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Sirius Sees Pickup in German Park Demand

LONDON-The company has invested more than $66 million to modernize and upgrade its 38 business parks, totaling almost 12 million square feet.

By Allan Saunderson | Updated on April 08, 2010

LONDON-AIM-listed Sirius Real Estate, which owns a $665 million portfolio of German business parks, is benefiting from hundreds of small firm set-ups by staff from major companies hit by the global crisis, and expects to move occupancy up to 80% by year-end.

The improvement in demand could not come at a better time. Sirius was hit late last year by two large tenant move-outs which, it warned recently, could cut profits below expectations in the financial year just ended in March. But founder and CEO Kevin Oppenheim is optimistic that the surge in demand across the portfolio – 38 separate German business parks of 11.8 million square feet of mixed-used flexible-workspace real estate – means the worst is over.

Sirius has invested $66.5 million of capital expenditure to modernize and upgrade, and the strategy is paying off, Oppenheim says. “What we’ve essentially achieved is Phase 1, which included building up the existing portfolio and the management team, and creating the regional platform in Germany, really spending the capital to procure the transformation from tired old buildings into modern new vibrant multi-let branded business parks. We’ve created a lot of product, put our brand in the market, and Phase Two, which we’ve now entered, is what I call a drive towards occupancy and efficiency.”

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