AS Viisnurk yesterday signed a contract with AS Trigon Capital to make use of its property development resources to develop the land plot located at Rääma 31, Pärnu. The total size of the land plot is 43,963 m2, out of which roughly 20,000 m2 is planned to develop under the signed agreement, and it lies along the river Pärnu in an area undergoing fast development. Currently the whole land plot is recorded in the accounts at approximately 700 thousand EEK (45 thousand EUR). The recent fast appreciation in land values together with growing demand for prime office and residential property along the river side have led the Company to take the decision to re-develop the site, which today is largely unused. The site covered by the current contract is totally separate from the much larger Niidu Street property (total size of appr. 400,000 m2), which is not covered by the current contract. The Company expects that by working towards rezoning and potentially developing the said land area itself, rather than selling it out at the current market price, it can create substantial value for its shareholders.

The signed contract assigns AS Trigon Capital as the development management services provider. AS Trigon Capital was appointed to become the exclusive service provider due to its independence from any local construction companies or real estate firms, which in the view of the management gives it an ideal position to implement a development strategy generating the most value for AS Viisnurk shareholders. From Trigon Capital's side the project will be headed by its Property Development Director Mr Aivar Kempi who joined Trigon Capital 1,5 years ago from a senior position in Merko and holds more than 20 years of property development experience in the Baltic States. Under the signed contract Trigon Capital will be paid a quarterly fee of 5,000 EUR (78,233 EEK), capped at a total maximum of 20,000 EUR (312,932 EEK) and a success fee of 20% of net proceeds received in the process of value creation through rezoning and development. The benchmark for net proceeds calculation will be today's market value of the development area to be assessed by an independent valuator. An annual hurdle rate of 6% is fixed on the value of property on which there is no success fee payable.

AS Trigon Capital is a leading investment banking and management group, majority owned by Mr. Joakim Helenius who is also a Supervisory Board member of AS Viisnurk. As part of its activities AS Trigon Capital directly or through affiliated companies operates property development businesses in the Baltics, Russia and Croatia.

Einar Pähkel
Business- and Administration Manager
+372 447 8331