Dawnay, Day Sirius acquires two business parks in Germany for a total of ?37 million

Dawnay, Day Sirius Limited announces that it has acquired two freehold business parks located in Offenbach and North Berlin for a combined total of ?37 million, to be satisfied by cash from existing resources. The Company believes both acquisitions will be earnings enhancing, and represent an opportunity to increase NAV capital growth through further development and transformation of the sites.
In line with the Company’s strategy, both sites are well suited for rebranding, development and upgrading into modern flexible workspaces to be leased predominantly to small and medium sized enterprises (SMEs). The Company believes the benefit of modernising and transforming these sites will be reflected in an uplift in rental and capital values.

BorsigWerke
   BorsigWerke, acquired for ?28 million, is located in a large economic region in the north of Berlin. BorsigWerke is formerly the headquarters for Borsig, one of the largest industrial companies in Germany. The site consists of offices, production facilities and warehouses with total lettable space of 73,123 m2. The occupancy rate is 90%, with more than 20 tenants in the metalworking, energy supply, electrical and service industries. The largest tenants are Borsig and MAN. The net rental income is approximately ?2.67m with a net initial yield of 8.9%.
   There is approximately 13,315.84 m2 of vacant land which brings excellent development potential for the Company. In addition, there is also 7,384 m2 of vacant warehouse and office space which provides the Company with the opportunity to sub-divide and transform the space into smaller, modern units to attract new predominantly SME tenants, thereby generating additional rental income.

Süd-Center, Offenbach
   Süd-Center business park in Offenbach, acquired for ?9 million, is located within the industrial and business district of Sprendlinger Landstrasse, on the south-western outskirts of Offenbach. The site consists of offices and warehouse facilities with a total lettable space of 14,856 m2. There is approximately 1,678 m2 of vacant warehouse and office space which provides the Company with an opportunity to develop and transform the site to attract new predominantly SME tenants. This will include sub-dividing the space into flexible workspaces, installation of a fitness centre and a café. The site also has surplus land which will provide significant future development opportunities.
   The occupancy rate is 89% and most of the tenants are in the service industry. The net rental income is approximately ?0.71 million with a net initial yield of 7.4%.
   Kevin Oppenheim of the Asset Manager said: “These acquisitions are in line with our strategy, providing us with an excellent opportunity to develop the vacant land and transform the existing space into modern business parks. Both sites are located in established economic regions with scope to generate uplift in rental values and attract new SME tenants. The German SME market remains buoyant and we continue to see strong tenant demand for modern flexible workspaces.”

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