There are several key areas the Platinum II deal report does not cover or I feel need to be clarified: Although not reported by the report or indeed widely communicated to the PS deal team (Martin didn’t know) it is possible to re-assign the contract before completion. This was confirmed by the deal lawyers to me 2 days ago. This is of great relevance to short term investors, or so-called speculators. I would like PS’s comments on this as a strategy for this deal, given the local area to which is applies. I would also like detail of the tax implications of both re-assigning the contract and CGT on selling post-completion. Equally, please could you clarify income tax payable on investments here. As the mortgage market is developing – are the rules for nationals and non-nationals purchasing property here the same? The flow plans on the deal are not scanned at sufficient resolution. Can you provide better quality floorplans, as good layout is essential to successful investing. Do you have any information on the psychology of local people – do they prefer to rent/buy on higher floors as is the case in other countries in Eastern Europe or is there no significant trend to be aware of? Investors versus owner-occupiers: 42% of the development (80 Norwiegen, 15 Spanish, and the 27 PS units) this is a total of 122 units or 42% of the 290 units have been reserved by formal investment groups. This does not include local and international investors who are holding for the purpose of letting on completion or selling on before. If we include these numbers, the total amount of investors in the development could be greater than 50%. Add to this future local developments which may have a similar completion deadline, and an unsophisticated rental market, we are looking at potentially a glut of apartments on the rental market at the same time. The local market may be able to absorb these numbers, but I would consider that to be an unknown factor. I would suggest we reassess the length of voids at the beginning of the ownership period. In regards to completion of the esplanāde project – please can you specify when this is projected to be? If this is more than 5 years away its impact on investment on this development for the small-medium term investor (0-5 years) would be negligible. Indeed, having a giant building site on your doorstep may actually be detrimental to the investment. Please confirm if planning permission has been granted and if there is any risk of local objections delaying the construction? Also – no mention has been made of the impact of being so close to the congestion travelling to and from Bucharest centrē along the Sos. Mihai Bravu road. This is only going to get more congested with the visual and sound implications that brings with it. Can we have some quantifiable predictor on the effect of this on property prices? The discount and Appriasal: Why is the developer offering properties at supposedly 20+ % below the so-called market level. Either the developer is happy to reducē its profit margiņ (unlikely), the developer was concerned they would find the apartaments difficult to sell (unlikely), the market is currently overpriced (possible), the appraisal was flawed in some way. Review of the appraisal 4 method approach: I believe there are not currently sufficient local developments of an equivalent standard to give a reasonable comparison. Indeed, one of the ‘comparable’ developments offered ‘’Diamond Park’’ is so far away from Platinum Towers II - at over 2 kms – it is off the provided map! I therefore question the appraisers ‘Market Comparison Approach’ methodology. PS has admitted there is a rental market in its infancy at present, I would suggest it is too early to accurately use this as a measure of property values to check if they are consistent with market averages. Therefore I believe the appraisers ‘Income Approach’ methodology is also on shaky ground. The ‘costs approach’ of the apparaiser would appear only to calculate the construction + land cost and does not incorporate the developers margiņ. And finally, the ‘Market Comparison’ approach attempts to compare this development with appreciation of ‘similar developments’ in other parts of Bucharest. The city is large with areas of differing quality social demographics, building type and intensity, and level and quality of infrastructure. Conclusively, the 20+% under market value headline sounds great, but is it all that is appears to be?

My main concern with regard to the high proportion of foreign investors is that the development is being priced with them (us) in mind. I would be much happier if locals were snapping them up at these prices, but it doesn't seem to be happening. The last time I was in Bucharest there were several groups of property investors in the departure lounge on the way back. One of them was a group of London wide boys carrying Platinum Towers bags, and talking very loudly about how many units/floors they were going to buy.

Dear Andy, I have forward your post onto the deal broker, Simon Blakebrough and asked him to address your queries on this development. Floor plans to every unit on Platinum Towers can be found on its investment page at http: / /www .propertysecrets .net /view _investment /platinum _towers _ii /101 .html and by clicking on the downloads/floor plans tab. Kind regards, Martin Grainger Purchase Support Manager 01270 539576

