Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF) has notarised the disposal of an industrial park in Maintal in Germany's southwest Hesse region for €40.1 million (£34.8 million), representing a net initial yield (NIY) of 5.7%.
The disposal was achieved at approximately a 6% premium to Maintal’s last reported book value.
Sirius, which owns and operates branded business and industrial parks providing conventional space and flexible workspace in Germany and the UK, said that while Maintal provided little potential for further value creation, “its strategic location made it attractive to the purchaser, a trend we have witnessed in past disposals of mature assets”.
Chief executive Andrew Coombs said the deal was “a good example of our strategy of recycling capital from mature assets into those where we believe we can grow income and value through our operating platform”.
He commented: “In the current market we are focused on improving rental levels and providing tenants with the flexibility and services they need.
“We are increasingly seeing attractive acquisition opportunities across both Germany and the UK and will continue to pursue our asset recycling activities to support the long-term growth of the group."
Sirius buys three assets in inner London
The company also announces that through its BizSpace subsidiary, it has exchanged and completed the acquisition of a £33.5 million portfolio of three assets located in North London, from a closed-ended fund.
Based in the trendy areas of the boroughs of Islington and Camden, the three assets have a combined area of 103,962 square feet of primarily multi-let studio workspaces.
They have an occupancy rate of just under 70% and a weighted average unexpired lease term of 3.1 years, which the group views as providing significant potential for growth.
The buildings are well maintained and have over 70 customers, the 10 largest of whom occupy over 50% of the occupied area.
Sirius noted that the purchase price of these three assets represents a NIY of 7.3%, which, through active asset management initiatives, should generate a running yield in excess of 10% at maturity.