17th Jan 2006 07:00
Black Sea Property Fund Limited17 January 2006 For immediate release 17 January 2006 The Black Sea Property Fund Ltd (AIM: BKSA) Significant land purchase in Borovetz The Black Sea Property Fund Limited,("the Fund") which specialises in thefinancing and sale "off-plan" of luxury holiday properties in Bulgaria,announces the acquisition of development land in the Borovetz ski region. The Fund is managed by Development Capital Management (Jersey) Limited. Highlights •Agreement has been signed to purchase 53,047 square metres of development land in Borovetz, one of Bulgaria's most popular ski resorts only 45 minutes drive from Sofia. The site is located approximately 500 metres from the location of a planned new gondola lift. •The total initial purchase price is approximately €3.6 million, equivalent to €68 per square metre. Two further instalments of €10 per square metre are payable on commencement and the completion of planned construction works, bringing the total purchase price to €4.7 million. •The land has been valued independently at €118 per square metre. •On completion of the purchase, the Fund intends to develop the land, in joint venture with a local project manager, into a gated residential/holiday apartment complex of around 900 units. •Total development costs are expected to be in the region of €530 (incl. VAT) per square metre, including land acquisition, construction and infrastructure costs. Current "as-built" sale prices of comparable properties are estimated by the Manager at €1,200 (incl VAT) per square metre. The Fund's contribution towards construction costs is expected to be in the region of €11 million. The Chairman of the Fund, Melville Trimble said: "The purchase of land inBorovetz coupled with the Fund's development plans represents an important stepin the continued diversification of the Fund. Borovetz is undergoingconsiderable improvement and extension as part of Bulgaria's bid to host the2014 winter Olympics." Further Details The Fund has (through a wholly owned local subsidiary) signed an agreement toacquire 53,047 square metres of land in Borovetz, one of the most popular skiresorts in Bulgaria, only 45 minutes drive from Sofia. The site is situated in a south facing position immediately on the main roadbetween Samakov and Borovetz. The site, which includes a number of small lakes,is 10 minutes drive from the centre of Borovetz, opposite a planned new golfcourse and backs onto a small river. The site is located approximately 500metres from the location of a planned new gondola lift. The Fund will pay an initial purchase price of €68 per square metre,representing an aggregate initial purchase price of €3.607 million. A refundable10% deposit (€360,000) will be paid, with the balance of the initial purchaseprice due upon completion of the notary deed once final approval of the builddensity is obtained and other conditions satisfied. The Fund plans to develop the land into a gated residential/holiday apartmentcomplex of around 900 units and to this end intends to enter into a ConsultancyAgreement with a local project management company. The Fund will work in jointventure with this company to produce a development plan for the site and toselect and appoint architects, a construction company and other professionalsfor the project. Work is expected to commence in the second quarter 2006, withcompletion for the start of the ski season in 2007. Total development costs are expected to be in the region of €530 (incl VAT) persquare metre, including land acquisition, construction and infrastructure costs.Current "as-built" sale prices of comparable properties are estimated by theManager at €1,200 (incl VAT) per square metre. The Fund's contribution towardsconstruction costs is expected to be in the region of €11 million. The land purchase agreement includes an earn-out clause under which the Fundwill pay an additional €10 per square metre to the seller of the land when theconstruction permit is issued. A further and final €10 per square metre becomespayable upon the sale of all the apartments or Act 16 (final completion),whichever is the earlier. The land has been valued independently by one of Bulgaria's leading real estateagents at €118 per square metre, on an "extracted value" basis taking intoaccount the planned development and the development costs. Fund up-date •The signing of this agreement brings the number of development projects to six since the launch of the Fund in March 2005. •As a result of the finance committed on all options and agreements signed, the Fund will be approximately 67% committed (40% end Oct 2005). For further information please contact: Development Capital Management 020 7399 4270Roger HornettTom Pridmore Buchanan Communications 020 7466 5000Charles RylandIsabel Podda Numis Securities Ltd 020 7776 1500Andrew DawberCharles Farquhar This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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