Regulatory News

NEPI NEW EUROPE PROPERTY INVESTMENTS PLC

CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012 and trading statement for the six months ending

31 december 2012

Incorporated and registered in the Isle of Man with registered number 001211V

Registered as an external company with limited liability under the laws of South Africa

Registration number 2009/000025/10

AIM share code: NEPI

BVB share code: NEP

JSE share code: NEP

ISIN: IM00B23XCH02

("NEPI", "the Group" or "the Company")

Directors' commentary

1 DISTRIBUTABLE EARNINGS AND APPROVAL OF DIVIDEND

The Group has achieved distributable earnings of 15.8 euro cents per share for the six months ended 30 June 2012. This is as a result of continued strong performances of the Group's assets, the favourable acquisition made by the Group of the City Business Centre in Timisoara, Romania in February 2012, additional rental income generated due to the re-developments in Brasov and Pitesti that were completed in December 2011 and a settlement with the vendors of Promenada Mall.

The Board resolved to limit the half-year distribution to 11.24 euro cents per share (the recurring portion is 10.12 euro cents per share) in respect of the six-month period ended 30 June 2012. This is an improvement of 15% over the 9.77 euro cents per share distributed for the comparable prior interim period.

The vendor settlement generated €7.1 million in non-recurring distributable income. The total value of retained distributable earnings (including retained distributable earnings carried over from the 2011 financial year) after the half-year distribution amounts to €10.1 million. This amount will be considered for distribution when the Group pursues property developments. Developments have a positive impact on per share distributions, once completed. During the construction period, however, developments are yield dilutionary as interest capitalised on working capital is at the Group's average cost of finance.

2 OPTION TO RECEIVE CAPITAL RETURN

Given the Group's ongoing development and acquisition programme, and following requests from shareholders, the Board explored alternatives to cash distributions to shareholders. As a result, the Board has resolved to offer shareholders the option to receive the 11.24 euro cents per share distribution as a cash dividend or to receive a return of capital by way of an issue of new shares credited as fully paid up at a ratio of three new shares for each 100 shares held in respect of the six months ended 30 June 2012, the latter being subject to the adoption of the proposed amendments to the Company's articles of association at the Company's extraordinary general meeting on 24 August 2012. Pending approval by the relevant exchanges, a circular that contains details of the election, accompanied by an announcement on SENS, RNS and the BVB, will be issued in due course.

3 RETAIL PROPERTY ACQUISITIONS, EXTENSIONS AND DEVELOPMENTS

Promenada Mall Braila

The expansion of the fashion offering referred to in NEPI's 2011 annual report was completed on 10 May 2012 with the opening of H&M and C&A. A further expansion phase to accommodate demand from additional international fashion tenants is being considered.

Ploiesti Shopping City

The construction of the Ploiesti Shopping City is advancing as planned with the opening of the first phase scheduled for 15 November 2012. Lease agreements have been signed with 66 tenants for the first phase of the Carrefour Hypermarket extension with tenants including Altex, Bamboo, Bershka, Cinema City, Douglas, Fishbone, H&M, Intersport, Leonardo, Massimo Dutti, Nescafe, New Yorker, Office Shoes, Orsay, Paul, Pull and Bear, Quasi Pronti, Reserved, Segafredo, Stradivarius, Swarovski, Vodafone, Yves Rocher and Zara. A number of further lease agreements are being finalised and as a result, the centre is expected to be fully tenanted on the opening date.

Brasov Shopping City

As announced in June 2012 the Group finalised the purchase and leaseback of a retail box (including additional land) from Mobexpert, the leading Romanian furniture retailer. The acquired properties are adjacent to the Group's recently re-developed strip mall and the Carrefour hypermarket in Brasov, Romania. The Group intends to re-develop the combined properties into a regional mall, in partnership with Carrefour Property. The project is subject to board and planning approvals being obtained. Initial tenant discussions have confirmed strong demand for the project. The development is planned in two phases, with the construction of the first phase expected to commence prior to the year-end.

