LONDON (ShareCast) - (Sharecast News) - Property fund manager and investor First Property Group said on Friday that it has, in conjunction with a club of investors, acquired the Maestro office building, located on 21 Decembrie 1989 Boulevard, in Cluj-Napoca, Romania.
The AIM-traded company said Cluj-Napoca is the capital of Transylvania, with a population of around 320,000.

A further 100,000 lived in the wider metropolitan area, with the city also featuring 11 universities and a student population of more than 100,000.

It said the net operating income being generated by the property was around €0.88m per annum, with the property acquired at a yield on purchase costs of about 9.4% per annum.

The weighted average unexpired lease term was approximately three years.

First Property said the investment was funded by a combination of equity and bank debt, with the equity component amounting to just over €3m, of which the group invested around €0.51m, pari passu with other investors.

The forecast annual pre-tax profit from the investment was €0.55m per annum, of which the group's share after tax would be €0.09m per annum, which would equate to a post-tax rate of return on equity of 16% per annum.

In addition, First Property said it would earn an acquisition fee of €0.09m, and ongoing management fees of around €0.11m per annum.

The cash position of the group following the investment totalled £12.8m, the company's board confirmed.

"I am very pleased by the investment made by our clients and ourselves in this well located office building in the centre of Cluj-Napoca," said group chief executive Ben Habib.

"Cluj-Napoca is a fast growing city which is supportive for both rents and capital values."

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