Sirius Real Estate is to acquire a multi-tenanted business park in Mönchengladbach for €17.21m (R338m), it said on Thursday.
The owner and operator of branded business and industrial parks in Germany and the UK also announced it has exchanged contracts for the sale of its BizSpace Cardiff site for £5.075m (R120m), representing a 10% premium to current book value.
Located on Cardiff’s city fringe, the property comprises 4,105m2 of lettable office space and will be converted into student accommodation by the buyer.
This follows the recent successful disposal of its BizSpace Tyseley business park at a 20% premium to book value.
The sale of Cardiff is the fourth disposal in the UK this financial year, with these sales having collectively achieved an average premium of 13.5% to book value, Sirius said.
The Mönchengladbach site is being acquired through a sale and partial leaseback agreement with the current owner, engineering and plant construction company SMS group, which occupies about 26% of the site.
The new leases with SMS group, which is one of the largest employers in Mönchengladbach and has its global headquarters adjacent to the site, have been secured on terms between three and 10 years. These leases will contribute materially to the asset's day one rent roll of €2.43m, Sirius said.
The 124,599m2 business park currently has a gross lettable area of 70,899m2, 65% of which is production and warehouse space, and includes a 25,773m2 car park with about 1,000 spaces. It is currently 66% occupied, leaving plenty of value-add opportunity for the Sirius operating platform.
The Mönchengladbach asset is located close to the major economic hubs of Düsseldorf, Duisburg and Cologne in Germany's North Rhine-Westphalia, a region in which Sirius already owns a number of business parks, thereby providing operational synergies.
Once the acquisition of Mönchengladbach completes, Sirius will have successfully deployed €118m of the €181m raised in July 2024 on six income-producing assets, which have value creation potential and collectively generate day one net operating income of €8.5m.
In addition, the group has balance sheet headroom for at least €100m of additional debt funding, while remaining well within its leverage targets, to continue its acquisition programme.
CEO Andrew Coombs said the acquisition in Mönchengladbach allowed Sirius to take ownership of an asset with enormous potential.
“It will provide both day one income and a longer-term opportunity to attract occupiers to the business park through asset management, with further operational synergies from the asset's close proximity to our existing portfolio in the region.
“We are also pleased to have undertaken another sale and leaseback deal, demonstrating our ability to work with corporate owner occupiers to help them extract value from their property assets, while maintaining operations in locations that are highly important to the continuity of their businesses. We see significant potential for similar transactions in Germany,” he said.
“The disposal of our Cardiff asset at a 10% premium to book value also underlines our ability to maximise the value of noncore assets to recycle the proceeds into properties which offer greater opportunity for us to add value through Sirius' asset management platform,” he added.
In February, Sirius bought the Earl Mill business park in Oldham in the UK for £5.7m, and a business park in Reinsberg in Saxony, Germany, for €20.4m. This was followed in March by the purchase of Chalcroft Business Park in Southampton and an adjoining piece of development land with outline planning permission for £40.5m.
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