Andy Thanks for your comments in relation to Platinum Towers – please find my responses below: You are correct in pointing out that contracts are assignable on Platinum Towers. Our view on reassigning contracts as an investment strategy is that it really depends on the individual investors’ investment strategy but ultimately what most investors want to do is get out before the peak of the market. As you mention this has great relevance for short term investors or so-called speculators. Assignable contracts gives investors an option, a “get out of jail” card so to speak. Even if they see growth of 25% per annum their investment will have seen a return of 50% by the time the development completes in 2 years time. I have forwarded your queries in relation to the tax implications of both re-assigning the contact and CGT on selling post – completion to our tax expert who will be happy to explain this in detail for you. In terms of the psychology of the local people – yes they are starting to rent and buy on higher floors now similar to other Eastern European countries. This used not be the case - local people preferred to be on the lower floors in case the lifts broke – which was often the case- or there was a problem with water pressure on higher floors. In terms of the local mindset in Romania and how local attitudes are changing, our deal broker Simon Blakebrough has just posted an excellent blog on the website today entitled “Changing the mindset – let the numbers do the talking” which is definitely worth a read and addresses some of the issues you have raised. Andy, I would agree that 42% (and a potential 50%) of the development sold to investors is a lot however we need to put this into perspective - this is in a whole new area of Bucharest and local demand is still not being met by supply. The rental market is relatively young and what you describe as “an unknown factor” however fundamentals are there which point to further rental demand in the city. Population increase - I would again point you to Simon’s blog. He points out, the population of Bucharest is officially 2.8 million but is increasing and estimates are that it is probably more like 4 million - yet in 2006 there were only 3,000 units being built in the city. More and more people are moving to Bucharest attracted by the jobs created by companies such as Microsoft. We are always reviewing our methods of analysis including the length of voids at the beginning of the ownership period and are happy to change these to support changes in the market. Regarding the Esplanade project – the project has outline planning permission and is currently going through the final planning stages. The fact that this project is coming on stream is positive for the short term investor and we expect the completion time to be under 5 years. The fact that the project might have a long completion however should not seen as negligible. We have see the impact the announcement of such projects in different cities has had on house prices in the area (regardless of completion time) – e.g the Bullring in Birmingham or projects such as Grand Canal Dock or the building of the LUAS transport line in Dublin. Yes, no one wants a giant building site on their doorsteps but like any project of this scale, once the shell is up, then the majority of work will be internal and the benefits will be huge to the area. Congestion on Sos. Mihai Bravu - With so much development going on in the area, there will be an increase in the flow of traffic on Sos. Mihai Bravu Road. Platinum Towers is set back from the road so the disruption from traffic should be minimal. Also, there are excellent public transport links on this road as described in the Investment Report – the main one being the metro located close to the development. Our independent valuation showed a 20% difference between Property Secrets and market prices. We don’t believe the market valuation was flawed - Prices are rising fast in the city, the developer bought the land cheap and is selling the units 20% below market value – like the majority of developers he simply wants to sell the development and move onto the next project. I agree 100% with you that we do not have sufficient local developments to offer more comprehensive comparables. In terms of “Diamond Park”, this is located 2km from Platinum Towers further out from the city centre however it serves as a good comparable. This is a development we offered circa 6 months ago at 1,350 euro per sqm and now the developer is selling the remaining units at 1,800 euro per sqm. We do consider the rental market to be in the early stages however there is a big demand on rental properties in the city at present. We analyse the rental data provided by agencies in the city and then consider the experiences of the local market from information provided by our local partner in the city. We also consider that areas in the city do differ largely in terms of social demographics, building type and intensity and the level of quality and infrastructure. We endeavour to take all of these factors into consideration when providing analysis on our deals. You can view Simon’s blog here which will further help you with some of your queries: http: / /www .propertysecrets .net /article /changing _a _mindset _let _the _numbers _do _the _talking /1642 .html Thanks a lot Noreen Lucey, Investment Analyst

Thanks for that Noreen, Andy - just to add my 2 pence worth... I really like Platinum because it is right above a tube and is set back from the road. I don't think noise will be a particular problem - given that you have a city centre location - but think that congestion might be - which is why the tube stop is so very valuable. As Noreen says, the rental market is harder to predict - but, if I were a betting man, I'd bet that quality new build flats above a tube line will always let before other developments... ... and that is what is going to make this development appeal to tenants. So, for me, the tube is a guarantee against the unknowable state of the rental market in 2009! Hope this helps Cheers Neil

Hi all, Thank you for your responses, have been tied up for a couple of days and couldn't respond earlier. I appreciate Noreen's reposte to my evaluation, it has cleared up the central points for me. Martin I can't seem to see the floorplan download option on the deal page - am I going blind? I will be purchasing my usual 1 bed 55-60m/2 apartment tomorrow in as high a floor as possible. A.

Hi Andy, If you follow that link I sent in the last post you will be re-directed to the Investment Page for Platinum Towers II. In the middle of the age are 5 tabs, the middle tab, or 3rd along takes you to the floor plan links. Kind regards, Martin

Seems I was blind - have found them now! The 1 bed apartments are facing inwards with another part of the development visible out of the windows. This is positive in that the outlook will be new build rather than Soviet block, but do we know how far away each side of the building is from the other (it is being built in a U-shape)? If they are too near this could affect amount of sunlight the apartments receieve.... Thanks Andy

I have spoken to Simon on this - for thos of you interested - proximity to the other side of the building should not affect levels of light during the day. A.

I too find the high proportion of foreign investors in the units quite unsettling, However, as a Romanian myself, I can tell (although I have to agree that I am quite detached from the realities in Romania as I have left the country some 8 years ago) you that the concept of buying off plan is completely alien to the Romanians. Romanians have been used to and like to see what they are buying and only the select few will be choosing to buy off plan. It is true that for the local market where the average salary is way below 1000 euros the prices are exorbitant, but the Romanian market is an atypical market and it never ceases to amaze me, especially if you consider that it is cheaper to buy a similar flat in Paris or in Vienna. Having said that, when I asked a project manager friend's opinion on this investment, he merely said, without looking at the project that one cannot loose money at the moment if buying off plan.