Finance

This report presents the business plan for the development of Acropolis Technological Park which will be constructed in the outskirts of the Attica Region (Afidnes area).

Acropolis Technological Park will be developed on a land plot of 330.000 m2 total area (signed contract agreement) out of which 216.000 m2 is eligible for building.

The plots acquisition cost totaled the 5,6 million, contributed by the Acropolis Technological Park S.A. shareholders, following a share capital increase according to their respective ownership percentages in the companys share capital.

In total 108.000 m2 of building area will be developed including:

  • 95.300 m2 of office facilities (70.000 m2 will be sold to the Shareholders of Acropolis Technological Park S.A and 25.300 m2 will be leased or sold to third parties)
  • 12.700 m2 of retail and supporting facilities, out of which.
    • 10.187 m2 will be leased to third parties and
    • 2.513 m2 will be allocated to administrative and support facilities (non income producing)

Additionally :

  • 48.420 m2 of Parking space (out of which 28.650 m2 will be sold to Shareholders of Acropolis Technological Park S.A. and the remaining 19.770 m2 will be leased or sold).
  • 16.200 m2 of storage space (out of which 10.500 m2 will be sold to Shareholders of Acropolis Technological Park S.A. and the remaining 5.700 m2 will be leased or sold).

Building Construction ( 140 million)

  • Offices for Sale to shareholders (70,000 m2) together with Parking (954 places) and storage space (10,500 m2): 99,07 million
  • Offices for sale or rent to third parties (25,300 m2), Retail (4,040 m2) Parking (345 places) and storage space (5,700 m2): 40.93 million

Infrastructure Networks and Buildings ( 36 million)

  • All required networks: 20,24 million
  • Supporting facilities: (8.660 m2 of buildings and 9.420m2 of 314 underground parking space): 15,76million

The construction of infrastructure networks along with the supporting facilities is eligible for subsidy from the 4th Community Supporting Framework up to 35%.

Responsible entity (the developer) for the construction of office facilities is Acropolis Technological Park S.A and for the infrastructure (network and buildings) is ... Entity (Technopolis Acropolis), a Societe Anonyme 100% subsidiary of the developer.

The requested Bank financing consists of two parts (one short-term and one long term) loans. The short-term loan refers to loan against the permitted subsidies (12, 6 million), fully repaid (interest + principal) as soon as the amount of subsidy is received, whereas the long term loan for financing building construction (66, 88 million) will be repaid by the rental income of leased properties, within a period of 3 + 15 years (with fixed interest and principal payments) following a 3 year grace period during the construction.

In order to perform an evaluation of the projects profitability and bankability, several scenarios had been examined. At this part the basic scenario is examined and includes the extraction of the financial ratios in the case of non capitalized interest payments as it is assumed that Acropolis Technological Park S.A will proceed in the interest payments during the three (3) year Grace Period. Additionally the 76% of the area (approximately 82.954 m2 out of 109.150 m2 - including parking and storage spaces) that belong to Acropolis Technological Parks Shareholders will be sold during the 2nd and the 3rd year of the construction period and the remaining 24% (approximately 26.196 m2 including parking and storage spaces) will be fully repaid (by the Shareholders) in 15 years, baring the corresponding financial cost (annually readjusted by 5, 93%). Additionally shareholders will provide payments in advance for the acquisition of building facilities (office, storage and retail) which correspond to the 24% of the sold area to shareholders.

Interest payments (for the construction period) will be provided by additional equity contributions approximately 15, 02 million (land acquisition and existent equity 8, 2 - million - has already been provided - plus 6, 82 million for interest payments). The financial ratios extracted are presented in the following table:

Payback Period 3+12
Average DCR 1,49
Average Loan to Value 25,48%
verage Break - even 59,81%

Payback Period: It is calculated assuming that the 100% of the generated Cash Flows are used for the loan (Interest + Principal) instalments. In this case the Payback period of the loan is 3 years (construction period) + 12 years.

Debt Coverage Ratio (DCR): DCR is used to indicate the ability of available after tax free cash flows to cover the investments loan instalments (both interest and principal). In this particular case, a DCR of 1, 49 is extracted, meaning that cash flows can cover the required payments by 149%, which is considered favourable. Important notice: In the present financial analysis Free Cash Flows are calculated on an after-tax basis.

Loan-to-Value: Loan-outstanding-over-market-value ratio is calculated at the end of each year dividing the outstanding loan amount by the propertys estimated value. A low value of this ratio is a factor of increased safety for the bank, as it means that a safe exit is assured in case the property has to be liquidated in order for the bank loan to be paid. In this case, the initial value equals to 58% and drops below 50% at the third year of the operation. The Average Loan to-Value ratio is 25, 48%, which is considered favourable.

Important notice: For the four years of the operation period the value of the complex is calculated without considering the rental revenues that occur from the exploitation of certain infrastructure buildings. The legislation prohibits selling those buildings for the first five years starting from the completion of building construction and the transformation of ... Entity into ... Management Entity.

Break - Even: The developments break-even ratio is interpreted as the projects capacity to decrease its income by the same time remaining in position to match its costs, including loan repayment and income tax. In this case, the respective value is equal to 59,81%, meaning that it would be possible to reduce the projects income by almost 41% and the project would still be able to correspond successfully to its liabilities.