Equest Balkan Properties - 121.5p

Equest Balkan Properties invests in commercial property in South-East Europe.

The main focus is on Bulgaria and Romania, with neighbouring countries also being monitored for opportunities.

For example, acquisitions have been made in Serbia and Macedonia. The company has already made investments in a variety of schemes on what look to be very attractive terms. It has also made commitments to invest in further projects.

Results for 2006 have been released recently and these have reinforced our view that this is an interesting company which has made good progress to date.

Having listed on AIM in December 2005, raising £140 million through a placing at 100p per share, the original intention to pay chunky dividends remains on track.

A dividend of 7.5p per share has recently been declared and this will be paid out on May 25, meaning that at the current price those who buy in before May 9 will receive around six per cent of their investment back in the form of a dividend within a matter of weeks!

Analysts expect dividends to increase over the coming years and the stream of income this will produce is a key reason for buying the shares.

Although there is undoubtedly scope for capital growth as the value of owned properties rises, this could be seen more as a bonus on top of what is one of the best yields available from an AIM-listed company.

Equest Balkan Properties remain onservativefident and the announcement of the latest deal demonstrates why.

An office building in Macedonia was bought for 7.8 million Euros and once this is fully let it should produce an income of 800,000 Euros per annum, a yield of more than ten per cent on the purchase price.

Projects like this are made even more attractive by the fact that Equest Balkan Properties has access to debt funding, which enables the company to gear up on sensible terms.

By the middle of this year, it is hoped that there will be a property portfolio of around 400 million Euros, of which approximately half will be debt funded.

For those looking for income from their investments, Equest Balkan Properties looks to be an interesting play. Despite the current share price representing a small premium to Net Asset Value as at December 31, 2006, we believe that this is acceptable and rate the shares as a BUY at current levels.

WARNING: Opinions expressed are the writers' judgments at the time of writing. The information does not conservativestitute a personal recommendation and readers should seek their own professional advice as to the suitability of the investments.