Corbeanca Update Report June 2017 Property Update Location Brasov County, Romania PropertyType Land Valuation Date: 31 October 2016 Appraiser: Winterhill Value: EUR 1,090,000 % change from 2015: 0% Equity Gain/Loss*: -77%* Strategy To actively market and sell the property. *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. The equity Gain/Loss is updated upon obtaining the annual valuation for the property. Market Update The latest economic indicators show that Romania s GDP growth for 2016 was at 4.8%, the highest for the past eight years. Majority of this growth is attributed to trade at 1.8%. The year also registered the largest volume of FDI since 2008, which reached EUR 4.1 billion in transaction volumes. This was an 18% growth compared to the previous year. Since the issuance of the last update report, the property market continued to strengthen. Where, towards the end of the year residential constructions grew by 12.1%. In addition, average prices also grew in the residential market by 3-10% across Romania. In 2016, supply of residential units grew by 11% when compared to 2015. The strengthening real estate sector was supported by the fact that the government made a decision to eliminate taxes on residential sales with a price lower than EUR 100,000. Page 1 of 5
Corbeanca (the Project ) 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 to exit investors through selling the property to achieve the greatest realization for investors. There have been no significant developments to Corbeanca since the last update report, since the target is to sell the property. Site Visit Ithmaar representatives plan to visit Corbeanca during 2017, whereby meetings will take place with the local property managers and real estate experts. The purpose of this visit is to explore the potential sale of Corbeanca. Page 2 of 5
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 180-220 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. Project Milestones The Project land has been acquired by the Project. Changes to the Original Plan and Anticipated Completion Date Due to the lack of funds and current market conditions, Corbeanca remains in its raw status. As previously communicated by the ex-investment manager, the anticipated completion date for the Project is 31 December 2017. 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, due to the current market conditions and unavailability of funds. Page 3 of 5
Utilisation of Proceeds Project Fair Value* as on 31 December 2016: All amounts in EUR Nominal Equity Fair Value Surplus (Shortfall) 2,364,250 537,841 (1,847,157) *The Project Fair Value is updated on an annual basis upon receiving the year-end thirdparty valuation report. Project s bank accounts as on 30 June 2017: Bank Name Currency Amount Unicredit EUR 7,234.57 Unicredit RON 6,325.94 *The Project 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 Project expenses arise. Financing undertaken by the Project: Type of Financing Amount (EUR) % of Financing Drawn down Subordinate Financing 28,894 100% Unsecured Security Value Date Maturity Date 30 June 2017 Due upon sale of the Project Amount Spent from 1 January 2017 to 30 June 2017: Category From 1 January 2017 to 30 June 2017 From 1 July 2016 to 30 June 2017 Amount (EUR) Percentage (%) Amount (EUR) Percentage (%) Project Expenses* 7,709.69 100% 15,479.94 100% Total 7,709.69 100% 15,479.94 100% *Project Expenses represent the local property manager s fees, office rent, bank fees and other operational fees related to the ongoing business of the company. Page 4 of 5
Recipients of Material Amounts (above 10%) from 1 January 2017 to 30 June 2017: Supplier Trammel Mackenzie Risk Control (the local property manager) Amount (EUR) % of Total Spent during the period 5,751.66 74.6% The company does not have senior management, and is managed by the Investment Manager. Current Board Members: Name Date Elected Date Resigned Dan Ghita 14/01/2013 N/A Board remuneration paid during 1 January 2017 to 30 June 2017: The Board does not receive any remuneration. Summary of Board resolutions from 1 January 2017 to 30 June 2017 There were no Board resolutions in for the period 1 January 2017 to 30 June 2017. Litigation or Disputes: There were no litigations or disputes during the Project 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