Sirius Real Estate makes £31m worth of UK acquisitions

20th Jun 2024 11:47

(Sharecast News) - Germany and UK-focussed business and industrial park investor Sirius Real Estate announced £31m worth of completed acquisitions in the UK on Thursday.

The FTSE 250 company said it acquired two industrial assets in Banbury and Wembley, in the south east of England, at a net initial yield of 9.2% including acquisition costs.

It said the acquisitions added more than 492,000 square feet of light industrial space to its UK portfolio.

The purchases were funded by proceeds from the recent sale of the Maintal property in Germany, which was sold for €40.1m at a gross yield of 6% in March.

Sirius said the Banbury acquisition included the 473,000 square foot Beaumont Industrial Estate, acquired for £25m excluding acquisition costs, reflecting a 9.1% net initial yield.

The freehold asset was fully let to two tenants on full repairing and insuring leases, generating a net operating income of £2.4m per annum at an average rate of £5.15 per square foot, with leases expiring in July 2027.

It said the tenants were expected to extend their leases due to significant investments in production equipment.

The second acquisition in Wembley involved a 19,145 square foot light industrial multi-let building, purchased for just under £6.3m before acquisition costs, reflecting a 9.3% net initial yield.

Sirius said the freehold property, located at the northern end of Water Road, nearly fully occupied, generated a net operating income of £0.62m.

The site complemented three properties Sirius recently acquired in Islington, and offered strategic advantages due to its proximity to Bizspace in Perivale.

Sirius said it was planning to leverage its asset management platform to enhance occupancy, income, and service charge recovery at both the Banbury and Wembley locations.

Additionally, Sirius said it had sold two non-core UK assets in Hartlepool and Letchworth for a combined total of £1.9m.

The properties, totalling over 60,500 square feet, were sold at a 2.7% premium to their last reported book value.

Sirius said the disposals were part of its strategy to streamline its portfolio and focus on core assets.

"These acquisitions present the Company with a number of value-add opportunities to utilise the Sirius platform to grow income and value across two strategic locations in the UK, including one in which we already have an established presence," said chief executive officer Andrew Coombs.

"Additionally, the strategic disposal of two non-core U.K. sites, which when combined, were achieved at a modest premium to book value, allows us to crystallise returns from these assets which we will look to recycle into sites with larger scale and more opportunity."

Coombs said the company was continuing to make progress on its acquisition pipeline, following on from six months of active investments in both Germany and the UK.

"The company's bond tap of its 1.75% corporate bond due in November 2028, alongside advanced discussions on additional opportunities, leaves us well funded and well placed to support the further long-term growth of the group."

At 1220 BST, shares in Sirius Real Estate were up 0.78% at 97.3p.

Reporting by Josh White for Sharecast.com.