28 January 2008
Taliesin Property Fund Limited ('Taliesin' or the 'Company')
Additions to Portfolio
Taliesin is pleased to announce the purchase, subject to final notarisation, of
a total of €22,290,000 of Berlin property. These signings include a €6,550,000
portfolio of four primarily residential buildings in Berlin, located in
Friedrichshain, Kreuzberg, Wannsee and Spandau. The seller has provided a rent
guarantee and the portfolio has been extensively refurbished. Based on the rent
guarantee expected yield is 7.2% and there is scope for rent increases through
active asset management. Acquisition cost per square metre of €1,100 equates to
approximately £83 per square foot.
A second portfolio of seven primarily residential buildings has been notarised
for a sum of €13,250,000. The buildings are in excellent locations in Berlin and
have received significant investment over the past couple of years. The slightly
lower initial yield of 6.2% reflects the quality of the locations but average
rents show potential for increases. Per square metre acquisition costs of €1,150
equate to £87 per square foot.
A final portfolio of two buildings in Pankow has been acquired for a sum of
€2,490,000. The buildings are modern apartment blocks containing 30 residential
and 2 commercial units. Current rents are below the levels that are achievable
under the official Berlin rental comparison instrument, known as the
'Mietspiegel', and optimised yields should exceed our target of 7.5%.
The Company's strategy continues to be to buy good quality property at prices
that offer a substantial discount to replacement cost, with scope for
significant rent increases. To optimise the performance of our portfolio,
Taliesin has entered into an exclusive property management agreement with Core
Immobilien Management GmbH ('Core'), a newly created property and asset
management company formed by the founding partner of one of Berlin's largest and
best respected property management companies. Taliesin Management Limited, the
Company's Investment Adviser, controls 20% of Core.
Taliesin has now spent or committed to spend €77,429,000 on property purchases.
Recent purchases and the improved pipeline of property offers mean that the
Company remains confident of achieving the target portfolio size of €300 million
by the end of 2008.
Mark Smith, a Director of the Company commented: 'The Berlin economy and
property markets remain resilient in the face of financial market turbulence. In
particular, the top end residential market appears to be buoyant and is
experiencing a lack of supply. Consequently, we have received a number of
enquiries from property development companies about our undeveloped sites in
Mitte and Potsdam. Sale prices per square metre in these locations are exceeding
Euro 3,000 for new build properties.
The main consequence of the credit crunch in Germany has been to reduce loan
availability for some of the more leveraged participants in the market thereby
improving our property pipeline. We expect to be able to announce further
purchases in the near future. Our local presence and the profile we get from our
AIM listing means that we are still able to finance our purchases. Terms being
offered by our existing lenders are similar to last summer and new lenders are
offering indicative terms superior to those received last year.'
For further information, please contact:
Taliesin Property Fund Limited
Mark Smith, Director 01702 606 993
NCB Stockbrokers Limited
Christopher Caldwell 020 7071 5234