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Credo clients own stakes in the following investments:
Gross acquisition cost represents the total cost of the acquisition
rather than the portion attributable to Credo clients' investment.

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  Property: Germany - ATU Autoparts
Address: 19 locations in Germany
Tenant: ATU
Gross Acquisition Cost: €45m

This portfolio of 19 ATU properties in Germany was purchased in July 2005 by Nadiv Investments SA for €45m, at a net initial yield of 7.6% on gross acquisition cost. Credo investors purchased 30% of the equity of Nadiv Investments SA for €3.4m. This investment is held through two special purpose vehicles: Clovelly Investment Holdings Limited and Mowbray Investment Holdings Limited.

Funding

Shareholders’ loan and equity of €11m was used to capitalise Nadiv Investments SA, which purchased the properties, while a loan of €33.8m was provided by Barclays Capital Mortgage Servicing Ltd for 7.5 years until January 2013. This loan has been amortised and has €31.4m outstanding as at November 2008.

Rent

All 19 German ATU properties are freehold and have long leases with an average length in excess of 10 years. Their combined contractual annual rent is €3.67m, subject to a formula calculated on annual CPI escalations (which has averaged 1.62% over the last 10 years).

Status

The investment in Nadiv was revalued upwards by the Directors at December 2007 to €46.8m (a yield of 7.86% on the current rent). Although a formal revaluation has not taken place we have built in a provision to take account of the fact that the market has weakened in 2008 and the status of the tenant covenant has declined as discussed above.

Distributions

The investment in ATU Germany is structured as 90% loan and 10% equity. All distributions are treated as a repayment of the loan. The October 2008 distribution includes a loan repayment of €87,000. To date investors have received a total repayment of €476,131 (14% of the initial investment.) The cashflow has been lower than forecast in the last reporting period as the company had large tax bill to pay which was not included in the initial forecast.


  Property: Austria - ATU Autoparts
Address: 9 locations in Austria
Tenant: ATU
Gross Acquisition Cost: €21m

This portfolio of 9 ATU properties in Austria was purchased in July 2005 by Peter Unger GmbH Co. KG for €21m, at a net initial yield of 7.6% on gross acquisition cost. Credo investors purchased 30% of the equity in Peter Unger GmbH Co. KG for €1.65m. This investment is held in a special purpose vehicle called Robben Property Investments Limited.

Funding

Shareholders’ equity of €5.5m was used to capitalise Peter Unger GmbH Co. KG, while a loan of €15.5m was provided by Barclays Capital Mortgage Servicing Ltd for 7.5 years until October 2012. The loan has been amortised to €14.4m as at November 2008.

Rent

The portfolio comprises 8 properties in Austria located in 7 cities. Two of the properties are in Vienna, the others are in Leoben, Rum, Salzburg, Villach, Wels and Wiener Neustadt. The largest property is in Vienna (1,663 m²). Each of the properties have long leases with an average length in excess of 10 years. Their combined projected gross annual rental income is €1.73m, subject to a formula calculated on annual CPI escalations (which has averaged 1.62% over the last 10 years). The annual rent has increased by €22,100 due to indexation at the properties in Wels and Villach.

Status

Valued at €23.62m by CBRE in February 2008 at an initial yield of 6.35% and revalued internally subsequently at a yield of 8% (€21.435m) to reflect the current market.

With regard to asset management, we have negotiated a new lease to regularise the arrangement with respect of 798 sq.m² of parking bays at the property in Vienna. ATU currently has a lease for 15 years with the adjoining OMV Petrol Station, who themselves are a tenant and have sublet this area to us. We have agreed with the current owners of the parking bays to sign a new 40 years lease directly with us. This will enable us to sublet this area to ATU directly. The rent due to the current owners will be €7,988 p.a. and the agreed rent with ATU will be €10,621 p.a., which provides us with an additional income of €2,600 p.a. We will benefit with slightly more rental income and this will make the lease end dates co–terminus and will enhance the investment value of the property.

We anticipate the cost for this arrangement to be approximately €75,000, which will be funded by the cashflow over the next 6 months. All of the above is subject to finalisation of legal documents.

Distributions

A dividend of €40,000 has been declared by Robben for the 6 month period ended August 2008. To date investors have received a total return of 14.5%. This is lower than originally forecast due to sales and refinancing abort costs.


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