Sirius Real Estate has agreed to acquire Chalcroft Business Park in Southampton for £36.5m, reflecting a net initial yield of 5.5%, as well as an adjacent 4.5-acre development site for £4m with outline planning permission.
The acquisitions are part of Sirius’s continued deployment of proceeds from its £152m capital raise last July.
The business park spans 56 acres and includes 267,073 sq ft of warehouse space, along with 126,511 sq ft of outdoor industrial storage.
The site also features a 1.2-acre solar farm operating under a 2013 government feed-in tariff that runs until 2038, generating a third of the estate’s power needs.
The property is 80% occupied, with the only two vacant units recently undergoing a refurbishment.
It currently generates a net operating income of £2.1m, with a WAULT of four years to break. Once leased, the vacant units are expected to contribute an additional £500,000 to the rent roll.
The site also offers various development opportunities, including planning consent for around 69,000 sq ft of new industrial space, which could bring in £800,000 of extra rental income.
Sirius will operate the asset through its UK platform, BizSpace, complementing its existing site in nearby Fareham.
Sirius aims to boost value across the estate by leveraging its asset management platform to enhance occupancy and income, capitalising on clear reversionary potential.
Additionally, the adjacent land plot, acquired with outline planning permission for approximately 40,000 sq ft of commercial space, provides further development potential.
Andrew Coombs, chief executive officer of Sirius Real Estate, said: “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.
“Since our equity raise last July, 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. With a robust and active pipeline of prospects across the UK and Germany, as well as additional capital available for investment, we remain well positioned to complete the acquisition programme initiated last summer.”
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