Source: Sponda Oyj
Publishing of the Offering Circular related to Sponda Plc's Share Offering
SPONDA PLC Stock Exchange Release 10 January 2007 at 4:25 p.m.
Not for release, publication or distribution, directly or indirectly, in or into
Australia, Canada, Japan or the United States.
PUBLISHING OF THE OFFERING CIRCULAR RELATED TO SPONDA PLC'S SHARE OFFERING
The offering circular related to the share offering of Sponda Plc ("Sponda") will
be published January 11, 2007. The Finnish language offering circular will be
available from the internet (www.sponda.fi/osakeanti) from January 11, 2007 as
well as at the places of subscription and the Helsinki Stock Exchange service
point OMX Way (Fabianinkatu 14, Helsinki) from Monday, January 15, 2007 at the
latest.
The offering circular contains certain unpublished information, which is included
in this release.
Information related to the acquisition of Kapiteeli
Financial effects of the acquisition of Kapiteeli
The management of Sponda expects the acquisition of Kapiteeli Ltd ("Kapiteeli")
to enhance Sponda's expected earnings per share for the year 2007 (excluding the
impact of any changes in the fair value of its assets) when compared with
Sponda's expected earnings per share without the acquisition of Kapiteeli, in
each case, taking into account the impact of the offering.
Financing of the acquisition of Kapiteeli
The acquisition of Kapiteeli was financed with a short-term loan (the
"Acquisition Facility"). Sponda intends to refinance the Acquisition Facility and
to achieve its equity ratio of 33 percent by the end of 2007 with the proceeds of
the offering; the proceeds from certain real estate disposals; and long-term debt
financing. The Acquisition Facility consists of different tranches with
maturities up to one year. The total amount of the Acquisition Facility is EUR
1.5 billion.
Sponda is considering selling some of its real property assets in order to
refinance a part of the Acquisition Facility. The sale is expected to be carried
out as one or several divestments and to be completed by the end of 2007. The
company expects to receive EUR 300-500 million from these divestments. The
selection of the divested properties has been based on their geographical
location and their strategic fit within Sponda. These contemplated divestments
have not been reflected in the presented pro forma financial information and no
assurance can be given that such contemplated divestments will be successfully
completed.
At the closing of the acquisition of Kapiteeli on December 14, 2006, Sponda
borrowed EUR 960 million under the Acquisition Facility, of which EUR 947 million
has been used to pay the purchase price of the shares in Kapiteeli as well as
financing expenses. The rest of the Acquisition Facility may be used for further
refinancing of Kapiteeli's existing debt as well as for general corporate
purposes. The Acquisition Facility includes customary covenants, event of default
provisions as well as representations and warranties. In addition, Sponda has
obtained the requisite waivers from its existing lenders to keep its existing
debt facilities in place.
Pro forma information
The offering circular includes pro forma consolidated financial information,
which has been prepared in order to describe the acquisition of Kapiteeli. This
pro forma information is set out at appendix A to this release.
Other information
External Valuer's Statement
An external valuer, Kiinteistotaito Peltola & Pulkkanen Oy, has valued Sponda's
and Kapiteeli's properties as at September 30, 2006 and this valuer's statement
is set out at appendix B to this release.
Additional information on Fund Business unit
The Fund Business unit focuses on properties located outside the major cities in
Finland. The business operations comprise of two funds, First Top LuxCo, a fund
registered in Luxembourg, which invests mainly in office and retail properties in
the middle-sized cities in Finland, and Sponda Real Estate Fund Ky, which invests
mainly in logistics properties outside the Helsinki Metropolitan Area. Sponda
owns 20 percent of the First Top LuxCo fund and at 9 January 2007, it has
invested approximately EUR 2.5 million in the fund. The size of the fund is
currently approximately EUR 82.0 million, the target size being approximately EUR
150-400 million measured by the value of its properties. Sponda owns 47 percent
of Sponda Real Estate Fund I Ky fund and, as at 9 January 2007, it has invested
approximately EUR 15 million in the fund. The size of the fund is currently
approximately EUR 80 million, the target size being approximately EUR 200 million
measured by the value of its properties. Sponda's affiliate, Sponda is
responsible for providing management services both to the funds and the
properties they acquire.
