Orion Real Estate reports that it is ready for a fresh start after a year of restructuring including a change in ownership, new management and an exciting new strategic direction.

While reporting a loss for the year to 30 June 2006 due to the costs of repositioning, Orion is confident that all outstanding issues have now been addressed, providing the company with a solid foundation from which to grow and establish a unique entry point to the listed property sector which will soon become increasingly accessible to retail investors.

Orion is the result of a reverse takeover of Alpina Property by the Gmeiner family’s Orion Group. Change of control in the fund, which originally listed as Gold Edge in 1997 and was later sold and renamed Alpina, resulting in a controlling stake resting with the Gmeiner Family.

CEO Franz Gmeiner explains that the reverse take over, with little retained from previous entity save from a few of its properties, was subject to all the statutory conditions and JSE Limited requirements of a new listing.

As a precondition to the takeover, a meaningful cleanup of the Alpina portfolio was undertaken with all non-performing properties sold prior to the transaction. In addition to the paring down of the property portfolio, management overheads were slashed. Orion Real Estate is now run from Orion’s head office, with a small and dedicated team guiding the fund.

Gmeiner is confident that headline earnings will increase going forward. Reduced operating costs as a result of the pared-down management structure, rental escalations which are expected to exceed inflation, a strong demand for space and Orion’s ability to service this demand together with lower interest rate charges from more efficient debt funding will all contribute to this.

“The past year has been one of rising commercial property prices and the portfolio has gained value over the year under review,” notes Gmeiner. At year end Orion owned 18 properties valued at R218 million.  A further 22 properties which have increase in value since concluding the relevant deals by approximately R60 million to an impressive R220 million, are in the process of being transferred to Orion.  Orion’s agility as a result of its new foundation is evident by its activity in enhancing income streams, unlocking value and growing the portfolio.

During the year the company acquired the landmark Promenade Centre in Nelspruit for some R33 million in April and the centre has already been revalued at approximately R50 million. Orion is also redeveloping the apartments in the Orion Centre in Elma Park for resale which includes the construction of five spectacular new penthouse suites. At 30 June 2006, 89 of a total of 95 units were sold.

 “Anticipated property sales will yield further capital and revenue gains which will be applied to increase the overall portfolio value,” Gmeiner explains.

The current financial year has already seen dramatic activity in the Orion Real Estate Portfolio where some properties have been sold including its Spoornet property erf 4899 Johannesburg which has been identified by Gauteng Provincial Government; Dept of Public Transport, Roads and Works for  expropriation pursuant to the construction of the Gautrain.

Issued on behalf of Orion Real Estate Limited

Franz Gmeiner, CEO
Tel: 011 718 6452, 082 387 5181 or Johan Coetzee 082 909 9243

By Marketing Concepts
Sandy Davey/Bronwen Noble
011 783 0700