Business
New investment by the Group in Poland
New investment by the Group in Poland.
About this update from First Property Group Plc
[{"type":"text","content":"\n \nRNS Number : 6684W First Property Group PLC 13 February 2017 \n\n\n\n\n\nDate:\n\n\n13 February 2017\n\n\n\n\nOn behalf of:\n\n\nFirst Property Group plc (\"First Property\", \"the Company\" or the \"Group\")\n\n\n\n\nEmbargoed:\n\n\n0700hrs\n\n\n\n\n \nFirst Property Group plc \nNew investment by the Group in Poland\n \nFirst Property Group plc (AIM: FPO), the property fund manager and investor, announces that it has, in conjunction with a club of investors, agreed to acquire Pilot Tower, a recently built class A office building in Krakow, Poland, at a total cost of some €23 million. Completion of the acquisition, which is unconditional save for it being subject to receiving a ruling on the tax treatment of the transaction, is expected to take place in the second quarter of 2017. \n \nThe net operating income being generated by the property is currently €1.9 million per annum, equating to a net initial yield on purchase of 8.3% per annum.\n \nThe acquisition will be part funded by a bank loan of up to €15.9 million and cash of approximately €7.5 million. The cash has been committed by two family offices, a Cambridge college, and other clients of First Property. Included within this the Group intends to co-invest €1.5 million pari-passu with other investors.\n \nThe investment is forecast to earn a pre-tax profit of €1.16 million per annum, of which the Group's share, which will be accounted for as an associate, should be €230,000 per annum. This equates to a pre-tax rate of return on equity invested of more than 15% per annum. \n \nThe Group will also earn ongoing management fees of circa €220,000 per annum. In addition it will earn a one-off arrangement fee of €220,000.\n \nCommenting on the new investment, Ben Habib, Group Chief Executive, said:\n \n\"I am very pleased by the investment made by our clients and ourselves in this striking new office building in Krakow, Poland. It is in a prime location, boasts state-of-the-art facilities and is fully let at rent levels that offer room for growth in due course.\"\n \n \n-Ends- \n \nFor further information please contact:\n \n\n\n\n\nFirst Property Group plc \n\n\nTel: +44 (20) 7340 0270\n\n\n\n\nBen Habib (Chief Executive Officer)\nGeorge Digby (Group Fina...