History

Expat Beta REIT was established on 04/02/2008 and was filed into the Trade Register on 19/02/2008. On 31/07/2008 Expat Beta was licensed by the FSC as a real estate investment trust.

Date	Activity
04.02.2008	Establishment
19.02.2008	Filed into the Trade Register
31.07.2008	Licensed by the FSC
09.10.2008	Initial capital increase
30.07.2009	Purchase of land in Kamchia Resort
22.07.2010	Capital Increase up to BGN 5,143,190
21.10.2010	Purchase of 4-storey building in Tsarevo
15.02.2011	Purchase of a 3-storey house with a yard in Varna
07.06.2011	Purchase of 5079 m2 in the residential complex 'St. Stefan' in Bankya
13.07.2011	Purchase of a 123m2 apartment in Sofia

Activity

The main activity of the fund is focused on the real estate market for commercial, administrative and residential uses, including construction, rental and sale. In the long term, the fund aims at a balanced portfolio of residential, commercial, office and vacation properties, while the other types of investments should not exceed 40% of the fund's portfolio.


Projects

1. Kamchia
On 30/07/2009, Expat Beta REIT purchased 3 plots with a total area of 140,099 m² in the Kamchia resort, Avren Municipality, at approximately 28 km South of Varna. The land has been zoned for residential/resort use with a maximum floor area ratio (FAR) of 0.8x and roofline height of 11 metres. The plots have road access, water and electricity infrastructure. More information about the project may be found here.

2. Tsarevo
On 21/10/2010 Expat Beta REIT purchased a newly-built 4-storey building (finished and in exploitation) in Tsarevo, on the South Black Sea Coast. The waterview property, overlooking at the marina, includes 9 apartments with built-up area of 826 m² and a plot of 284 m². The purchase price is BGN 300,000 excl. VAT, or 186 EUR/m² for the built-up area – a price that provides low risk and good yield opportunities. Expat Beta REIT have an option to pay this price any time within a 3-year period without owing interest. There is a repurchase option for the seller for a 3-year period at a price, giving 20% yield per year for Expat Beta REIT on the basis of the real expenditures. The REIT will gain 5% commission in the case of a sale to third parties with the agreement of the seller. Pictures of the property may be found here.

 

3. Varna

On 15 February 2011, Expat Beta REIT purchased a 3-storey house in Varna, the largest city on the Black Sea coast of Bulgaria. The house is in an unfinished condition with a total built-up area of 640 m2, built on a plot of 390 m².

Simultaneously, Expat Beta REIT has signed a contract with a construction company to finish the house completely around July 2011, and obtain all the necessary permits shortly afterwards. Expat Beta REIT intends to try to resell the house as early as this year. The house can be sold as a whole or as 2 or 3 completely separable apartments, depending on the future buyers' preferences.

The purchase price plus the construction contract together equal BGN 300,000 (EUR 153,388). If we do not include the value of the plot (which by itself might be, say EUR 20-40,000 or so), the price of the house is below 240 EUR/m² which is considered attractive for the REIT. In this deal the previous owner has a buy-back option within 3 years with a 20% annual yield for the REIT. On top of its 20% annual yield, Expat Beta REIT will charge a 5% brokerage fee upon the sale of the house (5% of the gross revenues).

 

4. Bankya

On 7 June 2011, Expat Beta REIT purchased 5 plots zoned for development and construction in the residential complex ‘St. Stefan' in the city of Bankya, near Sofia.
The property size is 5079 m² with a purchase price of 30 EUR/m² (totalling EUR 152,370, BGN 298,010) which is considered attractive for the REIT and in line with the policy of buying high-quality underestimated assets. For comparison, the reference market price for Bankya is 80-100 EUR/m2, and for the 'St. Stefan' Complex- 150 EUR/m2.
In this deal, the previous owner has a buy-back option within 3 years with a 20% annual yield for the REIT without capitalisation.
'St. Stefan' is a luxury residential complex with controlled access, 24-hour security and video surveillance. It is situated in the city of Bankya with an area of 100,000 m², half of which is built up and with fully completed infrastructure (with roads, street lighting, footpaths, water channels, gas and electricity). The complex has 22 completed inhabited houses, and another 7 under construction.
Pictures of the property can be found here. 

 

5. Sofia

On 13 July 2011, Expat Beta REIT purchased a 3-room apartment in Sofia, the Lagera District. The property size is 123 m², plus 16.5 m² basement. The purchase price for Expat Beta REIT was 211 EUR/m² (totalling EUR 26,000; BGN 50,852). For comparison, the reference market prices for finished apartments in this area are around 700 EUR/m². In this deal, the previous owner has a buy-back option within 3 years with a 20% annual yield for the REIT without capitalisation.

Equity Capital

Initial capital: BGN 3,000,000

Initial capital increase, October 2008: BGN 4,342,890

Capital increase, July 2010: BGN 5,143,190

On 22 July 2010 the REIT accomplished a capital increase procedure. 800 300 new shares have been bought. Thus the number of shareholders has almost doubled, and the fund capital reached BGN 5,143,190. This is an increase of the assets of over 18.4% – very few Bulgarian companies may achieve this today. The Expat Beta team expects to conclude some small scale deals for high-quality office and commercial buildings with very attractive valuations. The ultimate goal is to achieve the highest possible Return on Equity and increase the price of our shares on the stock exchange. Expat Beta REIT is one of the few stocks in Bulgaria whose market price has not fallen during the crisis. One of the reasons is that the fund has zero bank debt.