Sirius Real Estate sells Wuppertal business park at premium to book value 

Sirius Real Estate Limited (LSE:SRE, JSE:SRE, OTC:SRRLF) said it has completed the disposal of two assets for €12.2mln in total, representing an average net initial yield (NIY) of around 4.1%.

The most recent of these disposals, which was completed on 1 April 2023, was a 15,000 square-metre mixed-use mature business park in Wuppertal in North Rhine Westphalia, Germany. The sale was achieved at a 5.3% premium to book value, the owner of branded business and industrial parks in Germany and the UK said in a statement. 

The Wuppertal property was acquired by Sirius in 2007 and sold for €8.8mln. The sale follows the €3.4mln (£3mln) sale at book value of a 7,620 square metre vacant office building in Ipswich, which was completed in December 2022. 

Sirius has disposed of six assets in the last 12 months for a total sales price of €45.7mln compared with a book value of €36.7mln, representing a 25% aggregate premium to the last book value prior to each sale. 

Each disposal was achieved at or above book value, with the proceeds being invested in the acquisition of three new sites in Germany for €44.6mln. 

Sirius noted that the three newly acquired sites are now generating higher revenues than the income contributed by the assets disposed of earlier in the year. 

“The strategic disposal of these assets at or above book value during a challenging market underpins the strength of our portfolio,” commented Sirius chief executive officer Andrew Coombs in a statement.

“This is based on both the historically higher yields at which our portfolio is valued, relative to many other parts of the sector, which we believe provide it with a higher degree of insulation when real estate values come under pressure, as well as our ability to offset this further by driving inflationary income growth through our asset management platform. 

“It also demonstrates our ability to crystallise returns from mature assets, which can then be recycled into investing into new opportunities within our portfolio where we see an opportunity to create value,” he added.