Acquisition

RNS Number : 3770A

Sirius Real Estate Limited

22 December 2014

 



Sirius Real Estate Limited

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

Completed acquisition of two properties for €48.9 million in Germany

Sirius Real Estate is pleased to confirm that it has completed the acquisition of two multi-let business parks located in Mahlsdorf and Potsdam, for a total consideration of €48.9 million, inclusive of acquisition costs. The properties have been acquired from Union Investment and represent two of the five sites referred to in our announcement on 28^th November 2014.

Located on the outskirts of Berlin, the two business parks have a total lettable area of 67,774 sqm and will mean that the Company now has five business parks in the Berlin area, a core market for the Company where demand for flexible workspace solutions is high.

Based on the current occupancy of 86%, the two sites generate €4.1 million of annualised rental income and €3.8 million of net operating income at an EPRA Net Initial Yield of 7.7%* and an initial cash on cash return of 13.3%.  When fully mature, the two sites are expected to produce a rent roll in excess of €4.5 million per annum. The existing tenant base of 74 tenants provides good security with a weighted average lease length remaining of 3.94 years and the Company will now progress its plans to invest in the vacant space to create a mixture of conventional office and industrial space as well as its flexible workspace solutions.

*Calculated as rental income less non recoverable service charge costs and landlord maintenance, over purchase price plus acquisition costs 

The acquisitions were funded by a drawdown of €26.1 million from its new €36 million, 5-year debt facility from one of the Company's existing bankers. The monies drawn down have ‎a 2.85% annual fixed interest charge per annum and amortisation of 2.00%. The balance of the total consideration will come from the proceeds of the Company's recent €40 million Private Placement also announced on 28 November 2014. The remainder of the €36 million bank facility will be drawn down against further acquisitions, as previously announced, which are expected to complete in January 2015. 

Andrew Coombs, Chief Executive of Sirius, commented: "We are pleased to have completed the acquisition of the two properties which are in key locations on the outskirts of Berlin; a region in which we have a strong track record of creating value-added tenancy space, and where we plan to continue to increase our presence.

The EPRA Net Initial Yield of 7.7% is attractive and enables us to take advantage of our ability to borrow money at below 3%. This yield gap together with our asset management plans for the two sites makes us confident we can generate good returns for shareholders."

Enquiries:

Sirius Real Estate                         

Andrew Coombs, CEO                                                                                   [phone]

Alistair Marks, CFO

Peel Hunt

Capel Irwin                                                                                                         [phone]

Hugh Preston

Finncap

Stuart Andrews                                                                                               [phone]

Paul Harrington

PSG Capital                                    

David Tosi                                                                                                            [phone]

Willie Honeyball     

Novella                                     

Tim Robertson                                                                                                  [phone]

Ben Heath       

 

END

 

 

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