First Property Share News (FPO)

(ShareCast News) - AIM-listed investor First Property Group has, along with a club of investors, agreed to buy Pilot Tower, a recently built office building in Krakow, Poland, for about €23m.Completion of the deal, which is subject to receiving a ruling on the tax treatment of the transaction, is expected to take place in the second quarter of 2017.The acquisition will be part funded by a €15.9m bank loan and cash of about €7.5m, which has been committed by a Cambridge college and other clients of First Property.In addition, First Property will co-invest €1.5m in the office building along with the other investors.The building is expected to generate €1.9m in net operating income per year, which equates to a net initial yield of 8.3% per year, and the investment is forecast to earn a pre-tax profit of €1.16m per year, of which the company's share should be €230,000. This equates to a pre-tax rate of return on equity invested of more than 15% per year.First Property will also earn ongoing management fees of about €220,000 per year and a one-off arrangement fee of €220,000.Chief executive Ben Habib said: "I am very pleased by the investment made by our clients and ourselves in this striking new office building in Krakow, Poland. It is in a prime location, boasts state-of-the-art facilities and is fully let at rent levels that offer room for growth in due course."Shares in First Property Group were up 0.53% to 47.75p at 0801 GMT.