Your job would certainly be of interest to me ...In the automotive there is mainly termin, budget, quality to respect ...but rarely the possibility of talking and making action towards investment and wealth creation...Which is to me the interesting bit in business. Different suject : About the personal investment strategy and based on your experience, why are choosing Bucharest & Platinum instead of a deal like Golden Brook in Czech Republic or the Galaxy Gardens in Lodz/Polance... When you compare the PS Table "capital growth projection" , it looks really more interesting to go elsewhere as Roumania, doesn 't it? If we compare with some figures after 5 years, we have: Platinum: Cash Injected 59510 -> Potential invest profit 270 488 Golden Brook: Cash Inj 12741 -> Pot. inv. profit 122 064 Galaxy Gardens: Cash Inj 35657 -> Pot. inv. profit 193430 So we could theoritically with 5 appartments in Golden Brook (invest ca. 60000) achieved a potential invest profit of ca. 600000 after 5 years instead of 270 488 with the same cash invested in Roumania/ Platinum..More as double profit !! What is your view on this?? Regards Christian

Hi, Yes my job is very interesting though like anything can also be highly frustrating. We are currently in joint venture with a developer able to contractually guarantee 20% per annum return against equity into their developments. I am expecting the interest to be strong. I took the Bucharest apartment because I have a strategy of investing into capital cities in the emerging markets that I know where there is the greatest concentration of population and inwards migration and therefore the greatest demand for living accomodation as well a concentration of FDI. There are many excellent options out there but I was particularly motivated with the high discount on these apartments and therefore the built-in profit from day 1. I think it is hard to make concrete 5 year predictions with fast moviing fluid markets such as Romania the fundamentals are in place for strong growth. My primary objective is only to hold for 18 months and then re-invest in further apartment/apartments which may be in second tier Romanian cities or back in Poland or indeed another market in which we have some activity.

Hi Andy Apologies for not getting back to you sooner. We had been awaiting a response from our lawyer in Romania. I will have a full response for you regarding this issue tomorrow Thanks

Hi Andy Noreen has replied below - but just in case you missed it (as it is not directly under this thread), Noreen is chasing the answer from our partners and will get back to you tomorrow. Apologies for the delay.

I see your strategy and a capital city of Europe is also for me a very re-assuring position to adopt, especially on the medium to long term. By the way, you say you would only hold 18 months and why not longer , i believe it could make a better return on a far longer period ...or is it because of the cash flow negative from the mortgage/ rent yield? What make you choose, what criteria allow you to choose between holding up to completion to reassign or go for the longer term? I am also considering smaller town (tier 2) and i wonder what you think about it. If you sell after 18th month , we plan also to go for the tier 2 town . Right now, PS is promoting a project in Czech Republic and they forecast a return of 122064 for only 12741 cash injected. Do you believe it is a valid forecast? Because i am thinking to hold 5+years (unless you tell me that re-assigning in definitely more appropriate in the case of Platinum) , i see i could have generated with 5 appartments in Golden Brook / Czech (5 appt but the same cash injected as 1 Platinum) double more equity revenue (ca 600000) intead of ca 270000 in Platinum ...as i described in my previous message. What do you think of this ? Brno is certainly not so sure as Bucharest Centre but the double return looks quite attractive. Christian

Hi, Selling prior to completion is really just to free up some cash flow. Depending on my circumstances at that time plus other projects I am engaged in and the situation with the mortgage market in Romania which would seem to be evolving rapidly, I will review in 12 months time as to whether a longer hold strategy is advisable. In terms of the 5 Czech apartments - it is always the case that objects starting from a lower base level will tend to grow in value more quickly than object with a higher starting value. A land plot at 5m/2 is likely to see a 100% increase in value to 10 Euro m/2 than a 50 Euro m/2 plot that needs to increase by another 50 Euros m/2 to see the same return. BUt if you are talking about 5 apartments, that's 5 mortgages, 5 groups of tenants, 5 different void periods to balance out etc. Bottom line its a lot more hassle. Nevertheless certainly if you have available capital, diversification of your portfolio by investing in both markets is a reasonable strategy to employ. My advice would be to reappraise in 12 months time and see how the development is doing and the local dynamics - property markets and credit markets - have evolved.

Hi Andy CGT is payable on the profits made from reassiging the contracts similiar to the CGT paid on profits post completion. Capital gains tax amounts to 16%. However, from January 1 2006, capital gains tax was lowered to 10%, subject to certain criteria. In relation to your query regarding income tax payable in Romania. The tax rate for rental income is between 18%-40% and is dependent on thresholds established annually by the government. There is a double taxation treaty between Romania and the UK. In reference to your query regarding the mortgage market rules for nationals and non-nationals purchasing property being the same, nationals can currently obtain more favourable terms and rates than non nationals. However as you point out the mortgage market is maturing and availability of products increasing for non-nationals. Andy I hope this helps - again apologies for the delay in getting back to you. If you have any further queries, please do not hesitate to get in touch with me. Noreen Tel: 01279 539 577

Hi Andy, Back home for the week end, i remember that the Romanian/Poland Seminar has just happened! You were planning to go , did you manage it?

HI Christian, Yes I did go - the presentation was fine, the main difference between the 2 markets was that a) Romania is earlier in the development curve than Poland b) Its credit market for non-nationals is undeveloped but this is anticipated to change within the next 12 months. From a tax perspective Simon Blakemore drew people's attention to an anomoly in Romania's double tax treaty with the UK. It seems that if you pay tax in Romania on an asset you do not need to pay any top up when the money comes back to the UK. As hard as this is to believe, for example if you reassign contracts before completion - there is a 19% Romanian income tax to pay. When you bring the funds back to the UK there is no more tax to pay even if income tax in the UK is higher than 19%. The same rule applies for capital gains tax. However this loophole is expected to be closed - most probably before completion of the Platinum II units. It is therefore more useful for those people already owning property in the country. Andy

Hi Andy, Thanks for the update...i am sure it was interesting to hear about the difference of those 2 markets. About the loophole, it could have been great news if it had lasted the minimum 2 years needed for the completion of Platinum. Right now, i am also targetting Poland and will be buying 1 or 2 Units in the near future ... christian