15th Nov 2006 07:01
Black Sea Property Fund Limited15 November 2006 For immediate release 15 November 2006 The Black Sea Property Fund Exercise of option over development at Kavarna The Black Sea Property Fund Limited (the "Fund") is pleased to announce theexercise of its option, agreed prior to the March 2005 launch of the Fund, overthe development at Kavarna. The same team behind the YooBulgaria development atObzor are involved with this project: YOO (the design orientated developmentcompany formed by John Hitchcox and Philippe Starck), Unique Developments andDiamond + Schmitt Architects. Knight Frank International will be marketing thedevelopment globally. Highlights •The Fund has exercised its option to provide development finance for a coastal development at Kavarna, 48 kilometres north of Varna. It is intended that the development, due for completion in Spring 2008, will be branded by YOO as part of the "YooBulgaria" range and will be exclusively marketed by Knight Frank. •The Fund has extended the terms of its option so that it will now finance the entire first phase of the development, currently anticipated as comprising 268 units, rather than the 20% envisaged under the original option agreement. The Fund has agreed to finance the entire first phase as it believes that this development, through the involvement of the design and branding team, will successfully differentiate itself from other resorts on the Bulgarian coast. •The Fund's finance price is €625 per square metre, a total financing of €15,498,750. The Fund has provided finance in excess of that envisaged by the original option reflecting the increased quality and resultant build cost of this development, which the Manager believes will help to drive off-plan sales. •Colliers International valued the apartments as at 30 June 2006 on an "as if built" current market basis at €1,215 per square metre (€1,013 per square metre excluding VAT) indicating an entry price discount for the Fund of 38%. •The first €156.25 per square metre of any net proceeds on the sale of apartments will be paid to the Fund, with the balance shared in the ratio 70% to the developer and 30% to the Fund. The returns payable to the Fund are subject to an IRR cap of 90% (on a unit by unit basis) such that any profit in excess of this will accrue to the developer. •The marketing launch for this development is currently expected to take place in Spring 2007. •The Fund has also secured an option over 20% of the subsequent phases of the development. Chairman of the Fund, Melville Trimble said: "The Fund is delighted to announcethe financing of this development, which will be constructed and marketed by thesame team behind the YooBulgaria development at Obzor. This investmentreinforces the Board's objective of positioning its investments at the highquality end of the market." Details Kavarna is situated 48 kilometres north of Varna and just 12 kilometres awayfrom the picturesque Kaliakra cape. The coast to the north of Kavarna isdramatic and steep, whilst there are excellent beaches to the south. The same three companies behind the YooBulgaria Obzor project have come togetherto create this development. •YOO has been involved in high profile residential schemes around the world, from London to Miami, Hong Kong to Buenos Aires and Melbourne to London. The company places an emphasis on contemporary design and high specifications whilst retaining attractive prices. Further information can be found at www.yooarehere.com •Unique Developments has extensive experience of working in Bulgaria and is a significant investor in the country. •Diamond + Schmitt Architects, based in Toronto, is an internationally renowned firm of architects, with over 100 worldwide design awards. Diamond + Schmitt is involved in projects with an annual volume in excess of $1 billion. Further information can be found at www.dsai.ca The Fund has agreed to provide development finance for the entire first phase ofthe YooBulgaria development at Kavarna, comprising 268 units. This commits theFund to a total financing of €15,498,750. Work on the development is expected tocommence in early in 2007 and the launch of the first phase is expected to occurin Spring 2007. Under the terms of the contract, the Fund has agreed finance at a level of €625per square metre and will take the first €156.25 per square metre of any netsales proceeds on the sale of apartments, sharing the balance with the developerin the ratio of 70% developer/30% the Fund. This is subject to an IRR cap of 90%such that if the returns on the Fund's investment exceed a 90% IRR (on a unit byunit basis) any further profit will accrue to the developer. The Fund financing is split into two parts. The first part comprises 30% of thetotal amount, €4,649,625 or €187.50 per square metre, and will be advanced instages throughout the construction process. The second part, amounting to€10,849,125 or €437.50 per square metre, will be advanced three months aftercompletion of the development in respect of unsold units only. The Fund has theoption to acquire any unsold units six months following completion in exchangefor cancelling the developer's debt, subject to payment of the applicable VAT at20%. Colliers International have valued the apartments on an "as if built" currentmarket basis at €1,215 per square metre (€1,013 excluding VAT) indicating anentry price discount for the Fund of 38%. For further details please contact:- Development Capital ManagementRoger HornettTom Pridmore020 7355 7600 Buchanan CommunicationsCharles RylandIsabel Podda020 7466 5000 Numis SecuritiesCharles FarquharIain McDonald020 7776 1500 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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