SIRIUS REAL ESTATE LIMITED

(Incorporated in Guernsey)

Company Number: 46442

JSE Share Code: SRE

LSE (GBP) Share Code: SRE

LEI: 213800NURUF5W8QSK566

ISIN Code: GG00B1W3VF54

18 August 2021 

Sirius Real Estate Limited

("Sirius Real Estate", "Sirius" or the "Company")

SIRIUS ACQUIRES FOUR BUSINESS PARK ASSETS & LAND PARCEL FOR €84.8 MILLION

Sirius Real Estate, the leading owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany, announces it has notarised or completed the acquisition of four business park assets and one land parcel for a total of approximately €84.8 million (total acquisition costs).

The acquisitions are located in Oberhausen, Frankfurt, Heiligenhaus and Öhringen and provide over 150,000 sqm of lettable space. In addition, the Company has acquired a land parcel adjacent to its existing asset in Neuruppin. The properties have been acquired using proceeds of the Company's inaugural €400.0 million corporate bond issuance that successfully completed in June 2021.  

Together the acquisitions* generate day one net operating income (NOI) of €3.4 million per annum, representing a blended EPRA net initial yield of 4.1% at occupancy of 59%. With 62,000 sqm of vacant space, the assets provide an opportunity to grow income through the letting up of vacant space, accretive refurbishment and selective development.    

* excluding the land parcel

Commenting on the acquisitions, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: "With our strong cash position, Sirius continues to deliver on an attractive pipeline of opportunities generated by our in-house acquisitions team. The new assets provide a mix of warehouse, production, and office space that we know works well for our platform and our customers. The assets are in well-established locations that benefit from strong SME demand and growth potential, as well as synergies with existing Sirius business park sites.

"Whilst the assets primarily represent an opportunity for the company to utilise its operating platform to drive the take up of lettable space and reduce service charge leakage, significant refurbishment and development opportunities also exist to provide further potential for value creation."

Further details on the acquisitions are set out below:

Oberhausen

The Company has notarised the acquisition of Oberhausen Business Park for €39.8 million (total acquisition cost). The park is located in a well-developed commercial area of the city of Oberhausen, in the northwest of Germany's Ruhr region. The asset offers a mix of uses with approximately 77,600 sqm of lettable space, comprising around 47,400 sqm of offices, 19,200 sqm of warehouse space, 4,600 sqm of storage and 6,400 sqm of other space. 

The property generates NOI of €2.33 million per annum, with an average rent of €3.29 per sqm (excluding parking and other income), reflecting an EPRA Net Initial Yield of 5.9% at 63% occupancy. The asset has a remaining Weighted Average Lease Expiry ("WALE") of 3.2 years. Completion is expected to be in Q4 of calendar year 2021.

Oberhausen Business Park offers attractive day one cash flow for Sirius, but also the potential to grow income by letting vacant space with the support of targeted investment and refurbishment.

Frankfurt III

The Company has notarised the acquisition of its third asset in Frankfurt, for €21.2 million (total acquisition cost), representing an EPRA Net Initial Yield of 2.8% with occupancy at 54%.

The multi-tenanted office tower offers 15 floors of lettable space, comprising around 9,300 sqm of office and 900 sqm of storage space. The building generates NOI of €598,000 per annum at an average rent of €11.02 per sqm (excluding parking) and has a remaining WALE of 2.9 years. Completion is expected to be in Q4 of calendar year 2021.

Key tenants of the building include ENGIE, the international energy business. Located in the east of the city of Frankfurt, the building benefits from its location close to two of the city's main Autobahns and supports the Company's strategy of providing a range of flexible out of town office products that it expects to appeal to the local market.

Heiligenhaus

The Company has notarised a multi-tenanted business park at Heiligenhaus, North Rhine-Westphalia, for €14.2 million (total acquisition cost). The property has a lettable area of approximately 45,000 sqm, consisting of around 23,200 sqm of office space, 11,400 sqm of warehouse space, 7,800 sqm of production space and 2,600 sqm of other space.

The asset currently generates NOI of €1.12 million per annum, with an average rent of €2.44 per sqm (excluding parking and other income), representing an attractive EPRA Net Initial Yield of 7.9%. The asset is currently 77.2% let with a WALE of 3.7 years. Completion is expected to be in Q4 of calendar year 2021.

One of the key tenants is Kiekert Aktiengesellschaft, which provides safety systems for the automotive sector. The Company aims to increase operating income through the letting of vacant space and improving service charge collection.

Located to the west of the town of Heiligenhaus, the business park is situated between the cities of Essen, Duisburg, Dusseldorf and Wuppertal, with strong Autobahn and public transport links. A new Autobahn connection is due to be created to connect Heiligenhaus and nearby Ratingen.

Öhringen

Öhringen Business Park was acquired for €9.02 million (total acquisition cost) on 1 August 2021. Located in the town of Öhringen in Baden-Württemberg, the business park is well-connected by road and public transport. The asset offers a lettable area of approximately 18,000 sqm comprising around 15,800 sqm of warehouse space, 1,500 sqm of office space and 700 sqm of other space, as well as a potential development land parcel of around 11,600 sqm.  

The asset has strong value-add potential, with vacant, marketable warehouse space, and provides a development opportunity for further light industrial space.

The business park has been acquired with vacant possession, but with a new lease already agreed with Filtration Group GmbH, an international filtration systems business, which currently occupies an adjacent property. Filtration Group will take up approximately 50% of the vacant space on an initial five-year term generating an annual rent of €490,000 and an NOI of around €224,000.  

Neuruppin

The Company has also completed the notarisation of an approximately 16,000 sqm land parcel adjacent to its asset in Neuruppin for €0.5 million (total acquisition cost), to assist in its plans to expand and develop the existing property. Sirius is engaged in negotiations with the current tenant regarding the extension and a possible new lease for the additional developed space.

For further information:

Sirius Real Estate

Andrew Coombs, CEO / Alistair Marks, CFO

+49 (0) 30 285010110 

FTI Consulting (Financial PR)

Richard Sunderland / Claire Turvey / James McEwan / Talia Jessener

+44 (0) 20 3727 1000

SiriusRealEstate@fticonsulting.com 

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 JSE Limited.  It is a leading operator of branded business parks providing conventional space and flexible workspace in Germany. The Company's purpose is to create and manage optimal workspaces that empower small and medium-sized businesses to grow, evolve and thrive. Sirius seeks to unlock the potential of its people, its properties, and the communities in which it operates, so that together we can create sustainable impact, and long-term financial and social value.

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.

Sirius also has a venture with clients represented by AXA IM Alts. Titanium was formed through the acquisition by AXA IM Alts, on behalf of its clients, from Sirius, of a 65% stake in five business parks across Germany. Sirius retained the remaining 35%. The venture seeks to grow primarily through the acquisition of larger stabilised business park assets and portfolios of assets with strong tenant profiles and occupancy. As well as its equity interest, Sirius acts as operator of the assets in the venture, on a fee basis. Sirius will continue to grow its wholly owned portfolio through acquisitions of more opportunistic assets, where it can capitalise on its asset management expertise to maximise utilisation of the space, grow occupancy and improve quality of the tenants. The strategies have been clearly defined so that the venture does not conflict with Sirius's existing business.

For more information, please visit: www.sirius-real-estate.com  

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