Professional Documents
Culture Documents
Sofia
April 2009
CONTENTS
Overview
Shareholders
Services
Real Estate Investment Advisory
Real Estate Portfolio Management
Property Fund Management
Mezzanine Real Estate Financing
Investment Process
Board of Directors
Key Team Members
Investment Portfolio
Appendix – Bulgaria Overview
Corporate Presentation 2
OVERVIEW
SORTIS Real Estate is a joint venture between:
SORTIS Invest
BMF Bulgaria
Mr. Joel Baquiche
Strong management team with significant real estate and private
equity investment experience in Bulgaria and internationally.
Applying best international corporate governance and compliance
practices.
Member of FIABCI Bulgaria, the Bulgarian chapter of FIABCI (The
International Real Estate Federation)
Real estate investment management company, offering the following
services on the territory of Republic of Bulgaria:
Real estate investment advisory
Real estate portfolio management
Property fund management
Mezzanine real estate financing
Corporate Presentation 3
SHAREHOLDERS
SORTIS Invest - investment advisory firm providing
services in the fields of private equity, venture
capital, corporate finance, mergers & acquisitions.
Assisting entrepreneurs in obtaining financing - equity,
quasi-equity, mezzanine loans and project financing
Wholly owned by Martin Paev, CFA, an investment banker
with significant M&A, private equity, asset management and
real estate experience, who structured the first Real Estate Investment Trust in Bulgaria
Corporate Presentation 4
SERVICES
SORTIS Real Estate structures individual and collective investment
schemes that enable its client-investors to benefit from the real estate
opportunities the Company has sourced and secured in Bulgaria.
Corporate Presentation 5
REAL ESTATE INVESTMENT ADVISORY
Corporate Presentation 6
REAL ESTATE PORTFOLIO MANAGEMENT
Corporate Presentation 7
PROPERTY FUND MANAGEMENT
Our team has substantial experience in structuring and managing
regulated and unregulated investment vehicles, both in Bulgaria and
internationally.
Mr. Martin Paev, CFA, General Manager of SORTIS Real Estate :
structured and managed TBI-BAC REIT (now Prime Property REIT), the first Real Estate
Investment Trust in Bulgaria. During his directorship, the REIT provided a return to its
investors of 73%, realized over a period of 18 months (Oct 2003-Mar 2005)
worked on structuring Bulgarian Land Development, a GBP 40 mln property investment
fund, listed on the AIM Market of the London Stock Exchange.
Mr. Thomas Higgins, Board Member and Investor :
ex-Managing Director and Chief Investment Officer of the Bulgarian-American Enterprise
Fund
ex-Executive Director in charge of SME and hotel lending at Bulgarian-American Credit
Bank
co-founder and Managing Partner of Balkan Accession Fund, a EUR 110 mln private
equity and mezzanine investment fund
Mr. Joel Baquiche, Board Member and Investor :
active real estate investor in Europe and the USA
investor in numerous private equity and venture capital deals
committee member of London Business Angels Network and London Seed Capital Fund.
Corporate Presentation 8
MEZZANINE REAL ESTATE FINANCING
SORTIS Real Estate structures mezzanine financing deals to
support experienced property developers.
Between 60 and 80% of the equity component required for a
development project may be provided in
the form of a mezzanine loan.
Investors take a quasi-equity position thus
achieving attractive risk-adjusted returns:
transfer large part of project risks to the developer
keep part of the upside exposure.
Corporate Presentation 9
INVESTMENT PROCESS
Project Deal Due Deal Project
Exit
Identification Structure Diligence Closing Development
Corporate Presentation 10
BOARD OF DIRECTORS
Mr. Martin Paev, CFA (born 1975, Bulgarian) – Chief Executive Officer
Mr. Paev structured the first Real Estate Investment Trust in Bulgaria (TBI-BAC REIT) and acted as the REIT’s Executive Director from its
establishment until he joined Address Group as Executive Director of ADDRESS Investment & Development in 2005. In 2006 he
established SORTIS Invest, an investment advisory firm, providing services in the fields of private equity, venture capital, corporate
finance and mergers & acquisitions.
