Acquisition Update

RNS Number : 2527J

Sirius Real Estate Limited

08 September 2016

 

8 September 2016

Sirius Real Estate Limited

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

Acquisition Update

Sirius Real Estate, the leading operator of branded business parks providing conventional space and flexible workspace in Germany, is pleased to announce that following on from the successful private placing raising €30 million before expenses completed in June 2016, the Company has notarised and is near to completing the acquisition of two multi-let business parks, referred to at the time of the fundraising, for a total consideration of €46.3 million.

The first site being purchased is for a total consideration of €28.6 million and is located in Dresden, a prosperous industrial city where many international corporations are based. This multi-let business park is positioned next to the city's airport and is well placed to continue to benefit from demand from Dresden's successful commercial sector. The site has 53,200 sqm of gross lettable area of which 45.9% is offices and 39.3% is warehouse.  The occupancy upon acquisition is 65.7% across a broad base of 60 tenants paying a total annual rental income of €2.78 million (equating to €4.35 psm) with a weighted average lease length remaining of 3.3 years.  It is being acquired on an 8.3% EPRA net initial yield (equating to €538 per sqm of capital value) and is expected to complete in October 2016.

The second business park is being purchased for a total consideration of €17.7 million and is located in the heart of Wiesbaden's commercial district known for being strong across the public administration, IT, construction and insurance sectors. The total gross lettable area of the property is 19,602 sqm of office space of which 64.6% is let to 3 tenants paying an annual rental income of €1.88 million (equating to €7.99 psm) with a weighted average lease length remaining of 2.7 years.  The business park is being acquired on a 9.1% EPRA net initial yield (equating to €901 per sqm of capital value) and is expected to complete in October 2016.

The purchase costs of these two sites will be met in part by funds raised from the private placement and the balance will be funded by a new €70 million banking facility with BerlinHyp referred to at the time of the fundraising which the Company expects to be in place in October.  As announced in June, this facility is expected to have a 7 year term and an interest rate priced at or around 1.6%.  The Company still has circa €10 million of cash from the June equity raise with which to fund further acquisitions.

Andrew Coombs, Chief Executive Officer, said, "After 10 years of focusing exclusively on this market we know exactly what we are looking for and what makes the best returns for our shareholders. These two sites fit neatly within our criteria as we are buying them at an EPRA net initial yield above 8%, financing the transaction with very attractive banking terms and purchasing enough vacancy to provide significant value-add opportunity.  They will provide both an attractive immediate return and strong opportunity for income and valuation growth following a capex investment program to enable leasing of the current voids."

Ends -

Enquiries:

Sirius Real Estate                           Andrew Coombs, CEO Alistair Marks, CFO	[phone]
Peel Hunt Capel Irwin  Edward Fox	[phone]
Canaccord Genuity Limited	[phone]

Bruce Garrow

Chris Connors                                                                                 

JSE Sponsor: PSG Capital                                                   [phone]

David Tosi                                                                                                    

Willie Honeyball

Novella                                                                                    [phone]

Tim Robertson

Toby Andrews

 

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