Sirius Real Estate, the leading owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany, announces that it has notarised the acquisition of a business park in Essen for €10,710,000. The transaction is by way of a sale and leaseback with thyssenkrupp, the international industrial engineering and technology group, and reflects an EPRA net initial yield of 6.5%. The purchase was sourced by the Sirius acquisitions team off-market and will be funded from existing cash resources, with completion expected in Q2 2021.
Built between 1962 and 1963, the mixed-use business and industrial park offers 14,711 sqm of gross lettable area, of which 45% is warehouse, 42% is office and 13% production space. The park is situated on a 34,844 sqm plot, which includes a 4,450 sqm parcel of land that offers the potential for development into additional warehouse and office space. The site currently has 190 parking spaces.
The business park is currently 80% let to six entities within thyssenkrupp, and produces total annualised rental income of approximately €830,000, reflecting an average rent of €5.85 per sqm (including car parking).
The weighted average unexpired lease length is 1.4 years, presenting Sirius with a range of asset management options and the opportunity to increase income through the re-letting of vacated space and selective investment into the asset.
Located in the south west of Essen, around 2km from the city centre, the park is highly accessible by rail and car. Essen is the second largest city in the Ruhr, Germany’s most populous region and industrial heartland, which is home to many of the country’s largest companies. Sirius already manages office space at Ruhrturm Essen, also located in the south of the city.
Commenting on the acquisition, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: “The business park we are acquiring at Essen offers a good mix of warehouse and office space, as well as great potential for Sirius to use our asset management capability and local expertise to add value, improve rental tone and explore development of part of the site. Essen is a city we know well and one we believe has strong long-term growth prospects. The asset is well positioned for the Autobahn and public transport, and will also complement the space we manage at Ruhrturm Essen.
“We were able to proactively secure this high-yielding asset on an off-market basis from thyssenkrupp directly, demonstrating the power of our local knowledge and network, and we see further opportunities to acquire assets from Germany’s manufacturing and industrial firms looking to free up capital. This presents a positive opportunity to strengthen our pipeline and source the most attractive deals.
“This will be the fifth asset acquired by Sirius Real Estate in the second half of our financial year, bringing our total acquisitions to €46.2m. Alongside our Titanium joint venture, Sirius has executed €125m of transactions over this period, underlining our significant presence in the German industrial market.”
Source : Sirius Real Estate