Sirius Real Estate sells non-core UK assets, invests in self-storage

Industrial park owner Sirius Real Estate is disposing of two non-core UK assets and acquiring three new self-storage development opportunities in the UK.

Luton

In line with its strategy of recycling capital from less strategic assets, Sirius has exchanged contracts to sell two smaller multi-use business parks in the Sheffield area for a total of £5.3 mln (€6.2 mln). This represents a 3% premium over their book value. These properties, while stable and well-occupied, offered limited potential for future income or valuation growth. The sale is to a single purchaser with whom Sirius has previously worked.

Expanding its self-storage footprint in both Germany and the UK, Sirius has also exchanged contracts to acquire and develop three digitally automated self-storage sites. These opportunities, located in Leicestershire, Bedfordshire, and Merton (Greater London), are all subject to planning permission. The total acquisition cost for these sites is approximately £12.6 mln (€14.7 mln). This will be funded by the proceeds from the Sheffield asset sales, with the remaining £7.3 mln (€8.5 mln) expected to come from further disposals of non-core UK assets later this year.

The three new self-storage sites are in prime locations characterised by market undersupply and strong business and residential demand. The Leicestershire and Bedfordshire facilities are slated to open in spring 2027, with the Merton site expected to be completed in 2028. Each of these self-storage development projects is projected to deliver double-digit Internal Rates of Return (IRRs), exceeding Sirius's cost of capital.

Andrew Coombs, CEO of Sirius Real Estate, commented: “The disposals, agreed at a premium to book value, demonstrate Sirius’s continued focus on disciplined capital recycling, crystallising value from smaller, mature assets where we see limited scope for further income or valuation growth and redeploying the proceeds into opportunities with stronger returns potential. “The two self-storage conversion sites in Leicestershire and Bedfordshire are expected to open early in the next financial year.”