Acquisition update

RNS Number : 6601P

Sirius Real Estate Limited

04 September 2017

 

The Company considers this announcement to contain inside information which is disclosed in accordance with the Market Abuse Regulation

4 September 2017

Sirius Real Estate Limited

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

Update on Acquisitions and Disposals

and inclusion in the FTSE AllShare and SmallCap indices

Sirius Real Estate, the leading operator of branded business parks providing conventional space and flexible workspace in Germany, is pleased to announce the following update regarding the completion of a €7.0m disposal of a mature asset and two property acquisitions for €25.8m and its entry into the FTSE AllShare and SmallCap indices.

On 31 August 2017, the Group completed two acquisitions and one disposal as follows:

·     the acquisition of a property in Neuss, just outside Dusseldorf, for total acquisition costs of €16.1m. This asset comprises two office buildings which are 38.3% let with a net lettable area of 18,258sqm, thereby providing significant income and value creation potential through our asset management platform.

·     the acquisition of a property in Neu-Isenburg, just outside Frankfurt, for total acquisition costs of €9.7m.  This asset comprises a single office building which is currently 41.3% let with a net lettable area of 7,996sqm.  This also provides excellent scope as a property with great opportunity for significant asset management potential.

·     the sale of a property in Kiel for €7.0m, representing an EPRA net initial yield of 7.4% (including acquisition costs).  The property is now considered mature having been turned around from a loss making position to generating €0.56m of net operating income and consists of a single office building plus a warehouse building with occupancy having increased under Sirius from 19% to 92% on a net lettable area of around 10,000 sqm.

Funding for the acquisitions will come from the proceeds of the Company's disposals programme and the equity raise completed 28 July 2017.

In addition, Sirius Real Estate is pleased to announce that the Company was included in the FTSE AllShare and SmallCap indices following the FTSE index series quarterly review which took place on Wednesday 30 August 2017.

Andrew Coombs Chief Executive Officer of Sirius Real Estate, said:

"These transactions are good examples of our strategy to recycle capital from mature assets like Kiel into opportunistic assets such as Neuss and Neu-Isenburg, which are secondary locations of Dusseldorf and Frankfurt, two markets we know well and where we are currently experiencing extremely high demand for office space.  We are confident that there is significant potential to increase the capital value and rental income streams from both of these sites over the next three years. Following on from our move up to the main market in March 2017, I am delighted that Sirius has qualified for the FTSE AllShare and SmallCap indices and look forward to seeing the benefits that come with these inclusions."

For further information:

Sirius Real Estate Andrew Coombs, CEO Alistair Marks, CFO	[phone]
Novella Tim Robertson Toby Andrews	[phone]

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.

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

LEI: 213800NURUF5W8QSK566

 

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