RNS Number:7820J
Bulgarian Property DevelopmentsPLC
12 December 2007
FOR IMMEDIATE RELEASE 12 DECEMBER
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR
FROM AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES
BULGARIAN PROPERTY DEVELOPMENTS PLC
("BPD")
RULE 29 VALUATION CERTIFICATE
BPD made its preliminary announcement of results for the year ended 30 June 2007
on 27 November 2007. In that announcement, the Directors included a summary of
the valuation of the properties in BPD's portfolio carried out by Colliers CRE.
Colliers CRE has now completed its Valuation Report. The Valuation Certificate,
prepared in compliance with Rule 29 of the City Code on Takeovers and Mergers,
is set out below.
The individual property reports will not be published or put on display as the
Takeover Panel has agreed such disclosure could be commercially disadvantageous
to BPD.
Colliers CRE has consented to publication of its Valuation Certificate.
Colliers CRE's valuation, adjusted for cash and other assets and liabilities,
results in a NAV on a Current Value basis of between 75p and 90p per BPD share
(depending on the outcome of an application for an increase in density at the
Sofia Central Commercial Site) and of between 84p and 98p per share on a
discounted Gross Development Value basis (as set out in the preliminary
announcement dated 27 November 2007).
Enquiries:
Bulgarian Property Developments
Christian Williams (Chairman) +44 (0) 20 7488 0778
Ivo Hesmondhalgh (Joint Chief Executive) +44 (0) 20 7243 1336
Matrix Corporate Capital LLP (Nominated Adviser)
Ken Vere Nicoll +44 (0) 20 7925 3388
Fairfax I.S. PLC (Adviser and Broker)
Simon Stevens +44 (0) 20 7598 4034
Cubitt Consulting
Michael Henman +44 (0) 20 7367 5100
James Verstringhe
Colliers CRE Valuation Certificate
Your Ref
Our Ref G:/International/CFT/Projects/BulgarianPropertyDevelopments/Certificate
Date 12 December 2007
9 Marylebone Lane
London
W1U 1HL
Tel: 020 7935 4499
Fax: 020 7487 1800
www.collierscre.com
Direct Line +44 20 7344 6609
Direct Fax +44 20 7344 6539
Mobile +44 7768 500202
Chris.Fowler-Tutt@collierscre.co.uk
The Directors
Bulgarian Property Developments Plc
166 Portobello Road
London
W11 2EB
Advisors to Bulgarian Property Developments Plc
The Directors The Directors
Fairfax Mergers & Acquisitions Matrix Corporate Capital LLP
46 Berkeley Square One Jermyn Street
London London
W1J 5AT SW1Y 4UH
Dear Sirs
BULGARIAN PROPERTY DEVELOPMENTS PLC (BPD)
PORTFOLIO OF DEVELOPMENT SITES
In accordance with your instructions, we have inspected the above properties in
order to provide you with our opinion of their Market Value, as at today's date,
for the purpose of meeting the requirements of Rule 29 of the City Code on
Takeovers and Mergers.
STATUS OF VALUER AND INSPECTIONS
The properties have been inspected and valued by suitably qualified valuers who
fall within the requirements as to competence as set out in PS 1.1 and 1.2 of
the Appraisal and Valuation Standards (the "Red Book") issued by the Royal
Institution of Chartered Surveyors (the "RICS"). We confirm that Colliers CRE
falls within the definition of Independent Valuers and that we have no conflict
of interest in acting on your behalf on this matter and that we hold adequate
Professional Indemnity Insurance. These properties have also been previously
valued by Colliers International in Bulgaria for the purpose of financial
reporting.
The General Assumptions and Definitions form Appendix I to this report. The
properties were inspected during September 2007 by Kristian Engley MRICS and
Lachlan Stewart GAPI and supervised by Christopher Fowler-Tutt BSc MRICS.
COMPLIANCE
This appraisal has been prepared in accordance with the International Valuation
Standards 2005 and the RICS Appraisal and Valuation Standards (the "Red Book").
In the context of the valuation Colliers CRE act as an Independent Valuer. The
valuers do not have any direct or indirect personal or corporate relationships
with the property or Company that is the subject of this assignment and that
might lead to a potential conflict of interest.
This engagement has been performed independently and without bias toward the
client or others. We have complied with the code of conduct and adhered to the
ethical standards set out in the RICS Appraisal and Valuation Standards.
