Date: |
13 June 2018 |
On behalf of: |
First Property Group plc ("First Property", "the Company" or the "Group") |
Embargoed: |
0700hrs |
First Property Group plc
New investment in Poland
As set out in our Preliminary Results announced last week, in September 2017 the Group acquired the principal operating companies owning the majority of properties situated in Krakow Business Park (KBP), Poland. Krakow is the second largest city in Poland with a population in its metropolitan area of some 1.5 million.
KBP comprises four Class A office buildings with a gross leasable area of some 50,000 m2, half of which is vacant. There is room in the park for additional development. It is close to Krakow International Airport and has its own railway station.
At the time of our purchase the value of the investment was compromised by the bank loans secured on the properties, which were all in default. On 25 May 2018, after the Group's financial year end, the bank loans were restructured so that the debt is no longer in default. The total value of the bank loans is €47 million.
First Property is now pleased to announce that:
1. It has secured third party investor commitments from a group of investors to invest some €33 million of new equity in Fprop Phoenix Ltd, the holding company for KBP, with the aim of making it the best business park in and around Krakow. These investors include the Willis Towers Watson Partners Fund, Christ Church, Oxford, St Catherine's College, Oxford and Christ's College, Cambridge.
2. The Group, which is not participating in this fundraising, now owns some 23.4% of the issued share capital of Fprop Phoenix Ltd. The Group's share will be treated as an associate and, in keeping with its accounting policies, will be held at cost plus associated expenses of £900,000 (rather than at its market value).
3. In addition to earnings derived from its shareholding in KBP, the Group will earn management fees of €360,000 per annum.
With effect from later in June/ July 2018 the Park is to be renamed Eximius Park to reflect its excellent future.
Ben Habib, Group Chief Executive, First Property said:
"We fully expect to make Eximius Park the best business park in and around Krakow. The buildings on the park provide excellent office space but we shall be expanding its facilities to make it a home away from home for its tenants. Our plans include a new sports ground, park area, additional car parking, a free bus service for all tenants, a refurbished railway station with an improved frequent service to central Krakow (some 15 minutes away), new retail facilities, top of the range restaurants, a kindergarten and much much more. And en route we expect to earn good returns for our shareholders and our investors in the Park."
-Ends-
For further information please contact:
First Property Group plc |
Tel: +44 (20) 7340 0270 |
Ben Habib (Chief Executive Officer) George Digby (Group Finance Director) Jeremy Barkes (Director, Business Development) |
www.fprop.com [email protected] |
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Arden Partners (NOMAD & Broker) |
Tel: +44 (20) 7614 5900 |
Chris Hardie (Director, Corporate Finance) Ben Cryer (Corporate Finance) |
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Redleaf Communications (PR) |
Tel: +44 (20) 3757 6865 |
Robin Tozer / Lizzie Cowell |
[email protected] |
Notes to Investors and Editors:
First Property Group plc is an award winning property fund manager and investor with operations in the United Kingdom and Central Europe. Around one third of the shares in the Company are owned by management and their families.
Its focus is on higher yielding commercial property with sustainable cash flows. The company is flexible and takes an active approach to asset management. Its earnings are derived from:
· Fund management - via its FCA regulated and AIFMD approved subsidiary, First Property Asset Management Ltd (FPAM), which earns fees from investing for third parties in property. FPAM currently manages twelve funds which are invested across the United Kingdom, Poland and Romania.
· Group Properties - principal investments by the Group, to earn a return on its own capital, usually in partnership with third parties. Investments include ten directly held properties in Poland and Romania (including five held by Fprop Opportunities plc [FOP], in which the Group is currently the majority shareholder), and interests in nine other funds managed by FPAM.
Listed on AIM the Company has offices in London, Warsaw and Bucharest. Further information about the Company and its products can be found at: www.fprop.com.
