Sirius Real Estate Limited (LSE: SRE), the FTSE 250-listed operator of branded business and industrial parks in Germany and the United Kingdom, has notarised the acquisition of a major commercial asset in Feldkirchen, Bavaria, for €43.7 million including acquisition costs. This latest strategic move adds 27,180 square metres of gross lettable space to the company’s fast-expanding German portfolio and deepens its exposure to the high-demand Munich logistics and industrial market. The newly acquired site is anchored by a high-quality tenant base with significant alignment to defence and photonics sectors, including Excelitas Technologies and subsidiaries of Bosch and Japan Pulp & Paper Group.
Located on the outskirts of Munich, the Feldkirchen business park is 94% occupied and currently generates €3.4 million in annualised rental income. The asset has been secured at a net initial yield of 7.8%, based on EPRA methodology, and features a weighted average unexpired lease term (WAULT) of 7.8 years. Excelitas, the principal tenant, occupies 72% of the park under a lease with 10.2 years remaining. The company specialises in high-performance optical and photonic components serving mission-critical sectors such as defence, aerospace, and medical technologies.
Sirius Real Estate, which has increasingly targeted high-yield, income-producing assets with asset management potential, stated that this transaction aligns with its H2 FY25 strategy to prioritise acquisitions in Germany. The Feldkirchen business park is situated less than 10 minutes by road from Sirius’ existing Grasbrunn Business Park, enabling operational synergies and consolidated property management. The site is also served by an adjacent S-Bahn train station and lies within a 20-minute radius of central Munich, one of Germany’s most competitive and resilient logistics corridors.
Why Sirius Real Estate is betting on Munich as a core strategic geography in 2025
Munich continues to lead as one of Europe’s most diversified and economically stable cities, attracting investment across sectors including finance, automotive, industrial automation, advanced manufacturing, and increasingly, defence. Sirius Real Estate’s decision to acquire the Feldkirchen site reflects a broader macroeconomic reading that Germany’s logistics and commercial infrastructure will remain in strong demand as supply chains are realigned and reshored across Europe.
The Feldkirchen asset is strategically located to tap into this multi-sectoral demand. Beyond Excelitas, the business park also houses tenants such as OVOL Papier, a subsidiary of Japan Pulp & Paper Group, and a Bosch-affiliated operation. This tenant mix provides Sirius with a balance of defensive, industrial, and diversified income streams. With Germany significantly increasing its defence budget in the wake of shifting geopolitical dynamics, properties that serve the defence supply chain—including photonics and component manufacturers—are gaining new relevance among institutional real estate investors.
By securing this park at a 7.8% EPRA net initial yield, Sirius Real Estate has locked in a risk-adjusted cash flow opportunity in a market otherwise marked by tightening yields and rising capital values. The firm also sees upside potential in lease repricing, particularly from shorter-term tenants whose rents remain below prevailing market benchmarks.
How this acquisition fits into Sirius Real Estate’s evolving platform strategy
The Feldkirchen transaction adds to a busy year of acquisitions for Sirius Real Estate, bringing the total gross investment for 2025 across Germany and the UK to approximately €340 million. The Group has acquired income-producing assets in key markets including Dresden, Lübeck, Munich, Reinsberg, Monchengladbach, Hartlebury, Bedford, Oldham, and Chalcroft.
As of 31 March 2025, Sirius Real Estate’s portfolio consisted of 145 assets with over 10,477 tenants, generating €221.4 million in annualised rent roll. The total book value of the company’s holdings exceeds €2.7 billion. The company also owns a 35% stake in Titanium, a joint venture with AXA IM Alts focused on high-value German commercial property, with a collective asset value exceeding €350 million.
Sirius Real Estate’s strategy revolves around acquiring properties at attractive entry yields, integrating them into its existing operational infrastructure, and upgrading or repositioning space through active asset management. Sites are typically rebranded under either the Sirius or BizSpace banners, which cater to different segments of the commercial real estate market in Germany and the UK. The firm then deploys localised marketing, space reconfiguration, and cost optimisation initiatives to lift net operating income. Once properties mature and reach targeted value metrics, Sirius may selectively refinance or dispose of the assets to recycle capital and fund new acquisitions.
