Eurocastle Releases Third Quarter 2014 Financial Results

Tel:  +44 1481 723450      EUROCASTLE INVESTMENT LIMITED

                                                                  FOR IMMEDIATE RELEASE
Contact:
International Administration Group (Guernsey) Limited
Company Administrator
Attn:  Mark Woodall

Eurocastle Releases Third Quarter 2014 Financial Results

Guernsey. 6 November 2014 - Eurocastle Investment Limited (Euronext Amsterdam: ECT) today has released the interim report for the nine months ended 30 September 2014 and an investor presentation on the Investor Relations section of its website www.eurocastleinv.com.

In addition, management will host an earnings conference call at 01:00 P.M. London time (08:00 A.M. New York time). All interested parties are welcome to participate on the live call. You can access the conference call by dialing +1-800-215-5243 (from within the U.S.) or +1-330-863-8154 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference "Eurocastle Third Quarter 2014 Earnings Call or Conference ID Number: 28141089"

A webcast of the conference call will be available to the public on a listen-only basis at www.eurocastleinv.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast. A replay of the webcast will be available for three months following the call.

For those who are not available to listen to the live call, a replay will be available until 11:59 P.M. New York time on Saturday, 6 December 2014 by dialing +1-855-859-2056 (from within the U.S.) or +1-404-537-3406 (from outside of the U.S.); please reference access code "28141089." 

A summary of the interim report is detailed below:

Key highlights for the quarter

• In July, invested €12.6 million of an anticipated €15.4 million to acquire a ~50% interest in an Italian fund dedicated to converting real estate assets into luxury residential units in Rome
• Closed the first of a series of anticipated NPL transactions with an Italian banking group, investing €0.3 million in July and committing a further €0.2 million in November
• Committed to acquire a ~50% share of the units of an Italian real estate fund for an estimated €11.3 million
• Dividends declared to date in 2014 amount to €12.2 million
• Adjusted NAV as at 30 September of €288.7 million or €8.85 per share
• Normalised FFO of €1.7 million or €0.05 per share for the quarter

Strategy

Eurocastle Investment Limited ("Eurocastle" or the "Company") and its consolidated investments (together with Eurocastle, the "Group") continue to focus its investment strategy on Italy and is targeting a wide range of real estate related products, including, but not limited to, non-performing loans ("NPLs"), real estate fund units and real estate assets. The Company may also pursue other performing and non-performing loan and receivable deals in Italy, real estate related investments (including direct and real estate-related debt investments) in other European markets, including Germany and the United Kingdom. The Company will generally target assets that generate significant current cash flows and/or have the potential for meaningful capital appreciation. At the same time, the Group may further invest in its legacy business to preserve or harvest value from the underlying portfolio.

Dividends

The Company has declared and paid cash dividends for the first three quarters of 2014. Each quarter's dividend was for a total of €4.1 million which equated to a dividend of €0.125 per ordinary share. Since the capital raise last year, the Company has distributed €20.4 million.

New Investments

On 9 June 2014, the Group acquired 25% of the membership interest of Fortress Italian NPL Opportunities Series Fund LLC (the "Series 1 Fund") for a total consideration of €7.4 million. The Series 1 Fund acquired the non-performing loan portfolio from
Banca Monte dei Paschi di Siena ("MPS") on 27 June 2014.

On 14 July 2014, the Group acquired 25% of the membership in the second series of the Fortress Italian NPL Opportunities Series Fund LLC ("the Series II Fund") for a total consideration of €0.3m. The Series II Fund acquired the non-performing portfolio of loans from three Italian local co-operative banks affiliated with ICCREA Group ("BCC") on 29 July 2014. This is the first investment as part of a series of transactions with the banking Group.

During the first nine months of 2014, the Company received €5.4 million of cash from the investments in the performing and non-performing loan portfolios. The fair value of the Group's investment increased by €2.2 million in the first nine months of 2014 ⁽¹⁾.