Helsinki, January 10, 2007
Sponda Plc
The Board of Directors
Further information:
President and Chief Executive Officer Kari Inkinen, tel. +358 9 6805 8202 or +358
400 402 653
Chief Financial Officer Robert Öhman, tel. +358 9 6805 8206 or +358 40 540 0741
The information contained herein is not for release, publication or distribution,
directly or indirectly, in or into Australia, Canada, Japan or the United States.
This release does not constitute an offer to sell subscription rights or shares
in Australia, Japan, Canada or the United States (save for exemption regarding
the private placement). The shares referred to in the release may only be offered
or sold in the United States pursuant to an exemption from registration
requirements as provided for in the U.S. Securities Act of 1933, or in a
transaction not subject to the U.S. Securities Act of 1933 or any applicable laws
of the states of the United States. There is no intention to register this
offering or any portion of it in the United States or to conduct a public
offering of the shares in the United States.
This release does not constitute a direct or indirect offer to sell or acquire
securities, nor shall there be any sale of the shares in any jurisdiction in
which such offer or sale would be unlawful prior to registration of the shares,
exemption from registration requirement or other qualification under the
securities laws of any such jurisdiction.
This release does not constitute an offer of securities to the public in the
United Kingdom. No offering circular has been or will be registered in the United
Kingdom in respect of the securities, and consequently, the offering is directed
only to persons who (i) are outside the United Kingdom or (ii) are persons
falling within Article 19(5) ("investment professionals") of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such persons
together being referred to as "relevant persons"). This release or any of its
contents must not be acted on or relied on by persons who are not relevant
persons.
Merrill Lynch and Nordea are acting for Sponda and for no-one else in connection
with the offering and will not be responsible to anyone other than Sponda for
providing the protections afforded to the respective clients of Merrill Lynch or
Nordea nor for providing any advice in relation to the offering.
Appendix A
SELECTED UNAUDITED CONDENSED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited condensed pro forma consolidated financial information
has been prepared for illustrative purposes only in order to describe the impact
of the Acquisition of Kapiteeli.
On October 20, 2006, Sponda announced the acquisition of all of the issued and
outstanding shares in Kapiteeli for EUR 943 million, equivalent to an enterprise
value of approximately EUR 1.3 billion. The acquisition value of the Office and
Retail Properties was approximately EUR 1 billion and of the Sales Properties
and Development Properties approximately EUR 0.3 billion. The transaction was
cleared by the Finnish Competition Authority on November 16, 2006 and completed
on December 14, 2006.
The pro forma adjustments give effect to the following:
. the Acquisition of Kapiteeli;
. the financing of the Acquisition of Kapiteeli with the proceeds from the
Offering and debt financing; and
. adjustment for the discontinued Hotel Properties business unit of Kapiteeli.
Sponda is considering selling some of its real property assets in order to
refinance a part of the Acquisition Facility. The sales are expected to be
carried out as one or several divestments and to be completed
by the end of 2007. The Company expects to receive EUR 300-500 million from these
divestments. The selection of the divested properties has been based on their
geographical location and their strategic fit within Sponda.
These contemplated divestments have not been reflected in the pro forma financial
information presented in the Offering Circular and no assurance can be given that
such contemplated divestments will be successfully
completed.
The unaudited condensed pro forma consolidated income statements for the year
ended December 31, 2005 and for the nine months ended September 30, 2006 have
been prepared as if the Acquisition of Kapiteeli had occurred as at January 1,
2005. The unaudited condensed pro forma consolidated balance sheet as of
September 30, 2006 gives effect of the transactions as if they had occurred on
September 30, 2006.
According to IFRS Standard for Business Combination 3, a business combination
means bringing together separate entities or business operations into one
reporting entity. In a business combination, the acquiring party obtains control
over the acquisition target. A combining entity shall be presumed to have
obtained control over another combining entity when it acquires more than one-
half of that entity's voting rights. The pro forma financial information has been
prepared in accordance with the standard in question, and Sponda is considered
the acquiring entity.
