1/ Particulars of the property

Address: 1095 Budapest (IX. district), Tinódi u. 1-3. – Vaskapu u. 3/A.

Land registry No.: 37912/2

Plot size: 6169 sq. m.

Classification: former outbuildings and yard

Superstructure: for current circumstances see the ground space layout

groundspace: 19516.88 sq. m. net; 22231.38 sq. m. gross

2. Property development projects in the IX. district of Budapest during the previous 3 years

The IX. district has seen the most dynamic development in Budapest recently. Among all the districts of the capital, IX. district, also known as Ferencváros has been a role model of settlement rehabilitation implemented in cooperation of government agencies and private entrepreneurs. As a result of this Public Private Partnership (PPP) scheme, 3094 flats have been created during the past 3 years.

The PPP initiative of the district’s management has changed the image of the area and gave rise to new development schemes, e.g. the TELECOM Zeneház (TELECOM Music House), the Zsidó Emlékmúzeum (Jewish Memorial Museum), the Lurdy-Ház Shopping Centre, the Budapest Central Bus Station, six 3-star hotels, the Zwack Unicum Office Building, the Gastronomical District in Ráday utca and the new National Theatre inaugurated two years ago.

3. Development schemes of the IX. district scheduled for the next 3 years

Ferencváros is the site of the development scheme with the largest single ground space in Budapest, located between Mester utca and the Danube.

This is where the new Philharmonic Hall, the Museum of Modern Arts, some 110 000 sq. m. of new office premises, 1000 flats (including the 140 flats of The Mill Lofts), a 6000-seat Convention Centre with several casinos and a 5-star and a 4-star hotel are going to be built.

All this will promote the IX. district to the new southern City Centre of Budapest.

4. Appreciation expected in the IX. district property market

The rise of average price per square metre of residential properties in this district has been the most dynamic in the capital. According to the records of the Budapest Districts’ Land Register the property purchase agreements concluded between January 2000 and January 2003 indicate a nominal value increase of 83 per cent for this period.

According to the analyses of market research companies the appreciation experienced earlier will continue at the same pace for the next 4-5 years to come.

5. Quality and price level of flats in MALOM LOFT compared to similar properties in Budapest

The properties of MALOM LOFT are going to be built to significantly higher standards than those of the average Budapest residential developments.

6. Expected appreciation of the MALOM LOFT project

Supposing an off-plan purchase, the first year of the development will yield a 15 per cent appreciation. The nominal appreciation between years 2-5 will be 82 per cent.

Please read on to find out why:

• this is the first loft project in Budapest
• off-plan prices contain discounts
• there is a high demand
• based on their quality and design these properties have the most favourable price/value ratio on the market
• these flats can be used for residential and office purposes simultaneously
• residents of the lofts will be trendsetting, creative businessmen
• we encountered positive feedback from preliminary rental surveys
• the project introduces the Anglo-Saxon housing culture and lifestyle in Budapest.

7. The financing company

The prime financing partner of the MALOM LOFT Project is one of the chief actors in the Hungarian financing scene, Raiffeisen Bank (www.raiffeisen.hu), offering universal financial services. According to the 2003 Annual report of Raiffeisen Bank the net value of outstanding loans of the bank in 2003 was HUF 479 040 million, the total of deposits amounted to HUF 286 618 million.

8. Development of MALOM LOFT

Both the utilisation concept and the architects’ tendering have been completed, architectural design is in progress and by the 4Q of this year the building permit will have been issued.

The developer has also assumed the responsibilities related to project management, including planning and design supervision and the coordination of marketing and sales.

The flats are sold by A1 Real Estate.

9. Property management

A1 Real Estate offers comprehensive property management services for investors and also undertakes

• letting with tenant-guarantee
• furnishing
• financing arrangements
• re-sale upon request.