Net Asset Value(s)

Fabian Romania Limited
22 October 2007



22 October 2007



                        Fabian Romania Limited (FAB.LN)


                    Net asset value as at 30 September 2007


Highlights


  • As at 30 September 2007, the Net Asset Value ("NAV") per share of the
    Company as determined in accordance with its Articles of Association was
    €1.607 (at 30 June 2007: €1.548) an increase of 3.8 per cent. over the
    second quarter and 18.5 per cent. year to date (at 31 December 2006:
    €1.356).


  • Adjusting the current NAV for the estimated future development profits of
    €0.535 per share indicates a potential future NAV ("Development Profit NAV"
    or "DPNAV") of €2.142 per share (at 30 June 2007: €1.923) an increase of
    11.4 per cent. over the second quarter and 38.6 per cent. year to date (at
    the 31 December 2006: €1.546).


  • Lakeview building consent granted and area increased. The Lakeview office
    joint venture development with AIG/Lincoln received its full consents and
    the scheme is now estimated to have a net lettable office area of 24,100
    square metres ("sqm") with 427 parking spaces, which exceeds the investment
    manager's initial expectations.


  • New Town residential scheme now well into construction and experiencing
    strong forward sales. The fixed price construction contract has been agreed
    with Mivan Kier. Sales commenced in July and 139 apartments have now been
    reserved off plan comprising nearly all of the first release of 119
    apartments and a number from an initial 50 of the second release now for
    sale.


  • Growth in DPNAV driven by a €4.2 million first time contribution from the
    Cubic Center forward purchase valued at 7.15 per cent. yield and an uplift
    of €3.4 million in the valuation of the Lakeview office joint venture based
    on a 6.8 per cent. yield.


  • Further yield convergence for the Company's fully let office buildings to
    6.8 per cent. as at 30 September 2007.


  • In total, nine investments executed or committed, with 62,850 sqm of
    lettable office space in Bucharest secured together with 443 residential
    apartments.


To the shareholders of Fabian Romania,


Fabian Romania Limited ("Fabian", "Fabian Romania" or the "Company"), the AIM
quoted dedicated Romanian real estate investor announces its NAV as at 30
September 2007 was €1.607 per share. This represents a rise of 3.8 per cent.
from the preceding second quarter NAV of €1.548 per share. For the year to date,
the NAV of the company has risen 18.5 per cent. from €1.356 per share as at 31
December 2006.


The published NAV was calculated according to the Company's Articles of
Association and the results are summarised below:


(as at 30 September'07)        Fabians' share      Bank (debt)       Net Worth           Original
                              of Market Value                                          Investment
                                           €m               €m              €m                 €m
Cascades                                 16.6            (9.3)             7.3               12.2
Banu                                     17.1            (8.9)             8.2               12.3
New Town * (^)                           17.4            (3.4)            14.0                5.8
Lakeview *                                9.7            (5.5)             4.2                5.4
Cubic Center                             12.3                -            12.3               12.3
Baneasa Business Center                  28.4           (19.6)             8.8               23.9
Timisoara *                               3.5            (1.8)             1.7                1.6
Net Cash                                                                  26.3
Other assets / (liabilities)                                             (1.1)
**
Sub-total                               105.0           (48.5)            81.7               73.4
Shares (#)
                                                                    50,831,130
NAVPS (€)
                                                                         1.607
Growth in Q3 2007                                                         3.8%
* represents Fabians' share of the development, Lakeview after post-acquisition debt financing
** includes deposits on Evocenter & Romana plus deferred tax liabilities added back
(^) includes development WIP financed by bank debt
increase in original investment in the period as set out in text



Future Development Profit



Under the Red Book methodology of the Royal Institution of Chartered Surveyors,
residual land valuations for development projects provided to Companies such as
Fabian Romania, exclude the net present value of future development profits. As
at 30 September 2007, the portfolio of the Company comprised the following type
of investments as a percentage of the net asset value of the Company.


Income                                                     30%
Development                                                39%
Cash and other assets / (liabilities)                      31%
                                                          100%



In order to provide transparency to investors as to the potential level of such
future development profits that may accrue to the Company, DTZ Echinox ("DTZ")
has been asked to provide estimates of these development profits. Shareholders
may then choose to discount these profits to estimate their net present value in
today's terms based on current market conditions. The forecast development
profit figures are stated gross and do not include all costs that may be
incurred by Fabian over the course of the projects (in particular transaction
fees and any carried interest payable to the investment manager). The implied
share of future development profit figures for the New Town, Lakeview, Timisoara
and Cubic Center schemes based on the DTZ estimates are highlighted in the table
below.


Project                              Implied Fabian Share of future Development Profit            Final Year of
                                                               from DTZ estimates (€m)            Development *
New Town                                                                           8.8                     2009
Lakeview                                                                           9.4                     2009
Timisoara                                                                          4.8                     2010
Cubic Center                                                                       4.2                     2009
NAV contribution (€m)                                                             27.2

NAVPS contribution (€)                                                           0.535


* Fabian Romania estimates

Adding these forecast development profits of €27.2 million or €0.535 per share
to the NAV produces what the Directors have called the DPNAV of €2.142 per
share. This represents a rise of 11.4 per cent. over the 30 June 2007 DPNAV of
€1.923 and 38.6 per cent over the DPNAV comparative figure as at the 31 December
2006 of €1.546.