The Acquisition of Kapiteeli is accounted for using the purchase method of
accounting. In the pro forma information, the purchase price is preliminarily
allocated to the assets acquired and liabilities assumed and contingent
liabilities based on their fair values. The final combination of Sponda and
Kapiteeli will, under IFRS, be calculated based on the transaction value and the
fair values of Kapiteeli's identifiable assets and liabilities and contingent
liabilities at the date of exchange of control.
The management of Sponda has prepared the pro forma adjustments based upon
available information and various assumptions that they believe are reasonable.
The pro forma adjustments and certain assumptions are described in the
accompanying notes. Other information included in the unaudited pro forma
consolidated condensed financial information has been presented to provide
additional information for analysis.
The management of Sponda has prepared and presented this unaudited pro forma
consolidated financial information for illustrative purposes only. The pro forma
financial information addresses a hypothetical situation and, therefore, is not
necessarily indicative of the actual results of operations or financial position
that would have occurred had the transactions occurred on the dates indicated.
Future operating results may differ materially from the pro forma condensed
consolidated financial information reflected hereinafter and are not necessarily
representative of Sponda's financial position or results of operations at any
future date or for any future period. The unaudited pro forma combined condensed
financial information does not reflect certain future costs, charges and expected
cost savings.
The unaudited condensed pro forma consolidated financial information should be
read in conjunction with the historical financial statements and related notes of
Sponda and Kapiteeli and all other information presented elsewhere or reference
in the Offering Circular.
Unaudited Pro Forma Combined Condensed Income Statement
As at September 30, 2006
(Eur, in millions)
Sponda Kapiteeli Pro forma Pro forma Pro Pro
IFRS(1) IFRS(2) adjustment adjustment forma forma
s for s for adjust- Sponda
Acquisitio Financing ments
n of the for
Kapiteeli( acquisitio presen-
3) n of tation(
Kapiteeli( 5)
4)
Total revenue 79.8 91.3 171.1
Gross rental income 91.1 (91.1) 0.0
and service charge
income
Interest received on 0.2 (0.2) 0.0
finance lease assets
Maintenance expenses (18.9) (33.7) 0.3 (52.3)
Net operating income 60.9 57.6 0.0 0.0 0.3 118.8
Gains from disposals 0.7 0.7
(investment
properties)
Gains from disposals 43.6 43.6
(trading properties)
Fair value adjustment 19.1 14.5 33.6
Write-down of trading (13.4) (13.4)
properties
Sales and marketing (0.8) (1.2) (2.0)
expenses
Administrative (6.4) (14.4) 0.9 (19.9)
expenses
Other operating 0.3 5.0 5.3
income
Other operating (0.1) (0,1)
expenses
Operating profit 73.1 93.5 0.0 0.0 0.0 166.6
Financial income 0,1 4,3 4.4
Financial expenses (22.2) (11.9) (20.2) (54.3)
Financial income and (22.1) (7.6) 0.0 (20.2) 0.0 (49.9)
expenses,net
Profit before taxes 51.0 85.9 0.0 (20.2) 0.0 116.7
Income tax (13.3) 0 5.3 (8.0)
Profit from 37.7 85.9 0.0 (14.9) 0.0 108.7
continuing operations
Profit from 91.0 (91.0) 0.0
discontinued
operations
Net profit 37.7 176.9 0.0 (14.9) (91.0) 108.7
Attributable to:
Equity holders of the 37.7 176.6 0.0 (14.9) (91.0) 108.4
parent
Minority interest 0.3 0.3
Unaudited Pro Forma Combined Condensed Income
Statement
For the year ended December 31, 2005
