AIM-listed Sirius refinances, buys two further assets

The AIM-listed Sirius Real Estate, which owns and operates self-storage facilities, business parks, industrial complexes and offices across Germany, said this week that it has agreed a new debt facility of €137.0 million on "more favourable terms" than its previous facility, which will be used to complete the acquisition of two business parks in Germany which it bought for €22.0m.

Sirius said its existing facility of €110.4 million has been refinanced with the new debt facility, provided by the same consortium of BerlinHyp and Deutsche Pfandbriefbank AG (REFIRE reported on this likely refinancing in our March issue).

The new facility has been negotiated on more favourable terms, with €94.5 million at an interest rate of 1.66%, fixed for the full seven-year term, and €42.5 million on a floating rate of 1.25 percentage points over three-month Euribor. This will bring the group's weighted average cost of debt to around 2.3%, down from 3.3% as at September 30.

Sirius plans to use the €26.6 million surplus from the new facility to complete its acquisition of two business parks, one in Markgroeningen near Stuttgart and the other in Krefeld, near Düsseldorf.

The property in Markgroeningen is being acquired on a 15.2% EPRA index net initial yield, a vacancy of 32% and a weighted average lease length remaining of 4.9 years. The Krefeld park is being bought at an 8.4% EPRA net initial yield, a vacancy of 6.4% and a weighted average lease length remaining of 3.4 years. The total consideration for the two is €22.2 million.

Sirius CEO Andrew Coombs said that, once completed, the two assets are anticipated to add a further €2.5 million to annualised rental income. "The new facility, which was agreed on more favourable terms, reflects well on the business. The fact that we have also been able to fund two new acquisitions with this long-term low-cost facility means that these transactions are significantly earnings enhancing", he said.