The Italian loan portfolio strats are as follows

(Unaudited)	Acquisition Date		Gross book value (1) €'000		Purchase price  (1) €'000		No. of loans		Secured %
Palazzo portfolio	May 2013		8,102.8		4,594.2		869		100.0%
Ieffe and BAM portfolios	May 2013		3,252,804.1		9,412.5		7,290		11.7%
BNL portfolio	July 2013		6,895.9		2,632.5		86		100.0%
MPS portfolio	June 2014		883,100.0		7,357.5		11,763		19.0%
BCC portfolio	July 2014		15,287.9		312.5		843		18.0%
Total Italian Loan Portfolio			4,166,190.7		24,309.2		20,851		13.6%
	Actual (1)						Underwriting (1)
(Unaudited)	Estimated future cashflows €'000		Life to date Cashflows  (2) €'000		Internal rate of return (3) %		Life to date cashflows  (2) €'000		Internal rate of return  (3) %
Palazzo portfolio	2,060.9		4,632.0		39.0%		3,899.5		17.1%
Ieffe and BAM portfolios	6,985.8		8,342.3		57.9%		5,725.1		19.9%
BNL portfolio	2,926.3		1,066.9		21.1%		874.2		18.4%
MPS portfolio	11,884.8		1,826.9		20.8%		1,393.4		20.7%
BCC portfolio	504.7		27.2		13.6%		27.2		13.6%
Total Italian Loan Portfolio	24,362.5		15,895.3		39.2%		11,919.4		19.1%

1. The amount is shown net of minority interests
2. Cash flows received by the portfolios from date of acquisition and excludes cash not yet distributed to the Company of €3.8 million.
3. Effective rate represents current estimated internal rate of return given cash flows received to date and projected cash flows based on the current projections and original underwriting assumptions.

On 22 July 2014, the Group entered into a limited partnership called CF Aula SCS. The Group acquired 50% interest in the partnership for a total consideration of €12.6 million. The other partner is an affiliate of the Manager who also has a 50% interest. The partnership has acquired 100% of the units in Torre Real Estate Fund III Value Added - Sub fund A which is managed by another affiliate of the Manager.

The fund has invested in two office buildings in Rome that will be redeveloped into luxury residential properties for resale. The redevelopment program is expected to take place over 2 and an a half years. The first property (Via Bertoloni) will involve the demolition of the existing office building. A new residential and retail building will be constructed. The units will be sold on an individual basis. The second office building (Via Bolzano) will be converted into residential units and also sold on an individual basis.

On 28 March 2014, the Group purchased 11,929 (representing 7.46%) of the units in UniCredito Immobiliare Uno - Closed-End Real Estate Investment Fund ("UIU") for €21.3 million. The acquisition cost per unit was €1,787.50 which was a 36.5% discount to NAV of the fund. In addition, the Group incurred €1.0 million of transaction costs. UIU is a close-ended real estate fund listed on the Italian Stock Exchange. It was incorporated in 2009 and has a maturity of 31 December 2017. The fund invests in a variety of real estate across Italy which includes residential, office and commercial properties. As at 30 September 2014, the share price was €1,786.00 per unit.

The summarised portfolio strats as at 30 September 2014 are as follows:

Split of Property portfolio (Unaudited)						No. of assets		Market value of assets €'000		Market value as % of total portfolio
	Office					2		236,800		48%
	Residential and residential conversions					3		148,423		30%
	Commercial					1		55,684		11%
	Retail					8		51,637		11%
Total portfolio						14		492,544		100%

Existing Business - European Real Estate Debt

In January 2014, the Group sold the remaining securities in the CDO IV portfolio for an average price of 96.4% of face value. After repaying the CDO IV facility in full, the Group realised €22.5 million of cash.

In February 2014, Eurocastle Funding Limited acquired €4.0 million of the Group's own senior liabilities at a price of 51% of nominal generating a book gain of €2.0 million.

The net asset value of the portfolio increased by €3.3 million in the quarter primarily due to the  recognition of gains on a paydown of a loan and receivable position and accretion income in the other positions. This was partially offset by the impairment charge of €4.5 million.

During the three months ending 30 September 2014, the Duncannon portfolio received €43.8 million of amortisation proceeds. These proceeds (together with additional available cash) were used to repay €17.3 million of senior debt with the remaining €26.5 million used to repay senior debt at the next interest payment date in December 2014. Total debt outstanding at the end of September 2014 was €230.4 million.

