A STUNNING BLOCK OF 12 APARTMENTS

Wittenburg - Germany

SUPERB INVESTMENT OPPORTUNITY!

A STUNNING BLOCK OF 12 APARTMENTS – TOTAL 932m2

ALL LET PRODUCING A NET INCOME OF 47,453.52 EUROS PER YEAR

PURCHASE PRICE 550,000 EUROS PLUS 3% PURCHASERS FEE

LOCATED ON BEETHOVEN STRASSE

RENTAL INFORMATION

Apartment

RENT/STARTED

M2 / EUR PAID PER M2

NET

RENT

EUROS

UTILITIES /

SERVICES

EUROS

GROSS

RENT

EUROS

1

01/06/03

71,22 / 4,41

314,00

76,00

390,00

2

01/08/06

55,89 / 4,65

260,00

40,00

300,00

3

01/02/99

108 / 4,60

496,98

110,44

607,41

4

01/01/91

73,18 / 2,99

219,00

67,35

286,35

5

15/03/01

00,43 / 4,29

426,86

76,25

503,12

6

01/03/06

72,64 / 4,26

310,00

70,00

380,00

7

01/03/07

97,82 / 3,86

378,00

63,00

441,00

8

01/06/07

77,80 / 4,35

339,00

60,00

399,00

9

01/10/05

73,15 / 4,25

311,00

70,00

381,00

10

01/02/03

95,52 / 4,00

382,00

110,00

492,00

11

01/05/07

44,97 / 4,35

195,62

50,00

245,62

12

01/06/07

74,22 / 4,34

322,00

60,00

382,00

TOTAL 932,07 M2

3.954,46

853,04

TENANTS PAY THIS

4.807,50

MORTGAGE INFO

* TRANSFERABLE MORTGAGE AVAILABLE – 330,000 EUROS
* 60% LOAN TO VALUE
* OVER 50% OF THE MORTGAGE AT AN INTEREST RATE OF 3.5%
* INTEREST RATE RANGING FROM 3.55 – 5.59%
* TOTAL MORTGAGE PAYMENT OF 21,630.56 EUROS ON A CAPITAL AND INTEREST BASIS WITH 12 YEARS REMAINING

CLOSING COSTS

* 5% OF THE PURCHASE PRICE = TAX, NOTARY & REGISTRATION FEES.

OTHER COSTS

* MANAGEMENT FEE IS 200 EUROS PER MONTH.

NO OTHER ADDITIONAL FEES AS THEY ARE COVERED BY ADDITIONAL PAYMENTS FROM TENANTS.

WHY WITTENBERGE?

· Within a 2½ hour driving radius of Wittenberge there is a population of 14 million people.

* Transports links – 50 minutes from Berlin and 67 minutes from Hamburg on high speed train.

* Commuting location – Monthly transferable ticket 167 euros to Berlin.

* New motorway link from Magdeburg to Rostock (A14) with a new junction at Wittenberge to start end of 2008 and due for completion 2012.

* In 2004 15 million euros was invested in the railway station

* Well positioned on the River Elbe which is an important commercial route linking Hamburg to the Czech Republic.

* Wittenberge is surrounded by a UNESCO national park making it impossible to over develop the area.

* Over the last 10 years Wittenberge has benefited from a brand new communications system that rivals any existing system elsewhere.

· Cost of land is on average 1/5th of the price of Berlin e.g Berlin 250 euros per m2 – Wittenberge 50 euros per m2.

* Corporation tax on properties in Wittenberge is 88% less than Berlin and 48% less than Hamburg.

* Immigration of tenants – average age in Wittenberge is 47 compared to a younger average age in nearby cities like Berlin. Therefore tenants are staying longer in their respected properties in Wittenberge.

* Rental supply and demand – Wittenberge has started a re-generation programme to demolish 3000 out of town pre-fabricated units. The concept is to re-house these tenants in the centre of town. This programme is backed by the German government who are paying 60 euros per m2 to the local housing association to demolish these units. The costs of demolition are only 40 euros per m2.

* On the 25th September 2007 nearby Parchim Airport was purchased by a major Chinese company to be their European cargo base. In addition they have purchased 85 hectares of land

* 7 million euros of local investment in Wittenberge to start a 58 bedroom hotel, brewery, conference centre, retail outlets & restaurants.
* Tourism / theatre – Wittenberge currently holds the 2nd largest outdoor opera in Europe shown on National television. Funding has been granted to further this with 2500 fixed seats. Another 1 million euros worth of funding started in September 2007 to link the theatre above on the river to the railway station.
* Increasing population.

Property Acquisition in Germany

The German property market is a promising one. With low interest rates and properties considered as undervalued, the investor will find adequate acquisition opportunities. In 2005 the transaction volume significantly increased to EUR 51.4 billion and 62 % of the investment originated from non-German investors, in particular from the UK, Ireland and the USA. Both investors and lenders find in Germany a highly developed legal and land registry system enabling reliable title transfer and property financing.

This briefing note looks at legal and practical issues which prospective buyers should be aware of in relation to property acquisitions in Germany.

The Basics:

Ownership of property
Absolute title to property, comparable to the common law concept of freehold, is recognised under the German Civil Code. The owner has the right to possess and to dispose of the property, to encumber it, grant leases and other rights over it. Absolute title to property is evidenced in Germany by the respective entries in the land register (Grundbuch).

Land Registry
For each parcel of land located in Germany the land registry (Grundbuchamt) records its owner and existing encumbrances. The boundaries of the land will be shown on a cadastral map. Entries in the land registry are conclusive. That means all parties may rely on its accuracy and completeness unless they have positive knowledge that the respective entry is incorrect. Hence anyone purchasing from the person registered as the owner will acquire good title and likewise anyone taking security from the person registered as owner, will acquire valid and enforceable security interests.

Property Purchase Agreement
In general, property purchase agreements are considerably shorter than in common law jurisdictions as most of the relevant applicable legal provisions and principles are set out in the German Civil Code (Bürgerliches Gesetzbuch). All agreements pertaining to properties need to be notarised by a notary public. The notary is a legally trained official appointed by the federal state and deemed to be strictly impartial. Commonly, the purchase agreements are drafted by the parties' lawyers and, subsequently, forwarded to the notary for his review. The notary is obliged to examine the entries in the land register and to include these entries in the property purchase agreement. He will also carry through the conveyancing process for the parties.

However, as the notary's duty is limited to examining the title and all related encumbrances, the prospective buyer should carry out independent due diligence in relation to leases, planning, environmental and tax issues as well as all other relevant matters.

Property transfer tax and VAT
The transfer of German properties is subject to property transfer tax (Grunderwerbssteuer) at the rate of 3.5 % of the consideration. Typically, the notary will inform the tax authorities of the transfer of property following the notarisation of the property purchase agreement. Once the buyer pays the tax due, a tax clearance certificate will be issued and submitted to the land registry.

Notary's and land registry's fees

The notary's and land registry's fees are calculated on a scale by reference to the Cost Ordinance (Kostenordnung). The amount depends on the subject item to be notarised / registered and its related value. Approximate cost 1.5%

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