AIM Admission - Update

RNS Number:9945G
Bulgarian Property DevelopmentsPLC
04 January 2005


                            (for immediate release)

                     BULGARIAN PROPERTY DEVELOPMENTS PLC


The Directors of Bulgarian Property Developments Plc ("BPD" or "the Company")
are pleased to announce that its shares have this morning been admitted to
trading on the AIM Market.

BPD is a newly formed company which has raised approximately #4.5 million
(before expenses) under an offer for subscription which closed on 15 December
2004.  Of this amount shares in respect of applications totalling #750,000 have
yet to be issued and allotted.

It is the Directors' intention to undertake property development, trading and
investment primarily in Bulgaria.  The Directors believe that prices in the
Bulgarian property market, which have increased in previous years, will continue
to increase over the next few years.  The Directors will also consider property
market opportunities which arise in other south eastern European countries.

The Directors believe that this is a good time to be investing in property in
Bulgaria. The main reasons for this belief are as follows:

*        Bulgaria is a small, politically stable country. It is not reliant on
old-fashioned heavy industry and therefore does not have many of the economic
and structural (economic) problems of other former Eastern bloc countries. It
has a well-educated low cost labour force with significant cost advantages over
Western European countries.

*        It is well situated geographically. It straddles the main overland
route between Western Europe and the Middle East, and it provides access to the
Black Sea through its ports. The combination of its geographical location and
its labour force makes it an attractive location for multi national companies to
set up operations. Sofia is both the Capital and major city with 1.8 million
inhabitants.

*        The Bulgarian economy is growing steadily. Strong growth in industrial
production, employment and credit has resulted in high GDP growth over the last
few years. The economy has grown at an average rate of 4.8 per cent. over the
last five years and despite this, inflation has been reduced to the low level of
2.3 per cent. in 2003. Foreign direct investment ("FDI") into Bulgaria has
increased on a year on year basis over the past three years. FDI reached US$1.4
billion in 2003 compared to US$0.9 billion in 2002 (a 55 per cent. increase).
Bulgarian exports increased to US$7.4 billion in 2003 from US$5.7 billion in
2002 (a 30 per cent. increase). The growth in the Bulgarian economy should
underpin a strong property market and lead to increased property prices.

*        Property prices are relatively low. Property in the better residential
areas of Sofia sells for around Euro1,100 - Euro1,300 per square metre (roughly #67 -
#82 per square foot).  By way of comparison, in London, property in a number of
residential areas (such as Knightsbridge, Kensington and Chelsea) can sell for
approximately Euro16,000 per square metre (#1,000 per square foot).

*        Bulgaria has applied to join the European Union in 2007. Significant
funds have already been provided by the EU to assist in the economic
regeneration of Bulgaria. This process should continue if Bulgaria joins the EU.
Inward investment should continue to stimulate the Bulgarian economy and also
the Bulgarian property market.

*        Low currency risk. The Lev has been pegged to the Euro since its
introduction at a fixed rate equivalent to Euro1 to Lev 1.9558. From 1997 the Lev
was pegged to the DM at a rate of 1 Lev to 1 DM.

*        The current cost of domestic borrowing is relatively high. The rate
that ordinary Bulgarians pay for a floating rate mortgage is in the range of 8 -
11 per cent. p.a. The Directors believe that once Bulgaria joins the EU,
interest rates should fall in order to harmonise with rates in the Euro zone.
Lower interest rates should help stimulate the Bulgarian property market.

*        It is currently possible to achieve high rental yields on property.
Rental yields on residential property are currently in the range of 10 - 12 per
cent. of the purchase cost and on commercial/industrial property yields of 16
per cent. or more may be obtainable. The Directors believe that the Company
should be able to achieve higher rental yield on properties which it has
developed or refurbished.

*        Much residential property available is unsuitable for letting. There is
currently no mechanism whereby individual leaseholders can be compelled to
contribute towards the cost of repairs to common parts and the exterior of
buildings unless their leases specifically contain provisions to this effect.
Whilst suitable provision is sometimes made in the leases of recently
constructed blocks, blocks constructed in the communist era, or earlier, rarely
have such clauses in leases. The result is that unless all the owners in a block
agree to repair, nothing may be done. Even in the best residential areas of
Sofia the common parts of older blocks are frequently unattractive and are,
therefore, difficult to let. Good quality modern blocks of flats therefore
command a premium in the letting market.

