12 Apr 2010 13:29
12th April 2010
Riviera Update #2
The Company:
Speymill Macau Property Company plc ("Speymill Macau" or "the Company") is a Macau focused real estate investment company. One of the Company's main assets is 259 apartment units in a two tower, 518 unit residential development located on the Inner Harbour area of Macau Peninsula known as The Riviera ("Riviera" or "the Development") which was formerly known as Lorcha. The Company owns 145 units of 296 units in Tower 1 and 114 units of 222 units in Tower 2 of Riviera.
Sale of Apartment Units:
As noted in the announcement of 31st March 2010, the Company began to sell units in Tower 1 of the Development, and on 8th April it began the sale of units in Tower 2 to reputable local buyers known to the local sales team and for whom no marketing or outside agents were required. On 10th April, the Company launched an open sales program to the general public for units in both Tower 1 and Tower 2.
Update regarding Sales:
As of the close of business on Sunday April 12th, 119 Provisional Sales and Purchase Agreements (PSPAs) for units have been signed for Tower 1. Of these, the buyers for 97 units have now signed Formal Sales and Purchase Agreements (FSPAs) , for which a 10% deposit has been received. Buyers for an additional 12 units have paid the 10% deposit but have yet to sign the FSPA. There exist another 10 signed PSPAs which need to be converted into FSPA at which time the initial 10% deposit will be paid, and 18 Reservation Agreements which are waiting conversion to PSPAs. The total number of contracts pending in various stages of completion in regard to the purchase of apartments in Tower 1 cover 137 out of the 145 units owned by the Company leaving 8 remaining units in Tower 1 for sale. The average price of the units sold in Tower 1 was HK$3,568 p.s.f., net of payment option discounts. After deduction for commissions and VIP discounts, the average selling price of Tower 1 units achieved to date is HK$3,472 p.s.f.
In regard to Tower 2, as of the close of business on Sunday April 12th, the Company has received 42 Reservation Agreements that need to be converted to PSPAs and an additional 42 PSPAs which await the payment of the 10% deposit to become FSPAs. As a result, there are 30 units left for sale in Tower 2. The average price of the units sold in Tower 2 was HK$3,581 p.s.f, net of payment option discounts. After deduction for commissions and VIP discounts, the average selling price of Tower 2 units achieved to date was HK$3,509 p.s.f.
As of 31st December 2009, the Company's investment in Riviera, not taking into account transaction costs, was valued by Jones Lang Lasalle at HK$943.8 million (US$121 million) or HK$3,486 p.s.f. Ninety seven percent of the proceeds, after deduction for VIP and Payment Option discounts, will be paid to the developer in order to reduce the Company's outstanding debt.
In the event that all the apartment units for which the Company has received PSPAs, Reservation Agreements and Formal SPAs close as contracted, the total net revenue from such sales would amount to approximately HK$796million (US$ 102 million). The entire amount owed to the developer of Riviera is HK$720 million (US$93 million). The Company owns a total amount of 270,951 square feet in the Development, of which 231,291 sq. ft. were under contract as of April 12th leaving a total of 39,660 sq. ft. remaining to be sold.
Information about the sales process:
A Reservation Agreement is the first of four steps to completion and the receipt of full proceeds in regard to the sale of an apartment unit. The Reservation Agreement requires a down payment of HK$100,000 which would be forfeited in the event the buyer does not sign a PSPA within seven days. This PSPA provides the potential buyer with an additional 7 days in which to provide the 10% down payment, failing which the HK$100,000 would be forfeited. Upon payment of the 10% the SPA becomes "formal" (FSPA) and the buyer is obligated to proceed to closing under one of two payment schemes:
(a) Payment of 20% of the unit price (including the 10% down payment) within 21 days of signing the FSPA and the remaining 80% within one month: or
(b) An additional 20% deposit to be paid in two 10% increments spaced 30 and 90 days after signing the FSPA with the remaining 70% to be paid within 14 days after receiving notification that the Occupancy Permit has been issued to the developer.
Negotiated prices for the sales of units are completed on an apartment by apartment basis and negotiations are ongoing. The Company will update the market periodically as reasonable numbers of units have been sold.
Enquiries
For more information, please visit www.speymillmacau.com or contact:
Speymill Property Group Limited Galileo Fund Services Limited (Manager) (Administrator) Nigel Caine, CFO Funds Ian Dungate Nick Harris, Manager Suzanne Jones +44 1624 640 860 +44 1624 692600
Matrix Corporate Capital LLP Fairfax I.S. PLC (Nominated Adviser) (Broker) Paul Fincham James King Jonathan Becher Andrew Cox +44 20 3206 7000 +44 20 7598 5368
Tavistock Communications Limited
(Media & Investor Relations)
Jeremy Carey
Simon Hudson
Gemma Bradley
+44 20 7920 3150
Notes to Editors:
·; Speymill Macau Property Company plc ("Speymill Macau" or the "Company") was incorporated and registered in the Isle of Man on 31 October 2006 and is a closed-ended investment company registered in the Isle of Man and traded on AIM, a market of the London Stock Exchange.
·; The Company was established to invest primarily in the Macau property market. This includes pursuing selective commercial property investments to capture expected ancillary Macau service sector growth. The Company was admitted to AIM on 17 November 2006 raising US$ 80 million in a placing on admission. A second fundraising of US$ 70 million was completed in May 2007. The Company's objective is to provide shareholders with an attractive overall return to be achieved primarily through long-term capital growth.
·; Macau is one of only two Special Economic Regions, a semi-autonomous administrative area, in China, and has enjoyed explosive economic growth, in part due to its establishment as an important gambling centre which has led to high historical and forecast GDP growth, driven by rising incomes and low unemployment levels. Coupled with the limited availability of land, developers are now struggling to meet a stronger than anticipated demand for higher quality housing. The Company intends to exploit these favourable market dynamics with the aim of generating attractive overall returns for shareholders.
Speymill Property Group Limited ("SPG") is the Manager of the Company and the Investment Adviser is Speymill Property Group (Far East) Limited, a wholly owned subsidiary of SPG.