Industry Magazine
epra_full_logo_white500

Sirius Real Estate property tour

Sirius Real Estate is looking to repeat its turnaround of the Mahlsdorf I Business Park, which is 20 kilometres east of Berlin’s city centre, with its acquisition just over a year ago of Mahlsdorf II, a further section of the same business park.

Sirius took over Mahlsldorf II with 38% of the 12,830 m2 of office and industrial space lying vacant. The value-add investor has integrated the management of the estate with that of its larger business park next door. It aims to improve net operating income through efficiencies of scale and lift occupancy, which in turn will raise the value of the park.
It is a strategy that has already worked on the larger 31,000 m2 Mahlsdorf Business Park I, which Sirius has owned since 2014.
The company has raised occupancy across Mahlsdorf I by 13 percentage points to 98% by offering occupiers flexible or conventional workspace, storage or production space through its various national brands of tenant packages. A significant attraction to incoming tenants has been Mahlsdorf’s connectivity to Berlin’s principal road to Poland. Another focus of its asset management was the space previously treated as structural vacancy, which the company transformed into income-producing units through targeted investment. These initiatives resulted in a 28% boost to the business park’s annual rental income and an EUR 7.8 million, or 40%, uplift to its appraisal value.
Business Park Berlin-Mahlsdorf
Mahlsdorf Business Park I and II illustrate Sirius’s value-add strategy of acquiring under-performing business parks outside the prime locations of Germany’s seven largest cities. Its portfolio of 55 managed or owned properties accommodate more than 4,000 tenants from diverse businesses. Most are small- or medium-sized German companies, which form the backbone of Europe’s largest economy.
Sirius seeks to acquire business parks at attractive prices and unlock their value through targeted investment, using its large in-house sales and marketing teams to grow occupancy alongside intensive asset management activity. Over time, the company looks to re-cycle capital once it has optimised rental income from mature assets into new assets with greater potential to generate higher returns.