2nd Nov 2006 12:00
Black Sea Property Fund Limited02 November 2006 For immediate release 2 November 2006 The Black Sea Property Fund Exercise of option over development at Obzor 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 YooBulgaria development at Obzor. This development is a co-operativeventure between YOO (the design orientated development company formed by JohnHitchcox and Philippe Starck), Unique Developments and Diamond + SchmittArchitects. Knight Frank will be marketing the development. Highlights • The Fund has exercised its option to provide development finance for a coastal development at Obzor, approximately midway between Varna and Bourgas, each home to an international airport. The development, due for completion in Spring 2008, has been branded by YOO as "YooBulgaria" and will be exclusively marketed globally 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, comprising 257 units, rather than the 20% envisaged under the original option agreement. The Fund has decided 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 €650 per square metre, a total financing of €17,582,500. 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 €1,250 per square metre (€1,041 per square metre excluding VAT) indicating an entry price discount for the Fund of 38%. • The first €162.50 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 initial marketing launch of the development will take place today, Thursday 2 November 2006, at Sketch, 9 Conduit Street, London W1. Images of the site and the development will be available at www.yoobulgaria.com following the full launch on 18 November 2006. • 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. The quality that YOO and the internationallyrecognised Diamond + Schmitt will bring to the project should differentiate thisdevelopment from the other resorts on the Black Sea coast. This, together withKnight Frank's marketing, provides a very strong base to maximise sales." Details Located 65 kilometres south of Varna and 73 kilometres north of Bourgas (eachwith international airports that should benefit from €400 million of investmentfollowing the recent Fraport concession award) Obzor is one of Bulgaria's oldestBlack Sea resorts. The town sits on a large bay with a 10 kilometre sandy beachthat stretches from Cape St. Atanas in the north to Mona Petra Cape in thesouth. Here it meets a small cove and second beach, called Irakli. Inland,Obzor is surrounded by forests and vineyards. The Stara Planina mountains areto the west and the River Dvoynitsa borders it to the north. Three key companies have worked closely to create this exciting 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 puts an emphasis on contemporary design and high specifications whilst retaining attractive prices. Further information can be found at www.yooarehere.com • Unique Developments has significant 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, comprising 257 units. This commits the Fund to atotal financing of €17,582,500. Work on the development, which has recentlyreceived its construction permit, is expected to commence in the week beginning6 November 2006 and the first phase is expected to be completed by Spring 2008. Under the terms of the contract, the Fund has agreed finance at a level of €650per square metre and will take the first €162.50 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 of90% such that if the returns on the Fund's investment exceed a 90% IRR (on aunit by unit basis) any further profits will accrue to the developer. The Fund financing is split into two parts. The first part comprises 30% of thetotal amount, €5,274,750 or €195 per square metre, and will be advanced instages throughout the construction process. The second part, amounting to€12,307,750 or €455 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 €1,250 per square metre (€1,041 excluding VAT) indicating anentry price discount for the Fund of 38%. For further details please contact:- Development Capital Management Roger Hornett Tom Pridmore 020 7355 7600 Buchanan Communications Charles Ryland Isabel Podda 020 7466 5000 Numis Securities Charles Farquhar Iain McDonald 020 7776 1500 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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