Sirius makes first UK acquisition in Gloucestershire
By Josh White
Date: Wednesday 27 Mar 2024
(Sharecast News) - Sirius Real Estate announced a significant portfolio expansion on Wednesday, with the acquisition of Vantage Point Business Village in Gloucestershire.
The FTSE 250 company said the deal, valued at £48.25m, was its inaugural asset in the UK, boasting a net initial yield of 10.2%.
It said the move leveraged the proceeds from its £147m capital raise last November.
The acquisition was part of Sirius' aggressive expansion strategy, adding to its recent acquisitions in Germany, including properties in Köln, Göppingen, and Klipphausen, totaling around €53.75m.
Vantage Point Business Village would add over 1.5 million square feet to Sirius's 'BizSpace' portfolio, significantly bolstering its industrial space offerings by over one million square feet.
Historically notable as a manufacturing site for Rank projection equipment and later for Rank Xerox until 2003, the 60-acre park currently hosts more than 70 companies across 119 units, with an occupancy rate of 81%.
Sirius said it planned to use its asset management expertise to enhance the park's value through improved occupancy, income, and service charge recovery.
The deal included a conditional £1.25m deferred payment, contingent on specific milestones within the next nine months.
An additional facet of the acquisition was the inclusion of a photovoltaic solar business that supplies most of the park's electricity, representing both an energy security measure and an attractive income stream for Sirius.
Located near the Forest of Dean and within reach of Bristol, Gloucester and Cardiff, the business park benefitted from solid transport connections and proximity to other Sirius locations, promising operational synergies and local market advantages.
In a separate transaction, Sirius said it had also finalised the sale of an industrial park in Maintal, Germany, for €40.1m (£34.3m), aligning with its strategy to recycle capital from mature assets to those with higher growth potential.
The sale was made at a 6% premium over the last reported book value.
"This sizeable strategic acquisition is transformational for our UK BizSpace platform, and increases its portfolio by over 1.5 million square feet," said chief executive officer Andrew Coombs.
"The 60-acre park generates strong day-one cash flow from a stable, diversified tenant base and offers various synergies with our existing assets in the local area.
"It also presents a number of value creation opportunities by driving both occupancy and rental income."
Coombs added that the completion of the Maintal disposal at a premium to book value allowed the company to capitalise on demand for the high-quality property, and continue to crystallise returns from its mature portfolio.
"It also provides us further flexibility to recycle capital into new opportunities within our existing portfolio, as well as into our pipeline of acquisitions, alongside the proceeds of November's £147m equity raise.
"We have now committed to over £135m of acquisitions since November and are continuing to actively seek future opportunities where we see the chance to create value, leaving us well placed to support the continued long-term growth of the group."
Sirius said it would provide its customary year-end trading update on 15 April, following the end of its financial year.
At 0938 GMT, shares in Sirius Real Estate were up 1.18% at 94.2p.
Reporting by Josh White for Sharecast.com.
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