Brief Description OF PORTFOLIO
The portfolio comprises sixteen mostly 'green field' development sites in
Bulgaria. Eight of the properties are located in the capital city Sofia, with
the remaining properties in Bankso, Plovdiv, Pleven, Burgas, Rousse, Sandanski,
Vidin and Varna.
Within Sofia, two of the properties are located within close proximity to the
Sofia International Airport. The agricultural land surrounding the airport is
currently being redeveloped into logistics, office and 'bulky goods' properties.
A further five properties are located on the eastern and south eastern portion
of the Sofia Ring Road. Two of these properties are currently land locked and we
consider that additional adjoining land would need to be acquired to create a
potential development site. One of the holdings incorporates three small
properties fronting the western alignment of the ring road, south of Ring Road
Site 1, and we have been advised by BPD that these sites have been acquired for
strategic purposes.
The final property within Sofia is situated to the south of the city centre, in
an area that has been referred to as Sofia Central Commercial Site, with a land
area of approximately 87,000m(2). This property features various industrial
buildings of circa 1960's construction in a poor condition. It is proposed to
redevelop the site into a new Business Park with approximately 130,000m(2) of
building area.
Bankso is a ski resort location, and is zoned for residential use. It has a land
area of 6,094m(2), with development approval for a building footprint of 2,097m
(2) and a total built-up area of 10,781m(2).
Plovdiv is a green field development site with a total area of 21,830m(2). It is
proposed to develop a retail shopping centre, with a total area of approximately
36,454m(2).
Pleven is a green field development site with a total area of 36,755m(2). It is
proposed to develop the site in two stages with the first stage comprising
19,793m(2) of built-up area. From discussions with BPD, stage two comprises of
approximately 12,000m(2) of built-up area for use as 'bulky goods'.
Burgas is a green field site that fronts the main road leading from Burgas to
Sofia. Access to the site is only available in an easterly direction from the
dual carriageway. This site is currently zoned for agricultural use.
Rousse is an industrial development site within a new industrial estate. This
site has recently been purchased from the municipality, with several conditions
written into the contract of sale. It is proposed to develop an industrial
warehouse facility of approximately 17,000m(2).
Sandanski is a retail development site of 19,615m(2). It is proposed to develop
the site into a retail shopping centre of approximately 15,000m(2). We have been
provided with basic architectural sketches outlining the proposed development.
Vidin is a retail/office development site of 11,716m(2) situated to the north of
the town centre. The site was previously used as a cinema, which has been
largely demolished. No planning or concept design has been approved for the site
as yet.
Varna is an industrial development site of 132,500m(2). The site is currently
features various industrial buildings of circa 1960's construction in a poor
condition. The site is currently being redeveloped and renamed the Logistics
Park Varna, with the first phase already under construction.
All of the properties are described in greater detail in the individual reports
attached hereto.
SITE AREAS
For the purpose of this report and valuation, we have relied upon the schedule
of areas supplied by BPD, as reproduced in the property reports annexed hereto.
We reserve the right to revisit our valuation at a later date should any of the
information provided by BPD change in anyway.
TENURE
We have solely relied upon the information provided by BPD and, except where you
have advised us to the contrary, or our other enquiries have alerted us
otherwise, our valuation assumes the properties are all held freehold with a
clean and marketable title, and that there are no unusual, onerous or
restrictive covenants in the titles which are likely to materially affect our
values reported herein.
If our assumption is proven to be incorrect then we reserve the right to revisit
our valuation.
ENVIRONMENTAL MATTERS
We have relied upon the environmental information provided by BPD and unless you
have advised us otherwise, we have assumed that there are no environmental
matters which would impact on our valuations reported herein. We have also
assumed that the information and opinions we have been given are complete and
correct in respect of each property and that further investigations would not
reveal more information sufficient to affect value.
PLANNING
In conjunction with our local Colliers office in Sofia we have, where possible,
made verbal planning enquiries of the local municipality with respect to each
site where it has been rezoned. Where no such zoning has occurred we have made
what we consider to be reasonable assumptions as to its planning potential given
our knowledge of the individual locations.
We have also relied upon the zoning information and opinions provided by BPD for
the purpose of this report and valuation. We have assumed that the information
we have been given is accurate and complete for each property. Should our
assumptions prove to be incorrect at a later date, we reserve the right to
revisit our valuation reported herein.
