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(Alliance News) - Sirius Real Estate Ltd on Tuesday announced the acquisition of a mixed-use business park in Fellbach, near Stuttgart in Germany for EUR9.2 million, reflecting a net initial yield of 6.0%.
The business park has a gross lettable area of 8,800 square metres, comprising 62% office space and 32% warehouses and logistics.
The park is currently let to German automobile maker Daimler AG as the single tenant, at an average rent of EUR7.04 per square metres, producing an annualised rental income of EUR730,000.
Daimler is expected to vacate the office segment of the property and the end of June, and the warehouse part by the end of 2021, after which Sirius plans to implement several initiatives, including the upgrades of space to take advantage of local market demand.
"This high-quality asset deepens our exposure to a commercial market in which we already have extensive experience. The acquisition will provide a number of compelling operational synergies and widens our range of asset management options particularly when considered alongside our existing adjacent Fellbach business park. With the major tenant moving out shortly after completion our focus is on growing income through the capture of reversion and reduction in service charge leakage," said Chief Executive Officer Andrew Coombs.
Shares in Sirius Real Estate were up 0.4% at 94.00 pence on Tuesday in London, while its Johannesburg shares were 1.7% higher at ZAR19.57.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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