Martin Paev has 7+ years of investment banking, M&A and asset management experience at the investment banks ING Barings in
Frankfurt/Main (Germany), ETEBA (National Bank of Greece Group) in Sofia, Bulgaria, Balkan Advisory Company (an independent
investment banking boutique in South-Eastern Europe) in Sofia, Bulgaria and SORTIS Invest in Sofia, Bulgaria.
Educated in Bulgaria, Netherlands & Germany, he has Master’s degree in Banking & Finance and Bachelor’s Degree in Business
Administration. Mr. Paev is CFA® Charterholder and served two mandates as Board member of the Bulgarian CFA Society.
Mr. Thomas Higgins (born 1966, US citizen) – Board Member, Investor
Mr. Higgins is an investment professional who has been living and working in Bulgaria for the last 15 years. From 1993 to 2005 he worked
for the Bulgarian-American Enterprise Fund (BAEF) where he become Managing Director and Chief Investment Officer in 1997.
In 2005 Mr. Higgins co-founded and become Co-Managing Partner of the Balkan Accession Fund (BAF), a EUR 110 million private equity
& mezzanine finance investment fund primarily focused on helping successful Bulgarian and Romanian companies expand in the
region. He has previously worked also with Coopers & Lybrand and Equitable Real Estate in New York.
Mr. Higgins has held significant leadership positions in the Bulgarian business community, which currently includes Financial Director and
Board Member of the Confederation of Employers & Industrialists in Bulgaria, Board Member of the American Chamber of Commerce in
Bulgaria, Member of the University Council of the American University in Bulgaria and Co-Founder and Board Member of the Bulgarian
Business Foundation for Education.
Mr. Higgins is an MBA graduate from the Kellogg School of Management at Northwestern University and received a B.Sc. degree in
Finance and Management Information Systems from the University at Albany – summa cum laude. Mr. Higgins speaks Bulgarian.
Mr. Joel Baquiche (born 1951, British) – Board Member, Investor
Mr. Baquiche is an experienced investor in private equity and international real estate. He has been doing real estate development in
Paris (France) and overseeing family property interests in New York, Atlanta and Florida (USA). Mr. Baquiche is an active investor in real
estate projects in the UK since 1987 and in Bulgaria and Romania since 2005.
In the period 1974-1980 Mr. Baquiche has represented European companies in the transport, trading and construction sectors in Egypt.
In 1982 he became Founder and 50% shareholder of Checkout Computer Systems, an EPOS manufacturer for the hospitality industry.
Mr. Baquiche has made numerous investments in start-ups and SMEs, listed and unlisted companies.
Mr. Baquiche studied Economics at Manchester University. He has been a Committee member of London Business Angels Network and
London Seed Capital Fund for many years.
Corporate Presentation 11
KEY TEAM MEMBERS
Eng. Ivaylo Angelov, (born 1968, Bulgarian) – Project Manager
Ivaylo Angelov has significant project management and technical experience in the construction and real
estate business. He has 16+ years of professional experience and has completed numerous developments of
office, industrial and residential buildings with aggregate gross built-up area of about 200 000 sq.m.
Mr. Angelov has worked as Site Engineer and Project Manager on a number of construction sites, some of
which are: Business Park Sofia - Construction of Building B2 (GBA 20,000 sq.m.); Residential complexes at
Manastirski Livadi, Sofia (aggregate GBA 30,000 sq.m.) and Malinova Dolina, Sofia (GBA 16,700 sq.m.);
Apartment buildings - Borovetz (GBA 24,500 sq.m); Office building – Gorubliane, Sofia (GBA 20,000 sq.m.).
Mr. Angelov has a degree in Civil Engineering from the Military Construction Academy in Sofia, Bulgaria.
Ms. Eftimova has a Master’s degree in Accounting and Financial Control from the University of National and
World Economy in Sofia, Bulgaria.
