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27.07.2018
Current report No. 30/2018
Current report No. 30/2018

Conclusion of a final agreement on the sale of a real property – Symetris Business Park II in Łódź

With reference to the information disclosed in current report No. 31/2016, the Management Board of Echo Investment S.A. (the “Issuer”) reports that on 26 July 2018 the Issuer"s subsidiary, SYMETRIS - PROJEKT ECHO – 131 sp. z o.o. sp. k. acting as the seller, concluded a final agreement on the purchase of a real property consisting of separate ownership of 12 premises located in a Stage II building constituting part of an office building complex, Symetris Business Park, situated in Łódź at Aleia Marszałka Józefa Piłsudskiego 88 (the “Real Property”) with a subsidiary of EPP N.V. (“EPP”), FLAXTON INVESTMENTS sp. z o.o. sp. k., acting as the buyer (the “Agreement”). The gross leasable area (GLA) of the Real Property (12 premises) amounts to approximately 9,700m2, the generated annual net operating income (NOI) of the Real Property amounts to approximately EUR 1.6 million, the weighted average unexpired lease term (WAULT) exceeds 9 years, and the main tenant is Philips Polska sp. z o.o. The Agreement was concluded in performance of a preliminary conditional agreement for the sale of the premises described in current report No. 31/2016 following the satisfaction of the relevant conditions precedent. The terms and conditions of the Agreement are similar to the terms and conditions generally applied in such types of transactions. The Agreement contains representations and warranties of the seller and the buyer and relating to the liability of the parties that are standard for such types of transactions.  Within the transaction, the seller and the buyer concluded a rental guarantee agreement (the “RGA”). The principal terms of the RGA provide for a guarantee extended to the buyer regarding the seller"s coverage of rent payments and average service fees for sections of the building that are not leased out to third parties as at the date of signing the Agreement.  Moreover, in connection with the Agreement, the parties thereto concluded among others:  (i) an escrow account agreement; (ii) a fit-out agreement; and (iii) an understanding regarding the repayment of the profit participation loan extended by EPP (Cyprus) 2 Limited, a subsidiary of EPP. The purchase price based on the calculation described in current report No. 31/2016 was finally determined as EUR 19,089,012 plus VAT. The purchase price has been reduced by the amount of the rent-free periods resulting from the signed lease agreements. The seller may obtain additional payments pursuant to the fit-out agreement in the amount of EUR 2,579,220 plus VAT and as a result of removing minor technical defects of a further EUR 192,988 plus VAT. Simultaneously, under the RGA the seller is required to make to the buyer a one-off payment in the amount of EUR 2,120,695, and the charges related to vacant space (i.e. 6% of the areas of the premises) will be settled over a period of three years. Legal grounds: Article 17(1) of the MAR – inside information.

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