BSX Shorts June 2008 Edition

Fabian Romania And SCD Announce Residential Development Joint Venture And Acquisition Of First Two Sites.

Hamilton, Bermuda: 11 June, 2008 -- AIM listed Fabian Romania Limited (“Fabian”) and Hungarian real estate developer SCD Group (“SCD”) are pleased to announce the formation of a 50/50 joint venture, SCD Fabian OSM S.A. (“Joint Venture”), to develop residential property projects in western Romania. The Joint Venture has reached agreement to buy two residential development sites in western Romania. The projects will comprise two residential developments, one of 388 residential apartments in Oradea and the other being 165 residential apartments in Satu Mare. Both cities are located close to the Hungarian border, benefitting from the growth in cross-border trade and investment. SCD Group will act as developer on both projects and Fabian has signed joint venture and development management agreements with SCD to this effect. The purchase price for the two sites was €2.5 million (excluding VAT) with an additional equity requirement of €3.75 million, adding up to a total investment of €6.25 million, contributed by Fabian and SCD in equal proportions. The Oradea site comprises 33,862 square metres and comes with outline planning consent (PUZ) to build 24,100 square metres of residential apartments and 404 parking spaces. Detailed planning and construction consents will be required from local planners and are expected to be received by the third quarter of 2008. The Satu Mare site is 6,700 square metres and already has a building permit to construct 12,400 square metres of residential apartments with 103 parking spaces. Construction work on both sites is forecast to begin in the first quarter of 2009 with practical completion anticipated in the first half of 2011 for the Satu Mare development and in the third quarter of 2012 for the Oradea development. Fabian and SCD both aim to identify further development opportunities for the Joint Venture with a focus on secondary cities in western Romania. These two acquisitions form part of Fabian’s strategy to invest in and develop residential schemes in the fast growing secondary cities, particularly in western Romania. The first such scheme was an investment in Timisoara, where Fabian is developing 350 residential apartments. Commenting on the transaction, Mark Owen, Property Director of Fabian Capital, the investment adviser to Fabian said: “We are delighted that Fabian has reached agreement with SCD Group, a strong partner to co-invest alongside in two new residential schemes and thereby build further on its residential strategy. SCD Group has considerable development experience particularly in Eastern Europe and is the ideal partner for Fabian.” “Both cities are experiencing strong growth through property and business investments. Oradea is an attractive historic city and Satu Mare has an industrial background. Both cities will benefit from a new supply of modern design-led, quality constructed developments.” The partnership with Fabian is in line with SCD’s regional expansion strategy, to team up with experienced professional property investors when entering new development markets. Mike Boris, SCD’s Chief Transaction Officer commented: “Fabian has unparalleled expertise on the Romanian property market. We are pleased to announce our joint venture with Fabian and we are excited about working with them.” “The developments in Oradea and Satu Mare are the first steps in SCD’s regional expansion strategy. We are constantly looking for development opportunities in Central and South-Eastern Europe.”