In accordance with Clause (d) subsection (iv) of Rule 29.2 we confirm that, with
the exception of Varna and Bankso, planning consent has not yet been granted on
any of the properties. We discuss this in more detail in the individual reports
attached hereto.
We have been provided with copies of the building design and approval, power and
water supply diagrams and technical drawings for the development of the Bankso
site by BPD. Notwithstanding that the plans and documentation supplied to us is
mostly in Bulgarian, we have had sight of several translated documents. These
documents, together with our discussions with BPD, confirm that the subject site
has zoning and building approval dated 7 July 2007, to allow for the
construction of the proposed development, outlined in the attached property
report.
We have also been provided with a signed and dated letter from BPD stating that
the development site at Varna has construction/building approval for Phase 1,
being the development of the warehouse and office space. The letter also states
that this approval was obtained on 27 February 2007. We have been further
advised that the construction approval for Phase 2 is expected in the short
term, with approval for the warehouse element of this Phase obtained on 5 July
2007. The original planning documents have not been provided to us, as all the
documentation is written in Bulgarian and we have therefore relied upon the
information provided by BPD.
MARKET OVERVIEW
Bulgaria joined NATO in 2004 and the EU in January 2007. During the first half
of the 1990s Bulgaria's economy shrunk dramatically owing to the loss of the
COMECON markets, and UN sanctions against its major trading partner Yugoslavia.
In 1994, GDP began to show signs of growth and inflation fell for the first time
since transition commenced in 1990 and the collapse of the economy in 1996 due
primarily to an unstable banking system. Since 1997 the economy has gradually
recovered due to sound macroeconomic policies and a broad structural reform
programme.
Since 2000, GDP has grown at 4% to 6% per annum and is forecast to grow by
similar levels in 2007 and 2008.
Bulgaria macroeconomic data and forecasts
2005 2006e 2007f 2008f 2009f
Nominal GDP (Euro bn) 21.4 24.4 27.5 30.5 33.5
Per capita GDP (Euro) 2,780 3,170 3,590 4,010 4,420
Real GDP, yoy (%) 5.5 6.3 6.5 6.3 6.2
Inflation (CPI), yoy, avg (%) 5 7.3 6.2 4.7 3.6
Unemployment rate (%) 10.7 9.1 8 7.5 7
Exchange rate/Euro, avg 1.96 1.96 1.96 1.96 1.96
1M SOFIBOR (1), avg of the year 2.7 3.7 4.2 4.1 3.9
Current account/GDP (%) -11.3 -14.7 -14.2 -11 -9.5
FDI/GDP (%) 10.8 15.5 14 10.5 9
General government debt/GDP (%) 31.9 25 24.5 23 22
Budget balance/GDP (%) 2.3 3.5 2 1.5 1
Total external debt/GDP (%) 71.4 75 81 83.5 86
(1) Prior to SOFIBOR introduction yield on 3M treasury bonds was used as a
benchmark interest rate.
e - Estimate f - Forecast Source: Bank Austria
Bulgaria's dynamic GDP and per capita income growth rates and increasing
economic integration since 2000 have been driven by domestic consumption and
investment. Bulgaria's GDP per head in 2005 was circa $3,500. The country
remains the poorest of the CEE states (excluding Russia and Ukraine). Its
estimated GDP per capita in 2006, even at Purchasing Power Parity, was just 30%
of the EU15 average, 35% of the EU25 average and 53% of the EU8 average.
The reform programme launched in the late 1990s led to a steady fall in
inflation. During the 2003 - 2006 periods, however, inflation has varied between
2.3% and 7.3%. Given the rapid GDP growth, it will be difficult to bring down
inflation much further in the short term which presents a threat to the
country's targeted accession to the Eurozone in 2010.
Bulgarian's unemployment level has also been falling since 2000, reaching circa
9% by year end 2006. This is the lowest level since the beginning of transition
and compared with approximately 19% in 2000.
The biggest constraint on growth and risk to underlying economic stability in
Bulgaria has been its trade deficit. Estimated at approximately 15% of GDP in
2006, it is the highest in the CEE region and is forecast to remain in double
figures until at least 2008. Furthermore, Bulgaria's fixed exchange rate has
made it difficult for Bulgarian exports to remain competitive.
