Weifang, People’s Republic of China, 03 December 2010
Euro Asia Premier Real Estate Company Limited (ISIN: VGG3223A1057) today provides shareholders with an update of certain of its existing projects.
Patrick Chan, Vice Chairman for Euro Asia, stated, “We are very pleased with the progress made this past year. When we went public in May, 2010, we shared with the market our belief that there was significant upside potential in our current portfolio of projects and our land bank. This has proven to be the case, as can be seen from the recently announced sale of the German Hotel, as well as from the expected increase in the land value we have now received zoning approval for.”
JV Partner Negotiations for Training and Exhibition Center
Construction of `The Training and Exhibition Center`, which commenced in July 2010, was scheduled for completion by December, 2010. The Company is pleased to announce that this construction schedule was maintained and the contractors are currently in the process of completing the outer structure.
NIW real-estate, on behalf of Euro Asia, has completed initial negotiations with a Chinese multinational company concerning the formation of a joint venture regarding the Training & Exhibition Center. Under the current discussions, NIW`s capital investment into project will be transferred to the joint venture partner in return for a fixed fee plus a to be negotiated percentage of gross and/or net income, along with the hotel`s management rights. In return, the partner will invest into the lease hold improvements of the hotel, estimated at RMB 120 million (Euro 13.7 million), and act as its operator in lieu of Euro Asia. The Company expects negotiations for the management contract to be completed by March 31, 2011.
The China Agricultural Machinery Marketing Center Will Be More Than Triple its Original Planned Size
Euro Asia acquired the land rights to 159,999.3 m², originally intended for the construction and started presale during the second half of 2010. Upon further discussion with potential purchasers, the government and other users, it was concluded that a larger scale project was required fully to fulfill the concept of the China Agricultural Machinery Marketing Center. In the second half of 2010, Euro Asia entered into discussions with the Fangzi government to acquire a site adjacent to the existing parcel of 333,333.5 m², or approximately 2.5 times the size of the original site. This adjacent site will be added to our original plan and bring our project size to almost 500,000 m². The Company aims to acquire the site at a reasonable cost, which should not be in excess of RMB 175 million (Euro 19.3 million). Negotiations for the site and approval of development plans are expected to be completed by March, 2011.
The original plan was to produce an agricultural center catering to the middle/high end market, whereas the new plan calls for a medium priced center, catering to the complete range of machinery, equipment and agricultural supplies, both domestic and international.
First Zoning Approvals Received for Luxury Town Houses at Julongjian
Euro Asia holds in its land bank a 200,000 m² site in the Julongjian Park, to be zoned into luxury town housing. The original valuation carried out by DTZ appraised the site at RMB 200 million (Euro 22.8 million) once zoning approval is received. Euro Asia is pleased to announce that the Company has received initial approval on one half of this site, with further applications pending. A new appraisal has been commissioned and Management believes that the 100,000 m2 site on which approval has been received will be valued at no less than RMB 150 million (Euro 17.1 million), an increase in value by RMB 50 million (5,7 million Euro). Zoning and construction permits for the entire site are expected to be awarded by June 30, 2011, construction to start during the second half of the year.
Mr Chan concludes, “Our new plans for the Training Center and the Agricultural Center as described in this release are further examples of how we are looking to accelerate growth, cash flow and shareholder value creation. We are in a good position and in a very good market. Some of the opportunities we have identified are, as is the case for the Agricultural Center, much larger than originally anticipated. We have the organization to benefit from these and other opportunities and we look forward to making further announcements.”