brendan investments

The Closing Date is just around the Corner – so don't hang about!

Just a reminder for your diary – closing date is Oct 31st.To invest simply fill in the application form and get it together with your cheque made payable to "Computershare investor services (Ireland) limited a/c Brendan Investments". You can download the application form here.

Don't forget to enclose a copy of your driving license or passport and a utility bill verifying your address. The address to post is Computershare Investor Services, PO Box 54, Heron House, Corrig Rd, Sandyford Industrial Estate, Dublin 18. Tel 01 2475691.

If you want further information go to www.brendaninvestments.ie.

Good News on the Prospectus – we've added another bit!

Brendan Investments Pan European Property Plc last week issued a supplementary Prospectus that increases its investor subscription threshold to €750,000. This was due to large demand for subscription levels in excess of €200,000. It was also a reaction to demand from the Self Administered Pension Trust sector and Self-Directed Personal Pensions Sector, for larger scale investment in the Company's shares.

We also formally added Mr Pat Owens to our Board of Directors. Pat is an Architect and developer with over €1 billion in gross development value under his belt and brings a vast range of property development experience particularly in the UK and Portugal. He was also adviser to Quinnsworth (now Tesco) on its strategic Irish property portfolio.

Finally Brendan Investments took the opportunity to append broader market research, received in August this year, to the Company's Prospectus. This research, which has been available through the website since the launch, validates the Company's European investment strategy.

Action Started on Germany Market Entry

Brendan Investments has started due diligence examinations before formal acquisition of €115 million of property in Germany.

The properties consist of the following:

1. Newly developed retail property in Dusseldorf city centre with good tenants and a 15 year lease. The property has a yield of 6.15% and has a purchase price of €51m.
2. Newly developed office property in Dusseldorf city with an AAA rated tenant and a 10 year lease. The property is newly developed to third generation standards and comes with a yield of 6.45%. The price of the property is €19m.
3. Prime city centre mixed office and retail complex in Cologne. This is a newly refurbished complex with leases averaging 7 years. The yield is 6.25% and the purchase price is €45m.

Portugal Development - International Sports Resort and technology park

Brendan Investment is finalising negotiations on a joint venture agreement on a €100 million development project in the Algarve, comprising a 200 bed five star hotel and 160 apartments. The projected return over 2 years is in the region of 40% IRR which is a very significant return for such a prestigious project. The development is part of a much bigger project centred upon an international sports academy and a technology park covering 780 acres. The complex is expected to boost tourism further in The Algarve by an extra 1 million visitors per year.

Very High Interest Level

Investor interest continues to grow strongly with over 25,000 potential investors registering interest via our road shows, website and call centre. Brendan Investments is delighted with this huge vote of confidence and looks forward to driving shareholder value over the years ahead for those who invest by Oct 31st. The campaign continues to the last minute so if you like the proposition, then get your application in today!

Directors Put their Cash on the Table

The directors of the company will invest c. €1m in the Company.

Questions on the Road

The Directors have been on the road for the past five weeks, covering cities and towns from Letterkenny to Cork and from Galway to Dublin. These events have afforded us the very valuable opportunity to respond to more detailed questions;

Why invest in European Property?

The experience of the Board and the CBRE reports of 2006 and 2007 confirm that European property is a good place to invest. Our strategy is well supported in the industry as can be seem by the large number of private banks and life companies who have launched pan European property companies of late such as

Hibernian Life Assurance Co : Euro Property Fund
Bank of Ireland : Euro Property Commercial Property Fund

In addition a number of other commentators and investors support our views.

According to Jones Lang Lasalle and a host of other International property advisors (DTZ, DIP and CBRE) Germany will see record levels of commercial property investment in 2007 and 2008 with over €55bn of property purchased in this market. The main buyers are the large pension funds and private banks.

Irish Independent 17th October 2007

Cheval Properties Invest €29m in UK Property
Warren Private Clients Invest €123m in UK Property
Bank of Ireland Launch fund to invest €425m in European Property

Other Irish Syndicates/Companies investing in Germany in 2007

Ballymore Properties Invest €155m in Germany Retail Property
Quinlan Private Invest €270m in Germany property

There are many more but the above is clear evidence that well informed investors consider European Property a good investment.

