Apartment Block in Emerging Market Under the Hammer!

Foreclosure on an entire residential portfolio of a major developer caught on the wrong side of the interest rate cycle here in South Africa. Opportunity to acquire 622 newly developed units in security estates in Gauteng, South Africa.

Target is to acquire these at 60-70% of market value for bulk acquisition at an average of circa US$26500 per unit. Strategy would be to finalise the sectional title registers, lease the units out and then exit via sales from year 3 at circa US$73500 per unit on a 3 year phased basis so as not to flood the market. Expect to lease at a yield in excess of 10% pa and sell at 175% of cost, giving an annualised return in excess of 37% pa over 5 years. Asset management team in place comprising real estate specialist manager, audit specialist, real estate legal specialist and a marketing team.

The attached files relate to one of 6 complexes comprising a new apartment block in Florida, Gauteng, South Africa, fully let with waiting list. Information packs and financial models are available on each complex on request.

AUCTION DATE IS 20 OCTOBER 2009

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