(in millions of Euro)
Sponda Pro forma Pro forma Pro Pro
IFRS(1) adjustment adjustment forma forma
s for s for adjustm- Sponda
Acquisitio Financing
n of the ents for
Kapiteeli Kapiteeli( acquisitio present-
IFRS(2) 3) n of ation(5)
Kapiteeli(
4)
Total revenue 103.1 119.5 222.7
Gross rental income (119.3) 0.0
and service charge 119.3
income
Interest received on (0.2) 0.0
finance lease assets 0.2
Maintenance expenses (25.6) (48.7) 0.3 (74.0)
Net operating income 77.5 70.9 0.0 0.0 0.3 148.7
Gains from disposals (0.2) 0.1
(investment 0.3
properties)
Gains from disposals 36.8
(trading properties) 36.8
Fair value (5.1) 62.0 56.9
adjustment
Write-down of (7.2)
trading properties (7.2)
Sales and marketing (1.2) (1.4) (2.6)
expenses
Administrative (5.8) (20.4) 1.1 (25.1)
expenses
Other operating 0.4 4.8 5.2
income
Other operating (0.1) (0.2) (0.3)
expenses
Operating profit 65.5 147.0 0.0 0.0 0.0 212.5
Financial income 0.2 3.2 3.4
Financial expenses (26.5) (19.4) (25.9) (71.8)
Financial income and (26.3) (25.9) 0.0 (68.4)
expenses,net (16.2)
Profit before taxes 39.2 130.8 0.0 (25.9) 0.0 144.1
Income tax (9.6) (23.4) 6.7 (26.3)
Profit from 29.6 0.0 (19.2) 0.0 117.8
continuing 107.4
operations
Profit from (1.6) 0.0
discontinued 1.6
operations
Net profit 29.6 109.0 0.0 (19.2) (1.6) 117.8
Attributable to:
Equity holders of 29.6 0.0 (19.2) (1.6) 117.8
the parent 109.0
Undited Pro Forma Combined Condensed Balance Sheet
As at September 30, 2006
(EUR, in millions)
Sponda Kapiteeli Pro forma Pro forma Pro Pro
IFRS(1) IFRS(2) adjustment adjustment forma forma
s for s for adjust- Sponda
Acquisitio Financing ments
n of the for
Kapiteeli( Acqui-siti present-
3) on of ation(5)
Kapiteeli(
4)
ASSETS
Investment 1 372.5 840.1 233.7 2 446.3
properties
Investments in 2.6 2.6
real estate funds
Property, plant 12.4 5.1 17.5
and equipment
Goodwill 22.5 22.5
Other intangible 0.4 5.0 5.4
assets
Finance lease 2.7 2.7
receivables
Long-term 0.1 0.1
receivables
Deferred tax 0.4 51.4 56.7 108.5
assets
Total non-current 1 388.4 899.3 317.9 0.0 0.0 2 605.6
assets
Trading properties 198.8 36.5 235.3
Trade and other 5.7 22.4 14.5 42.6
receivables
Cash and cash 0.6 2.1 2.7
equivalents
Total current 6.3 223.3 51.0 0.0 0.0 280.6
assets
Total assets 1 394.7 1 122.6 368.9 0.0 0.0 2 886.2
EQUITY AND
LIABILITIES
Equity belonging
to owners of
parent company
Share capital 79.3 190.0 (190.0) 31.7 111.0
Share premium fund 159.4 76.7 (76.7) 159.4
Fair value reserve (0.9) (0.9)
Revaluation fund 0.6 0.6
Paid-up 208.4 208.4
unrestricted eqity
reserve
Retained earnings 338.6 399.2 (399.2) 338.6
577.0 665.9 (665.9) 240.1 0.0 817.1
Minority interest 1.9 1.9
Total 577.0 667.8 (665.9) 240.1 0.0 819.0
shareholders'
equity
Long-term 499.2 305.2 804.4
interest-bearing
debt
Pension 0.0
obligations
Provisions 0.8 14.0 14.8
Other liabilities 0.7 0.7
Deferred tax 75.2 55.0 74.4 204.6
liabilities
Total non-current 575.9 374.2 74.4 0.0 0.0 1 024.5
liabilities
Current 199.0 57.7 959.4 (240.1) 976.0
interest-bearing
liabilities
Trade and other 42.8 22.9 1.0 66.7
payables
Total current 241.8 80.6 960.4 (240.1) 0.0 1 042.7
liabilities
Total liabilities 817.7 454.8 1 034.8 (240.1) 0.0 2 067.2
Total equity and 1 394.7 1 122.6 368.9 0.0 0.0 2 886.2
liabilities
Pro Forma notes:
(1) This column reflects Sponda's historical consolidated income statements for
the year ended December 31, 2005 (audited) and for the nine months ended
September 30, 2006 (unaudited) and balance sheet as of September 30, 2006
(unaudited), prepared and presented in accordance with IFRS.
