Sirius Real Estate acquires €50m business park in Germany

Sirius Real Estate, an owner and operator of business and industrial parks in Germany and the UK, has completed the acquisition of a light-industrial business park in Fulda, Germany, for €49.8 mln.

Andrew Coombs

The park features 57,771 m2 of rentable space on a 112,867 m2 plot. It is currently fully occupied, generating an annual rental income of €3.93 mln, with an average lease term of 5.1 years. This acquisition yields an EPRA Net Initial Yield of 7.8%.

Primarily used for manufacturing and warehousing, the property's main tenant is a leading European manufacturer of ballistic protection equipment for military and law enforcement, accounting for 78% of the current rent. This tenant plans to expand its leased space as it becomes available, potentially making the park a single-tenant asset with an estimated annual rental income of €4.0 mln.

The tenant has occupied the site since 2014, benefiting from increased demand due to rising defense and security spending in Germany and Europe. This acquisition aligns with Sirius's strategy to invest in properties with long-term demand drivers, stable income, and opportunities for asset management.

Located approximately 100km from Frankfurt in Hesse, Germany's state with the highest GDP per capita, Fulda offers a strategic industrial location. The site boasts excellent connectivity via direct access to the A7 and A66 motorways, as well as robust local public transport links, including 11 bus lines and a regional rail and bus interchange.

Andrew Coombs, CEO of Sirius Real Estate, commented: "This acquisition represents another attractive opportunity to deploy capital into a high-yielding industrial asset with strong existing income and clear potential for further growth. The property is anchored by a high-quality manufacturing tenant operating in the defence sector, which aligns with our strategy of increasing exposure to areas supported by long-term structural demand and brings our portfolio of recently acquired defence assets to just over €200 million at a blended gross yield of circa 8.9%.

We have already identified opportunities to grow income through the expansion of the anchor tenant, while benefiting from the strength of the existing rent roll from day one. The acquisition is therefore highly complementary to our platform and supports our continued focus on generating sustainable income growth alongside selective asset management opportunities.”