Muscat, Oman: A team of leading European investment managers is launching the Element's South East European Heritage Property Fund – and raising €100 million of equity from international investors.

The Fund is in the process of raising €100 million in equity – and has secured up to €400 million of debt through a syndicate of European banks. The Fund's senior management has committed to personally investing €2 million – whilst they also have commitments from a number of Middle Eastern investors (including members of various royal families) for up to 15% of the balance of the cash.

The Fund - will invest in high quality city centre residences in key markets (including Ljubljana, Belgrade, Bucharest, Zagreb, Istanbul and Athens) – where there is a growing shortage – and is forecasting exceptional returns of between 60 – 75% IRR – subject to the preferred portfolio mix.

The Fund also has an existing pipeline of high quality and high return developments already identified in key cities, which include certain key Western European cities, including London.

The Fund will target properties which have historical, cultural, architectural value in city centres to preserve the history of the city with also possible private public partnership.

The Fund can also invest in hotel and leisure developments and has already identified a significant property in partnership with one of the world's leading five star hotel chains.

Turnover of the projects will be shorter than the industry average with a typical lifespan of 2 year on each investment. The proceeds of the sales from each development will be reinvested into the Fund – however, dividends may be paid after year 2.

The Fund aims to take advantage of recent financial situation within the real estate market, to acquire distressed value city centre properties for future developments – and will be looking to also build an attractive land bank for future development.

For each investment the Fund is going to form a Special Purpose Vehicle which will be formed for each single development project. The Fund can also hold the title of real estate if the tax benefits will be in favour of the investor.

In addition, the Fund will be able to receive rental income and to benefit from yield 'arbitrages' in high end London market (and other Western European cities). As a result, the Fund has put in place a 'blue-chip' team of advisors – including Colliers (who will provide regular NAV calculations), Foxtons and KPMG.

Finally, the Fund is in the process of recruiting a very 'blue-chip' Chairman and Advisory Board.

The Fund's other Key characteristics include:

• Exceptional returns forecast – of between 60 – 75% IRR – subject to preferred portfolio mix.
• The ability to identify niche development opportunities in key heritage sites – and ‘fast track’ the planning process.
• 'Blue chip' partners - incorporating the leading developers in each market.
• Fund raising under-pinned by commitments from Middle Eastern investors.
• Bank debt/loan agreements already negotiated for individual investments/developments.
• Fund will be insulated from any local currency issues – by both investing and paying development costs in Euros.

Commenting on the launch, the Fund's Joint Managing Director, Savvas Liasis said:

"We are delighted to be launching this unique, high growth Fund at such a timely moment in the European property cycle."

"I believe that we will have first mover advantage in a number of key capital cites – where prices have fallen sharply and there is a marked shortage of potential buyers."

"We will be looking for a flexible mix of investments reflecting the risk : reward profile of the Fund's investors – and will also be targeting possible subsidies offered by EU Heritage Funds, which could significantly enhance returns. Furthermore, there are significant public to private partnership opportunities for historical heritage properties."

"Our aim is for the Fund aims to be fully invested within 18 months – and producing rental income within 6 months and capital returns from the sale of developments within 12 months."

"Finally, the Fund is considering a listing on the UK's AIM exchange – or another designated market."

The Fund will be tax efficient – via Cyprus registration/domicile – and also EU regulated. The Company is registered as a regulated ICIS under the Law and recognised as a private ICIS by the Central Bank of Cyprus and which will be offered to experienced investors. The Company's base currency is the EURO.

15 November 2009

Muscat, Oman: Senior Representatives of the Elements SEED Fund (South Eastern Europe Development - Residential Heritage Fund), an open-ended investment company incorporated in Cyprus, are visiting Oman to encourage Middle Eastern investments in South Eastern Europe. Having secured nearly EUR 400 million in debt from a consortium of European banks, Elements is looking to raise EUR 100 million in equity.

The Elements SEED Fund aims to achieve substantial long-term capital appreciation from investment in and renovations as well as refurbishment of classical residential properties in key city centres in South Eastern Europe and other select European capital cities, developing them into high net worth residencies.

Focusing on large cities in South Eastern European, Element's portfolio will also include real estate in major western capitals to provide a more balanced asset base for the Fund.

Savvas Liasis and Ugur Yildrim, both Investment Directors' and Partners' in the Elements SEED Fund, are veterans in Europe's real estate industry and will be visiting Oman between November 16th and 19th, 2009.

"The Fund is unique in that it will target properties which have historical, cultural and architectural value. The SEED Fund is not just a value proposition for investors but also seeks to preserve the history of the city through possible private- public partnerships," commented Savvas Liasis.

"Under-pinned by demand from Middle Eastern investors we will also be marketing to investors in the UK, Europe and the US in the coming weeks," said Ugur Yildrim, Investment Director, Elements Property.

"Our goal is to be fully invested within 18 months, producing rental income within 6 months and receiving capital returns from the sale of developments within 12 months. Our initial feedback from European and US- based investors to the fund demonstrates that we are well on our way to adhering to our timeline," Yildrim added.

"The Elements SEED Fund offers Middle Eastern investors the opportunity to capitalize on the growth in the up-scale property sector that South Eastern Europe is currently experiencing. Our Oman launch will be followed by visits to other GCC countries in the coming months," concluded Liasis.