Last checked at 3 May 2017 07:00
3 May 2017
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Completes Sale and Leaseback of Rupert Mayer Strasse site for €85 million
Sirius Real Estate, a leading operator of branded business parks providing conventional space and flexible workspace in Germany, is pleased to announce the completion of the sale of its Rupert Mayer Strasse business park in Munich for €85 million to Munich based Fiduciary Capital and the agreement to lease back and manage the asset for six years. Notarisation of this transaction was first announced on 6 January 2017.
Rupert Mayer Strasse business park has approximately 72,000 sqm of office and warehouse space and was acquired by Sirius in 2008. Since then Sirius's asset management activity has increased net operating income from €4.4 million to €5.3 million with the value of the asset increasing by 48% from the €57.5 million it cost to acquire.
The sale has been structured as a sale and leaseback with a lease of six years and a rent payable by Sirius of c. €5.0 million per annum for the first five years and then in the final year at a cost equal to the net operating income of the site. Sirius will continue to receive the net operating income of the site for the term of the lease which is currently at around €5.3 million.
The leaseback enables Sirius to retain the difference between the rent it pays and the income from the site in addition to an annual management fee of €100,000 per year for the term of the lease.
Andrew Coombs Chief Executive Officer of Sirius Real Estate, said,
"Rupert Mayer Strasse is an excellent example of the Sirius business model. We have successfully repositioned this site through the replacement of a single tenant with multiple tenants on higher rents, invested in transforming sub-optimal spaces, increased net operating income by 30% and now we have completed the sale at a 9% premium to book value. In addition, we have agreed a management contract extending income from this site through to 2023.
We now have the opportunity to recycle this capital into higher opportunity assets where we can increase income levels and capital values and thereby increase total returns to shareholders."
Enquiries:
Sirius Real Estate +49 (0)30 285010110
Andrew Coombs, CEO
Alistair Marks, CFO
Novella +44 (0)20 3151 7008
Tim Robertson
Toby Andrews
About Sirius Real Estate
Sirius is a property company listed on the main market and premium segment of the London Stock Exchange and the main board of the Johannesburg Stock Exchange. It is a leading operator of branded business parks providing conventional space and flexible workspace in Germany. The Company's core strategy is the acquisition of business parks at attractive yields, the integration of these business parks into its network of sites under the Company's own name as well as offering a range of branded products within those sites, and the reconfiguration and upgrade of existing and vacant space to appeal to the local market, through intensive asset management and investment. The Company's strategy aims to deliver attractive risk adjusted returns for shareholders by increasing rental income and improving cost recoveries and capital values, as well as by enhancing those returns through financing its assets on favourable terms. Once sites are mature and net income and values have been optimised, Sirius may consider their disposal in order to recycle equity into assets which present greater opportunity for the Group's asset management skills.
For more information, please visit: www.sirius-real-estate.com