Sirius Real Estate has purchased an office and two business parks in Frankfurt, Erfurt and Essen, in separate transactions for €45 million.
The acquisition in Frankfurt, Germany’s main financial hub, is the company’s third in the city and comprises a multi-tenanted office with a total lettable area of approximately 10,000 sqm. The property has been purchased for total acquisition costs of €21.2 million and generates an annualised net operating income of €598,000. With occupancy at 54% and an average rent of €11.02 per sqm (excluding parking and other income) with a WAULT (Weighted Average Unexpired Lease Term) of 2.9 years, the property offers the opportunity for Sirius to use its platform to improve occupancy and income.
Following on from the completion of the company’s first investment in Essen in May this year, Sirius has added further scale in this local market completing the purchase of an office and production space property for total acquisition costs of €12.2 million. The property comprises 11,709 sqm of lettable space and generates an annualised net operating income of €851,000, from an occupancy of 81%.
The final transaction comprises the completion of the acquisition of a 22,000 sqm multi tenanted business park with development land in Erfurt and represents the Company’s first investment into this key logistics location. With total acquisition costs of €11.7 million, the park comprises 14,000 sqm of industrial space, 7,400 sqm of office space and 760 sqm of other space. The site generates €623,000 of annualised net operating income at 81% occupancy, presenting an opportunity to grow income through the letting of vacant space and potential investment into an 18,000 sqm development land parcel.
”The acquisitions have been made using the proceeds of the company’s €400 million oversubscribed corporate bond issuance in June 2021 and will add a further 44,000 sqm of primarily office and industrial space to the company’s 1.5 million sqm portfolio,” said the company in a statement.
Commenting on the acquisition, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: “Following our oversubscribed €400 million bond issuance in June, the business has retained its strong cash position, and remains well placed to continue to deliver on an attractive pipeline of acquisition opportunities. These three assets provide a strong mix of industrial, production, storage and out of town office space – with occupier demand for these types of assets remaining robust – while providing further potential to create value and grow income through asset management, improving sustainability and the letting of vacant space. These assets add to our existing operations in Essen and Frankfurt, whilst also growing our business into Erfurt, a key logistics location, as we continue to target strategic locations in Germany in order to generate sustainable returns on behalf of investors.”