Secure Property completes sale of Kiev warehouse property

South eastern Europe-focused property and investment company Secure Property Development and Investment confirmed on Monday that the sale of the Terminal Brovary warehouse in Kiev to Temania Enterprises has now completed.

The AIM-traded firm said the transaction was concluded at a gross asset value of more than $16m - before the deduction of the outstanding EBRD loan, which was acquired by the buyer, while the SPDI guarantee to EBRD has been cancelled.

It said the transaction generated a profit for SPDI of around €2.7m, as well as a cash inflow of more than €3m.

The transaction was in line with the company's strategy to focus on high-yielding south eastern Europe countries such as Romania, Bulgaria and Greece, the board claimed, while limiting its exposure in Ukraine.

SPDI said it was currently evaluating further acquisition targets that meet its objective of delivering value to its shareholders through acquiring properties that fit its investment criteria of well-located income generating properties, with blue chip tenants in high-yielding locations that have favourable demand and supply dynamics for modern commercial properties.

Following the conclusion of the transaction, the company's income producing asset portfolio will include logistics terminals in Athens and Bucharest, offices in Bucharest, as well as a retail big box in Craiova, Romania.

In addition, SPDI said it holds substantial residential and land assets in Bucharest and Sofia, as well as in Ukraine - all of which have “excellent locations”, according to the board.

SPDI was currently evaluating various options to generate value from those assets.

“Following the successful closing of this profitable transaction, on 27 January 2017, having a property portfolio yielding 9.0% based on diversified actually yielding and ground land assets, anchored by Logistics Greek and Romanian assets, SPDI intends to step up its growth path,” said CEO Lambros Anagnostopoulos.

“Closing the Terminal Brovary sale reinforces SPDI's strategy of selecting prime well-located assets, ensuring these are both fully let, optimally financed, and generating value for its shareholders through both cash inflows and capital appreciation.”

Anagnostopoulos said Terminal Brovary was fully let, despite the difficulties that the Ukrainian economy is going through, adding that its sale at a profit proved SPDI's capacity to deliver on its strategy.

“The price achieved confirms SPDI's capabilities of generating value for its shareholders but also serves to illustrate the disparity that persists between the net asset value of our company and our share price.

“We are determined to close this gap so that SPDI's share price fully reflects the real value of our prime real estate portfolio.”