Executive summary
Eda Center is a mixed use development of residential, office, retail, gastronomy and parking, in Nova Gorica, a town of 32,000 inhabitants on the border with Italy. The neighbouring Italian town of Gorizia is home to 35,000 inhabitants, and there is no longer a border between the two towns. The building is in an excellent location in the centre.

Current status
The project is currently under construction, out of the ground and up to the 5th floor, and letters of intent have been signed for acquisitions or rentals for approximately 50% of the retail and office space.

Investment opportunity
There is an opportunity to make a forward purchase of the completed building, at a discount, because the developers are in need of liquidity to finance other projects. The developers would finish the property and deliver it 70% let and/or sold. The finished value of the building with some space sold, and other space rented at an 8.5% yield is estimated at 41.7m euro.

Investment required
The developer would sell the SPV with project for 6.7m euro. There is currently approximately 10m euro of debt, and the project will cost a further 18.3m euro to finish. The entire project cost would therefore be 35m euro, giving a 19%, or 6.7m euro profit.

Likely percentage of bank finance available
Negotiations are taking place with state owned bank Nova KMB and Sid Banka to provide 60% LTV.

Advantages
Opportunity to acquire a prime income generating asset for the fund at a discount to value. There is limited land available in the town centre so little chance of competitive properties being developed. Although the developers have letters of intent from potential buyers of some space, there is no contractual agreement so those units could be rented instead, making the property an ideal mid- to long-term income generating asset for the fund.