Sirius Real Estate is making waves in the UK property market with its latest acquisition in Southampton. The company has finalized a deal to purchase Chalcroft Business Park and an adjacent development plot for a total of £40.5 million. This strategic move is set to boost Sirius’s portfolio and generate substantial returns.
Key Details of the Acquisition
- Chalcroft Business Park: Acquired for £36.5 million, this park spans 267,073 sq ft of warehousing space and 126,511 sq ft of outdoor industrial storage.
- Development Land: An additional 4.5-acre plot with outline planning permission was secured for £4.0 million, offering potential for future commercial development.
- Funding: The acquisition was financed using proceeds from Sirius’s £152 million capital raise in July.
Why Southampton? Strategic Benefits
Chalcroft Business Park, boasting an 80% occupancy rate and a net initial yield of 5.5%, presents a lucrative investment opportunity. The park also features a 1.2-acre solar farm, aligning with sustainability goals by supplying a third of the estate’s power needs. The integration of BizSpace, Sirius’s operating platform, will further optimize the park’s performance. Its proximity to Sirius’s existing site in Fareham is also a strategic advantage.
Untapped Potential and Growth Opportunities
With a net operating income of £2.1 million and potential for an additional £500,000 from vacant units, Chalcroft Business Park is poised for growth. Moreover, existing planning consent allows for approximately 69,000 sq ft of new industrial space, potentially adding £800,000 in rental income. The adjacent development land offers even more long-term prospects.
Management Perspective
Andrew Coombs, CEO of Sirius, emphasized the strategic nature of the acquisition: “The acquisition of Chalcroft Business Park adds a strong, income-generating asset to our portfolio, with strong sustainability credentials and significant potential for further value creation… we have continued to acquire properties at attractive yields, demonstrating our ability to identify and secure strategic opportunities that drive rent roll growth and, in many cases, also offer interesting additional development opportunities.”
Sirius Real Estate’s Expansion Strategy
This acquisition is part of Sirius’s broader strategy to expand its footprint in the UK and Germany. Since its equity raise last July, Sirius has invested over €100 million in income-producing properties, set to add €7.1 million to the company’s annual funds from operations. With a robust pipeline of prospects and available capital, Sirius is well-positioned for continued growth.
In Summary: Sirius Real Estate’s latest acquisition in Southampton not only enhances its portfolio but also highlights the company’s commitment to strategic investments that drive income and create long-term value.