Surging inflows of capital goods in recent years, however, will continue to
stimulate export growth, providing sufficient financing for the current account
shortfall and as such mitigating much of the associated risk.
Growth Drivers
Bulgaria's tourism sector generated more than Euro2 billion of revenue in 2006 from
four million visitors enjoying its sun, sand and sea along its 354km of Black
Sea Coast, skiing opportunities in the winter and mountain landscapes in the
interior. The sector accounted for approximately 14% of Bulgaria's GDP in 2006
and accounts for more than 140,000 jobs.
Bulgaria's accession to the EU is contributing to a boom in tourism, raising its
profile as a major emerging travel destination. Post EU accession, the number of
foreign tourists in Bulgaria have jumped by at least 10% in 2007 and a forecast
by the World Tourism Organisation indicates that by the year 2010, the number of
tourists in visiting the country will annually exceed 20 million.
Since 2003, Bulgaria has seen booming interest from foreign investors. The
driving forces have been the EU accession process and membership; the
highly-skilled multilingual workforce with the EU's most competitive wage; a
stable and predictable business environment; the lowest operational costs and
tax rate in the EU and tax exemption and investment incentives for qualified
investors.
Between January and November 2006, the state exchequer received Euro3.2 billion of
inward investments. This equates to approximately 13% of GDP and more than 100%
of current account deficit. Bulgaria has the highest level of FDI as a
percentage of GDP in the CEE region.
Retail
The retail sector is demonstrating significant performance at present throughout
Bulgaria. While Bulgaria has less than 8 million inhabitants, the competition
between retailers to secure a share of a growing market has been strong.
Existing retailers are expanding their nationwide chains whilst new entrants
across the sectors are searching for entry sites. The food retail, hypermarket,
electronics, DIY and home furnishing sectors have driven the expansion of the
retail sector and 2007 - 2008 will see several international retailers enter the
market.
The lack of suitable plots of land in good locations with favourable logistics,
however, is a considerable constraint on the retail market. In the larger
cities, such locations have largely been secured, either by competitors or by
companies holding out for the best offers. This has in many cases led to
competitors having to stand in close proximity to each other.
The following table illustrates the major retail developments in Sofia both
completed and under construction.
Name Investor/Developer GLA (m(2)) Status Completion
TZUM Atlas Invest AD 19,000 existing 1999
Mall of Sofia GE/Quinlan 21,500 existing 2006
Private
CCS Equest 20,000 existing 2006
Sky City Fantastico 15,000 existing 2006
Carrefour Mall Carrefour 66,000 under 2009
construction
Serdika Shopping
Centre ECE 52,000 under 2009
construction
Akropolis Complex Sofiyski 100,000 under 2010
Akropolis construction
Bulgaria Mall London Sofia 49,500 under 2009
construction
Property/Salama
nca
Capital
Investments
Riofisa Complex Riofisa 85,000 project
Olympian Mall and
Tower Eurocapital 45,000 project n/a
Finance
DiVi South Mall Kondor 20,000 project 2010
Mall Tzarigradski Sofia Building 50,000 under 2009
construction
Enterprises
Evropa Park ECE 70,000 project 2010
Proektmanagemen
t
San Stefano Plaza Balkanstroy/San 13,600 under n/a
construction
Stefano
Property
Developments
The shopping centre market is currently under-supplied throughout the country
with queues of international retailers competing for any available space. In
Sofia, a city of up to 1.8 million inhabitants, the market consists of just two
large western standard malls; Mall of Sofia and CCS, both of which opened in
2006. Only one mall has opened outside Sofia, in Veliko Turnovo. Large supply
pipelines are in place in most cities however. Whilst Sofia will wait until late
2008 and 2009 for its next new mall, three new shopping centres will open in
fast developing Varna between mid 2007 and early 2008, whilst two new schemes
are scheduled to open in Plovdiv by late 2008.
Offices
Sofia's office market is one of the smallest capital city markets in the CEE
region. Total modern stock by the end of 2006 reached 157,000m2, which is
smaller than the regional Polish cities of Wrocklaw and Krakow and only slightly
bigger than the Czech city of Brno.
It is estimated that only 30,000m2 will come onto the market in 2007, leading to
an undersupply situation as annual demand is in the 40 - 50,000m(2) range and
rising. A large supply pipeline of 300-400,000m(2) is in place, however, most
will be built out through 2008-2011. Larger projects include Spanish developers
Riofisa's 100,000m(2) mixed used scheme behind the central train station and a
planned 80,000m(2) scheme from established Sofia developer Soravia on
Tsarigradsko Shose.
