21st Nov 2005 07:01
Lewis Charles Sofia Property Fund21 November 2005 LEWIS CHARLES SOFIA PROPERTY FUND LIMITED EXERCISE OF OPTIONS The Lewis Charles Sofia Property Fund Limited, which specialises in investing inBulgarian property primarily in Sofia and the ski resorts, is pleased toannounce an update on recent activity since its launch and successfulfundraising in September 2005. Property Options The Fund has now given notice of its decision to exercise seven out of a totalof 12 options. As provided for by the Option Agreement both sides are nowobliged to enter into a preliminary sales contract. The properties concerned arein VitoshavVets Simeonovo, Krustovat and Dragalevtsi. The aggregate depositpayable on exercise of these options is €9,150,471. These seven initial optionswere at a substantial discount to the estimated 'as if built' market value andwould result in a gross profit to the Fund of €18,219,932 before tax if targetprices are met, or, a net present value of the shares of 88.7p per share (beforetax). Building has already commenced on one apartment block at the VitoshavVetsSimeonovo site. The underground parking ground, first and second floor are nowin place and completion of this first apartment block is expected for March2006. Off plan sales have just begun with 32 of the Krustovat apartments sold.We achieved a selling price of €900 per square metre with interest from bothdomestic and overseas buyers. The Company web site is currently underconstruction and should be available before Christmas. We expect this to greatlyenhance the marketing and hence sales. Residential property prices in the area continue to be very buoyant andconsequently the target selling prices of the apartments have been increased tobetween €850 and €900 per square metre from the original expected selling pricesof between €800 and €840 per square metre. Costs have also risen slightly;however, the overall increase in selling price more than offsets this. Thereforeif these prices are achieved the profit for the Fund will exceed expectations inrespect of these properties. * * Statements made above about the sales prices of properties subject to optionshould not be taken as an indication that the properties will be sold at the stated price or at all. A number of other interesting and potentially profitable projects in and aroundSofia and the ski resorts have been presented to the management over the pastfew weeks due to our strong local contacts and we are now very busy assessingthe relative merits of these proposals. The Managers of the Fund have also been in discussions with other Developerswith respect to other projects and we expect to make an announcement about thisin the near future. Stavros Loizou, Managing Director, Lewis Charles Securities (the Manager)commented " I am delighted to report that in the first three months since our successful£38 million fund raising we have made significant progress with our initialproperty portfolio. The combination of buoyant property prices, qualityproperties and exceptional demand from both domestic and overseas buyers, meansprofits from the portfolio could exceed expectations. "The Fund is also examining a number of other exciting, prime developmentopportunities made available due to our knowledge of the region and excellentlocal contacts. I look forward to giving a further update in due course. "I believe the Fund is excellently positioned to build on its recent progress.The positive outlook for the Bulgarian economy, coupled with the significantdevelopment opportunities available to the Fund, enable us to approach thefuture with confidence. " * Statements made above about the sales prices of properties subject to optionshould not be taken as an indication that the properties will be sold at thestated price or at all. -ends- Date: 21 November 2005For further information contact: Lewis Charles + 44 (0)20 7065 1150Stavros Loizou, Managing DirectorAndy Charalambous, Deputy Managing DirectorLoraine Pinel, Fund Manager Panmure Gordon + 44 (0)20 7614 8388Dominic Morley, Executive Director cityPROFILE + 44 (0)20 7448 3244Simon CourtenayAndrew Harris Notes to editors Despite devastating floods in Bulgaria over the summer months, we are pleased toreport that none of our projects were affected because they are not in areasprone to flooding. On the political front, the new government was formed by a grand coalition ofthree parties, the socialist BSP (winner of the June elections), centrist NMSand the minority party MRF. The top priority for the new government is now 2007accession. On the economic front we remain very positive. GDP growth for 2006 isexpected to be 5.7 %(EIU). GDP for Q1 and Q2 came in at 6.4% and 6%respectively. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SPFL.L