Sdic Power. Regulatory News (SDIC)

22 Oct 2007 15:26

Speymill Deutsche Immobilien Co PLC22 October 2007 Speymill Deutsche Immobilien Company plc ("SDIC" or "the Company") C Share Portfolio Investment Update Speymill Deutsche Immobilien Company plc (AIM: SDIC; SDCC), the pan-Germanresidential property investment company listed on AIM, announces furtherinvestments for the second tranche of funds raised ("the C Share Portfolio"). Main highlights as at 19 October 2007 are: - Residential properties in and around various German cities and towns have been notarised (i.e. committed to be purchased) for a cumulative cash consideration of approximately EUR200.1 million. - Initial net rental income (as at notarisation) is expected to be approximately EUR13.6 million per annum (though this amount will be temporarily augmented by initial rental guarantees for vacancies while certain refurbishments are being carried out). - Blended net initial property yield (as at notarisation) is expected to be 6.6% (*excluding rental guarantees for certain properties - please see below), and is anticipated to rise to 7.3% at the end of the period commencing 12 months after completion of all acquisitions, full takeover of property management and completion of refurbishments ("stabilised yield"). *Rental guarantees are in place during the period of refurbishment and until one year following the completion of those refurbishments (refurbishment costs of approximately EUR12.3 million are to be borne by the selling entities) for approximately EUR78.5 million of the current notarised properties. Taking these rental guarantees into account in the overall portfolio figures, the blended net initial yield is expected to be approximately 7.3%, with adjusted initial net rental income (as at notarisation) at a level of approximately EUR15.1 million. The Company has notarised 3,954 apartment block units at an overall averageprice of EUR766 per square metre. There were approximately 592 vacant units atnotarisation (circa 15% vacancy). These include units in buildings covered bythe aforementioned initial rental guarantees (most at 95% of maximum rentalincome as at notarisation). Thus the adjusted vacancy in terms of rental incomeis approximately 4.4%. Refurbishment related costs of over EUR6.3 million are to be borne by the fundentities in addition to any costs covered by sellers. After contract completion and when the properties have been taken over,refurbished and are fully under management for a suitable period, the Companywill target a 95% overall occupancy rate (allowing for some natural vacancy andtenant fluctuation). It is envisaged that this target will be reached in thesecond year after takeover. Where the Investment Manager and Investment Advisor feel certain deals in themarket may be overpriced, in light of the tightening of credit markets, they areholding back in the expectation of obtaining more advantageous prices. Summary SDCC Portfolio Information Total Number of Units 3,954 Total Purchase Price EUR 200.1 million Average Price per m2 EUR 766 Net Rental Income (excluding rental guarantees) EUR 13.6 million Net Initial Yield (excluding rental guarantees) 6.6% Stabilised Yield 7.3% Note: The stabilised (normalised) rent represents a target income level based on a 95%of maximum rents. If not already achieved, it is envisaged that this will bereached in the second year after takeover. In the few months to one year after assuming full ownership and management, therental income level may temporarily fall from the level at notarisation for thefollowing reasons: - the buildings may be subject to some refurbishment which can lead to increasedtenant turnover; - during the handover period between notarisation and completion, the incumbentowner may be less active in managing the property and, consequently, there maybe additional vacancies that will need to be replaced through letting activityfollowing completion; or - the building's operating/service charge costs may have to be subsidised out ofrental income before a reconciliation with tenants occurs (this typically occursin the year following takeover). 22 October 2007 Contact: Smith & Williamson Corporate Finance Limited +44 (0)20 7131 4000Azhic Basirov / Siobhan Sergeant Fairfax I.S. PLC +44 (0)20 7598 5368Paul Richards / James King Notes to editors: - Speymill Deutsche Immobilien Company plc is a pan-German residential propertyinvestment company which listed on AIM on March 2006, raising £170 million onadmission. - In May 2007, the Company raised a further EUR250 million through a placing ofC Shares which were admitted to trading on AIM on 10 May 2007. - The Company was established to invest in the German property market and,predominantly, in the residential sector. It is anticipated that once fullyinvested, the Company will have a balanced portfolio of properties throughoutGermany. - The Company's objective is to provide Shareholders with an attractive level ofincome together with the prospect for long-term capital growth. - The Manager is Speymill Property Managers Limited and the Investment Adviseris GOAL Service GmbH. The Manager and Investment Adviser are responsible foridentifying new investment opportunities. - The Manager is a subsidiary of Speymill Group plc (AIM:SYG) while theInvestment Adviser is a joint venture partner of Speymill Group plc (which owns51% of the venture). This information is provided by RNS The company news service from the London Stock Exchange