Few plots remain in the city centre for development. Further projects are
concentrated on and around the major road arteries and boulevards branching out
from the city centre e.g. Tsarigradsko (south east to the airport), Tsar Boris
III (south west) and Todor Alexandrov (west) as well as the southern section of
the ring road where the Business Park Sofia is located. Office demand will
continue to be driven by company expansions rather than new entrants. Most
international companies have already established a presence in Sofia, although
several large requirements are on the market from companies who have waited
until EU accession has been secured to enter the market.
Industrial
Despite the strong recent economic growth, Bulgaria's internal warehouse and
industrial market is still relatively small. The existing warehouse stock,
throughout Bulgaria, almost entirely comprises older inefficient facilities
built before 1990. As a result of the lack of space for letting and the absence
of developers with experience, larger companies have built warehouses for
themselves and sublet unused space where necessary.
The logistic market remains the least developed and most undersupplied of the
commercial sector in Sofia. Rising land prices in the capital have deterred
developers from launching projects. The first signs of an emerging development
market appeared in the last 18 months however, trigged by Bulgaria's economic
growth, a rising occupier interest in higher quality facilities, accession to
the EU, growing inward foreign investment and the rapid development of the
retail sector. A number of new developments around the airport in Druzhba,
Vrazhdebna and Slatina are rented out, e.g. DHL's facility, while new industrial
zones are emerging around the ring road.
One scheme dominates the Sofia supply pipeline. Tishman International's Sofia
Airport Centre (SAC) scheme, located 300 metres from the new airport terminal,
will be constructed over the next two to three years. SAC is a 165,000m(2) Class
A Business Park incorporating 22,000m(2) of high specification logistic space
for warehouse and light industrial use (as well as 100,000m(2) of offices and a
high-end hotel). Outside Sofia, the most likely development locations are those
on the Pan European transport corridors - the new cross country motorways, and
the Danube River - near the Black Sea Ports of Varna and Bourgas. A 100,000m(2)
logistic park is planned for Varna while Plovdiv is already home to three
industrial parks.
MARKET VALUES
We are of the opinion that the aggregate Market Value, as at today's date, of
the BPD portfolio of development sites, subject to a good and marketable title,
as detailed in the attached schedule is Euro75,020,000 (Seventy Five Million,
Twenty Thousand Euros). This figure is net of purchaser's costs of 3.5%.
The valuations of the individual properties form Appendix II to this report.
In accordance with Rule 29.2 Clause (d) our individual reports attached hereto
also address the following:
i. The value after the development has been completed.
ii. The value after the development has been completed and let
iii. The estimated total cost, including carrying charges, of completing the
development and the anticipated dates of completion and of letting or
occupation.
iv. A statement whether planning consent has been obtained and, if so, the
date thereof and the nature of any conditions attaching to the consent
which affect the value.
A summary of the figures are set out in the Appendices III, IV, V and VI
respectively.
SPECIAL REMARKS
1. In respect of those sites that are partially owned we have assessed the
Market Value of the site as a whole and then apportioned this value
according to the proportion of ownership by BPD. We are of the opinion that
we have had access to sufficient information to carry out a valuation on
these assets which are partially owned.
2. In order for the valuations reported in the attached schedules to be
achieved, the developments would need to be constructed as described in the
individual reports attached hereto. Our valuations assume that the
developments have been completed at today's date. Whilst we consider these
scenarios realistic in the current market any alteration in the actual
development may lead to a change in value.
3. In accordance with your instructions we have reported our opinions of values
both on a net of purchaser's costs and a gross of purchaser's costs basis.
Purchaser's costs have been assessed at 3.5%.
LIABILITY AND PUBLICATION
This report and valuation has been provided exclusively for the use of the
addresses for the purposes set out herein. We do not accept any responsibility
to any third party for the whole or any part of its contents.
Neither the whole nor any part of this valuation or any reference thereto may be
included within any published document, circular or statement nor published in
anyway nor disclosed orally to a third party, without our prior written consent
to the form and context of such publication or disclosure. Such approval is
required whether or not Colliers CRE are referred to by name and whether or not
the report is combined with others. In breach of this condition, no
responsibility can be accepted to third parties for the comments or advice
contained in this report.
