Aristo Sold – Cyprus

From a Press Release from the Purchasers – April 2007

 

Dolphin Capital Investors Limited, a real estate investment company focused on the Master-planned Residential Resort sector in Southeast Europe and managed by Dolphin Capital Partners Limited (“DCP” or the “Investment Manager”), is pleased to announce the securing of an 80% shareholding in Aristo Developers Plc (“Aristo”), the largest holiday home development company in Cyprus (the “Acquisition”).  Aristo is listed on the Cyprus Stock Exchange.

Dolphin has secured 60% from Theodoros Aristodimou, the principal shareholder and founder of Aristo, and related parties, in exchange for €129 million and a 15% interest in the Dolphin special purpose vehicle established for the purpose of acquiring Aristo, and a further 20% from Aristo’s second largest shareholder Mihalakis Ioannides for €57.9 million in cash implying a price of €2.15 (CYP 1.25) per share.

Aristo, founded in 1983, is today believed to be the largest private land owner in Cyprus and the largest holiday home developer both in terms of annual turnover and number of units sold. With more than 13 million m2 of development land under ownership, over 3,000 holiday home sales over the past five years and a pipeline of approximately 10,000 residential units under planning, Aristo has a strong presence within the real estate development sector in Southeast Europe. The Aristo group holds three out of the country’s 12 new preliminary licenses for golf-integrated residential resorts that have recently been granted by the Cypriot government and is considering applying for a fourth license. 
Aristo’s flagship asset is Venus Rock, one of the largest sea-front residential resort development sites in Europe. It is situated on next to Aphrodite Hills (Southeast Europe’s first golf-integrated residential resort) between the towns of Limassol and Paphos. The 1,000 hectare site of Venus Rock is expected to be a truly integrated destination comprising 3 golf courses, more than 3,000 residential units, a 5-star hotel with spa, extensive beach-front entertainment, retail and commercial facilities, marina and other sport facilities. The fourth golf-integrated permit relates to Eagle Pines, a 220 hectare site a few kilometres away from DCI’s Apollo Heights Polo Resort and a 15 minute drive from Venus Rock.
In addition to the golf-integrated developments described above, Aristo is currently involved in the development of additional large scale residential projects, which together represent the substantial majority of Aristo’s total land holdings.
Aristo has grown significantly in recent years, and turnover and net profit grew by an annual rate of 34% and 27% respectively from 2005 to 2006. Total sales and net profit before tax for 2006 were €137.2m and €28.8m respectively.

Cyprus Market Environment

Cyprus entered the EU on May 1st 2004 and offers one of the most competitive taxation environments in Europe (corporate income tax at 10%). The country further benefits from an excellent climate with long seasonality and is already a very popular 2nd home/retirement destination for British citizens. Over the past three years demand for second homes is estimated to have increased by an average 15 to 20 per cent annually.
Smaller mid-market residential projects with 30 to 60 houses have been quite common in Cyprus over the past 20 years. Those were mostly built in and around Paphos, a picturesque town in the Southwest corner of the island. 
There is only one master-planned leisure integrated residential development on the island, Aphrodite Hills (www.aphroditehills.com), which has experienced tremendous success. Aphrodite Hills has been developed and managed by Lanitis Development Ltd over 231 hectares. The development started golf course operations on October 1st 2002 and to date has sold over 400 villas and 200 apartments. 90% of sales have been made to foreigners, of which approximately 60% were to the United Kingdom. The largest other foreign markets have been Russia, Scandinavia and Germany.
The Cyprus Tourism Organization has recently prepared a new 10-year strategic plan for the tourism industry aimed at attracting wealthier tourists and residential buyers. This involves incentives to attract private financing to build additional marinas and golf courses. There are currently only three commercially operated 18-hole golf courses on the island and a further twelve golf course developments have recently received pre-approvals from the Cyprus government. To encourage investment in golf resorts, the Cyprus government has allowed for up to 100,000 m2 of residential real estate that could be integrated with the development of golf courses and sold as freehold, subject to developers meeting certain investment criteria.
Aristo is one of the leaders in the development of golf-integrated residential resorts in Cyprus, having received three out of the twelve preliminary golf-integrated project pre-approvals to date.

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