Brendan Investments fees

"Brendan Investments annual management fees would not raise any eyebrows in the market where the annual management fees range from 1% to 2.5% of Gross Asset Value".
Sunday Business Post Sept 2007

If we break down Brendan Investments fees and benchmark them against the industry, these are the facts:

1. Entry Fees
Brendan Investments does not charge any Entry Fees. Most industry rivals such as Syndicates, Insurance Funds and Stockbroking firms charge 3 to 5% entry fees.

2. Professional Set-up fees
Every company in this market charges professional set-up fees. These are the costs incurred to set up a company such as Legal, Taxation, Audit and Marketing costs. Brendan Investments is no different than any of these other companies and expects its professional set-up costs to be no more than 1.5% of the equity raised. You will find in most offerings the provision to recover professional set-up costs but most are vague on exactly how much the charge will be. None of these fees are paid to the Directors of the Company, they are to cover the costs of the set-up of the company.

3. Annual Management Fee:
The industry norm is anything from 1% to 2.5% Gross Asset Value (GAV) of the company. For Example the Hibernian Euro Residential Property Fund charges 1.45% of Gross Asset Value of the company as a minimum. This can be raised as high as 2.55% pa if fund-based commission is added. CMC charge 1% Gross Asset Value of the company, Merrion/Raglan charge 1% of the Gross Asset Value of the company.

The other point made is that we borrow more than other companies (75% gearing) so our fee goes from 1% to 4%. This is both untrue and misleading. For instance taking the above companies for example, CMC are looking to borrow 80% which would mean their fee would go from 1% to 5%. Merrion attempt to borrow at 85% which would mean their fee would go from 1% to 5.5%.

As you can see Brendan Investments is under the industry average and charges far less fees than the likes of the life companies and stockbrokers who are the main companies offering these products. It is also important to note that this fee comes out of the annual cash flows of the company and none of it is paid out of the equity invested by the shareholders.

Is the Management fee at 1% GAV, Value for Money?

The answer is yes because Brendan Investment costs are well below the norm for the type of services provided. Most companies are managed on a part-time basis, whereas Brendan Investments is managed on a full time basis on behalf of its shareholders. Most funds/syndicates only have commercial property to manage which after it is purchased is relatively straightforward. Brendan Investments will also manage development projects which use up a lot of time and expense but have the ability to deliver significant returns.

For instance to manage a company which raises €50m equity would require:

• 8–10 staff
• 2 full time directors
• Significant travel costs
• Offices
• A full time sales team
• Property management expenses among many other costs

Nothing up the Sleeve

As Brendan Investments is a PLC all the information in the company is public and subject to an annual audit by Price Waterhouse Coopers our accountants. All transaction within the company will be done at cost and therefore the shareholders can feel very comfortable that the fees outlined above are the only fees with no other hidden charges.

Unfortunately this is not always the case. For instance in one fund just recently launched, the promoters are splitting fees with the property agents which means that when they purchase a property they effectively charge the investors a min of 1% of the purchase cost. In addition, they have the right to take bank arrangement fees for loans set-up by the company to purchase the properties which again can be as high as 1% and again the cost will be borne by the investors.

Overall, Brendan Investments fees when compared to any industry competitor, comes out very favourable.

How much of the money raised is directly invested in Property?

The Directors confirm that the maximum deductions from all equity raised will be 1.5% representing the maximum capped set up costs at €750k as stated in the Prospectus for total equity raised of €50 million. For higher equity raised eg €100 million the effect of the cap is to drop this to 0.75%. For equity raised less than €50 million the set up costs will not be more than 1.5%. Therefore if you invest €10,000 the maximum deducted is €150 and will be lower if the total equity raised is over €50 million. This is used to cover all set up costs and professional fees. None of this money is paid to the Directors.

Thank You

The Directors of the Company would like to thank each of you for your continued interest in our company and we hope to see you on the share registrar with each of us on the 1st of November.

In this issue

• The Closing Date is just around the Corner – so don't hang about!
  
  
• Good News on the Prospectus – we've added another bit!
  
  
• Action Started on Germany Market Entry
  
  
• Portugal Development - International Sports Resort and technology park
  
  
• Very High Interest Level
  
  
• Directors Put their Cash on the Table
  
  
• Questions on the Road
  
  
• Why invest in European Property?
  
  
• Brendan Investments fees
  
  
• Is the Management fee at 1% GAV, Value for Money?
  
  
• Nothing up the Sleeve
  
  
• How much of the money raised is directly invested in Property?
  
  
• Thank You
  
  

Further Information

For further detail please see www.brendaninvestments.ie

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