Yours faithfully
Christopher J Fowler-Tutt BSc MRICS
Director
For and behalf of Colliers CRE
APPENDIX I
GENERAL ASSUMPTIONS AND DEFINITIONS
GENERAL ASSUMPTIONS & DEFINITIONS
The valuations have been prepared by a suitably qualified valuer, as defined by
PS1.1 of the Appraisal and Valuation Standards, on the basis set out below unless
any variations have been specifically referred to under the heading
"Special Remarks":
1 Market Value (MV)
Where we have been instructed to value the properties on the basis of Market
Value, we have done so in accordance with PS 3.2 of the Appraisal and Valuation
Standards issued by The Royal Institution of Chartered Surveyors, which is
defined as follows:
"The estimated amount for which a property should exchange on the date of
valuation between a willing buyer and a willing seller in an arm's-length
transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion."
The interpretative commentary on Market Value, as published in International
Valuation Standards 1, has been applied.
2 Market Rent (MR)
Valuations based on Market Rent (MR), as set out in PS 3.4 of the Appraisal and
Valuation Standards, adopt the definition as settled by the International
Valuation Standards Committee which is as follows:
'The estimated amount for which a property, or space within a property, should
lease (let) on the date of valuation between a willing lessor and a willing
lessee on appropriate lease terms in an arm's-length transaction after proper
marketing wherein the parties had acted knowledgeably, prudently and without
compulsion.'
MR will vary significantly according to the terms of the assumed lease
contract. The appropriate lease terms will normally reflect current practice in
the market in which the property is situated, although for certain purposes
unusual terms may need to be stipulated. Matters such as the duration of the
lease, the frequency of rent reviews, and the responsibilities of the parties
for maintenance and outgoings, will all impact on MR. In certain States,
statutory factors may either restrict the terms that may be agreed, or
influence the impact of terms in the contract. These need to be taken into
account where appropriate. The principal lease terms that are assumed when
providing MR will be clearly stated in the report.
Rental values are provided for the purpose described in this report and are not
to be relied upon by any third party for any other purpose.
3 Rental Assessment
Unless stated otherwise within the report, our valuations have been based upon
the assumption that the rent is to be assessed upon the premises as existing at
the date of our inspection.
4 Reinstatement Valuation
If we have prepared Reinstatement Values we will not have carried out a
detailed cost appraisal and the figures should therefore be considered for
guidance purposes only.
5 Purchase and Sale Costs
In arriving at our opinion of value we have allowed for purchaser's costs of
3.5% . This reflects 2% for land tax with the remainder being apportioned
between agents and legal fees.
6 Measurements
In accordance with your instructions we have relied upon the floor plans
and areas provided by the Borrower.
Floor areas are provided for the purpose described in this report and are
not to be relied upon by any third party for any other purpose.
7 Condition
Unless otherwise stated within the report, we have not carried out a
building survey, nor have we inspected the woodwork or other parts of the
structures which are covered, unexposed or inaccessible and we are,
therefore, unable to report that such parts of the properties are free
from rot, beetle or other defects.
Where we have noticed items of disrepair during the course of our
inspections, they have been reflected in our valuations, unless otherwise
stated.
None of the services, drainage or service installations was tested and we
are, therefore, unable to report upon their condition.
We have not been provided with a Technical Due Diligence Report.
8 Environmental Matters
Unless otherwise stated within the report, we have not carried out soil,
geological or other tests or surveys in order to ascertain the site
conditions or other environmental conditions of the properties. Unless
stated to the contrary within the report, our valuation assumes that there
are no unusual ground conditions, contamination, pollutants or any other
substances that may be environmentally harmful.
We have not been provided with an Environmental Report.
9 Fixtures and Fittings
In arriving at our opinions of value we have disregarded the value of all
process related plant, machinery, fixtures and fittings and those items
which are in the nature of tenants' trade fittings and equipment. We have
had regard to landlords' fixtures such as lifts, escalators, central
heating and air conditioning forming an integral part of the buildings.
Where the properties are valued as an operational entity and includes the
fixtures and fittings, it is assumed that these are not subject to any
hire purchase or lease agreements or any other claim on title. No
equipment or fixtures and fittings have been tested in respect of
Electrical Equipment Regulations and Gas Safety Regulations and we assume
that where appropriate all such equipment meets the necessary legislation.
