City Development REIT Launches Residential Construction Projects

City Development REIT Launches Residential Construction Projects

City Development REIT strats procedures for an initial capital increase from 500,000 leva to 2.2 mln leva by offering 170,000 shares with a face value of 10 leva.

The company will offer 170,000 rights, each entitling to the subscription of 1 new share. According to prognosis the auction and trade with the rights will take place between October 17 and November 1. The deadline for subscription of shares from the capital increase will be November 23, 2007.

City Developments currently has investments in two residential buildings - Perlite Complex on Cherni Vrah Blvd, and a project in Ovcha Kupel area in Sofia.

The company will acquire 13 apartments and 2 garages in the first project at a price tag of a total of 1.328 mln leva (678,995 euros). The complex will be completed by April 2008. The management expects revenue to reach 2.008 mln leva (1.026 mln euros).

5 of the 13 apartments have already been sold and preliminary contracts have been signed for the remaining 8 (the deals will be finalized in December after completion of capital increase procedures).

The company will acquire 5 apartments, 1 garage, a shop/office and a gym in the second building. City has invested 644,000 leva (329,271 euros) in this projects, revenue is estimated at 964,000 leva (492,885 euros).

4 apartments have already been sold and there is a preliminary contract for the last one.

“We will use the funds from the capital increase to acquire the properties in the two projects mentioned,” company official Nikolay Dimitrov said. The funds necessary for the purchase of 1 apartment, the gym, the shop and 2 garages amount to 389,000 leva.

City Developments is currently completing the final stages of examination of a 4-decares land plot in Gorna Banya, and a preliminary contract for its purchase may be signed this week.

At the end of August the company's revenue from core activity stood at 849,000 leva (434,086 euros), and profit amounted to 226,000 leva (115,551 euros), or 4.52 leva/share.

Main shareholders are ET Rumen Vatkov II controlling 65% of capital, and TBI Dynamic and TBI harmony with 15% each. Financial and Business Consultants has 5%.

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