*        Little modern commercial and industrial property development. The
Directors believe that there has been little commercial and industrial property
development, particularly of warehouses and distribution centers including cold
storage.

*        Multinationals are starting to establish themselves in Bulgaria. As
Bulgaria's integration into the mainstream of European economic life continues,
multinationals are starting to set up operations in Bulgaria. For example,
Unilever, Proctor & Gamble and Metro Group have recently invested in Bulgaria.
The Company will actively seek to locate sites and develop buildings
specifically designed for, and pre-leased to, specific multinational companies.

*        The Bulgarian property market is relatively unsophisticated. Colliers
International is one of only two international estate agencies that to the
Directors' knowledge are represented in Bulgaria. Whilst there are estate agents
in Sofia, they generally do not have shop fronts displaying properties that are
for sale with their prices clearly stated. It is common practice that estate
agents charge fees to both buyer and seller. This increases costs and hence
reduces the liquidity of the market. With accession to the EU, it is probable
that this situation will change, with a consequent beneficial impact on the
Bulgarian property market.

*        Investing in the Company allows investors to benefit from rises in the
Bulgarian property market without the problems of personally owning property.
Recent newspaper articles have suggested that an investment in the Bulgarian
property market may be a good idea. They have highlighted the problems inherent
in individuals purchasing property and holding it for investment purposes.
Holding Ordinary Shares in the Company would allow investors to benefit from any
increase in value of the property in Bulgaria without having to personally
negotiate the pitfalls of buying property in a foreign country and then having
to deal with the problems of owning and letting property in a foreign country.

*        Lower cost flights are becoming available to Bulgaria. BA and Bulgaria
Air currently operate direct economy flights to Sofia. In addition, there are a
number of carriers including Malev (the Hungarian carrier) and Czech Airways
which operate indirect flights to Sofia. There are also direct charter flights
to Varna, the country's third largest city and major Black Sea port.





DIRECTORS


Christian Williams, the non-executive Chairman is an experienced businessman. He
is the non-executive Chairman of Canterbury Foods Group Plc and he was formerly
Deputy Executive Chairman of Budgens, where he was also responsible for its
property portfolio including its warehouse and distribution centre.

The other non-executive Director is  John Mackay. John Mackay has worked in
finance for nearly thirty years in both London and New York. He is a former
Chief Executive of Seymour Pierce Group, and deputy CEO of Investment Banking
for HSBC. He has an MBA from INSEAD.

The executive Directors are Ivo Hesmondhalgh and Philip Pashov.

Ivo Hesmondhalgh (English) is an experienced London-based
property developer. He runs a number of ex-BES and EIS companies.  He will run
the London office and will oversee the purchase and development (where
appropriate) of properties in Bulgaria.

Philip Pashov (Bulgarian) is a former London investment banker
who has been working with the Bulgarian government to promote foreign investment
in Bulgaria. He is a director of Bulgarian Stock Exchange AD. His extensive
contacts in Bulgaria provide the possibility of locating developments and
investments that an outsider would be unlikely to achieve.

DIVIDEND POLICY

Whilst the Company might grow faster if no dividends were paid, the Directors
feel it important that Shareholders receive a return.  They are, therefore,
proposing to pay dividends representing one third of distributable annual
profits commencing at the end of the third year of trading and in respect of
each year after that.  The Company will only pay a dividend if its financial
circumstances permit it and if the Directors believe it is prudent to do so.


CURRENT TRADING AND PROSPECTUS

The Company has purchased six plots of land on the ring road near Sofia airport.
The total area of land acquired is 63,238 square metres and the aggregate
amount paid (excluding taxes and expenses) was Euro1,082,516.

The Directors are in negotiations to acquire additional strategically situated
parcels of land near Sofia.  These investments may or may not realise a profit
for the Company in the current financial year but the Directors believe they
should provide a return in due course.



4 January 2005
Enquiries                   Ivo Hesmondhalgh                    020 7243 1336



Copies of the Admission Document will be available free of charge to the public
at the Company's registered office and at the offices of Matrix at One Jermyn
Street, London, SW1Y 4UH during normal office hours, Saturdays and Sundays
excepted, for at least one month from Admission.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

AIMBIMFTMMTMBIA