24th May 2016 07:22
LONDON (Alliance News) - Summit Germany Ltd on Tuesday said it has engaged in a joint venture for the development of a new residential project in Berlin with an unnamed party.
The German commercial property investment company said the joint venture bought an existing building in Berlin for EUR5.5 million, and will convert the property into 60 apartments. Expected investment in the entire project is EUR18.0 million and revenue from sales of apartments is expected to be EUR23.0 million.
Summit said the joint venture will use a construction loan to finance the project, with EUR3.0 million of additional funds to be provided by a subsidiary of Summit. Summit will be entitled to a minimum interest rate of 15% plus a share in the project's profit, it said.
The loan and accrued interest are repayable from the revenue coming from the project, in the second half of 2019. Summit said to secure the recoverability of this loan, it received several securities from the developer and its shareholders.
Shares in Summit were up 1.2% at 1.02 pence on Tuesday.
By Hannah Boland; [email protected]; @Hannaheboland
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