CEO Andrew Coombs stated that the Feldkirchen deal exemplifies the Group’s intent to weight its acquisition activity toward Germany in the second half of the financial year. He noted that Munich remains a top-tier location given its role as a manufacturing, finance, media, and technology hub, adding that the site offers both near-term income and long-term value creation through repositioning and rental escalation. Coombs also emphasised that Sirius sees the defence-aligned tenant profile as a strategic positive, given broader European commitments to defence modernisation and technology investments.
How is the market responding to Sirius Real Estate’s growth strategy and portfolio mix?
Sirius Real Estate shares (LSE: SRE) closed at 99.00 GBX on 20 October 2025, marking a 0.51% gain from the prior session and a continuation of recent strength. Over the past 12 months, the stock has recovered steadily from a low of 72.65 GBX, reaching as high as 107.00 GBX. Trading volumes on the day were healthy, with 1.43 million shares exchanged, and the company’s market capitalisation stood at approximately £1.49 billion.
The bid-offer spread remained tight at 98.95/99.05 GBX, suggesting adequate liquidity and institutional interest. On a trailing basis, the earnings per share was recorded at 0.12 GBX. While the EPS figure remains modest, it reflects the company’s strategy of prioritising capital gains and recurring rental income over short-term earnings.
Investor sentiment around Sirius Real Estate has turned increasingly constructive in 2025, particularly as the firm demonstrates its ability to deploy capital efficiently and lock in defensive rental yields. Analysts tracking the stock see value in the company’s dual-market platform, its ability to generate organic rental growth through asset management, and its disciplined approach to debt financing.
The company’s dividend stability, focus on tenant retention, and operational leverage across Germany and the UK also appeal to income-focused investors. With rising interest in REITs and yield-bearing instruments amid a stabilising rate environment, Sirius Real Estate’s stock has re-entered the radar of institutional portfolio managers seeking European real estate exposure.
What indicators should investors track to gauge Sirius Real Estate’s portfolio growth and capital recycling momentum in 2025?
Looking ahead, investors will be closely watching Sirius Real Estate’s capital recycling progress, upcoming rental reversion data, and the impact of operational synergies in assets such as Feldkirchen and Grasbrunn. Analysts also expect the company to continue expanding its footprint selectively in Germany, particularly in logistics corridors aligned with government spending priorities, such as defence, industrial innovation, and infrastructure.
Additionally, Sirius Real Estate’s ability to maintain or enhance occupancy rates while managing costs across its portfolio will remain a key determinant of its return profile. While macroeconomic uncertainties continue to cast a shadow on parts of the European commercial real estate market, Sirius appears well-positioned to weather volatility, given its diversified tenant base, conservative leverage profile, and platform-led acquisition model.
The Group’s next trading update is expected to provide further insight into rental collections, lease renewals, and integration progress across its recent acquisitions. Any evidence of further margin expansion or successful repositioning could act as a catalyst for the stock, particularly as it hovers near its 52-week highs.
Key takeaways: Sirius Real Estate’s Feldkirchen deal reflects a tactical bet on Munich and defence income
- Sirius Real Estate has acquired a €43.7 million business park in Feldkirchen, near Munich, adding 27,180 sqm of lettable space.
- The property is 94% occupied, anchored by Excelitas Technologies, and generates €3.4 million in rent annually.
- The asset was purchased at an EPRA Net Initial Yield of 7.8%, with strategic synergy expected from proximity to Sirius’ Grasbrunn asset.
- Sirius Real Estate has completed €340 million in acquisitions in 2025, tilting heavily toward the German market in H2 FY25.
- Shares of Sirius Real Estate closed at 99.00 GBX on 20 October 2025, with the stock trending near its 52-week highs.
- Munich’s resilient industrial and defence ecosystem adds further long-term strategic value to the acquisition.
- The company continues to pursue its platform-based strategy of reconfiguration, rental uplift, and capital recycling for shareholder returns.
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