Since June 2009, Duncannon has failed to meet certain cashflow triggers, where compliance is generally a function of the default rate and external credit ratings of the underlying investments. As a consequence, excess interest has been mandatorily diverted to amortise senior debt. In order to meet this threshold, the value (calculated by reference to various rating agency criteria) of the assets must exceed the amount of debt senior to Eurocastle's interest by at least 5%. As at 30 September 2014, the ratio was reported at 73.2% against the required covenant level of 105%, which equates to a shortfall of €76.2 million or 31.8%. The Company does not therefore expect to receive cash flows from this portfolio in the near term.

The net assets of the debt business are shown by portfolio in the table below:

				CDO IV  (1)		Duncannon (2)		Balance Sheet (3)		Total European Debt Portfolio
(Unaudited)				€'000		€'000		€'000		€'000
Total assets				8,424		247,112		2,153		257,689
Total liabilities				(13)		(230,237)		(116)		(230,366)
Net assets excluding non-controlling interest				8,411		16,875		2,037		27,323

The summarised portfolio strats as at 30 September 2014 are as follows:

(Unaudited)			CDO IV  (1)		Duncannon (2)		Balance Sheet (3)		Total European Debt Portfolio
Weighted average Credit Rating			D		CCC-		D		CCC-
% Investment Grade			0%		16%		0%		14%
Number of securities (4)			2		44		4		45
Debt Maturity			-		Jun 2047		-		-

1. CDO IV represents the net assets of CDO IV PLC
2. Duncannon represents the net assets of Duncannon CRE CDO I PLC
3. Balance Sheet represents the net assets of Eurocastle Funding Limited
4. The number of securities consolidates positions where multiple classes are held. The total column eliminates positions that are held in two or more portfolios.

Existing Business - German Commercial Real Estate

The Group has a number of non-recourse financing facilities which are due to reach maturity within the next 12 months at which time, the outstanding balance of the financings will become due and payable unless such financings can be extended. If proceeds from the sale of the assets which secure the relevant portfolio financing do not equal or exceed the amount outstanding under the relevant portfolio financing, the Group would be unable to repay the outstanding balance of the relevant portfolio financing when it becomes due and payable. The Group will engage in discussions with lenders in relation to the relevant portfolio financing, as they approach maturity, typically commencing such discussions three to six months prior to the relevant maturity date. Given the non-recourse nature of the financings, the Company is not obliged to utilise any additional capital to support any of the relevant portfolio financings.

In April 2014, the Senior loan of the Drive portfolio was refinanced by the lending syndicate of the Junior facility to a maturity date of 15 January 2016 with interim amortisation targets of €110.0 million in July 2014, €70.0 million in January 2015 and €35.0 million in July 2015. The Junior loan was also extended in parallel at in-place terms to the same final maturity date. Additional terms of the Senior Loan include an arrangement fee of 1.1% (equivalent to an amount of €1.6 million), interest at a rate of 3 month Euribor plus 3.1% and an additional undrawn facility of up to €20 million to fund capital expenditures. Excess cash flow will continue to be retained at the senior loan level until the loan is repaid in full.

Sale fees equivalent to 3.5% of gross sales proceeds will continue to be paid to the Group should it meet the repayment targets with €1.2 million released to the Company in April  following the repayment of the existing Senior loan and a further €1.1 million in July. The outstanding balance reported as at 31 December 2013 of €142.3 million has since been repaid by a further €45.8 million, primarily from asset sales, resulting in a remaining balance of €96.5 million.

In April 2014, the Group agreed a short term extension of the Wave facility to end of August 2014 with an option to extend the loan a further 2 months should Eurocastle have agreed a sale of the remaining assets by the initial maturity date. As part of the terms of the extension, the loan was repaid by €38.7 million in 2014, reducing the outstanding balance to €68.2million (equivalent to a loan to value of 60% on the remaining assets). Of the €38.7 million repaid, €29.0 million was generated from the sale of four assets. The remaining amount of €9.5 million was paid using available cash within the Group, of which €6.1m came from corporate cash and €3.4m from cash reserves held within the Wave portfolio.

The Group is in advanced negotiations for a sale of the Wave portfolio. In parallel with the sales process, the Group has also received favourable terms to refinance the portfolio on both a short and a long term basis.

In January 2014, the Group secured an amendment to the Mars Floating facility extending the December 2013 maturity for a further six months to 30 June 2014. The Company continues to benefit from running asset management and sales fees, receiving €0.8 million in the first nine months of 2014. Since the year end, one asset has been sold and the loan has been repaid by a further €8.7 million reducing the outstanding balance to €118.0 million. The remaining assets are now under a disposal program In order to facilitate the closure of the sales, the facility has been extended on a short-term basis to 31 December 2014. As with all of the Group's real estate financings, the debt is non-recourse to Eurocastle.

