Sirius Real Estate Sirius Real Estate, JSE-listed owner of industrial parks in Germany and the UK, has disposed of two non-core UK assets and recycles into three self storage assets.
Image: Supplied
Sirius, a leading owner and operator of branded business and industrial parks in Germany and the UK, said Thursday it has exchanged contracts to dispose of two sub-scale multi-use business parks in the Sheffield area in the north of the UK, for a combined £5.3 million (R115.8 million).
"The disposals, agreed at a premium to book value, demonstrate Sirius's focus on disciplined capital recycling, crystalising 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,” said CEO Andrew Coombs in a statement Thursday.
The Sheffield assets are being sold to a single purchaser with whom Sirius has previously transacted. Both sites are stable and well occupied but offered limited scope to drive further income or valuation growth, Coombs said.The disposals represented a 3% premium to book value.
Meanwhile, building on Sirius's existing framework of self-storage offerings across Germany and the UK, as well as its recently announced development on its existing site at Berlin Gartenfeld, Sirius has exchanged contracts to acquire and develop three digitally automated self-storage opportunities, located in Leicestershire, Bedfordshire, and Merton (Greater London), all of which are subject to planning.
The site acquisition costs total about £12.6m, which will be funded from the recycling of the Sheffield assets and the remaining £7.3m from further disposals of non-core UK assets expected this year.
Sirius’ management stated all three sites benefit from good locations, characterised by market undersupply alongside strong business and residential fundamentals.
“The Leicestershire and Bedfordshire assets will open in spring 2027, with the Merton site expected to complete in 2028. Each of these self-storage development projects is forecast to generate double-digit IRRs (internal rate of return) in excess of our cost of capital,” the management said.
These transactions are in line with the group's strategy of recycling capital from mature, smaller assets into opportunities with stronger returns potential, said Coombs.
"The two self-storage conversion sites in Leicestershire and Bedfordshire are expected to open early in the next financial year, with all three acquisition opportunities representing an exciting further step in our self-storage strategy, as we expand on what is already an extensive, high-yielding and resilient part of our platform,” he said.
Sirius’ share price traded 1.39% higher to R21,90 on the JSE on Thursday afternoon. A year before, the share was trading at R23,56.
BUSINESS REPORT