Completion of first acquisition

RNS Number : 1720P

Globalworth Real Estate Inv Ltd

30 September 2013

 

Globalworth Real Estate Investments Limited

Completion of first acquisition

Guernsey, 30 September 2013: Globalworth Real Estate Investments Ltd. (AIM: GWI) ("Globalworth" or "the Company"), the real estate investment company targeting opportunities in Romania and the broader SEE and CEE regions, is pleased to announce the completion of the acquisition of Globalworth Asset Managers Srl ("GAM" or the "Asset Manager"), the first in its initial portfolio of real estate assets.

Ioannis Papalekas, Chief Executive Officer of the Company commented: "In line with our communication to investors during the IPO process, GAM represents a milestone acquisition for Globalworth as not only does it own a number of high quality assets, but it also employs a team of very experienced and talented asset management professionals with a proven track record.  With the acquisition of GAM, Globalworth is positioned as a fully integrated real estate investment and management company able to take advantage of the significant investment opportunities that present themselves in our target markets."

GAM is a real estate investment and asset management company founded and previously owned by Globalworth's Founder and CEO Ioannis Papalekas.  The acquisition of GAM took place in accordance with the terms and conditions of the Asset Manager Acquisition Agreement and the Founder Subscription Agreement as disclosed in the Company's Admission Document. As such, part of the transaction consideration has been satisfied through the issue to Zakiono Enterprises Limited, a Founder Company (as defined in the Admission Document) of 6,200,000 shares of no par value ("Ordinary Shares") at the placing price of Euro 5 per share.  Application will be made to AIM for these Ordinary Shares to be admitted to trading on AIM with this expected to occur on 4 October 2013. Following the above issue, the total issued share capital of the Company will comprise 16,918,703 Ordinary Shares.

As described in the Company's Admission Document, GAM is a fully-fledged real estate investment and operating company with a longstanding track record in acquiring, developing and managing real estate assets in Romania. GAM's main real estate investments, which form part of the Initial Portfolio as described in the Admission Document are as follows:

·     City Offices: is a mixed-use re-development/re-positioning project located in the southern part of Bucharest in the densely populated area of Eroii Revolutiei, at the crossroad of two of the City's principal arteries (Giurgiului Road and Oltenitei Road). City Offices consists of two connected buildings which, upon completion of the works undertaken, will offer a Commercial Building ("CB") and Multilevel Parking ("MP").  CB is currently under renovation and the works are expected to be completed by the end of 2013. Upon completion, the property will comprise 27,155 sqm of Gross Build Area over six floors above ground. The ground floor will offer retail space and the remaining floors are to be used as office.  MP comprises 28,883 sqm of Gross Build Area over 13 floors above ground, with retail space on the ground floor and 882 parking spaces spread across the property. Currently, the majority of the retail area is leased and there are there are active negotiations for the take-up of significant or all of the office space.

CB was originally developed by the Founder as a shopping centre, known as the City Mall Shopping Centre. City Mall, as it was then known, was acquired by an international institutional investor in 2005, which subsequently developed MP. A Founder Company re-acquired the property out of insolvency in December 2011.

·     Floreasca 1: Floreasca 1 is an office development on the shore of the Tei lake in the northern part of Bucharest in the Floreasca area. Upon completion, the building is expected to comprise 4,711 sqm of Gross Build Area over nine floors above ground. The site was acquired in January 2013 by Victoria Ventures SA (in which the GAM has a 60 per cent. equity interest) for future development. The development is expected to receive the necessary change of use building permits by December 2013 and construction is expected to be completed in late 2014.

·     Herastrau 1: Herastrau 1 is an office development to be constructed in the northern part of Bucharest on Nordului Road across from Herastrau Park. Upon completion, the building is expected to comprise 12,166 sqm of Gross Build Area over seven floors above ground. Most of the site was acquired out of insolvency in October and November 2012 by GAM for future development. The development is currently at conceptual phase and (subject to obtaining all necessary permits) construction is expected to be completed in 2015.

GAM has also signed a sale and purchase agreement to acquire the property in the Initial Portfolio described in the Admission Document known as Timisoara Airport Park ("TAP").  TAP is an industrial property located to the north-east of Timisoara in close vicinity to the Traian Vuia International Airport.  TAP property has been partially developed, with two phases completed in 2011 and subsequently leased in their entirety to Valeo Industries ("Valeo"), the multinational automotive components manufacturer. The two completed phases comprised a building with 27,474 sqm of Gross Built Area over two floors above ground. The asset will be the subject of a further phase of development of 12,000 sqm, also to be leased entirely to Valeo. The closing of the TAP transaction (and the payment of the related consideration to the vendor of the property) is pending receipt of the approval of Valeo.

In addition to the aforementioned assets, GAM also employs the Asset Management team which is responsible for the management of the Initial Portfolio as well as any future assets the Company will acquire. The Asset Manager currently comprises 33 professionals and executives with significant expertise in property management, leasing and sales, project management, construction management, accounting/book-keeping and administration. Many members of the team have managed the Founder's investments over many years.

For further information visit www.globalworth.com or contact:

Panmure Gordon (Nominated Adviser)                             Tel: [phone]

Nicola Marrin

Freddy Crossley

Cantor Fitzgerald Europe (Joint Broker)                            Tel: [phone]

Rick Thompson

David Porter

Milbourne (Public Relations)                                               Tel: [phone]

Tim Draper

About Globalworth:

Globalworth Real Estate Investments Ltd is a real estate investment company founded by real estate investor and developer Ioannis Papalekas to take advantage of investment opportunities in Romania and the broader SEE and CEE regions. The company is Guernsey incorporated and registered as a closed-ended collective investment scheme by the Guernsey FSC.

The Romanian market offers an attractive real estate investment proposition in the medium-to-long term. Globalworth believes that global investor capital flows will gradually move from markets considered as "safe havens" to more peripheral markets such as Romania and the broader SEE and CEE regions in search of higher yielding investments. As a result, Romania and the broader SEE and CEE regions should, in due course, become more attractive destinations for a wide investor audience. Globalworth anticipates holding an early mover advantage in these markets and benefitting from this gradual shift in investor sentiment.

 

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