Sirius Real Estate Regulatory News (SRE)

6 January 2020

Sirius Real Estate Limited

("Sirius Real Estate", "Sirius" or the "Company")

Sirius acquires two business parks for total of €33.4 million

Sirius Real Estate, the leading operator of branded business parks providing conventional space and flexible workspace in Germany, announces that it has completed the acquisitions of Neuss II, a business park near Düsseldorf, and Neuruppin Business Park, in the Brandenburg region, for a combined total of €33.4 million (including acquisition costs), reflecting an aggregate EPRA net initial yield of 6.8%.

Neuss II

Originally constructed in 1987 and since expanded, Neuss ll provides a total of 34,000 sqm of net lettable space (21,900 sqm of warehouse/production, 11,700 sqm of office and 400 sqm of other space), together with 371 parking spaces, on a total plot size of 58,800 sqm. The property is located on Fuggerstrasse in Neuss, 9.5 km south of Düsseldorf city centre. Sirius already owns an 18,000 sqm office building in Neuss and two other business parks in Düsseldorf.

The asset is 81.5% let to sixteen tenants, producing an annual rental income of €1.3 million, reflecting an average rate of €3.84 per sqm, and has a remaining WALT of 4.4 years. Tenants include Max Mothes GmbH, global specialists in the production and logistics of high-performance connecting technology, Steep GmbH, DINAX GmbH and FEAG GmbH, service providers in power generation and distribution.

The property has been acquired from a regional family real estate office for €19.1 million (including acquisition costs), reflecting an EPRA net initial yield of 5.4%.

Neuruppin

Originally constructed in 1992 and since expanded, Neuruppin Business Park, provides 22,400 sqm of net lettable space (12,600 sqm of production space, 7,200 sqm of warehouse space and 2,600 sqm of offices), together with 169 parking spaces on a total plot size of 108,200 sqm. The property is located 4.3 km south of Neuruppin city centre, 75 km north west of Berlin. Neuruppin is likely to benefit from a €1.4 billion road infrastructure expansion project on the main highway between Berlin and Hamburg, anticipated to complete in 2022.

The asset is 100% let to a single tenant, ESE GmbH, Europe's leading manufacturer of temporary storage systems for waste and recyclables, on a lease with 5.5 years to run, at a current annual rent of €1.3 million, reflecting a rate € 4.97 per sqm. The property has been acquired from Otto Immobilien GmbH & Co. KG for €14.3 million (including acquisition costs), reflecting an EPRA net initial yield of 8.6%.

The Company has now completed €98 million of the €170 million in acquisition capability that was set out in its Interim Results announced on 25 November 2019. These acquisitions provide a total of 136,000 sqm lettable area, with 14% vacancy, producing a current annual rent of €7.7 million, reflecting a blended EPRA net initial yield of 6.5%. Additionally, Sirius is reviewing a number of potential acquisitions for investment of its remaining designated acquisitions capital.

Commenting on these acquisitions, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: "The last month has been particularly successful on the acquisitions front providing us with some great assets which have good value add potential that can be realised next year and beyond.

"Neuss ll fits well with our strategy of buying assets at low capital values, with low average rents compared to the local market and located around key German cities. It offers us a good opportunity to add significant value by playing to the strengths of our integrated business model and track record of maximising occupation and growing rental levels.

"The Neuruppin property, which is 100% let to a tenant with a strong covenant with a WALE of 5.5 years and an EPRA net initial yield of 8.6%, is a very good acquisition, particularly when you take into account the tenant's potential plans to expand in the area as well as the further opportunity to develop vacant parcels of land within the site."

For further information:

Sirius Real Estate

Andrew Coombs, CEO/Alistair Marks, CFO

Tel: +49 (0)30 285 010 110

Tavistock (Financial PR)

Jeremy Carey/James Verstringhe

Tel: +44 (0)20 7920 3150

Email: siriusrealestate@tavistock.co.uk

NOTES TO EDITORS

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 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, the Company may take the opportunity to refinance the sites to release capital for investment in new sites or consider the disposal of sites in order to recycle equity into assets which present greater opportunity for the asset management skills of the Company's team.

In July 2019, the Company completed the formation of its Titanium real estate investment joint venture with clients represented by AXA Investment Managers - Real Assets. Titanium was formed through the acquisition by AXA IM - Real Assets, on behalf of its clients, from Sirius, of a 65% stake in five business parks across Germany. Sirius will retain the remaining 35% and will act as operator of the assets, on a fee basis. Subject to suitable investment opportunities, AXA IM - Real Assets and Sirius may consider opportunities to grow the JV's portfolio primarily through the acquisition of larger stabilised business park assets and portfolios of assets with strong tenant profiles and occupancy. Sirius will continue to grow its wholly owned portfolio through acquisitions of more opportunistic assets, where it can capitalise on its asset management expertise to maximise utilisation of the space, grow occupancy and improve quality of the tenants. The strategies have been clearly defined so that the JV does not conflict with Sirius's existing business.

For more information, please visit: www.sirius-real-estate.com

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