Sirius Real Estate (SRE) took in £77m from investors yesterday in an accelerated fund raise to complete the €130m (£113m) acquisition of two defence-related investments in Germany.

The £1.5bn property company, which invests in business parks in the UK and Germany, raised £77m before costs in a £75m share placing to institutions and a £2m offer to private investors through RetailBook after market close last night.

Just under 75.5m of new shares will be issued, increasing the company’s equity capital by 5%.

The new shares were priced at 102p, a 1% premium to yesterday’s closing price of 101p and in line with net asset value (NAV).

Subscribers made a quick gain as the company’s shares rallied 4% to 105p. That extends their advance over one year to 35%.

Chief executive Andrew Coombs said: “The success of this fund raise, which was multiple times oversubscribed and was priced in line with our latest adjusted NAV, demonstrates the continued support amongst the investment community for our strategy, the quality of our existing portfolio, as well as the opportunity for further growth from our pipeline. 

“The two German assets we are buying are in established locations, with strong tenants, high occupancy and stable day one income. They are complementary to our existing value-add portfolio in Germany and the UK and increase our exposure to the fast-growing defence sector.”

He said Sirius would continue to invest in its pipeline with disciplined capital allocation and recycling of assets to achieve the recently increased medium term cash flow, or funds from operations (FFO), target of €175m.

Berenberg and Peel Hunt acted as joint global co-ordinators and joint bookrunners for the placing.

Our view

Richard Williams, senior analyst at QuotedData, said: “It is good to see SRE’s capital raise multiple times oversubscribed, proving that investor appetite for the right real estate proposition is alive and well. SRE’s expertise in industrial property across Germany has put it in a unique position to gain from the boom in defence spend in the country and the related warehouse space required. The company sees this as a real driver of growth and is focused on leveraging its skills here, so I’m sure it will be back for more money in the near future.”