Last checked at 10 Jun 2016 15:25
Secure Property Development & Invest PLC/ Index: AIM / Epic: SPDI / Sector: Real Estate
10 June 2016
Secure Property Development & Investment PLC ('SPDI' or 'the Company')
Portfolio Update
Secure Property Development and Investment PLC (AIM: SPDI), the South Eastern European focused property and investment company, announces that it is in discussions with Nestle in Romania relating to its rental contract in the Company's Innovations Logistics Park in Bucharest ('the Logistics Park').
As part of its restructuring plans for its global ice-cream operations, Nestle has notified the Company that it intends to terminate its rental contract, which is due to expire in 2018. Such termination is currently expected to result in a settlement being payable to SPDI by Nestle. The Logistics Park has an existing sale and leaseback agreement in place with Piraeus Bank Leasing ('Piraeus') and as a result any final settlement requires their agreement on the allocation of funds to be received from Nestle as part of the expected amicable settlement. While discussions are taking place with Piraeus, payments of rent by Nestle and instalments due under the sale & leaseback agreement by the Company are currently suspended. SPDI currently expects that a settlement will be reached that is satisfactory to all parties, details of which will be provided when concluded, as well as an update on progress being made to secure future tenants for Nestle's space in this asset which is located at the ring road of Bucharest.
The rental income from Nestle comprises less than 15% of the Company's annualised income1, as the Logistics Park is one of a number of properties in SPDI's portfolio which are located in countries with attractive yields and favourable supply and demand dynamics for modern commercial properties.
1 based on current annualised rental income including Terminal Brovary (the conditional sale of which was announced on 9 June 2016)
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