5th May 2016 08:28
LONDON (Alliance News) - Sirius Real Estate Ltd on Thursday said it has agreed a new debt facility of EUR137.0 million on "more favourable terms" than its previous facility, which will be used to complete the acquisition of two business parks in Germany for a total consideration of EUR22.2 million.
The German business parks investor said its existing facility of EUR110.4 million has been refinanced with the new debt facility, provided by the same consortium of BerlinHyp and Deutsche Pfandbriefbank AG.
Sirius Real Estate said the new facility has been negotiated on more favourable terms, with EUR94.5 million at an interest rate of 1.66%, fixed for the full seven-year term, and EUR42.5 million on a floating rate of 1.25 percentage points over three-month Euribor.
The group's weighted average cost of debt following this refinancing will be around 2.3%, down from 3.3% as at September 30.
Sirius Real Estate said, using the EUR26.6 million surplus from the new facility, it will complete its acquisition of two business parks, located in Markgroeningen near Stuttgart and Krefeld near Dusseldorf.
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 acquired on 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 EUR22.2 million.
Sirius Real Estate said, once completed, the two assets are anticipated to add a further EUR2.5 million to annualised rental income.
"I am very pleased to confirm BerlinHyp's and Deutsche Pfandbriefbank's continuing support for Sirius and welcome the new facility which was agreed on more favourable terms which 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," said Chief Executive Andrew Coombs.
Sirius will announce it final results for the year ended March 31 on May 23.
Shares in Sirius were down 1.4% at EUR0.476 on Thursday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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