SIRIUS REAL ESTATE LIMITED - Sirius Completes German Business Park Joint Venture With AXA Investment Managers - Real Assets

Sirius Completes German Business Park Joint Venture With AXA Investment Managers - Real Assets

SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (EUR) Share Code: ESRE
LSE (GBP) Share Code: SRE
ISIN Code: ISIN GG00B1W3VF54

1 August 2019

                                       Sirius Real Estate Limited

                           ("Sirius Real Estate", “Sirius” or the "Company")

Sirius completes German business park joint venture with AXA Investment Managers - Real Assets

Sirius Real Estate, the leading operator of branded business parks providing conventional space and
flexible workspace in Germany, announces that, further to its announcement on 1 March 2019, having
fulfilled all the closing conditions, it has completed the formation of the Titanium real estate
investment joint venture (the “JV” or “Titanium”) with clients represented by AXA Investment
Managers - Real Assets (“AXA IM - Real Assets”).

Titanium has been formed through the acquisition by AXA IM - Real Assets, on behalf of its clients,
from Sirius, of a 65% stake in five business parks across Germany, of which two are located in Berlin
(Berlin Borsig and Berlin Tempelhof) and the remainder in Mainz, Nurnberg and Bayreuth. Sirius will
retain the remaining 35%.

The ongoing operation and management of the assets contained in the JV is governed by an
Operational Management Contract, which ensures Sirius will continue to act as operator of the assets,
on a fee basis. The JV will also be able to draw on the expertise of AXA IM – Real Assets’ team of local
in-house experts.

Sirius has provided guarantees and warranties to AXA IM - Real Assets which are customary for a
transaction of this nature. The transaction also includes standard drag-along rights in favour of the
majority shareholder, as well as tag-along rights in favour of Sirius, and dispute resolution clauses. The
business parks forming the JV provide a combination of office, warehouse, industrial and storage
space. The implied property value of €168 million equates to a gross yield for the portfolio of 6.2%
and reflects a premium to the book value as at 30 September 2018, being the last valuation date prior
to the transaction being agreed, which was €141.1 million. Following the refinancing of the JV portfolio
with a loan of €84 million at a fixed interest rate of 1.38%, the total cash commitment from AXA IM -
Real Assets amounts to €43.9 million. The transaction is expected to generate total cash proceeds of
more than €70 million for Sirius after refinancing and expected related costs.

Subject to suitable investment opportunities, AXA IM - Real Assets and Sirius may consider
opportunities to grow the JV’s portfolio primarily through the acquisition of larger stabilised business
park assets and portfolios of assets with strong tenant profiles and occupancy. Sirius will continue to
grow its wholly owned portfolio through acquisitions of more opportunistic assets, where it can
capitalise on its asset management expertise to maximise utilisation of the space, grow occupancy
and improve quality of the tenants. The strategies have been clearly defined so that the JV will not
conflict with Sirius's existing business.

Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: “To be partnering with such an
important institution as AXA IM - Real Assets underlines the professionalism and expertise within
Sirius. The relationship represents a major opportunity for both parties and gives Sirius key advantages
in an increasingly competitive market and through the real estate cycle. This transaction boosts our
ability to create value for both our shareholders and the JV, from which we will benefit as both the
manager and as an equity partner.”

John O’Driscoll, European Head of Transactions at AXA IM - Real Assets, commented: “Titanium
provides us with immediate scale in an important and growing asset class through the acquisition of
a majority stake in a highly attractive portfolio in Europe’s largest economy, alongside a best in class
operator. We now look forward to working with the team at Sirius to add further value to this portfolio
and on future opportunities."

For further information:

Sirius Real Estate

Andrew Coombs, CEO/Alistair Marks, CFO

Tel: +49 (0)30 285010110

Berenberg (Joint Broker)

Chris Bowman/Toby Flaux/Marie Stolberg

Tel: +44 (0)20 3207 7800

Peel Hunt (Joint Broker)

Capel Irwin/Carl Gough/Harry Nicholas

Tel: +44 (0)20 7418 8900

Tavistock (Financial PR)

Jeremy Carey/James Verstringhe

Tel: +44 (0)20 7920 3150

Email: siriusrealestate@tavistock.co.uk

NOTES TO EDITORS

About Sirius Real Estate

Sirius is a property company listed on the main market and premium segment of the London Stock
Exchange and the main board of the Johannesburg Stock Exchange. It is a leading operator of branded
business parks providing conventional space and flexible workspace in Germany. The Company's core
strategy is the acquisition of business parks at attractive yields, the integration of these business parks
into its network of sites under the Company's own name as well as offering a range of branded
products within those sites, and the reconfiguration and upgrade of existing and vacant space to
appeal to the local market, through intensive asset management and investment. The Company's
strategy aims to deliver attractive returns for shareholders by increasing rental income and improving
cost recoveries and capital values, as well as by enhancing those returns through financing its assets
on favourable terms. Once sites are mature and net income and values have been optimised, the
Company may take the opportunity to refinance the sites to release capital for investment in new sites
or consider the disposal of sites in order to recycle equity into assets which present greater
opportunity for the asset management skills of the Company's team.

For more information, please visit: www.sirius-real-estate.com

Follow us on LinkedIn at https://www.linkedin.com/company/siriusrealestate/

Follow us on Twitter at @SiriusRE

LEI: 213800NURUF5W8QSK566

JSE Sponsor

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Date: 01/08/2019 12:45:00
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