1 June 2017
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Update on Acquisitions and the Sale of Mature Assets
&
Results Date
Sirius Real Estate, a leading operator of branded business parks providing conventional space and flexible workspace in Germany, is pleased to announce the following update, regarding €18m of disposals of mature assets and €66.4m of property acquisitions, all progressed over the past six weeks, as follows:
· Notarisation of the sale of a mature asset in Kiel for €7m;
· Completion of the €11m Dusseldorf sale;
· Notarisation of the acquisition of three sites with a combined value of €43.5m; and
· Completion of the €22.9m Cologne acquisition.
The Company has been successfully pursuing its policy of re-cycling capital into new assets with greater opportunities to extract value through its asset management activities.
Disposals
On 21 April 2017, the Group notarised the sale of a mature asset located in Kiel for €7.0m, in line with book value and representing an EPRA net initial yield of 7.4% (including acquisition costs). Since the acquisition of this mixed-use business park in 2007 at less than half of the disposal price, Sirius's asset management activity has increased net operating income from a small loss to €0.56m and increased the occupancy from 19% to 92% over a net lettable area of 10,000 sqm.
On 19 May 2017, the Group completed the sale of a mature asset located in Dusseldorf for €11.0m, representing an EPRA net initial yield of 7.2% (including acquisition costs). Since this site was acquired in 2008, Sirius's asset management activity has significantly improved the tenant mix and lease terms. The sale is at a 25% premium to the site's book value of €8.7m as at 30 September 2016. The asset is a mixed-use business park generating €0.85m of net operating income with occupancy of 96% over a net lettable area of 16,600 sqm.
Acquisitions
On 3 May 2017, the Group notarised the acquisition of a property in Grasbrunn, an area on the Munich ring road. The property is located in a well-developed commercial area and is being purchased for a total consideration of €18.1m. The property comprises four office buildings and has a net lettable area of 14,791 sqm. Currently the property is nearly fully vacant with an annual rental income of €0.10m.
On 23 May 2017, the Group notarised the acquisition of a property in Neuss for a total consideration of €15.8m. Neuss is an active commercial centre, located on the west bank of the Rhine opposite Dusseldorf. The property comprises one office building and has a net lettable area of 18,258 sqm. The property is 38.3% occupied and let to six tenants, producing an annual rental income of €0.67m and having a remaining weighted average lease term of 5.1 years.
On 23 May 2017, the Group notarised the acquisition of a property located in Neu-Isenburg for a total consideration of €9.7m. Situated close to Frankfurt, Neu-Isenburg benefits from excellent transport links and will combine well with the nearby Sirius site in Dreieich. The property is a mixed-use business park comprising office and warehouse space and has a net lettable area of 7,996 sqm. The property is 41.3% occupied and let to three tenants, producing an annual rental income of €0.47m and having a remaining weighted average lease term of 1.5 years.
On 31 May 2017, the Group completed the purchase of an asset in Cologne for a total consideration of €22.9m. The site offers 20,342 sqm of gross lettable space, of which 93.6% is office space, and is currently 99% let to multi-tenants. The largest tenant occupies over 50% of the gross lettable area and has 2.9 years remaining on their lease. The total tenant base has a weighted average lease length term of 2.4 years. The asset is being acquired on an 8.1% EPRA net initial yield.
Final Results Date
The Company confirms that it will announce its final results for the 12 months to 31 March 2017 on Monday 26 June 2017.
Andrew Coombs Chief Executive Officer of Sirius Real Estate, said,
"This has been an active six weeks for Sirius during which we have notarised a further €43.5m of acquisitions and completed the Cologne acquisition for €22.9m. The three recently notarised sites are currently underutilised and under occupied, however, all are situated in good locations for our customer base.
We are confident therefore that we can significantly enhance the appeal of each site we have acquired just as we have done in the past with other similar assets. Our focus will be on rebranding, re-configuring and introducing specialist SME workspace and storage products to match demand in each local area. With the aim, as ever, to increase rental income and market value of each site.
This, combined with the sales of mature assets all of which are being transacted at prices in line with or above book value, clearly demonstrates the Sirius business model working in practice."
For further information, please contact: Sirius Real Estate |
+49 (0)30 285010110 |
Andrew Coombs, CEO Alistair Marks, CFO |
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Novella |
+44 (0)20 3151 7008 |
Tim Robertson Toby Andrews |
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 risk adjusted 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, Sirius may consider their disposal in order to recycle equity into assets which present greater opportunity for the Group's asset management skills.
For more information, please visit: www.sirius-real-estate.com
