OTM Ottoman

RNS Number:4155I
Ottoman Fund Limited (The)
04 September 2006


FOR IMMEDIATE RELEASE                                           4 September 2006



                            The Ottoman Fund Limited


            US$110 million development site acquired in Riva, Istanbul


The Ottoman Fund, which invests in the development of local housing and holiday
homes in the major cities and coastal resorts of Turkey, is pleased to announce
the acquisition of prime development land in Riva, located 45 minutes to the
north east of Istanbul close to the Black Sea.


The Fund, which is quoted on AIM, is managed by Development Capital Management
(Jersey) Limited.

Highlights


* The Fund has purchased 917,900 square metres of development land. The
site is located in Riva and is part of the Beykoz-Riva-Kavacik sub-region, which
is located in the north eastern part of the Asian side of Istanbul. Riva is
expected to become a major new area for the development of housing for the
expanding working population of Istanbul. Other developers active in the Riva
region or with land holdings there include Alarko, Yapi Kredi Koray, Dogus and
Galatasaray Sports Club,


* The total purchase price is approximately US$110 million, consisting of
an immediate payment of US$100 million and a payment of US$10 million in
September 2007. This purchase price is equivalent to US$119.2 per square metre
of land (applying a discount rate of 5.5% to the US$10 million payable in
September 2007) and approximately US$500 per square metre of buildable space.


* The Fund intends to develop the land, in joint venture with a local
developer, into a residential complex of villas, town houses and associated
commercial and recreational facilities.


* Construction of phase 1 of the development is targeted to commence
towards the end of 2007 with marketing and sales commencing in the second
quarter of 2007. The entire development is expected to take between three and
four years.


* Based on the Manager's cost and valuation estimates and assumptions, a
potential gross return of approximately 70% is anticipated in respect of the
Fund's total investment. This assumes a development of approximately 220,590
square metres of build area and that an average sales price of US$1,900 per
square metre over four years is achieved. This equates to a gross development
value of approximately US$420 million. These estimates are not a profit forecast
and should not be taken as an assurance that the units will be sold for the
assumed valuation.


* The purchase of land at Riva brings the Fund to approximately 60%
invested.



The Chairman of the Fund, Sir Timothy Daunt said: "The Board is pleased to be
able to announce this important investment. The Riva area is becoming
increasingly popular following the creation of new roads improving the area's
accessibility. Other developers are active in the region and we are pleased to
have been able to secure this substantial area of development land. The
acquisition follows several months of detailed negotiation and analysis, and is
a tribute to Development Capital Management's team."


Further Details


The Ottoman Fund Limited (the "Fund") has (through its local subsidiary, Osmanli
Yapi 2) signed an agreement to acquire 99 parcels of land comprising 917,900
square metres of development land. The site is located in Riva and is part of
the Beykoz-Riva-Kavacik sub-region, which is located in the north eastern part
of the Asian side of Istanbul.


The site is located in a wider area that has seen an increase in development in
recent years following the construction of the second bridge improving access
from the central business districts of the European side of Istanbul.
Development to date has primarily focussed on the Beykoz-Kavacik area but Riva
is becoming increasingly popular particularly since the creation of new roads
that make the area more accessible; a major new road connecting Riva with
eastern Istanbul has recently been completed, significantly reducing commute
times to around 45 minutes by car. Other developers active in the Riva region or
with land holdings there include Alarko, Yapi Kredi Koray, Dogus and Galatasaray
Sports Club. Recent sales price increases in Riva are reflective of both the
growing interest in the area and the limited amount of developable land
available due to the presence of government protected forests and the boundary
with the Black Sea.


The total purchase price is approximately US$110 million, consisting of an
immediate payment of US$100 million and US$10 million in September 2007. This
purchase price is equivalent to US$119.2 per square metre of land (applying a
discount rate of 5.5% to the US$10 million payable in September 2007) and
approximately US$500 per square metre of buildable space. Local taxes, agent
fees and other transaction costs total an additional US$3.4 million.


The Fund will work in joint venture with a local developer to produce a
development plan for the site and to select and appoint architects, a
construction company and other professionals for the project. The Fund intends
to develop the land into a residential complex of villas, town houses and
associated commercial and recreational facilities.


Construction of phase 1 of the development is targeted to commence towards the
end of 2007 with marketing and sales in the second quarter of 2007. The entire
development is expected to take between three and four years.

Approximately 668,210 square metres of the land is comprised of parcels with
implementation development plan with a scale of 1:5000. An application is to be
submitted to the authorities for implementation development plan with a scale of
1:1000 to allow development to commence. Elit (one of the valuers used by the
Fund for this investment) have indicated in their valuation report that there is
a difference varying in the region of US$30 and US$55 between the sales values
per square metre of those parcels that have implementation development plan with
a scale of 1:1000 and those that do not.


Based on the Manager's cost and valuation estimates and assumptions, a potential
gross return of approximately 70% is anticipated in respect of the Fund's total
investment. This assumes a development of approximately 220,590 square metres of
build area and that an average sales price of US$1,900 per square metre over
four years is achieved. This equates to a gross development value of
approximately US$420 million. These estimates are not a profit forecast and
should not be taken as an assurance that the units will be sold for the assumed
valuation.


The Board retains confidence in both the economic and political stability of
Turkey and the revival of domestic demand in the housing market as interest
rates fall.


List of contacts

Development Capital Management 020 7355 7600
Roger Hornett
Tom Pridmore


Buchanan Communications 020 7466 5000
Charles Ryland
Isabel Podda


Numis Securities Ltd 020 7776 1500
Andrew Dawber
Iain McDonald
Bruce Garrow
Adam Shapton




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

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