergies."
For further information:
Sirius Real Estate
Andrew Coombs, CEO/Alistair Marks, CFO
Tel: +49 (0)30 285010110
Tavistock (Financial PR)
Jeremy Carey/James Verstringhe
Tel: +44 (0)20 7920 3150
Email: siriusrealestate@tavistock.co.uk
NOTES TO EDITORS
About Sirius Real Estate
Sirius is a property company listed on the main market and
premium segment of the London Stock Exchange and the main board of
the Johannesburg Stock Exchange. It is a leading operator of
branded business parks providing conventional space and flexible
workspace in Germany. The Company's core strategy is the
acquisition of business parks at attractive yields, the integration
of these business parks into its network of sites under the
Company's own name as well as offering a range of branded products
within those sites, and the reconfiguration and upgrade of existing
and vacant space to appeal to the local market, through intensive
asset management and investment. The Company's strategy aims to
deliver attractive returns for shareholders by increasing rental
income and improving cost recoveries and capital values, as well as
by enhancing those returns through financing its assets on
favourable terms. Once sites are mature and net income and values
have been optimised, the Company may take the opportunity to
refinance the sites to release capital for investment in new sites
or consider the disposal of sites in order to recycle equity into
assets which present greater opportunity for the asset management
skills of the Company's team.
On 1 March 2019, Sirius announced that, in a transaction
anticipated to complete in July 2019, it had formed a real estate
investment joint venture with clients represented by AXA Investment
Managers - Real Assets in which AXA acting on behalf of its
clients, will own a 65% interest and Sirius will own the balance of
35%. The JV is called Titanium. The JV will initially be formed by
AXA acquiring, on behalf of its clients, from Sirius a 65% stake in
five SPVs through which it currently owns two business parks
located in Berlin (Berlin Borsig and Berlin Tempelhof) and one in
each of Mainz, Nurnberg and Bayreuth. The business parks provide a
combination of office, warehouse, industrial and storage space. The
implied property value of EUR168 million equates to a gross yield
for the portfolio of 6.2% and reflects a premium to the book value
as at 30 September 2018 which was EUR141.1 million. Total cash
commitment from AXA IM - Real Assets amounts to EUR43.9 million.
The transaction is expected to generate total cash proceeds of more
than EUR70 million for Sirius after refinancing and expected
related costs.
For more information, please visit:
www.sirius-real-estate.com
Follow us on LinkedIn at
https://www.linkedin.com/company/siriusrealestate/
Follow us on Twitter at @SiriusRE
LEI: 213800NURUF5W8QSK566
JSE Sponsor
PSG Capital
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END
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