Sirius Real Estate (LON:SRE) have updated the market on the purchase of two new business parks in Monday.
The firm said that they had acquired two retail parks in Germany in a deal valued at €33.4 million.
Neuss II
The Neuss II asset, located roughly 9.5 kilometres from the Dusseldorf city centre, offers 34,000 square metres of space and is 82% let.
The property is located on Fuggerstrasse in Neuss, 9.5 km south of Düsseldorf city centre. Sirius already owns an 18,000 per square meter office building in Neuss and two other business parks in Düsseldorf.
The firm added that this park produces an annual rental income of €1.3 million, reflecting an average rate of €3.84 per sqm, and has a remaining WALT of 4.4 years.
The property was acquired from a regional family real estate office for €19.1 million.
Neuruppin
Secondly, the firm announced the purchased of Neuruppin Business Park, which provides 22,400 sqm of net lettable space (12,600 sqm of production space, 7,200 sqm of warehouse space and 2,600 sqm of offices), together with 169 parking spaces on a total plot size of 108,200 sqm
The Company has now completed €98 million of the €170 million in acquisition capability that was set out in its Interim Results announced on 25 November 2019.
Chief Executive Officer Andrew Coombs comments
“The last month has been particularly successful on the acquisitions front providing us with some great assets which have good value add potential that can be realised next year and beyond.
“Neuss ll fits well with our strategy of buying assets at low capital values, with low average rents compared to the local market and located around key German cities. It offers us a good opportunity to add significant value by playing to the strengths of our integrated business model and track record of maximising occupation and growing rental levels.
“The Neuruppin property, which is 100% let to a tenant with a strong covenant with a WALE of 5.5 years and an EPRA net initial yield of 8.6%, is a very good acquisition, particularly when you take into account the tenant’s potential plans to expand in the area as well as the further opportunity to develop vacant parcels of land within the site.”
Sirius continue to perform in competitive market
At the end of November, the firm saw its shares rise on an increased payout. For the six months ended September, net asset value per share rose 7.3% to 76.18 euro cents from 71.01 cents six months earlier.
Operating income rose 9.4% to €39.5 million from €36.1 million the year before.
Pretax profit widened 1.9% to €79.7 million from €78.2 million the year prior, helped by investment properties revaluation gains rising 3.6% to €58.2 million from €56.2 million the year before.
The results are certainly impressive, and in a market where competitors such as Intu (LON: INTU) seem to be struggling, after they sold off a retail park to rival NewRiver Reit (LON: NRR).
Intu sold off Lisburn Retail Park for £40 million to NewRiver Reit at the end of November, and holds tenants such as Sainsbury’s (LON: SBRY) and B&Q, owned by Kingfisher PLC (LON: KGF).
Sirius Real Estate shareholders can remain optimistic on 2020 trading, the company clearly has a vision and strategy for expansion which will excite shareholders.
Shares in Sirius trade at 91p, rising 1.33% across Monday trading. 6/12/19 14:32BST.
