Information  X 
Enter a valid email address

Speymill DeutscheImm (SDIC)

  Print      Mail a friend

Friday 21 September, 2007

Speymill DeutscheImm

Investment Update

Speymill Deutsche Immobilien Co PLC
21 September 2007

Speymill Deutsche Immobilien Company plc ('SDIC' or 'the Company')

C Share Portfolio Investment Update

Speymill Deutsche Immobilien Company plc (AIM: SDIC; SDCC), the pan-German
residential property investment company listed on AIM, announces further
investments for the second tranche of funds raised ('the C Share Portfolio').

Main highlights as at 17 September 2007 are:

     -    Residential properties in and around various German cities and towns 
          have been notarised (i.e. committed to be purchased) for a cumulative 
          cash consideration of approximately EUR124.1 million.

     -    Initial net rental income (as at notarisation) is expected to be 
          approximately EUR8.4 million per annum (though this amount will be 
          temporarily augmented by initial rental guarantees for vacancies while 
          certain refurbishments are being carried out).

     -    Blended net initial property yield (as at notarisation) is expected to           
          be 6.6% (*excluding rental guarantees for certain properties - please 
          see below), and is anticipated to rise to 7.4% at the end of the 
          period commencing 12 months after completion of all acquisitions, full 
          takeover of property management and completion of refurbishments 
          ('stabilised yield').

     *Rental guarantees are in place during the period of refurbishment and 
     until one year following the completion of those refurbishments 
     (refurbishment costs of approximately EUR 8 million are to be borne by the 
     selling entities) for approximately EUR39.6 million of the current 
     notarised properties. Including these rental guarantees, these properties 
     are expected to deliver annual rental income of almost EUR3.1 million, 
     equating to an effective net initial property yield of approximately 7.7%. 
     Taking these rental guarantees into account in the overall portfolio 
     figures, the blended net initial yield is expected to be approximately 

The Company has notarised 2,395 apartment block units at an overall average
price of EUR766 per square metre. There were approximately 384 vacant units at
notarisation (circa 16% vacancy). These include units in buildings covered by
the aforementioned initial rental guarantees (most at 95% of maximum rental
income as at notarisation). Thus the adjusted vacancy in terms of rental income
is approximately 4.7%.

Refurbishment related costs of over EUR3.5 million are to be borne by the fund 
entities in addition to any costs covered by sellers.

After contract completion and when the properties have been taken over, 
refurbished and are fully under management for a suitable period, the Company 
will target a 95% overall occupancy rate (allowing for some natural vacancy and 
tenant fluctuation). It is envisaged that this target will be reached in the 
second year after takeover.

Where the Investment Manager and Investment Advisor feel certain deals in the 
market may be overpriced, in light of the tightening of credit markets, they are
holding back in the expectation of obtaining more advantageous prices.

Summary SDCC Portfolio Information

Total Number of Units          2,395
Total Purchase Price           EUR 124.1 million
Average Price per m2           EUR 766
Net Rental Income              EUR 8.4 million
Net Initial Yield              6.6%
Stabilised Yield               7.4%


The stabilised (normalised) rent represents a target income level based on a 95%
of maximum rents. If not already achieved, it is envisaged that this will be 
reached in the second year after takeover.

In the few months to one year after assuming full ownership and management, the 
rental income level may temporarily fall from the level at notarisation for the 
following reasons:

-     the buildings may be subject to some refurbishment which can lead to 
      increased tenant turnover;

-     during the handover period between notarisation and completion, the 
      incumbent owner may be less active in managing the property and, 
      consequently, there may be additional vacancies that will need to be 
      replaced through letting activity following completion; or

-     the building's operating/service charge costs may have to be subsidised 
      out of rental income before a reconciliation with tenants occurs (this 
      typically occurs in the year following takeover).

21 September 2007


Smith & Williamson Corporate Finance Limited                +44 (0)20 7131 4000
Azhic Basirov / Siobhan Sergeant

Fairfax I.S. PLC                                            +44 (0)20 7598 5368
Paul Richards / James King

Notes to editors:

-    Speymill Deutsche Immobilien Company plc is a pan-German residential 
     property investment company which listed on AIM on March 2006, raising £170 
     million on admission.

-    In May 2007, the Company raised a further EUR250 million through a placing 
     of C Shares which were admitted to trading on AIM on 10 May 2007.

-    The Company was established to invest in the German property market and, 
     predominantly, in the residential sector. It is anticipated that once 
     fully invested, the Company will have a balanced portfolio of properties 
     throughout Germany.

-    The Company's objective is to provide Shareholders with an attractive level 
     of income together with the prospect for long-term capital growth.

-    The Manager is Speymill Property Managers Limited and the Investment 
     Adviser is GOAL Service GmbH. The Manager and Investment Adviser are 
     responsible for identifying new investment opportunities.

-    The Manager is a subsidiary of Speymill Group plc (AIM: SYG) while the 
     Investment Adviser is a joint venture partner of Speymill Group plc (which 
     owns  51% of the venture).

                      This information is provided by RNS
            The company news service from the London Stock Exchange