Following the maturity of the Zama portfolio facility in May 2014, one asset was sold in August repaying the outstanding balance by €8.8 million. The remaining loan of €31.0 million is currently subject to a short-term standstill pending documentation of agreed terms on a 2 year extension. As at 30 September 2014, one asset is currently under a binding sales contract with the net proceeds of €5.2 million to be used to further reduce the outstanding loan balance.

The Tannenberg portfolio loan matured in October 2014. The Group is currently in discussions with the lenders of the Tannenberg facility regarding a potential one year extension of the facility pending which a short-term standstill has been put in place.

During the nine months ended 30 September 2014 and excluding Mars Floating, the Group signed 60 commercial leases for approximately 24,545 square metres (sqm). Of the leases signed, 7,182 sqm relate to new leases. The renewal rate for the nine months ending 30 September 2014 was 80.8%. Physical occupancy was at 75.9% compared to 77.6% at the end of 2013 on a like-for-like basis.  In the first nine months of 2014, the Group sold 19 properties for total sales proceeds of €116.8 million versus a carrying value of €111.8 million a loss of €5.9 million after transaction costs.

As at 30 September 2014, the NAV of the German Real Estate business excluding the Mars Floating portfolio was €107.0 million. Valuation adjustments arising from binding sales contracts and reduction in lease terms, together with capital expenditure, resulted in a fair value loss of €22.1 million. On 15 January 2014, the Bridge portfolio financing matured without any agreement on an extension or a refinancing. Following the execution of the Lender's security shares in the Company's subsidiaries holding the Bridge portfolio, these companies were transferred out of the Group. Consequently, the Group deconsolidated the Bridge portfolio with a reduction in NAV of €26.1 million.

Property Valuation Data (by Portfolio and unaudited)

For 2014:

		Number of		Occup- ancy		Lettable space		Property valuation (1)		Passing Rent		Net operating income (NOI) (2)		NOI yield on valuation
		properties		%		(sqm)		€m		€m		€m		%
Drive		130		51.3%		281,532		443.3		23.4		16.6		3.7%
Turret		63		95.4%		141,608		165.7		14.3		12.5		7.5%
Wave		44		74.2%		108,818		114.0		8.9		6.9		6.1%
Truss		41		96.0%		81,709		90.7		8.0		6.8		7.5%
Mars Fixed 2		1		82.8%		18,498		59.8		3.7		2.5		4.2%
Belfry		27		85.7%		52,913		56.5		4.6		3.9		7.0%
Tannenberg		26		89.5%		48,683		57.8		4.9		4.1		7.1%
Superstella		18		100.0%		38,641		55.1		4.4		3.9		7.1%
Zama		7		94.8%		25,110		34.4		3.1		2.8		8.3%
Total portfolio excluding Mars Floating		357		75.9%		797,512		1,077.3		75.3		60.1		5.6%
Mars Floating (3)		6		57.5%		103,757		70.8		6.7		4.3		6.1%
Total portfolio		363		73.8%		901,269		1,148.1		82.0		64.4		5.6%

For 2013 (on a like-for-like basis):

		Number of		Occup-ancy		Lettable space		Property valuation (1)		Passing Rent		Net operating income (NOI) (2)		NOI yield on valuation
		properties		%		(sqm)		€m		€m		€m		€m
Drive		130		55.3%		281,528		451.6		24.4		16.1		3.6%
Turret		63		96.2%		141,608		170.0		14.6		12.9		7.6%
Wave		44		76.4%		108,079		113.7		9.1		7.1		6.2%
Truss		41		92.9%		81,437		92.7		7.8		6.8		7.4%
Mars Fixed 2		1		86.4%		18,591		61.5		4.0		3.0		4.9%
Belfry		27		86.7%		52,900		57.3		4.7		3.9		6.7%
Tannenberg		26		90.6%		48,684		57.8		4.9		4.2		7.2%
Superstella		18		100.0%		38,641		55.2		4.4		4.0		7.3%
Zama		7		94.2%		25,110		35.3		3.0		2.7		7.6%
Total portfolio excluding Mars Floating		357		77.6%		796,578		1,095.1		76.9		60.7		5.5%
Mars Floating (3)		6		55.6%		103,738		83.7		6.5		3.3		4.0%
Total portfolio		363		75.1%		900,316		1,178.8		83.4		64.0		5.4%