(2) This column reflects Kapiteeli's historical consolidated income statements
for the year ended December 31, 2005 (restated) and for the nine months ended
September 30, 2006 (audited) and balance sheet as of September 30, 2006
(audited), prepared and presented in accordance with IFRS. The turnover of
Kapiteeli includes gross rental income, service charge income, interest received
from finance lease assets as well as proceeds from sale of trading and investment
property disposal proceeds. The turnover of Kapiteeli is shown as additional
information on the face of the financial statements and, numerically, it does not
constitute a caption within group income statement. As a result, these pro forma
calculations do not include turnover of Kapiteeli, rather, the separate income
statement captions are included starting from gross rental income.
Kapiteeli sold its Hotel Properties during the third quarter in 2006. Kapiteeli's
income statements for the nine months ended September 30, 2006 and for the year
ended December 31, 2005 are presented in this column in the same format as
published in the interim report as of September 30, 2006, where Hotel Properties
are presented as discontinued operations.
Kapiteeli amended the method of recognizing changes to the fair value of interest
rate cap options and loan prepayments and 2005 financial information has been
restated in Kapiteeli's interim report for the nine months ended September 30,
2006. The restatement was reflected in the pro forma income statement for the
year ended December 31, 2005 and it increased financial expenses by EUR 3.6
million and decreased taxes for the financial year by EUR 0.4 million. Kapiteeli
changed the charge for financial costs to be reported in financial expenses
instead of maintenance expenses. The change EUR 1.5 million has been reflected in
the pro forma income statement for the year ending December 31, 2005.
(3) This column reflects the Acquisition of Kapiteeli and the purchase price
allocation as of September 30, 2006, drafted for illustrative purposes only. The
total acquisition price is approximately EUR 959 million including approximately
EUR 16 million of estimated transaction costs directly related to the Acquisition
of Kapiteeli. The Acquisition of Kapiteeli was temporarily financed by a short-
term loan in the amount of approximately EUR 960 million.
The purchase price allocation as of September 30, 2006 is only preliminary. The
final purchase price allocation will be prepared based on the fair values of
Kapiteeli's identifiable assets, liabilities and contingent liabilities in
accordance with IFRS 3 at the closing date, when Sponda gained the control over
Kapiteeli at December 14, 2006. Therefore, the final purchase price allocation
may differ from the preliminary allocation presented in this unaudited condensed
pro forma consolidated financial information.
In accordance with the preliminary view of Sponda's management, the purchase
price is allocated as follows in the pro forma financial information in millions
of in euro:
Purchase price, including EUR 16.1 million of transaction costs 959.4
Net assets of Kapiteeli based on historical values 665.9
Fair value adjustments for
Investment properties 233.7
Trading properties 36.5
Other intangible assets 5.0
Trade and other receivables 14.5
Deferred tax assets 56.7
Deferred tax liabilities (74.4)
Trade and other payables (1.0)
Goodwill 22.5
Fair value of investment properties is determined reflecting rental income from
current leases, reasonable assumptions about rental income from future leases and
any cash outflows that could be expected with respect to the specific properties.
The yield method is used to assess the fair value of the properties reflecting
the risk-free interest rate and inflation together with property-specific and
market risks. The fair valuation method Sponda is applying in valuation of
investment properties has been described in more detail on
pages 57 and F-22 in this Offering Circular. Valuer's statement on Kapiteeli's
investment properties is attached to this Offering Circular and presented in
Annex B.
Fair value of the trading properties is based on the current market price of the
real estates.
Fair value adjustment for other intangible assets reflects the value of customer
base and contracts of Kapiteeli's subsidiary Ovenia Ltd.
