Equest Balkan Prop - Re: Acquisition

RNS Number:3561K
Equest Balkan Properties PLC
12 October 2006


12 October 2006


                Equest Balkan Properties plc ('EBP' / 'Company')


 EQUEST BALKAN PROPERTIES ACQUIRES RETAIL WAREHOUSES IN BULGARIA AND ANNOUNCES
                      APPOINTMENT OF TWO SENIOR EXECUTIVES


Equest Balkan Properties plc, the property investment company focused on
commercial, retail and industrial property in South Eastern Europe and primarily
Bulgaria and Romania, is pleased to announce a new investment in Bulgaria to
complement its current portfolio of commercial property investments in the
Balkan region.


Equest Balkan Properties plc has acquired a 40% equity interest in Glorient
Investment BV ('Glorient'), a property investment company specialising in the
ownership and management of retail warehouse assets in Bulgaria.  EBP's
investment is EUR 29.4 million (GBP 19.9 million) in cash, valuing Glorient at
EUR 73.5 million on a debt free basis.


EBP's partner in the company are the founders of K&K, who operate Bulgaria's
leading electronics retail chain, Technomarket (www.technomarket.bg), with a
market share in excess of 40%. EBP has already formed a joint investment company
called Aurora in order to drive the expansion of Technomarket's network of
retail warehouses in the Serbian market.


Following the acquisition of this stake, EBP has invested or committed to
property expenditure of EUR 231 million, representing 116% of the net proceeds
of the Company's initial capital at launch.


Glorient is the owner of a portfolio with a gross lettable area of 88,314 sq m.
In addition, Glorient currently owns a retail warehouse development scheme that
is under construction and a number of landholdings for which development plans
are currently being prepared.


Glorient's portfolio of existing premises comprises 17 separate properties:


*  16 Technomarket retail warehouse properties, comprising 83,052 sq m
   of retail warehouse space. Eight of the properties are located in Sofia
   (population: 1,377,531); the rest are in Plovdiv (376,276), Varna (335,000),
   Burgas (210,260), Russe (201,483), Stara Zagora (155,237), Haskovo (85,848),
   Blagoevgrad (80,000), Veliko Turnovo (65,031) and Sandanski (27,631)


*  A 5,262 sq m office building in Sofia leased to K&K / Technomarket.


Glorient is also in the process of constructing 14,500 sq m of new retail
warehouse space in the city of Pleven (population: 137,768) that has been
pre-leased to two German-owned retail chains, Billa and Praktiker, for food and
DIY retailing. The development for Praktiker is expected to be completed by the
end of October 2006, with the development for Billa scheduled for completion by
end of November 2006.


In addition to the existing properties and the properties under development,
Glorient also holds an additional 116,406 sq m of land that is currently
undeveloped but for which plans are being drawn up.


EBP has invested in the share capital of Glorient on a negotiated valuation
based on a calculated unleveraged portfolio yield of 9.5% for the existing
Technomarket properties and current Billa and Praktiker properties under
development. The current overall unleveraged yield of the investment, upon the
completion of the Billa and Praktiker properties, is 8.5%, taking into account
the undeveloped and currently non-income producing land owned by Glorient.


All Glorient's existing lease and pre-leasing agreements have recently been
completed and are for a minimum 10 year period. The rental is linked to the
annual CPI EUR25 countries index.


Equest Investments Bulgaria Limited, a company organised principally to make
direct equity investments in developing enterprises in Bulgaria and managed by
Equest Capital Management Limited,  is in advanced negotiations to acquire a
significant equity holding in the operational electronics chain with the
remaining shares being held by the owners of K&K / Technomarket. This
operational electronics chain has entered into the existing and pre-leasing
agreements detailed above.


In addition to the above transaction, Equest Partners Limited, the adviser to
Equest Balkan Properties plc, is pleased to announce the appointment of two
senior executives, Tero Halmari and Dimitar Koevsky as Chief Operating Officer
and Head of Project Management respectively to strengthen its property
management and investment team.


