CREO's investments fell 14% last year

THE VALUE of Treasury Holdings-backed China Real Estate Opportunities’ (CREO) property investments fell 14 per cent to €925 million last year, the company said yesterday.

CREO also announced that it will spend up to £15 million buying back shares from investors in a first step to tackle the shortfall between its stock price and actual asset values.

The London-listed company published results for 2009 showing that the overall value of its investment and development properties, located in Shanghai and Beijing, fell 14 per cent to £836.9 million (€925 million) from £913.3 million a year earlier.

Net asset value (NAV) per share stood at £11.37 at the year’s end. The company said that the fall was partly attributable to currency movements.

The value of the portfolio rose 7 per cent in the second half of the year. At the end of June 2009, it had an NAV of £10.62. The total portfolio was worth £780 million at the half-year stage. In local currency terms, gross value of the porfolio grew 4 per cent in the second half of the year to RMB9.2 billion.

The company’s debt at the end of the year was £316 million, or just over one-third of total assets. CREO cut borrowings by 12.3 per cent over the year from £344 million at the end of 2008.

It had £48 million in cash at the end of the year. This figure did not include the £35.6 million proceeds from the sale of its 50 per cent stake in a mixed-use development at Tangdao Bay. CREO will receive this money on completion.

CREO yesterday wrote to shareholders offering to buy back shares at £3.30 each, and has committed a maximum of £15 million of its own resources to purchase tendered shares.

Real Estate Opportunities which holds 8.4 million shares, or 16.9 per cent, has undertaken to tender all of those shares. The directors, Treasury Holdings and John Ronan, have agreed not to take part in the tender offer in respect of the 18 million shares which they hold in aggregate, which represents 36.5 per cent.