Adjustment for the fair value of other receivables reflects the estimated income
from Kapiteeli's operations after September 30, 2006 that Sponda shall be
entitled to at the closing date of the Acquisition of Kapiteeli on December 14,
2006.
A deferred tax asset of EUR 56.7 million is set up on Kapiteeli's tax losses
carried forward based on managements assessment of the future taxable profits
available for utilization of the tax losses. A deferred tax liability amounting
to EUR 74.4 million is recorded on the difference between the fair value and tax
base of investment and trading properties and other intangible assets. Goodwill
of EUR 22.5 million is tested annually for impairment.
The purchase price allocation including the determination of fair values will be
completed within 12 months after the Acquisition of Kapiteeli has been finalized.
The difference between the fair value of Kapiteeli's Property portfolio in
Kapiteeli's accounts and the fair value defined by Sponda is mainly due to higher
yield requirements applied by Kapiteeli.
(4) This column reflects the impact of the preliminary plan of the financing of
the Acquisition of Kapiteeli. The Acquisition of Kapiteeli was initially financed
with debt. Sponda intends to repay part of this debt through the net proceeds of
the Offering which are estimated to amount to EUR 240 million after deduction of
offering costs and by debt financing of EUR 719 million. The planned sales of
real estate assets have not been considered in these pro forma statements. The
financial expenses from the debt have been calculated based
on the terms of the agreement for the syndicated credit facility that Sponda
signed in the beginning of December 2006 using as base rate the Euribor reference
rate prevailing during the respective pro forma period. There is no underwriting
for the Offering and, therefore, there can be no assurance of the amount of
potential proceeds.
(5) In this column, adjustments have been made to present Kapiteeli's figures in
a consistent manner with Sponda figures. Kapiteeli's Hotel Properties were sold
during the third quarter of 2006. These operations are presented as discontinued
operations in Kapiteeli's IFRS income statement. The profit has been eliminated
in the pro forma statements.
The gross rental income, service charge income and interest received from finance
lease assets, as included in the income statement of Kapiteeli is presented
according to the structure of the income statement of Sponda.
Appendix B
VALUER'S STATEMENT
January 8, 2007
Sponda Plc
Korkeavuorenkatu 45
00130 Helsinki
Finland
Dear Sirs,
We, Kiinteistötaito Peltola & Pulkkanen Oy, have inspected the properties of
Sponda Plc ("Sponda"), including its wholly-owned subsidiary Kapiteeli Ltd
("Kapiteeli") as described in more detail below and made all relevant enquiries
in order to provide our opinion of the market value of such properties as at
September 30, 2006 (the "Valuation Date").
This valuer's statement has been prepared for the purpose of inclusion in the
offering circular of Sponda, dated January 9, 2007 (the "Offering Circular"), and
summarizes the findings of our valuation exercise, fuller details of which have
been provided to you.
1. The Properties
Our valuation comprises the properties included in the Office and Retail,
Logistics Properties and Development Properties of Sponda and its subsidiaries
(excluding Kapiteeli) and the properties included in the Office and Retail,
Development and Sales Properties business divisions of Kapiteeli and its
subsidiaries, in each case, as at the Valuation Date.
2. Appraisal Method
With respect to Sponda, our valuation is based on previous years' valuations and
any additions made thereto and with respect to Kapiteeli, our valuation is based
on the valuations prepared and provided to us by Sponda, the basis and procedures
of which we have separately investigated.
All properties have been evaluated based on the situation as of the Valuation
Date in accordance with the International Valuation Standards ("IVS") and based
on information received both from Sponda's and Kapiteeli's information systems,
including legal, technical and financial information.
The valuation of Sponda's and Kapiteeli's Office and Retail Properties as well as
Sponda's Logistics Properties has been carried out using discounted cash flow
analysis. The analysis takes into account the existing rental agreements,
estimated market rents, estimated vacancies, maintenance costs and repairment
needs. The estimation period for Sponda's properties extends to at least year
2016 and for Kapiteeli's properties into year 2008.