1. Property valuation excludes the leasehold gross-ups of €25.2 million (31 December 2013: €23.1 million).
2. Net operating income is after deducting €0.9 million (31 December 2013: €1.1 million on a like-for-like basis) of free rent. It excludes the amortisation of tenant incentives and leasing commissions, the fund costs related to the Drive portfolio and other real estate related general expenses included within property operating expenses in the consolidated income statement. It is shown here as the annualised amount at the period end.
3. The total portfolio includes 100% of the Mars Floating Portfolio, in which the Group has a 50% investment. The portfolio has a negative net asset value and has been separated as the financing is non-recourse to the Company and not callable as a result of any changes in the fair value of the assets.

Business Segments

The table below shows the summarised financial performance of the Group's business segments (excluding Mars Floating) for the nine months ended 30 September 2014.

			European Real Estate Debt (1)		German Real Estate (1)		Italian Investments (1)		Corporate (1)		Total Eurocastle
(Unaudited)			€'000		€'000		€'000		€'000		€'000
Revenue			11,024		71,578		45		83		82,730
Impairment losses			(15,109)		-		-		-		(15,109)
Fair value movements			-		(22,149)		2,490		-		(19,659)
Interest expense			(3,586)		(30,486)		(5)		-		(34,077)
Other operating expense			1,855		(60,972)		(1,202)		(10,837)		(71,156)
Net operating (loss) / profit before taxation			(5,816)		(42,029)		1,328		(10,754)		(57,271)
Taxation expense			-		(1,420)		(14)		-		(1,434)
Net operating (loss) / profit after taxation and before minority interest			(5,816)		(43,449)		1,314		(10,754)		(58,705)
Minority interest in Italian Investments			-		-		(355)		-		(355)
Net (loss) / profit after taxation and minority interest			(5,816)		(43,449)		959		(10,754)		(59,060)
Decrease in fair values of investment properties			-		23,679		-		-		23,679
FFO adjustment to Italian Investments			-		-		2,916		-		2,916
Unrealised fair market gains on Italian Investments			-		-		(2,152)		-		(2,152)
Deferred tax charge on investment properties			-		(1,346)		-		-		(1,346)
Funds from operations (FFO)			(5,816)		(21,116)		1,723		(10,754)		(35,963)
Net realised losses on investment property sales after sales costs and closure of swaps			-		2,781		-		-		2,781
(Gains) / losses on foreign currency contracts, translation and swaps			(1,363)		-		-		547		(816)
Impairment losses			15,109		-		-		-		15,109
Gain on purchase of Mezzanine debt			(1,963)		-		-		-		(1,963)
Gain on paydown of debt securities			(3,675)		-		-		-		(3,675)
Loss on sale of debt securities			407		-		-		-		407
Loss on deconsolidation of Bridge Portfolio			-		26,077		-		-		26,077
Normalisation of RE Fund Unit returns			-		-		1,801		-		1,801
Transaction costs on acquisition of UIU			-		-		1,012		-		1,012
Normalised funds from operations			2,699		7,742		4,536		(10,207)		4,770
(Unaudited)			European Real Estate Debt (1)		German Real Estate (1)		Italian Investments (1)		Corporate (1)		Total Eurocastle
Net (loss) / gain  per ordinary share €			(0.18)		(1.33)		0.04		(0.33)		(1.80)
Net (loss) / gain  per weighted average ordinary share €			(0.18)		(1.33)		0.04		(0.33)		(1.80)
FFO per weighted average ordinary share €			(0.18)		(0.65)		0.05		(0.33)		(1.10)
Normalised FFO per weighted diluted ordinary share €			0.08		0.24		0.14		(0.31)		0.15

1. Unallocated revenue and other operating expenses have been allocated between the segments based on each segment's share of net asset value.

