Sirius Real Estate, the London and JSE-listed owner of branded business and industrial parks in Germany and the UK, has acquired the Mönchengladbach business park for €17.2 million (R337.5m) and disposed of BizSpace Cardiff for £5.1m (R99.1m).

The acquisition of the multi-tenanted business park in Mönchengladbach represents an 8.21% net initial yield (NIY) and follows the recent successful disposal of Sirius’s BizSpace Tyseley business park at a 20% premium to book value.

"The acquisition in Mönchengladbach allows us to take ownership of an asset with enormous potential. It will provide day-one income and a longer-term opportunity to attract occupiers to the business park through asset management, with further operational synergies from its close proximity to our portfolio in the region,” Sirius CEO Andrew Coombs said in a JSE notice.

Sirius has also exchanged contracts for the sale of its BizSpace Cardiff site for £5.08m, representing a 10% premium to book value. This is the fourth disposal in the UK this financial year, with these sales seeing an average premium of 13.5% to book value, Coombs said.

The Mönchengladbach site is being acquired through a sale and partial leaseback agreement with current owner, SMS Group, a global engineering and plant construction company that occupies about 26% of the site.

"We are also pleased to have undertaken another sale and leaseback deal, demonstrating our ability to work with corporate owner-occupiers to help them extract value from their property assets while maintaining operations in locations that are highly important to the continuity of their businesses. We see significant potential for similar transactions in Germany," Coombs said.

The new leases with SMS Group, which is one of the largest employers in Mönchengladbach and has its global headquarters adjacent to the site, have been secured on terms between 3 and 10 years.

"These leases will contribute materially to the asset's day-one rent roll of €2.43m," said Coombs.

The 124 599 square metre business park has a gross lettable area of 70 899 square metres, 65% of which is production and warehouse space, and includes a 25 773 square metre car park with around 1 000 spaces.

"It is 66% occupied, leaving plenty of value-add opportunities for the Sirius operating platform," said Coombs.

The Mönchengladbach asset is close to the major hubs of Düsseldorf, Duisburg, and Cologne in Germany's North Rhine-Westphalia, a region where Sirius already owns a number of business parks, thereby providing operational synergies.

Sirius entered into terms to sell BizSpace Cardiff with the buyer in September 2023, subject to planning approval, which was granted in December 2024. Located on Cardiff's city fringe, the property comprises 44,195 square feet of lettable office space and will be converted into student accommodation by the buyer.

Once the acquisition of Mönchengladbach completes, Sirius will have deployed €118m of the €181m raised in July 2024 on six income-producing assets, which have value creation potential and collectively generate day-one net operating income of €8.5m.

The group has balance sheet headroom for at least €100m of additional debt funding while remaining well within leverage targets to continue its acquisition program.

Sirius also continues to receive interest from Sparkasse (local savings banks) to provide funding on individual assets at interest rates comfortably below 4%, as it did with the recently announced €13m five-year loan with Sparkasse Saarbrucken.

Sirius’ share price traded 0.76% higher at R19.90 on the JSE on Thursday.

Business Report