Sales update at New Town


A full sales launch for New Town commenced in mid July 2007. The first release
comprised 119 apartments with an average selling price of €1,219 per sqm
followed by the first 50 apartments from the second release, priced around 10
per cent. higher. As announced in the interim results at the end of September,
reservation levels have been strong with 139 apartments now reserved. City wide
newspaper and radio advertising has been taken to support the releases.


New Town is a scheme of 72,000 sqm above ground involving the construction of
636 apartments targeted at Bucharest's emerging middle class. The scheme was
granted final building consent at the start of April 2007. Subsequently, the
Company announced in July 2007 that its joint venture development company,
Phoenix Park SRL, has agreed a fixed price build contract with Mivan Kier.


The land valuation remains unchanged from the 30 June valuation, given by DTZ,
of €27.9 million of which 50 per cent. is owned by Fabian.


Lakeview building consent granted


During the quarter, building consent has been granted for the Lakeview
co-investment office development project with AIG/Lincoln. This was the last
planning hurdle before detailed construction tendering could commence. The
consent allows for a building of 26,125 sqm above ground with a net lettable
area of 24,100 sqm. The amount of net lettable office space is higher than the
investment manager initially expected. The below ground constructed area is
estimated to be approximately 14,875 sqm including approximately 427 parking
spaces. Ground works are expected to commence in the first quarter next year
with completion of the project estimated to be during the third quarter of 2009.


DTZ, the Company's valuers, have given a land valuation, as at 30 September
2007, of €16.9 million of which 50 per cent. is owned by Fabian. Forecast gross
development value is €71.8 million based on a yield of 6.8 per cent.
representing an increase of 24 per cent. since over the last valuation conducted
as at 30 September 2006.


The Baneasa Business Center - financing drawn down


During the period, the Company took steps to increase the financial efficiency
of Baneasa by increasing the level of debt secured against the building. It has
drawn down on a debt facility with Investkredit Bank AG to increase total
borrowings secured against Baneasa to almost €19.7 million at an interest rate
of 6.28 per cent. fixed for three years. This has resulted in a net equity in
the company of approximately €4.2 million on an initial acquisition value of
€23.9 million.


As previously stated, the building is a Class A office building comprising 9,600
sqm of net lettable area. The building hosts a range of multinational tenants
including Schering Plough, Colgate, Fresenius, Cargill and Volksbank. The
average lease length is around three years with a variety of reversionary leases
at rents between €12 per sqm/month to €16 per sqm/month. The fund manager is now
working to extend leases as they come up for renewal and is hopeful of securing
rental increases at the same time.


As at 30 September 2007, the building was valued by DTZ at €28.4 million. This
represents a satisfactory gain of almost 19 per cent. over the purchase price in
June 2007 or a 107 per cent. return on invested equity post debt drawdown.


Timisoara - further land plot acquired


During the second quarter, the Company purchased a 50 per cent. interest in a
residential development site to build 250 apartments in Timisoara for €4.7
million. During the third quarter, a neighbouring plot of 1,820 sqm was
purchased by the joint venture for €819k. This will allow a combined total of
approximately 35,000 sqm of residential development above ground, subject to
planning approval and building consents. The purchase price for both land plots
including acquisition expenses was approximately €5.7 million. This equates to
around €445 per sqm for the land and €166 per built sqm over ground, assuming
35,000 sqm. The development company has already secured and fully drawdown on a
land finance facility from Banca Romanesca for €3.6 million. Including near term
working capital needs, this leaves an initial net equity requirement of
approximately €1 million for Fabian.


A firm of UK architects has been employed by the development joint venture to
develop the concept design and to work with local architects to upgrade the
planning on the site. Progress is according to schedule.


DTZ have given a land valuation, as at 30 September 2007, of €7.0 million of
which 50 per cent. is owned by Fabian. Forecast development profits by DTZ
amount to €9.6 million of which 50 per cent. is due to Fabian. This shows an
uplift in the land valuation of €1.3m or 23 per cent. on the cumulative
acquisition price in June and July 2007.


Cubic Center - first closing achieved


During the quarter, the Company paid a further €7.25 million bringing the total
first instalment to €12.25 million of the anticipated purchase price upon the
developer securing full construction finance and building consent. At practical
completion of the building by the developer, the Company will pay the final
instalment based upon a forward purchase yield of 7.4 per cent. to 7.8 per cent.
applied to rents achieved. The total equity requirement for the Company is
estimated to be €12 million and assumes debt financing on terms currently
available in the market. Construction on site continues according to plan, with
the developer estimating practical completion to be achieved during the second
quarter of 2009.


DTZ, have estimated the future value of the building based on a yield of 7.15
per cent. and this implies the company's future profit over and above the
acquisition cost, as at 30 September 2007, of €4.2 million. This equates to a
forecast return on project equity of some 34 per cent. on the full acquisition
amount.


