This is an offer from a development company based in Sofia to an investor for participation in a joint development project with working title Opalchenska Residence. The offer to the investor is to participate with 50% partnership in the project by financing the project until it reaches the shell stage.

Location: Sofia’s central area, the intersection of the streets Opalchenska and Pirotska Distance to the center of Sofia (The Sheraton Hotel): 1 km
Area of the plot: 255 sq.m.
Height of the building: 34.20 m
Floors: 14 levels (12 floors above ground and 2 underground levels)
Function: residential-commercial building with an underground parking lot
Layout:
• apartments: 32 units – a total of 2,669 sq.m. (net area – without common areas);
• shops: 5 units - 186.80 sq.m. (net area – without common areas);
• parking lot: 587 sq.m. (area with common areas);
Total built-up area above ground: 2,921.50 sq.m.
Total built-up area under ground: 540.29 sq.m.
Total built-up area of the building: 3,461.70 sq.m.
Exclusive consultant on the project: BULGARIAN PROPERTIES – strategic planning, marketing and sale, establishing of a joint venture enterprise and project management.

Description of the project. Features
The project has been officially agreed to be executed between the developer and the owners of the plot of land against compensation - right to build against a compensation of about 45% or 1,500 sq.m. as follows:
• 17 apartments (1,359 sq.m.)
• 3 shops (91 sq.m.)
• 4 underground parking spaces in the building for the owners of the plot.

At present the architectural plans of the project are finished at 90%. The building permit can be obtained within 45 days and the actual construction works – upon secured financing – can start within 60 days. The developer is looking for an investor who is ready to finance the project with a sum of about 425,000 Euro. The financing is needed for the building to reach its shell stage, after which the financing could come from the off-plan sale of apartments, offices and commercial areas, as well as from a bank loan (the building being the pledge). The profit from the investment project is projected to come from the sale of the property units in the building and its common areas to end buyers.

The building’s merits are to be sought in its perfect location – at the intersection of an emblematic boulevard and a popular commercial street, in the center of Sofia. The other merit of the project is its well optimized area, the wise use of the dimension possibilities of the building, and the efficient distribution of the apartments/commercial areas. The total built-up area of the building is well optimized – it is not too big to need a big initial capital and at the same time it is not too small to hinder the construction itself. The team of professionals who designed and planned the project wanted to create a simple construction and intelligent layout of the internal spaces planning the finishing works to be done with Bulgarian materials of high quality and at a bargain price. These important details guarantee the building to be done at the lowest possible cost but with a smart interior and exterior. Nowadays this is an absolutely necessary condition for the successful sale of the units to end buyers – homes and garages, offices, and commercial areas (shops), while generating high return on the invested funds.

Business plan for the realization of the project:
• Price of the land: compensation of about 45% (1,500 sq.m.) to the owners of the land in the form of apartments, shops and parking spaces in the building. Price of the compensation: 1,550 sq.m. x 280 EUR= 434,000 EUR
• Cost price of the construction and finishing works in the building as per Bulgarian State Standard: 796,191 EUR (at a price of 230 EUR/sq.m.)
• Working plans – architectural and installations: 41,540 EUR
• Fees and permits: 40,000 EUR
• Vertical planning: 20,000 EUR
• External connections: 50,000 EUR
• Rent for temporary housing of the owners of the plot for the period of the construction: 20,000 EUR
• Other costs during the construction of the project: 40,000 EUR (administrative, fees, taxes, etc.)
• Fee for the intermediary selling the units: 60,000 EUR
• Total cost price of the project with finishing works as per Bulgarian State Standard: 1,067,731 EUR
• Maximum period for building the development: about 18 months
• Maximum period for realization and sale of the separate units in the development: about 24 months
• Financing on the part of the investor: 425,000 EUR (the financing must be secured and spent in parts for a period of 6 months, as per a specific time schedule/plan that is consistent with the stages of the construction and realization of the project)
• Total income from the realization of the project: 1,328,275 EUR (at average sale price of the separate units above ground of 850 EUR/sq.m. and 9,000 EUR per parking space in the underground parking lot – for more detailed estimate see below)

For sale:
• area above ground: 2,921.50 sq.m. - 1500 sq.m. = 1,421.50 sq.m. for sale
• parking spaces: 12 spaces – 4 spaces = 8 spaces for sale

1,421.50 sq.m. õ 850 EUR/sq.m. (average sale price) = 1,208,275 EUR
8 parking spaces õ 9000 EUR/each. = 72,000 EUR
terraces: 120 sq.m. õ 400 EUR/sq.m. = 48,000 EUR
Total: 1,328,275 EUR

• Net profit from the realization of the project: 260,544 EUR
• Net profit for the investor: EUR 130,272 (50% of the business project)
• Profitability for the investor (%)
- for the whole period: 30.6 %
- annually (on average): 15.3 %
• Investor’s equity: 50 %

Note: all cited figures and periods are for reference only as they are valid and as accurate as possible as of the date of the drafting of this business plan (27.11.2011).
The figures and periods can vary during the actual realization of the project, in accordance with the present business conditions and the situation on the market.
This presentation and business plan should be used for information purposes only.

The exclusive consultant for the project, the overall marketing and the sales, the establishing of the enterprise and the overall project management is our company BULGARIAN PROPERTIES. Strategic planning has also been done and potential investors in the project will be acquainted with the possibilities to participate in the project and with the financial indicators.

Area features