Corbeanca Update Report December 2016

Transcription

1 Corbeanca Update Report December 2016 Property Update Location Brasov County, Romania Type Land Occupancy Rate Senior Financing Projected Preferred Reserve Valuation Date: 31 October 2016 Appraiser: Winterhill Value: EUR 1,090,000 % change from 2015: 0% Equity Gain/(Loss)*: (77%)* Strategy Hold until such time as it will be possible to sell with the greatest realization to investors. Income Generating No *This represents the percentage gain / (loss) that investors would realise if the asset (property) was sold at its most recent valuation. No preferred return has been paid to date. Market Update In 2016, Romania s property market has been supported by strong economic indicators, where in Q the country reached its highest GDP growth since Q at 6% (year-on-year). It is expected that Romania would register a 5% GDP growth by the end of the year. During 2016, apartment selling prices increased by 6.85% and 5.07% in Brasov and Constanta (respectively). As part of Romania s accession to the EU, certain political and economic reforms were promised in the country, but these have not been implemented. The real estate market was affected by the non-implementation of these reforms, where property prices dropped in excess of 56% between 2008 and As previously mentioned, 2016 witnessed a recovery for the Romanian economy and property prices. Aided by the rise in wages and the labour market, demand for residential units increased during the year. Page 1 of 5

2 Corbeanca (the Fund ) Key Developments On 30 June 2016, the responsibility of Investment Manager transferred from Faisal Private Bureau ( FPB ) to Ithmaar Bank B.S.C. (c) ( Ithmaar or the Investment Manager ). Ithmaar is currently looking at different options to maximize the value of the subject plot in Corbeanca. The latest valuation conducted by Winterhill, values Corbeanca at EUR 1,090,000. Site Visit Ithmaar representatives plan to visit Corbeanca during 2017, whereby meetings will take place with the local property managers and real estate experts. Page 2 of 5

3 Appendix Central Bank of Bahrain Disclosure Requirements Up-front fees: up to 6.21% of the total capital Management fee: an annual fee up to 0.99% of the total capital and reasonable out of pocket expenses. Original Plan As per the Investment Term Sheet, the initial objective was to build a cash flow generating real estate asset in Corbeanca, Romania, and to capture development value by selling the villas during and after construction. Corbeanca, is an investment opportunity located close to the North of Bucharest. Corbeanca presented an investment opportunity as its surroundings were among the locations experiencing high growth in residential development due to their proximity to the lake, airport, businesses and to the constant development of infrastructure in the area. The site had an excellent access route to the airport and the green park areas. Corbeanca stretches on a land of 30,000 sqm at the brink of the lake and forest. The project, conveniently located at a short distance (5 minutes drive) from the Bucharest Airport and 20 minutes to the North of Bucharest Central Business District. The development was envisaged to comprise of 45 single-family homes (Villas) with a built surface area of sqm for each house. The lake was main attraction of each building, as the houses were planned to have lake view and access. The ground floor was to feature a living room, hallway, toilet and study while the first floor will have 3-4 bedrooms. Fund Milestones The Fund land has been acquired by the Fund. Changes to the Original Plan and Anticipated Completion Date Due to the lacklustre of funds, Corbeanca remains in its raw status. As previously communicated by the ex-investment manager, the anticipated completion date for the Fund is 31 December However, Ithmaar is currently assessing various options with regards to Corbeanca in order to generate the greatest realization for its investors. Planning Permissions Obtained to date None Page 3 of 5

4 Utilisation of Proceeds Fund Fair Value as on 31 December 2016: All amounts in EUR Nominal Equity Fair Value Surplus (Shortfall) 2,364, ,841 (1,847,157) Fund s bank accounts: Bank Name Currency Amount Unicredit EUR 4, Unicredit RON 4, *The Fund s equity has been fully utilised, and further liquidity is obtained in the form of financing and payables (booked by the Investment Manager) as and when fund expenses arise. Financing undertaken by the Fund: Type of Financing Amount (EUR) % of Financing Drawn down Security Subordinate Financing 28, % Unsecured Amount Spent from 1 July 2016 to 31 December 2016: Category From 1 July 2016 to 31 December 2016 Amount (EUR) Percentage (%) Fund Expenses* 7, % Total 7, % *Fund Expenses represent management fees, office rent, bank fees and other operational fees related to the ongoing business of the company. Recipients of Material Amounts (above 10%): Supplier Trammel Mackenzie Risk Control Amount (EUR) % of Total Spent during the period 5, % The company does not have senior management, and is managed by the Investment Manager. Page 4 of 5

5 Current Board Members: Name Date Elected Date Resigned Dan Ghita 14/01/2013 Board remuneration paid during 1 July 2016 to 31 December 2016: The Board does not receive any remuneration. Summary of Board resolutions from 1 July 2016 to 31 December 2016: There were no Board resolutions in the period for 1 July 2016 to 31 December Litigation or Disputes: There were no litigations or disputes during the Fund s life. Pledges created over the assets of the investee company: The Investment Manager confirms that the property is free from any pledge or mortgage. Disclaimer: The information provided herein is provided by Ithmaar Bank B.S.C. (c) in the best of its knowledge following the transfer of management responsibility from the ex-investment manager. Every reasonable diligence and caution has been exercised to ensure its accuracy. However, this information is subject to a number of factors beyond the control of Ithmaar Bank B.S.C. (c), including current and future market conditions, constant changes in occupancy and vacancy rates, currency fluctuations, supply and demand, and more. Ithmaar Bank B.S.C. (c) is not a real estate promoter but an investment manager managing the investments on behalf of its clients. Ithmaar Bank B.S.C. (c) has a network of contacts helping it to select appropriate local real estate promoters. Page 5 of 5