It’s been a few months since I last published a blog post, and what a busy few months it has been. In November 2021, Sirius Real Estate completed the acquisition of BizSpace, a leading provider of regional flexible workspace, offering light industrial, workshop, studio and out of town office units to a wide range of businesses across the UK It’s a major milestone for Sirius and marks our entry into the UK commercial real estate market, acquiring an established business and portfolio in one transaction.

In this blog, I’ll explain a little more about BizSpace, why it’s aligned with Sirius and how we’ll grow and succeed together, and explore why the UK commercial real estate market is an attractive space for us to enter.

What does the UK commercial real estate market look like?

Firstly, a primer on the UK commercial real estate market. Fundamentally, this is a market with growing demand for exactly the types of spaces BizSpace offers, with shrinking supply of these spaces.

This growing demand is driven by a number of factors. Firstly, as we’re seeing across our portfolio in Germany, businesses are increasingly looking to shorten their supply chains and bring production and operations as close to the end customer as possible.

This is something I’ve covered before, and is a structural tailwind driving growth in the market: the experience of the pandemic means businesses are more aware than ever before of the need for resilience and flexibility in their supply chains, and this won’t change any time soon.

It’s not just businesses that are causing this shift, however – consumer preferences for buying locally and with more environmental awareness are also a driving factor.

Finally, there’s a political ambition to place more focus on regional investment across the UK, which has recently taken shape in the form of the Government’s 'Levelling Up the United Kingdom' whitepaper. While the regime may at present be on shaky ground, the underlying impetus behind this is again structural and long-lasting.

All told, the UK commercial real estate market is an attractive one, and an area we’re looking forward to growing into in the coming years. 

An introduction to BizSpace

So, where does BizSpace fit in to the UK’s CRE market? It’s the UK’s leading provider of regional flexible workspace, with 72 sites the majority of which are former warehouses, mills and industrial buildings in key regional towns across the UK. These sites are spread across nearly every region of the UK, and revenues are evenly spread across these regions.

In many ways, the model is similar to that which we have practised so successfully in Germany – acquiring existing sites and applying an asset management model to maximise utility for tenants and returns on investment.

This complementary approach means greater synergies between Sirius and BizSpace, which we’re already seeing the fruits of in the early stages of integrating the two businesses.

Ultimately, the acquisition is a good fit and will help us drive towards our long-term goals.

Shared ambition

We’re looking forward to working together with the team at BizSpace. It’s a fundamentally strong business with good real estate and a solid team. As part of the wider Group, BizSpace will thrive along with the rest of the Sirius business as it continues on its path to higher returns and improved sustainability.