Corporate Presentation 12
INVESTMENT PORTFOLIO
AIRPORT BUSINESS PARK PROJECT – SOFIA, BULGARIA
Location: close to the new Terminal 2 of Sofia International Airport
The Area: Sofia Airport is a fast-developing office district and a well-
established industrial and logistics area.
Transport: Frontage on current road to
Terminal 2 and on the new highway
connecting it to Downtown Sofia; existing
bus stop.
13
APPENDIX
BULGARIA OVERVIEW
Corporate Presentation 14
ABOUT BULGARIA - INTRODUCTION
GENERAL
Population: 7.7 mln
Area: 111,910 sq. km
Coastline: 354 km
POLITICS
NATO member since April 2004
EU member since January 2007
Stable political situation
Decreasing long-term political risk
A funding member of OSCE since 1995
ECONOMICS
Sustainable high real GDP growth rate (6.0% in 2008), inflation (12.5% in 2007)
Currency pegged to the EURO via currency board (EUR 1 = BGN 1.95583) since 1997
Investment grade credit rating (Moody’s: Baa3; Fitch: BBB-; S&P: BBB)
Developed financial sector – predominantly foreign owned
Strengthening economy and rising disposable income
Substantial foreign investments (EUR 6.1 bln in 2007, of which 35% in real estate and 12% in
construction and approximately EUR 6.0 bln in 2008 )
Sound fiscal policy (budget surplus)
Flat corporate and personal income tax rate of 10%, the lowest in EU
Booming tourism industry (EUR 1+ bln net revenues in 2007, 10% growth YoY)
Corporate Presentation 15
PROPERTY MARKET OVERVIEW
The Bulgarian property market is an emerging real estate market.
Rapid growth over the past 6 years.
Strong growth of investment activity.
Lack of investment grade products.
Financial crisis resulted in increasing yields and suspension of several large
development projects due to lack of financing.
The market offers attractive investment returns (8% to 12%), but saturation is
expected in some property segments.
Investment opportunities in distressed properties emerge.
Office segment is most developed, industrial has the highest yields.
IRR of 25+ % is achievable, but projects should be carefully selected.
Thoughtful design, accurate implementation and strong marketing are
essential to a successful project.
Investment timing and location are key factors to success.
Corporate Presentation 16
PROPERTY MARKET TRENDS
Corporate Presentation 17
BULGARIAN OFFICE MARKET
Sofia is the main office space market, Varna, Plovdiv and Bourgas follow
Total office stock in Sofia – over 883 507 sq.m., 173 000 sq.m. completed in 2008
Office space of 990 000 sq.m. under construction, 700 000 sq.m. in design phase
Undersupply of investment-grade product. Yields increased to 10+ % (Q4 2008).
Lease terms – 3-5 years, max. 10 years
Vacancy rates in Sofia – 9.4% (2008), lowest in broad center – 2.5%
Office developments in Sofia shift towards the main boulevards, dynamic
development of Ring Road and Sofia Airport areas
1600
Sofia High Street Rents & Yields (€/sq.m./yr) 16%
1400 14%
1200 12%
1000 10%
EUR 800 8%
600 6%
400 4%
200 2%
0 0%
2000 2001 2002 2003 2004 2005 2006 2007 Q3, 2008 Q4,2008
Sofia High Street Rents Sofia High Street Yields
90 18
80 16
70 14
60 12
50 10
EUR %
40 8
30 6
20 4
10 2
0 0
2000 2001 2002 2003 2004 2005 2006 2007 Q3,2008 Q4,2008
Tel: +359 2 946-39-15 Tel/Fax: +44 (207) 368-65-66 Tel: +359 2 946-39-15
Fax: +359 2 946-39-16 Mobile: +44 (7930) 39-82-80 Fax: +359 2 946-39-16
Mobile: +359 88 50-50-200 e-mail: baquiche@btinternet.com Mobile: +359 888 45-20-51
e-mail: paev@sortis.bg baquiche@sortis.bg e-mail: higgins@sortis.bg
www.sortis.bg
Corporate Presentation 21