t
Sirius Real Estate Limited completed three acquisitions in Germany for an aggregate of €44.6 million, which were notarised prior to the end of June. These acquisitions were predominantly funded by three strategic disposals in Germany and the UK totaling €33.6 million, including sales at a 5.5% premium to book value (€13.75m) and 94% above acquisition valuation (£16.0m). The disposals also included the notarisation of a €1.0 million land plot with a €250,000 book value, expected to complete in January 2023, while the acquired assets currently generate €2.3 million in annual rental income and €1.6 million in net operating profit, with a combined occupancy of 54%.
| Date | 4 Oct 2022 |
| Time | 11:43:45 |
| Category | Acquisitions and alliances |
| ID | 7317B |
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LEI: 213800NURUF5W8QSK566
ISIN Code: GG00B1W3VF54
4 October 2022
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
ACQUISITIONS AND DISPOSALS UPDATE
Sirius Real Estate, the leading owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany and the UK, announces further progress in its asset recycling programme with the completion of three acquisitions in Germany for €44.6 million in aggregate. These acquisitions were all notarised prior to the end of June and have been predominantly funded using capital recycled from three strategic disposals in Germany and the UK for a combined €33.6 million.
The disposals have been made at a premium to book value while Sirius has undertaken the acquisitions having identified a number of opportunities to drive future income and valuation growth through its asset management platform.
The three disposals were of assets that offered limited further growth opportunities due to location and/or condition, and comprised:
· The completion of the previously announced €13.75 million sale of the Company's asset in Magdeburg, Germany, which represented a 5.5% premium to the book value at the time of notarisation.
· Completion of the previously announced £16.0 million sale of a BizSpace business park in Camberwell, London, at 94% above the asset's valuation at the time of Sirius' acquisition of BizSpace.
· The notarisation of a €1.0 million 3,200 sqm non-income producing land plot in Heiligenhaus, Germany which had a book value of €250,000 at the time of notarisation. This asset is being sold to a supermarket chain as part of its expansion plans, with the transaction expected to complete in January 2023.
The disposals generated an annualised €1.7 million of rental income and €1.4 million of net operating profit, while the three new acquisitions totalling €44.6 million currently generate a combined total of €2.3 million of rental income and €1.6 million of net operating profit annually. The three acquired assets have a combined occupancy of just 54% and offer a range of avenues for Sirius to leverage its significant value creation expertise to grow rental income. The acquired assets comprise:
· A €39.8 million (including costs) mixed-use property in Düsseldorf, Germany, situated 2.6 km from the city's international airport. The property comprises mainly office and warehouse/light industrial space and is 55% occupied, offering good value add potential.
· A €3.9 million (including costs) primarily warehouse asset located in a well-developed commercial area in Dreieich, Germany, that is strategically adjacent to an existing property owned by Sirius. We intend to convert the property into a self-storage facility, adding to our existing SmartSpace Self-Storage brand that now exists in 32 locations across Germany
· A €0.9 million (including costs) small 239 sqm vacant office building in Potsdam. The property is placed strategically at the entrance to one of the Company's existing sites and directly adjacent to the world famous Babelsberg Film Studios.
Commenting on the transactions, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: "The strategic disposal of these mature assets at a premium to their book value demonstrates our continued ability to drive value within our portfolio and then crystallise returns, which can be recycled into new opportunities where we can grow operating income through our asset management platform.
We have identified a number of asset management initiatives within the three newly acquired properties which will allow us to grow rental income and occupancy by leasing into markets where we see continued strong demand for our products.
Given the current uncertainty in the market, we now expect to slow our acquisition pipeline, however we are continuing to monitor numerous acquisition opportunities so that we remain poised to execute transactions at the appropriate time in the future. We will also continue to seek to dispose of non-core or mature assets as and when we feel the timing is right."
For further information:
Sirius Real Estate
Andrew Coombs, CEO / Alistair Marks, CIO and Interim CFO
+49 (0) 30 285 010 110
FTI Consulting (Financial PR)
Richard Sunderland / James McEwan / Talia Shirion
+44 (0) 20 3727 1000
NOTES TO EDITORS
About Sirius Real Estate
Sirius is a property company listed on the main and premium market of the London Stock Exchange and the main board of the JSE Limited. It is a leading owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany and the UK. As of 31 March 2022, and following the acquisition of BizSpace, a leading UK provider of regional flexible workspace, the group's portfolio comprised 140 assets let to 9,452 tenants with a total book value of over €2 billion, generating a total annualised rent roll of €167.1 million. Sirius also holds a 35% stake in Titanium, its €350+ million German-focused joint venture with clients of AXA IM Alts.
The Company's strategy centres on acquiring business parks at attractive yields and integrating them into its network of sites - both under the Sirius name and alongside a range of branded products. The business then seeks to reconfigure and upgrade existing and vacant space to appeal to the local market via intensive asset management and investment and may then choose to selectively refinance or dispose of assets once they meet maturity, to release capital for new investment. This active approach allows the Company to generate attractive returns for shareholders through growing rental income, improving cost recoveries and capital values, and enhancing returns through securing efficient financing terms. The Company has a strong track record for growing its income and has delivered like-for-like rent roll growth in excess of 5% for the last eight consecutive years.
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
JSE Sponsor
PSG Capital