Vulcan Value Centre

As announced in June 2012 the Group entered into a joint venture to acquire and develop a former factory site located in an under serviced and densely populated area of Bucharest. The site has good vehicular and public transport access. The proposal is to develop a value centre anchored by a hypermarket on the site. Various prospective tenants (including three hypermarket groups) have shown strong interest in the proposed development and substantial preparation work has been completed in order to apply for a building permit once the zoning approval (PUZ) is issued. Construction will commence when the required building permit has been obtained, which should be prior to the year-end.

4 OFFICE PROPERTY ACQUISITIONS, EXTENSIONS AND DEVELOPMENT

City Business Centre

As reported in the 2011 Annual Report, the Group has acquired City Business Centre in Timisoara effective 1 January 2012. The Group acquired three existing office buildings with a rentable area of some 27,250 m2 which are tenanted mainly by multinationals. The Group has also committed to purchase two additional buildings which are in the process of being developed. The first of these buildings is expected to be completed by September 2012. More than 60% of this building has been leased to date.

Cluj office development

The Group has acquired an 18,082 m2 plot of land, in the city centre of Cluj Napoca (Cluj) in a joint venture with Mr. Ovidiu Sandor (the developer of City Business Centre) with a view to developing, in three phases, up to 52,000 m2 of rentable A class offices. Cluj is situated in the north-western part of Romania and is the second largest city in Romania by population. The city houses the headquarters of a number of multinational companies and the city is also an important centre for tertiary education. The planning approvals process for the project is underway and the construction works are expected to commence by November this year. The first phase of the development should be completed by spring 2014.

5 DISPOSALS

Retail Park Auchan Pitesti

As announced on 3 August 2012, the Group entered into agreements with the Auchan group to sell the hypermarket section of Retail Park Auchan Pitesti for a total consideration of approximately €28.7 million as against a book value of €21 million. The transaction, which is subject to a number of conditions precedent, is expected to conclude early in 2013.

6 CASH MANAGEMENT AND DEBT

The Company raised an aggregate of €66 million through a vendor placement and two private placements during the six month period.  The Group will retain high levels of access to liquidity due to the instability of the European banking markets and to finance the Group's development pipeline.

A portion of the cash held for capital commitments has been invested in liquid dividend-paying listed property shares such as Unibail-Rodamco, Klepierre, VastNed Retail, Corio and Eurocommercial Properties. The total investment exposure in listed securities amounted to €52 million as at 30 June 2012 and is expected to achieve a net dividend return of approximately 7% in per annum. As at 30 June 2012 and at the date of this report, the listed securities traded at a premium to their initial acquisition cost.

The Group has renewed its €9.5 million secured revolving facility with UniCredit Bank. The facility carries an interest rate of 1 month Euribor plus 4.0% and matures on 31 May 2013 when, at the Group's option, the facility is convertible into a term loan repayable on 31 December 2014. The facility remains undrawn as at 30 June 2012.

A construction loan of €33.5 million has been obtained from BRD (a subsidiary of Societe Generale) in July 2012 for the development of Ploiesti Shopping City. NEPI and Carrefour Property each own 50% of this project; therefore, the Group accounts for 50% of the loan. Upon completion of construction, the construction loan can be converted into an investment loan and the total loan amount increased to €40 million, repayable in 10 years. The construction loan carries an interest rate of 3 month Euribor plus 4.5%, while the investment loan will carry an interest rate of 3 month Euribor plus 4.0%.

7 PROSPECTS AND TRADING STATEMENT FOR THE SIX MONTHS ENDING 31 DECEMBER 2012

NEPI's property portfolio continues to perform well supported by the length of its lease profile and tenants with strong corporate covenants. The Group is actively pursuing further acquisition and development opportunities and will make further announcements in this regard as appropriate.