FFO as defined represents net profit after taxation (computed in accordance with IFRS), excluding changes in the fair value of investment properties net of attributable deferred taxation, fair value changes of the Italian investments, changes in the fair value of interest rate swaps that are taken to the income statement, unrealised movements on currency swaps (net of translation gains/losses of related assets) and accounting losses on investments made with non-recourse financing to the extent they exceed the net amount invested. The Group considers the realisation of gains and losses on its investments to be a normal part of its recurring operations and therefore does not exclude such gains and losses when arriving at FFO. FFO does not represent cash generated from operating activities in accordance with IFRS and therefore should not be considered an alternative to cash flow as a measure of liquidity, and is not necessarily indicative of cash available to fund cash needs. Eurocastle's calculation of FFO may be different from the calculation used by other companies and, therefore, comparability may be limited.

Normalised FFO is a non-IFRS financial measure used to provide investors with additional information regarding the underlying performance of the Group and its ability to service debt and make capital expenditure. This measure excludes realised gains and losses, sales related costs (including realised swap losses), impairment losses, foreign exchange movements, and accounting adjustments related to the Mars refinancing.

The table below shows the summarised financial position of the Group's business segments for the nine months ended 30 September 2014:

			European Real Estate Debt		German Real Estate  (2)		Italian Investments (1)		Corporate  (1)		Total Eurocastle
(Unaudited)			€'000		€'000		€'000		€'000		€'000
Investments			219,279		1,097,050		48,881		-		1,365,210
Other assets (including cash)			38,410		48,976		7,328		109,840		204,554
Total assets			257,689		1,146,026		56,209		109,840		1,569,764
Interest-bearing debt financing			(229,952)		(935,810)		-		-		(1,165,762)
Other liabilities			(414)		(90,369)		(2,707)		(8,878)		(102,368)
Total liabilities			(230,366)		(1,026,179)		(2,707)		(8,878)		(1,268,130)
Segment net assets			27,323		119,847		53,502		100,962		301,634
Tax liability			-		(12,884)		(2)		-		(12,886)
Adjusted net assets			27,323		106,963		53,500		100,962		288,748
Minority interest			(2)		(4)		2,251		-		2,245
Add back net liabilities of Mars Floating Portfolio (2)			-		(45,407)		-		-		(45,407)
Net Assets			27,321		61,552		55,751		100,962		245,586
Adjusted net asset value per ordinary share €			0.84		3.28		1.64		3.09		8.85
Net asset value per ordinary share €			0.84		1.89		1.71		3.09		7.53
Adjusted asset value per weighted average ordinary share €			0.84		3.28		1.64		3.09		8.85
Net asset value per weighted average ordinary share €			0.84		1,89		1.71		3.09		7.53

The table below shows the summarised cashflow of the Group's business segments for the nine months ended 30 September 2014:

Nine months ended 30 September 2014 (unaudited)		European Real Estate Debt		German Real Estate		Italian Invest-ments		Corp-orate		Total Adjusted Eurocastle		Mars Floating and Minorities		Total Eurocastle
		€'000		€'000		€'000		€'000		€'000		€'000		€'000
Cashflows from operating activities		1,943		(5,824)		(783)		(10,754)		(15,418)		29,378		13,960
Cashflows from investing activities		123,147		136,713		(35,954)		(7)		223,899		(20,906)		202,993
Cashflows from financing activities		(99,288)		(138,256)		37,304		(16,048)		(216,288)		(8,050)		(224,338)
Net increase /  (decrease) in cash and cash equivalents		25,802		(7,367)		567		(26,809)		(7,807)		422		(7,385)

Forward-Looking Statements

This release contains statements that constitute forward-looking statements. Such forward-looking statements may relate to, among other things, future commitments to sell real estate and achievement of disposal targets, availability of investment and divestment opportunities, timing or certainty of completion of acquisitions and disposals, the operating performance of our investments and financing needs. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may", "will", "should", "potential", "intend", "expect", "endeavour", "seek", "anticipate", "estimate", "overestimate", "underestimate", "believe", "could", "project", "predict", ""project"", "continue", "plan", "forecast" or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. The Group's ability to predict results or the actual effect of future plans or strategies is limited. Although the Group believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, its actual results and performance may differ materially from those set forth in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors that may cause the Group's actual results in future periods to differ materially from forecasted results or stated expectations including the risks regarding Eurocastle's ability to declare dividends, amortise the Group's debts, renegotiate the Group's credit facilities, make new investments, or achieve its targets regarding asset disposals or asset performance.

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