The Property Market


The sub prime lending crisis overseas has had a limited impact on the Romanian
property market. There is anecdotal evidence that some investors whose
investment strategy involves high levels of gearing, have stepped back from
transactions at the more speculative end of the office investment market. In
addition, some overseas developers seeking to enter Romania or add to existing
land holdings, have become more cautious in the size of schemes they are seeking
to develop. Otherwise, most banks appear not to have fundamentally changed their
key lending parameters such as loan to value, debt service coverage ratios or
amortisation periods.


Despite the concerns in the international credit markets, the period marked the
first time in Romania that headline yields fell below 6 per cent.. GTC, an
Israeli developer, sold its America House building in August for a yield of 5.6
per cent. to the French pension fund Ixis. However, as rents in the building
average €19 per sqm/month, the effective yield is over 6 per cent. assuming
future rents of around €21 per sqm/month are achievable given its location on
Victoria Square. The investment manager anticipates that yields will consolidate
at around the 6 per cent. level during the final quarter of the year.


Following on from the Ixis transaction and the portfolio acquisition from
Charlemagne by Degi of Germany in the second quarter, a number of Western
European open ended property, pension and insurance funds appear to be targeting
the country's property market over the remainder of the year and into 2008. This
should underpin current valuations and provide further evidence of yields in the
6.00-6.25 per cent range. Forward purchase yields continue to be around 7.25 -
8.00 per cent. depending on the location and project.


The main trend to emerge during the second quarter was the upturn in office
market rents. This has continued into the third quarter. In the investment
manager's opinion, prime rents per sqm in Bucharest city centre have risen to
€20-22 per sqm/month from €17-19 per sqm/month at the end of 2006. The upward
rise in rents has been driven by continuing low vacancy rates of sub 3 per cent.
as well as continued strong foreign direct investment by new multinationals to
Romania and by the expansion of existing multinationals. Several property agents
announced, during the period, that the vacancy rate for Class A office space to
rent during the remainder of 2007 was now zero.  The investment manager has
experienced the shortage of space directly with the majority of tenants in the
Baneasa Business Center office building seeking additional space.


In terms of the new supply of office space, the investment manager believes that
current forecasts of 300,000 sqm of new Class A office space to be delivered to
the market by the end of 2007 remain optimistic. Planning, land title and
financing issues continue to act as a brake on new office developments actually
getting off the drawing board.  Regardless, total modern stock in Bucharest will
remain substantially below commensurate levels in Warsaw, Prague and Budapest
for the next three years.


Other activity and outlook


As at 30 September 2007, approximately €21 million of equity (after refinancing)
from the €38.1 million of net proceeds from the AIM listing has been earmarked
for investment in the five transactions either executed or announced during the
year. This leaves approximately €17 million of equity to commit to further
investments.


The conditions for office co-investment developments continue to be attractive.
The office and retail leasing markets continue to favour the developer and
though visibility is difficult, the office rental market appears well supported
until at least 2010. Even then, Bucharest will still have substantially less
Class A space than either Prague or Budapest in today's terms. The benefits to
the developer from rising rents and falling yields continue to more than offset
construction inflation.


As stated previously, the investment manager no longer regards fully let offices
at yields below 7 per cent. as attractive either on an absolute basis or
relative to the opportunities available in Romania in other sub-sectors of the
market or through co-development opportunities. Exciting opportunities continue
to be pursued through participation in office co-investment developments and
through the forward purchase of office buildings for delivery over the next
twelve months where the taking of letting risk by the Company is compensated by
attractive prices. The investment manager is looking at a number of
opportunities in both Bucharest and the regional cities for the purchase of land
plots suitable for residential co-investment development.


In retail and logistics, yields for fully let buildings or for forward purchases
of buildings once let continue to offer attractive yields of between 7.25 - 8.00
per cent.. To date, the Company has not purchased any such assets. This is in
large part due to their scarcity value, their large unit price relative to the
size of Fabian Romania and legal title issues. However, the investment manager
is looking at a number of opportunities in both of these sub-sectors.


The investment manager regards the outlook for the Company, the Romanian
property market and Romania in general as attractive for remainder of the
current year.



Mark Holdsworth
Fabian Capital Limited
22 October 2007



Contacts:


Fabian Capital Limited
Mark Holdsworth                                                           Tel: [phone]

Shore Capital - Broker to Fabian
Dru Danford                                                               Tel: [phone]

Deloitte Corporate Finance - Nominated Adviser to Fabian
Jonathan Hinton / James Lewis                                             Tel: [phone]




Notes to Editors


Fabian Romania Limited is an experienced and well-known investor in the
Bucharest and wider Romanian real estate market and is quoted on AIM. Fabian
seeks to generate attractive total returns for its shareholders through a
portfolio of income producing buildings, co-development projects with
experienced partners and land investments. Fabian receives investment advice
from Fabian Capital Limited, an independent investment management firm that
specialises in Romanian real estate investments advice. (Fabian Capital does not
carry out any regulated activities in the UK)


The directors of Fabian accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Fabian (who have taken all reasonable care to ensure that such is the case) the
information contained in this announcement is in accordance with the facts and
does not omit anything likely to affect the import of such information.



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