In terms of the Listing Requirements of the JSE Limited, property entities are required to publish a trading statement as soon as they are satisfied that a reasonable degree of certainty exists that the distribution for the period to be reported upon next will differ by at least 15% from the distribution for the previous corresponding period. Accordingly, shareholders are advised that NEPI anticipates that the dividend per share for the six months ending 31 December 2012 will be 15% higher than for the six months ended 31 December 2011. The financial results on which this trading statement is based have not been reviewed or reported on by NEPI's external auditors.

By order of the Board

Martin Slabbert

Chief Executive Officer

Victor Semionov

Finance Director

7 August 2012

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS

•Includes interest paid on bank borrowings amounting to €4 186 538 for the six months ended 30 June 2012, €7 649 493 for the year ended 31 December 2011 and €3 947 973 for the six months ended 30 June 2011.

consolidated STATEMENT OF CHANGES IN EQUITY

consolidated STATEMENT OF CHANGES IN EQUITY (continued)

BANK LOANS AND BORROWINGS AS AT 30 JUNE 2012

BANK LOANS AND BORROWINGS AS AT 30 JUNE 2012 (CONTINUED)

BANK LOANS AND BORROWINGS REPAYMENT PROFILE

BANK LOANS AND BORROWINGS REPAYMENT PROFILE (CONTINUED)

CONSOLIDATED STATEMENT OF INCOME 

RECONCILIATION OF PROFIT FOR THE PERIOD TO DISTRIBUTABLE EARNINGS

consolidated STATEMENT OF OTHER COMPREHENSIVE INCOME

RECONCILIATION OF PROFIT FOR THE PERIOD TO HEADLINE EARNINGS

RECONCILIATION OF NET ASSET VALUE TO ADJUSTED NET ASSET VALUE

LEASE EXPIRY PROFILE

SEGMENTAL ANALYSIS

NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

BASIS OF PREPARATION

These condensed consolidated unaudited interim financial results have been prepared in accordance with the recognition and measurement criteria of the International Financial Reporting Standards ("IFRS") and its interpretations adopted by the International Accounting Board ("IASB"). The accounting policies which have been applied are consistent with those used in the preparation of the annual financial statements for the year ended 31 December 2011. These condensed consolidated interim financial results have not been reviewed or reported on by the Company's external auditors.

INVESTMENT PROPERTY

Investment properties are those held either to earn rental income or for capital appreciation or both. After initial recognition, investment properties are measured at fair value. Fair value is determined annually by external independent professional valuers with appropriate and recognised professional qualifications and recent experience in the location and category of property being valued.

INTERIM DIVIDEND

As detailed in the Directors' commentary, the Board has resolved, subject to the adoption of the proposed amendments to the Company's articles of association at the Company's extraordinary general meeting on 24 August 2012, to offer to shareholders the election to receive a cash dividend or a return of capital by way of an issue of new shares credited as fully paid up.  Pending the approval by the relevant exchanges, a circular that contains details of the election, accompanied by an announcement on SENS, RNS and the BVB, will be issued in due course.

Registered office

2nd Floor, Anglo International House, Lord Street, Douglas, Isle of Man, IM1 4LN

Transfer secretaries and settlement agent

Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001, South Africa (PO Box 61051, Marshalltown, 2107, South Africa)

Computershare Investor Services (Jersey) Limited, 2nd floor, Queensway House, Hilgrove Street, St Helier, JE1 1ES, Jersey

Directors

Dan Pascariu (Chairman)*, Desmond de Beer#, Michael Mills*, Dewald Joubert*, Jeffrey Zidel*, Victor Semionov  (Finance director), Martin Slabbert (Chief executive officer)   *Independent non-executive director   #Non-executive director

For further information please contact

New Europe Property Investments plc    Martin Slabbert   +40 74 432 8882

Nominated Adviser and Broker

Smith & Williamson Corporate Finance Limited   +44 20 7131 4000

JSE Sponsor

Java Capital   +27 11 283 0042

Romanian Advisor

SSIF Intercapital Invest SA    Razvan Pasol   +40 21 222 8731