The valuation of Sponda's and Kapiteeli's Development Properties has been carried
out based on the current condition of the properties and the current planning
status of the Development Properties. These have been compared to known
development projects and thereto related sales. For Kapiteeli's Development
Properties, additional development potential has been taken into account
depending on the nature of the ongoing planning process. In the acquisition of
Kapiteeli by Sponda, the valuation of Kapiteeli's Sales Properties was based on
the book values of the properties. Some individual properties were allocated a
higher value, primarily as a result of the nature of certain ongoing planning
processes which we have compared to comparable property transactions.
Based on our review we conclude that:
- the information on which the valuation is based on is accurate and
sufficient;
- the estimated market rents, vacancy rates and yield requirements are
based on market observations;
- the valuation methods are justified, taking into account the nature
and amount of properties; and
- the valuation has been performed applying the principles of the IVS
and good real estate valuation practice.
3. Property Inspections in Connection with the Valuation
As part of our previous valuation of Sponda's properties (prior to the
acquisition of Kapiteeli), we have visited all of Sponda's properties during the
last three years. In addition, we have interviewed Sponda's property management
regarding the qualities and characteristics of the properties. We have made an
independent valuation statement for each valuation that we have carried out,
however, the property knowledge acquired in each valuation was used in subsequent
valuations.
As a part of the valuation of Kapiteeli's properties, we have visited 26
properties representing 55 percent of Kapiteeli's Office and Retail Properties by
value and the valuation of the remainder of the properties in the Office and
Retail Properties has been conducted on a desktop basis. As to Kapiteeli's
Development Properties, we have visited 12 properties representing 60 percent of
Kapiteeli's Development Properties and the valuation of the remainder of the
properties in the Development Properties has been conducted as a desktop
valuation. As to Kapiteeli's Sales Properties, we have done no site visits and
the valuation has been conducted on a purely desktop basis. In total, our site
visits cover 50 percent of the value of Kapiteeli's total portfolio. The site
visits that we have undertaken have enabled us to independently verify the
valuation work carried out by Sponda with respect to Kapiteeli's properties. In
addition, we have interviewed, to the extent we deemed necessary, Kapiteeli's
property management regarding the qualities and characteristics of the
properties.
4. Market Value
Sponda's and Kapiteeli's property portfolios consist of a wide range of
properties with different market values and different levels of quality. The
value of the total portfolio has been calculated as the sum of the values of the
individual properties, which have been calculated as described in paragraph 2
above.
The aggregate of the said individual market values of the combined Sponda and
Kapiteeli properties as at the Valuation Date is EUR 2,676.4 million made up as
follows:
. Market Value of Sponda properties EUR 1,383.4 million
. Market Value of Kapiteeli properties EUR 1,293.0 million
The total market value of Sponda's properties as at the Valuation Date was EUR
1,383.4 million. The total market value is made up as follows:
. Office and Retail Properties EUR 1,026.2 million
. Logistics Properties EUR 278.7 million
. Development Properties EUR 78.5 million
The total market value of Kapiteeli's properties as at the Valuation Date was EUR
1,293.0 million. The total market value is made up as follows:
. Office and Retail Properties EUR 1,023.5 million
. Development Properties EUR 133.3 million
. Sales Properties EUR 136.2 million
Sincerely,
Appraiser contact information
Company:
Kiinteistötaito Peltola & Pulkkanen Oy
Registered Office:
Pieni Roobertinkatu 11
FI-00130 Helsinki
Appraiser:
Jouko Peltola, Authorised Property Appraiser
This valuer's statement has been attached to the Offering Circular of Sponda Plc
dated January 9, 2007 in such form and in context that Kiinteistötaito Peltola &
Pulkkanen Oy has given its consent to its publishing. Kiinteistötaito Peltola &
Pulkkanen Oy has approved the section titles "Business of Sponda-Real Estate
Assets and Business Units" in the Offering Circular to the extent that the
information in it is conformable to the information presented by Sponda for the
purpose of valuation. Kiinteistötaito Peltola & Pulkkanen Oy has no significant
interests in Sponda Plc.
The market values presented in this statement deviate from the fair value of
properties presented in the financial accounts of Sponda as properties in own use
are not included in the fair value in the financial accounts.