Lewis Charles Romania Poperty Fund's Consolidated Loss Widens to 3.89 Mln Euro in H1

The fund had a 770,536 euro loss in the first half of 2008.

The loss in the first half of this year is a result of “the further write down on the disposal of the Ploiesti project and the effects of changes in the Romanian leu/euro exchange rate on the consolidation of the fund’s Romanian assets,” the fund said in a statement.

Lewis Charles developed two projects in Romania last year - the Mogosoaia Residential Project in the outskirts of the capital Bucharest, designed to comprise 1,250 apartments on a built-up area of approximately 132,250 metres, and a shopping centre called Zenith, located in the southern city of Ploiesti. In March this year, the fund sold the project in Ploiesti to Ireland’s Blackpearl Property.

“The fund now only has one direct interest, which is 50% joint venture interest in the Mongosoia project, with a continuing indirect interest in the Ploiesti project,” Lewis Charles said.

It added that it achieved significant progress in Mongosoia project in the first half of the year and the scheme has received a building permit, an achievement that enables the marketing of the development.

“Cash resources for the fund are limited and the directors are taking every effort to reduce costs where possible, recognising that once final payments have been made on the existing management contract ongoing costs will be substantially reduced,” the investment company said.

However, for the fund to have any meaningful future, fresh equity will have to be raised within the next year.

It added that the residential market in the Bucharest area saw a continued decline in demand, supply and number of transactions in the first half of the year.

“Buyers have been postponing purchases because of poor supply in the market, restricted access to loans and the expectation that prices will continue to fall,” the fund said.

Lewis Charles Romania, registered in the British Crown dependency of Guernsey, is listed on the London Stock Exchange. Its objective is to generate capital gains by investing in both residential and commercial property in Romania, primarily, although not exclusively, in and around Bucharest and other large Romanian cities.

($=0.6833 euro)