Unless otherwise specifically mentioned the valuation excludes any value
attributable to plant and machinery.
10 Tenure, Lettings and Reports on Title and/or Tenancies
Unless otherwise stated, we have not inspected the title deeds, leases and
related legal documents and, unless otherwise disclosed to us, we have
assumed that there are no onerous or restrictive covenants in the titles
or leases which would affect the value.
11 Taxation
Whilst we have had regard to the general effects of taxation on market
value, we have not taken into account any liability for tax which may
arise on a disposal, whether actual or notional, and neither have we made
any deduction for Capital Gains Tax, Valued Added Tax or any other tax.
12 Mortgages
We have disregarded the existence of any mortgages, debentures or other
charges to which the properties may be subject.
13 Operational Entities
Where the properties are valued as an operational entity and reference has
been made to the trading history or trading potential of the property,
reliance has been placed on information supplied to us. Should this
information subsequently prove to be inaccurate or unreliable, the
valuations reported could be adversely affected.
Our valuations do not make any allowance for goodwill
14 Local authorities, Statutory Undertakers and Legal Searches
We have not made any formal searches or enquiries in respect of the
properties and are therefore unable to accept any responsibility in this
connection. We have, however, made informal enquiries of the local
planning authority in whose areas the properties are situated as to
whether or not they are affected by planning proposals. We have not
received a written reply and, accordingly, have had to rely upon
information obtained verbally.
15 Arrears
We have assumed that all rents and other payments payable by virtue of the
leases have been paid to date. If there are rent or other arrears, we
recommend that we should be informed in order that we may consider whether
our valuation should be revised.
16 Insurance
In arriving at our valuation we have assumed that the buildings are
capable of being insured by reputable insurers at reasonable market rates.
If, for any reason, insurance would be difficult to obtain or would be
subject to an abnormally high premium, it may have an effect on value.
17 Liability Cap
We confirm that the extent of our liability in respect of this valuation
and report is limited to a maximum sum of �50 million.
18 Standard Terms of Business
We confirm that this valuation report has been provided in accordance with
our Standard Terms of Business.
APPENDIX II
MARKET VALUES
MARKET VALUES
Property Market Value BPD % ownership BPD's share of
Euro Market Value Euro
Sofia Ring Road 1 6,850,000 100 6,850,000
Sofia Ring Road 2 1,215,000 100 1,215,000
Krivina 3 140,000 100 140,000
Kazichene (railway) 640,000 100 640,000
Hadjijnista (mines) 300,000 100 300,000
Airport site 1 3,450,000 100 3,450,000
Airport site 2 2,385,000 100 2,385,000
Commercial Park Sofia 36,500,000 100 36,500,000
Bansko 1,160,000 100 1,160,000
Plovdiv 7,480,000 50 3,740,000
Pleven 2,240,000 38 850,000
Varna 28,300,000 50 14,150,000
Vidin 2,180,000 50 1,090,000
Burgas 800,000 100 800,000
Sandanski 900,000 50 450,000
Russe 1,300,000 100 1,300,000
Total Euro95,840,000 Euro75,020,000
These figures are net of purchaser's costs.
