REG - First Property Group - Further investment in Blue Tower, Warsaw

First PropertyAnnouncement

12/08/2022 16:00

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RNS Number : 9131V  First Property Group PLC  12 August 2022

12 August 2022

 

First Property Group plc

Further investment in Blue Tower, Warsaw

 

First Property Group plc (AIM: FPO), the award-winning property fund manager
and investor, is pleased to report it has acquired a further 7,171 m(2) (or
32.1%) in Blue Tower, an office building in Warsaw, taking its ownership in
the building to 17,937 m(2) or 80.3%.

 

First Property already owned 90% of the management company constitutionally
tied to managing Blue Tower. The Company, therefore, now has effective total
control of this landmark property. Owning these two controlling interests
should result in an enhanced value for the Group's interest in the building.

 

The consideration for this new investment is PLN 40.4 million (£7.2 million),
payable in seven instalments over a six year period. The first instalment of
PLN 6.0 million has been paid and ownership of the property transferred to the
Group. The remaining instalments are to be paid as set out below:

 

-     PLN 5.0 million by 12-08-2023;

-     PLN 5.0 million by 12-08-2024;

-     PLN 5.0 million by 12-08-2025;

-     PLN 5.0 million by 12-08-2026;

-     PLN 5.0 million by 12-08-2027; and

-     PLN 9.4 million by 12-08-2028.

 

 

Of the space being acquired, 2,012 m(2) is let to Pekao Bank on a lease with
rolling termination provisions subject to 6 months' notice with the first such
notice being served no earlier than 12 August 2023. The rent payable pursuant
to the lease is PLN 55 per m(2) or some PLN 1.33 million per annum (£237,000
per annum).

 

Whilst the economic environment across Europe is challenging, the Polish
economy is doing relatively well. The Company expects occupational demand and
office rents in Poland to be buoyed due to a substantial increase in the cost
of building (materials and labour) and a resultant decline in the construction
of new office space in Warsaw.

 

The Company will now be embarking on a largely tenant led fitout programme,
refurbishing space in the newly acquired space as and when tenants are found.
The phasing of the consideration, as set out above, should enable the Company
to deliver a good rate of return from this investment as the space is upgraded
and leased.

 

Ben Habib, the Company's Chief Executive, said:

 

"I am excited by the Group's acquisition of a further 32.1% interest in Blue
Tower, taking our total interest in the building to 80.3%. Our first
investment in this office block was in 2008 and it has made a major
contribution to our profits over the years. I expect this to continue and
grow.

 

"It is a landmark building in Warsaw, centrally located, opposite the City
Hall, above a metro station and at the junction of major bus and tram routes.

 

"There is a substantial programme of refurbishment and leasing ahead but I
anticipate this should go well."

 

 

 

 

-Ends-

 

 

For further information please contact:

 

 First Property Group plc                            Tel: +44 (20) 7340 0270
 Ben Habib (Chief Executive Officer)                 www.fprop.com (http://www.fprop.com)

 Jeremy Barkes (Director, Business Development)      investor.relations@fprop.com (mailto:investor.relations@fprop.com)

 Allenby Capital (NOMAD & Broker)                    Tel: + 44 (20) 3328 5656
 Nick Naylor / Freddie Wooding (Corporate Finance)

 Amrit Nahal (Equity Sales)

 SEC Newgate (PR)                                    Tel: + 44 (20) 3757 6880;
 Robin Tozer / Richard Bicknell / Max Richardson     firstproperty@secnewgate (mailto:firstproperty@secnewgate) .co.uk

 

Notes to Investors and Editors:

 

First Property Group plc is an award-winning property fund manager and
investor with operations in the United Kingdom and Central Europe. Its focus
is on higher yielding commercial property with sustainable cash flows. The
Company is flexible and takes an active approach to asset management. Its
earnings are derived from:

 

·   Fund management - via its FCA regulated and AIFMD approved subsidiary,
First Property Asset Management Ltd ("FPAM"), which earns fees from investing
for third parties in property. FPAM currently manages thirteen funds which are
invested across the United Kingdom, Poland and Romania.

·    Group properties - principal investments by the Group to earn a return
on its own capital, usually in partnership with third parties. Investments
comprise seven directly held properties in Poland and Romania, and
non-controlling interests in ten of the thirteen funds managed by FPAM.

 

Quoted on AIM, the Company has offices in London, Warsaw and Bucharest. Around
one third of the Company's shares are owned by management and their families.
Further information about the Company and its properties can be found at:
www.fprop.com (http://www.fprop.com) . To receive RNS alerts by email please
subscribe here
(https://sirius.brighterir.com/public/fprop/news_alerts/email_alerts/register)
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