Sirius Real Estate has added a new €12.9m (R266.2m) industrial property to its German portfolio, extending the group’s buying spree this year.
The property is strategically located in Geilenkirchen, a German municipality lying close to the Belgian and Dutch borders, which is home to a large Nato airbase.
The area is expected to benefit from Germany’s increased focus on defence investment as Europe ramps up its defence budget to protect economic stability and ease its reliance on the US.
Sirius, which owns and operates branded business and industrial parks in Germany and the UK, said the acquisition would further strengthen its footprint in the Euregio Maas-Rhine industrial region.
"With Geilenkirchen being home to a key Nato airbase, it is also in line with our ambition of ensuring that Sirius’ portfolio is well placed to benefit from an increased focus on defence investment, particularly following the news earlier this week that Germany’s defence spending is now heading towards a new target of 5% of GDP," said Sirius CEO Andrew Coombs.
The property was acquired through a sale-and-leaseback transaction in collaboration with an undisclosed precision engineering business and reflects a net initial yield of 9.3%.
In a statement on Thursday, Sirius said it had the flexibility and resources to continue to make accretive acquisitions in Germany and the UK “at this opportune point in the market cycle”.
Earlier this week, the group secured a new €150m unsecured revolving credit facility. The facility, with an initial three-year term, has two one-year extension options and incorporates accordions, allowing it to be increased by up to an additional €100m.
This will be Sirius’ third German acquisition this year, following the purchase of a multi-tenanted business park in Mönchengladbach for €17.21m and a business park in Reinsberg in Saxony for €20.4m.
The group has completed several other transactions this year, including the sale of a business park in Pfungstadt on the outskirts of Frankfurt, for €30m.
In February, Sirius bought the Earl Mill business park in Oldham in the UK for £5.7m. 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.
The group also announced on Thursday that it had disposed of a small £1.55m asset in Huddersfield to a private individual. With a disposal yield of 8.1%, assuming standard purchaser costs, the money would be redeployed into opportunities within the group’s portfolio, it said.
As war wages on in Russia and the Middle East, Nato countries agreed on Sunday to set a goal of 5% of GDP for annual defence spending by 2035.
Reuters reported earlier this week that Germany’s finance minister had vowed to lift the country’s defence spending to 3.5% of GDP by 2029, a move which would be funded through a nearly €400bn borrowing programme.
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