APPENDIX III
VALUE AFTER THE DEVELOPMENT HAS BEEN COMPLETED
VALUE AFTER THE DEVELOPMENT HAS BEEN COMPLETED
Property Gross BPD % BPD's share of BPD's share of
ownership Gross Net
Market Market Value1 Market Value2
Value1 Euro Euro
Euro
Sofia Ring
Road 1 31,050,000 100 31,050,000 30,000,000
Sofia Ring
Road 2 5,900,000 100 5,900,000 5,700,000
Krivina 3 n/a 100 n/a n/a
Kazichene
(railway) n/a 100 n/a n/a
Hadjijnista
(mines) n/a 100 n/a n/a
Airport site 1 10,870,000 100 10,870,000 10,500,000
Airport site 2 7,700,000 100 7,700,000 7,430,000
Commercial
Park Sofia 145,275,000 100 145,275,000 140,200,000
Bansko 13,138,000 100 13,138,000 12,680,000
Plovdiv 26,800,000 50 13,400,000 12,930,000
Pleven 15,850,000 38 6,023,000 5,820,000
Varna 42,600,000 50 21,300,000 20,555,000
Vidin 13,280,000 50 6,690,000 6,455,000
Burgas n/a 100 n/a n/a
Sandanski 9,000,000 50 4,500,000 4,350,000
Russe 7,925,000 100 7,925,000 7,650,000
Total Euro329,388,000 Euro273,771,000 Euro264,270,000
1 These figures are gross of purchaser's costs
2 These figures are net of purchaser's costs
APPENDIX IV
VALUE AFTER THE DEVELOPMENT HAS BEEN COMPLETED AND LET
VALUE AFTER THE DEVELOPMENT HAS BEEN COMPLETED AND LET
Property Gross Market BPD % BPD's Share of BPD's Share of
Value1 ownership Gross Net
Euro Market Value1 Market Value2
Euro Euro
Sofia Ring
Road 1 46,678,000 100 46,678,000 45,050,000
Sofia Ring
Road 2 8,826,000 100 8,826,000 8,520,000
Krivina 3 n/a 100 n/a n/a
Kazichene
(railway) n/a 100 n/a n/a
Hadjijnista
(mines) n/a 100 n/a n/a
Airport site 1 15,223,000 100 15,223,000 14,700,000
Airport site 2 10,891,000 100 10,891,000 10,500,000
Commercial
Park Sofia 222,098,000 100 222,098,000 214,325,000
Bansko 13,138,000 100 13,138,000 12,680,000
Plovdiv 40,280,000 50 20,140,000 19,435,000
Pleven 24,184,000 38 9,190,000 8,870,000
Varna 77,302,000 50 38,651,000 37,300,000
Vidin 17,320,000 50 8,660,000 8,350,000
Burgas n/a 100 n/a n/a
Sandanski 12,750,000 50 6,375,000 6,150,000
Russe 10,536,000 100 10,536,000 10,170,000
Total Euro499,226,000 Euro410,406,000 Euro396,050,000
1 These figures are gross of purchaser's costs
2 These figures are net of purchaser's costs
APPENDIX V
SHARE OF TOTAL COSTS
SHARE OF TOTAL COSTS
Property BPD % ownership Total Cost1 to BPD
Euro
Sofia Ring Road 1 100 26,248,768
Sofia Ring Road 2 100 5,281,476
Krivina 3 100 n/a
Kazichene (railway) 100 n/a
Hadjijnista (mines) 100 n/a
Airport site 1 100 8,113,313
Airport site 2 100 5,932,777
Commercial Park Sofia 100 115,376,973
Bansko 100 8,181,111
Plovdiv 50 12,248,662
Pleven 38 6,185,013
Varna 50 17,567,721
Vidin 50 5,536,120
Burgas 100 n/a
Sandanski 50 4,257,520
Russe 100 6,761,873
Total Euro221,691,327
1 Excludes land value and acquisition costs.
APPENDIX VI
ESTIMATED DEVELOPMENT TIME FRAME
ESTIMATED DEVELOPMENT TIME FRAME
Property Total Time Frame for Development (mths)
Sofia Ring Road 1 48
Sofia Ring Road 2 19
Krivina 3 n/a
Kazichene (railway) n/a
Hadjijnista (mines) n/a
Airport site 1 36
Airport site 2 36
Commercial Park Sofia 71
Bansko 24
Plovdiv 36
Pleven 49
Varna 30
Vidin 25
Burgas n/a
Sandanski 27
Rousse 19
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the 'Code'), if any
person is, or becomes, 'interested' (directly or indirectly) in 1 per cent or
more of any class of 'relevant securities' of BPD, all 'dealings' in any
'relevant securities' of that company (including by means of an option in
respect of, or a derivative referenced to, any such 'relevant securities') must
be publicly disclosed by no later than 3.30 pm (London time) on the London
business day following the date of the relevant transaction. This requirement
will continue until the date on which the offer becomes, or is declared,
unconditional as to acceptances, lapses or is otherwise withdrawn or on which
the 'offer period' otherwise ends. If two or more persons act together pursuant
to an agreement or understanding, whether formal or informal, to acquire an
'interest' in 'relevant securities' of BPD, they will be deemed to be a single
person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of BGP, or by any of their respective 'associates', must be
disclosed by no later than 12.00 noon (London time) on the London business day
following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.
'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a 'dealing' under Rule 8, you should consult the Panel.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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