Sdic Power. Regulatory News (SDIC)

21 Sep 2007 12:44

Speymill Deutsche Immobilien Co PLC21 September 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 17 September 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 EUR124.1 million. - Initial net rental income (as at notarisation) is expected to be approximately EUR8.4 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 7.4% 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 EUR 8 million are to be borne by the selling entities) for approximately EUR39.6 million of the current notarised properties. Including these rental guarantees, these properties are expected to deliver annual rental income of almost EUR3.1 million, equating to an effective net initial property yield of approximately 7.7%. Taking these rental guarantees into account in the overall portfolio figures, the blended net initial yield is expected to be approximately 7.4%. The Company has notarised 2,395 apartment block units at an overall averageprice of EUR766 per square metre. There were approximately 384 vacant units atnotarisation (circa 16% 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 4.7%. Refurbishment related costs of over EUR3.5 million are to be borne by the fund entities 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 Company will target a 95% overall occupancy rate (allowing for some natural vacancy and tenant fluctuation). It is envisaged that this target will be reached in the second year after takeover. Where the Investment Manager and Investment Advisor feel certain deals in the market 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 2,395Total Purchase Price EUR 124.1 millionAverage Price per m2 EUR 766Net Rental Income EUR 8.4 millionNet Initial Yield 6.6%Stabilised Yield 7.4% 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 be reached in the second year after takeover. In the few months to one year after assuming full ownership and management, the rental income level may temporarily fall from the level at notarisation for the following reasons: - the buildings may be subject to some refurbishment which can lead to increased tenant turnover; - during the handover period between notarisation and completion, the incumbent owner may be less active in managing the property and, consequently, there may be additional vacancies that will need to be replaced through letting activity following completion; or - the building's operating/service charge costs may have to be subsidised out of rental income before a reconciliation with tenants occurs (this typically occurs in the year following takeover). 21 September 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 property investment company which listed on AIM on March 2006, raising £170 million on admission. - In May 2007, the Company raised a further EUR250 million through a placing of C 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 fully invested, the Company will have a balanced portfolio of properties throughout Germany. - The Company's objective is to provide Shareholders with an attractive level of income together with the prospect for long-term capital growth. - The Manager is Speymill Property Managers Limited and the Investment Adviser is GOAL Service GmbH. The Manager and Investment Adviser are responsible for identifying new investment opportunities. - The Manager is a subsidiary of Speymill Group plc (AIM: SYG) while the Investment Adviser is a joint venture partner of Speymill Group plc (which owns 51% of the venture). This information is provided by RNS The company news service from the London Stock Exchange