THE OTTOMAN FUND LIMITED

For immediate release
24 May 2007

Valuation and project update

Following the recent announcement of its end-February interim results, The Ottoman Fund Limited (“Fund”), which invests in the development of local housing and holiday homes in the major cities and coastal resorts of Turkey, is pleased to provide a general update for investors.

Highlights

Project Cost of land Valuation % uplift Construction costs (est.) Sales revenue (est.) Gross profit (pre tax and sales comm..) (est.)
Golturkbuku $38.6m $43.5m 13% $37.6m $142m $65.8m
Riva $111.2m $140.3m 29% $138.3m $400.2m $150.7m
Kazikli (50% share) $10m $12.35m 24% $27.7m $92.4m* $54.7m*
Total $159.85m $196.15m 23% $203.6m $634.6m $271.2m

*As referred to below, Colliers International also provided a sales valuation for Kazikli. As this was marginally lower than that of KB Savills, the Colliers sales valuation has been used in calculating the figures in this announcement.

Development projects

Golturkbuku, Bodrum

Progress on the Fund’s first land investment on the Bodrum peninsula has been promising. In addition to the original 166,825m² site, the Fund (via a local subsidiary) has recently agreed to purchase two strategically important adjacent plots with a combined land area of 18,350 m² for $5.23m ($285/m²). 10% of the purchase price has been paid with the balance payable upon the transfer of the title deed (by no later than 31 July).

Master-planning and architectural designs have been completed by Wimberley Allison Tong and Goo (WATG), the leading international hospitality, leisure and entertainment designers. WATG’s past projects include The Venetian Resort-Hotel-Casino, Las Vegas; Atlantis Paradise Island, Bahamas; The Ritz-Carlton, Bali; Hotel Bora Bora, French Polynesia and Disney’s Grand Floridian Resort and Spa.

Detailed application plans for the construction license are ready for submission. On-site excavations and construction of internal roads and a sales office have commenced. First phase sales are expected to commence shortly.

Discussions have been held with a number of leading hotel and spa operators and the Fund expects to announce its selection in the near future.

KB Savills have recently valued the enlarged site at $43.5m, 13% above an acquisition cost of $38.6m.

In addition, KB Savills have carried out a valuation of the project on current density and zoning permissions. Based on their estimated sales valuation of $2,667/m2, KB Savills have estimated potential gross project profits (before local taxes and sales commissions) of $65.8m. Approximately 85% of the project’s revenue will be derived from the sale of residential units with the remainder from the operation and eventual sale of the hotel and spa.

Riva, Istanbul

The original 917,900m2 site was purchased in September 2006 for $110m. Given the size, importance and prime position of this area, the overall master-planning for the region by the Istanbul municipality is on-going. The Manager’s local team are closely involved with other land-owners and developers in the area and there appears to be satisfaction at the municipality level with the proposals from leading US town-planners currently under consideration. The Manager expects that full zoning for the region will be in place within 6 months.

The Fund is carrying out a process of land aggregation of neighbouring plots and since January has purchased a further 13 plots with total land area of 9,083m² for $2.6m (c.$280/m²).

In line with its existing planning permissions, the Fund intends to commence sales and construction of its first phase of development within three months, following approval of the detailed plans for this phase by the local municipality.

KB Savills have recently carried out a revaluation of the enlarged site at $140.3m, 29% above the prevailing acquisition cost.

In addition, KB Savills have carried out a valuation of the project. Based on their estimated sales valuation of $1,928/m2, KB Savills have estimated potential gross project profits (before local taxes and sales commissions) of $150.7m.

Kazikli, Bodrum

This most recent addition to the Fund’s development portfolio is also reporting good progress. The Fund’s joint venture partner, Ado Group, is coordinating the planning approval process and working with local architects. The joint venture has obtained zoning for the majority of the site. In addition it has secured an increase in the permitted density of building from 49,000 m² to 74,000 m², an increase of 51% in buildable area.

The Manager is evaluating proposals from project management companies and international architects. Construction is expected to commence towards the end of the summer.

Colliers International have previously revalued the Fund’s share of the site at $12.35m, 24% above the acquisition cost of $10m. This valuation pre-dated the increase in permitted density and a new valuation has been commissioned to reflect this and will be announced in due course.

The Manager has had the project valued by KB Savills and by Colliers International (as to sales values) on the basis of the increased density and zoning permissions. Using the mid-point of the lower sales valuation of Colliers of $2,500/m2, the Fund’s potential share of gross project profit (before local taxes and sales commissions) is estimated at $54.7m.

Development finance – Alanya

As announced in the recent interim results, local valuers Elit have provided a sales valuation which would indicate that the Fund’s potential share of revenue at the Alanya site would be $18.5m against a total investment of $12.7m. However, sales at the site remain subdued, which the Manager believes stems from a combination of increased supply and lower pricing of developments in the immediate area. Although the site remains one of the best in the vicinity it is increasingly clear a more aggressive stance on pricing will be required.

List of contacts

Development Capital Management       020 7355 7600
Roger Hornett
Ertan Sevinc
Tom Pridmore

Buchanan Communications       020 7466 5000
Charles Ryland
Isabel Podda

Numis Securities       020 7260 1000
Iain McDonald
Bruce Garrow