*  Mr. Tero Halmari, who is a Finnish citizen and resident in Sofia,
   Bulgaria, holds a Master of Law degree from University of Helsinki. Prior to
   joining Equest, Mr. Halmari was a Senior Banker and Deputy Director at the
   European Bank of Reconstruction and Development ('EBRD') in Sofia responsible
   for the origination, execution and monitoring of investment in Bulgaria as
   well as an active participant in the bank's property investments. Prior to
   his assignment in Sofia, he worked as a Senior Syndications Manager at EBRD
   in London as well as a Director and team leader at GE Capital in London. Mr.
   Halmari has nearly 20 years experience working in the financial markets in
   Helsinki, London and Sofia.  As Chief Operating Officer, he will be
   responsible for further developing the operations of EBP in the Balkan
   region, including the execution and monitoring of investments.


*  Mr. Dimitar Koevsky, who is a Bulgarian citizen and resident in Sofia,
   Bulgaria, holds a degree in Civil Engineering from the High Institute for
   Architecture and Civil Engineering as well as Masters Degrees in Project
   Management and Logistics Management from Ecole Polytechnique Federale de
   Lausanne and the International Institute for Management in Logistics,
   Lausanne, Switzerland. Prior to joining Equest, Mr. Koevsky has held a number
   of senior positions in companies and organizations including Glavbolgrstroy,
   GBS, General Road Administration as well as having been the Deputy Minister
   for regional development and public works in Bulgaria. Mr. Koevsky has more
   than 20 years' experience of project and development management in Bulgaria
   and the region and will be responsible for EBP's development projects and
   teams across the Balkan region.


Commenting on this announcement, Petri Karjalainen, Managing Partner of Equest
Partners Limited, EBP's Investment Adviser, said:


'This investment into Glorient was one of the original exclusivities we had
outlined during the EBP flotation and we are pleased to have completed on the
purchase. The expected returns are in line with our return targets and we can
see substantial upside to the investment from the undeveloped land holdings
which account for about a third of the total land currently owned by Glorient.
We have established an extremely strong working relationship with K& K /
Technomarket through our earlier investment in Aurora in the Serbian market and
are looking forward to building further on this positive partnership in the
Bulgarian property market.'


Mr Karjalainen continued:


'This investment constitutes our eighth investment in the ten months since our
flotation and EBP continues to execute on its property acquisition strategy in
accordance with the plans outlined at the time of the Company's listing.  We
continue to focus principally on Bulgaria and Romania as well as the
neighbouring countries of Serbia and Montenegro, Croatia, Turkey, Bosnia and
Albania, with the intention to build the portfolio further in terms both of the
number of assets owned and the total investment size of the portfolio. The
pipeline of investment and development projects that meet the investment target
returns of EBP remains strong and the Company expects to be in a position to
announce further property acquisitions in the near future.


'We are also delighted with the appointments of Mr Tero Halmari and Mr Dimitar
Koevsky as members of the Equest team as they bring a wealth of expertise both
of financial and project management in the Balkan region. We are confident that
their skills and experience will prove invaluable as we develop our property
portfolio and establish EBP as a leading investor in commercial property in the
Balkan region.'


For further information please contact:


Equest Partners Limited                                  + 44 20 7240 7600
Petri Karjalainen
Naomi Kora

Financial Dynamics                                       + 44 20 7831 3113
Stephanie Highett
Ed Gascoigne-Pees
Dido Laurimore


Notes to Editors:


Equest Balkan Properties plc is a commercial property investment company focused
on South Eastern Europe and primarily Bulgaria and Romania. Its investment
objectives are to invest, principally, in a range of income-producing
commercial, retail and industrial property opportunities in or around the major
cities of Bulgaria, Romania, Albania, Bosnia & Herzegovina, Croatia, FYR
Macedonia, Serbia & Montenegro and Turkey, where it sees such investment as
having the potential for capital appreciation. The Company may also invest in
select development projects where it expects high rental yields. It may also
invest selectively in land acquisitions.


Equest Partners Limited, the Company's Investment Adviser, is an independent
investment management and advisory firm regulated by the FSA. Headquartered in
London and with offices in Sofia and Bucharest, Equest Partners comprises more
than 20 professionals with valuable experience of investing in emerging markets
and particularly Central and Eastern Europe. Equest Partners is currently one of
the largest dedicated investment and advisory companies for the Balkan region.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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