New investment in Cluj-Napoca, Romania

RNS Number : 9882S

First Property Group PLC

29 June 2018

 

Date:	29 June 2018
On behalf of:	First Property Group plc ("First Property", "the Company" or the "Group")
Embargoed:	0700hrs

First Property Group plc

New investment in Cluj-Napoca, Romania

First Property Group plc (AIM: FPO), the property fund manager and investor, announces that it has, in conjunction with a club of investors, acquired The Maestro office building on 21 Decembrie 1989

Boulevard, in Cluj-Napoca, Romania. Cluj-Napoca is the capital of Transylvania and has a population of some 320,000. A further 100,000 live in the wider metropolitan area. It also has 11 universities and a student population of over 100,000.

The net operating income being generated by the property is around €875,000 million per annum and the property was acquired at a yield on purchase costs of some 9.4% per annum. The weighted average unexpired lease term is approximately 3 years.

The investment was funded by a combination of equity and bank debt. The equity component amounted to just over €3 million, of which the Group invested circa €510,000, pari passu with other investors.

The forecast annual pre-tax profit from the investment is €550,000 per annum, of which the Group's share after tax would be €85,000 per annum, which would equate to a post-tax rate of return on equity of 16% per annum.

In addition the Group will earn an acquisition fee of €89,000 and ongoing management fees of some €111,000 per annum.

The cash position of the Group following this investment amounts to £12.8 million.

Commenting on the new investment, Ben Habib, Group Chief Executive, said:

"I am very pleased by the investment made by our clients and ourselves in this well located office building in the centre of Cluj-Napoca. Cluj-Napoca is a fast growing city which is supportive for both rents and capital values."

-Ends-

For further information please contact:

First Property Group plc	Tel: [phone]
Ben Habib (Chief Executive Officer) George Digby (Group Finance Director) Jeremy Barkes (Director, Business Development)	www.fprop.com [e-mail]
Arden Partners (NOMAD & Broker)	Tel: [phone]
Chris Hardie (Director, Corporate Finance) Ben Cryer (Corporate Finance)
Redleaf Communications (PR)	Tel: [phone]
Robin Tozer / Lizzie Cowell	[e-mail]

Notes to Investors and Editors:

First Property Group plc is an award winning property fund manager and investor with operations in the United Kingdom and Central Europe. Around one third of the shares in the Company are owned by management and their families.

Its focus is on higher yielding commercial property with sustainable cash flows. The company is flexible and takes an active approach to asset management. Its earnings are derived from:

·      Fund management - via its FCA regulated and AIFMD approved subsidiary, First Property Asset Management Ltd (FPAM), which earns fees from investing for third parties in property. FPAM currently manages eleven funds which are invested across the United Kingdom, Poland and Romania.

·      Group Properties - principal investments by the Group to earn a return on its own capital, usually in partnership with third parties. Investments include ten directly held properties in Poland and Romania (including five held by Fprop Opportunities plc [FOP], in which the Group is currently the majority shareholder), and interests in nine other funds managed by FPAM.

Listed on AIM the Company has offices in London, Warsaw and Bucharest. Further information about the Company and its products can be found at: www.fprop.com.

 

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