The wave of new property companies aimed at eastern Europe continues with the flotation of Equest Balkan Properties on Aim next month, at an estimated market capitalisation of 190 mln pounds, reported the Financial Times on November 15.
The group, which will invest primarily in commercial property in Bulgaria and Romania, is run by London-based Equest Capital Management, which already runs a Dublin-listed investment company focused on Bulgarian industry, said the British newspaper.
The expanding list of such ventures in the region includes Dawnay Day Carpathathian, Orchid, the Black Sea Property Fund and Raven Russia, said the Financial Times.
Yields tend to be higher in Eastern Europe than Western, reflecting the illiquid and undeveloped market and higher political risk. Although yields have fallen - in Sofia from 15% to 10% in two years - they remain relatively high. Property investors expect a fillip when Bulgaria and Romania join the EU, said the newspaper.
Equest is set to promise an initial income yield of 7.5%. It has identified nearly Pounds 200 mln pounds of properties that it will complete after it floats, said the Financial Times.
Equest said in mid October it planned to inject via its subsidiary Immofinance a total of 30 mln euro in a holiday village in Sofia’s upscale neighbourhood Boyana and in a spa complex in the village of Banya, close to popular ski resort Bansko.
The construction works are due to kick off next spring and finish in 2008.
The 10 mln lev Banya project is implemented in partnership with the municipality of Razlog which has contributed the land in exchange for a 30% stake in the joint venture. The 27,000 sq m complex will incorporate a hotel, family houses and three- and four-storey apartment buildings.
The development on the outskirts of Sofia, dubbed Boyana Park, will absorb 20 mln euro and will cover 30,000 sq m.
Equest has invested over 100 mln euro in Bulgaria so far.
The company has purchased five cinema theatres in Sofia and launched the construction of the luxury residential community Embassy Suites near the capital which is already 40% sold out.
Equest has also acquired the majority stake in Bulvaria, the local dealer of Opel, GM and Chevrolet, and 100% of the capital of local Mazda dealer Star Motors and of Auto Italia, the importer of Fiat, Lancia, Alfa Romeo and Ducatti. Earlier this year it acquired a substantial minority stake in local food store operator Familia.

Dnevnik