Sirius Real Estate to acquire defence business park near Munich for R878 million

Sirius Real Estate plans to acquire a defence-anchored business park near Munich for €43.7 million (R878.17 m), the owner of branded business and industrial parks in the UK and Germany announced yesterday.

The JSE and London Stock Exchange listed group said Monday it has notarised the acquisition of a business park in Feldkirchen, Germany.

This transaction means Sirius will have acquired around €340m (R6.9 billion) of income-producing assets across the UK and Germany so far in 2025. This has included properties in Dresden, Lübeck, Munich, Reinsberg, Monchengladbach, Hartlebury, Bedford, Oldham and Chalcroft.

"In our first half trading update earlier this month, we noted that we expected our acquisition programme to be more weighted towards Germany in the last six months of our financial year, and this transaction underscores that sentiment,” CEO Andrew Coombs said in a statement.

Located on the outskirts of Munich, Bavaria, the site has a gross lettable area of 27 180 square metres. The park is well connected with a nearby S-Bahn train station and is a 20-minute drive from central Munich.

It is also located less than a 10-minute drive from Sirius' Grasbrunn Business Park, providing operational synergies.

The group said the Feldkirchen business park generates €3.4m of rent roll per year and is 94% occupied with a 7.8-year weighted average unexpired lease term, albeit there are several smaller tenants whose leases are shorter and offer potential for upside from their current rental levels.

The property is anchored by Excelitas, a designer and manufacturer of high-performance optical and photonic solutions for defence, aerospace, medical and industrial applications, which occupies 72% of the park on a lease with 10.2 years to expiry.

Other tenants include OVOL Papier, a subsidiary of global paper conglomerate Japan Pulp & Paper Group, the IWV Institut für Wirtschaftsmathematik and a subsidiary of Bosch.

“Feldkirchen is an asset that benefits from strong existing fundamentals and offers future potential for our platform to exploit. Munich has the strongest economy of any German city and is one of Germany's most resilient and sought-after logistics hubs, being home to a strong and diverse range of industries spanning everything from manufacturing, finance, media and technology sectors,” said Coombs.

He said they had identified a number of ways to improve the site and to asset manage the rental tone up over time, while Feldkirchen also offered operational synergies, being in close proximity to an existing asset of the group at Grasbrunn.

“The acquisition also aligns with our focus on positioning ourselves to benefit from increased defence spending, being anchored by a high-quality manufacturing tenant that serves this sector," said Coombs.

Sirius’ share price gained 0.13% on the JSE to R23.07 on Monday afternoon. The price had risen from R21.33 a year ago.

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