Secure Prop Regulatory News (SPDI)

Secure Property Development & Investment PLC/ Index: AIM / Epic: SPDI / Sector: Real Estate

04 July 2017

Secure Property Development & Investment PLC ('SPDI' or 'the Company')

Conditional Sale of Development Land in Kiev, Ukraine

Secure Property Development and Investment PLC (AIM: SPDI), the South Eastern European focused property and investment company, is pleased to announce the conditional sale of its Kiyanovski land asset ('Kiyanovski') in central Kiev, in Ukraine to Riverside Developments ('Riverside'), a large Ukrainian developer, for a price to be finally determined at closing but will be in excess of US$3 million (which reflects approximately the valuation at the year end accounts). As part of a pre-Sale and Purchase Agreement ('the Agreement') signed by both parties, Riverside will pay SPDI a non-refundable deposit of US$100,000 in exchange for being granted a period of four months during which it will seek to obtain a construction permit to develop Kiyanovski. Subject to the issue of the permit and other relevant authorisations, both parties will sign a Sale and Purchase Agreement covering the sale of Kiyanovski.

The potential sale of Kiyanovski, which consists of 0.55 Ha of land near the centre of Kiev overlooking the scenic Dnipro River, St. Michaels' Spires and historic Podil district, forms part of the Company's strategy to focus on income producing assets in high-yielding South Eastern European countries such as Romania, and Greece while limiting its exposure in Ukraine. In line with this, earlier this year SPDI completed the sale of the Terminal Brovary warehouse in Kiev at a Gross Asset Value of over US$16 million which generated a profit for SPDI of ~€2.7 million, as well as a cash inflow of ~€3.5 million. SPDI continues to evaluate its options for its other land assets in Ukraine, all of which are debt free and have excellent locations.

Outside of Ukraine, the Company's core income producing asset portfolio includes logistics terminals in Athens and Bucharest, offices in Bucharest, as well as a retail BigBox in Craiova, Romania. In addition, SPDI holds substantial residential and land assets in Bucharest and Sofia.

SPDI CEO Lambros Anagnostopoulos commented, "As with the recent disposal of Terminal Brovary, today's conditional sale once again highlights the substantial value that the Company's assets command in the market, even under the difficult conditions the Ukraine economy has found itself in the last few years. Furthermore, this value was likely underestimated in our conservative year-end audited asset valuations, and represents a big disparity when compared to the level the market values the Company. For example, as at 31 December 2016 the net asset value of our property assets, stood at €38.9 million, value confirmed by the two sales effected in the first half of 2017, but which is almost twice the level of SPDI's current market capitalisation.

"The sales are in line with our strategy to generate value from all our property assets, including non-core ones. Our objective is to create attractive returns for shareholders through both capital appreciation and the distribution of regular cash dividends in the mid-term. By exposing investors to key regional growth drivers and the ongoing European yield compression play, our core portfolio of prime real estate, which generated an operating income (including net income resulting from on-going sales of residential assets and other non-core assets) of €6.4 million in the last financial year and which also includes numerous non-core residential and land assets that produce little or no income, provides us with an excellent platform with which to achieve our goal. With this in mind, we are focused on building our portfolio further and I look forward to providing further updates on our progress in due course."

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Notes to Editors

Secure Property Development and Investment plc is an AIM listed property development and investment company focused on the South East European markets. The Company's strategy is focused on generating healthy investment returns principally derived from: the operation of income generating commercial properties and capital appreciation through investment in high yield real estate assets. The Company is focused primarily on commercial and industrial property in populous locations with blue chip tenants on long term rental contracts. The Company's senior management consists of a team of executives that possess extensive experience in managing real estate companies both in the private and the publicly listed sector, in various European countries.