Alpha Real Regulatory News (ARTL)

13 February 2013

Alpha Real Trust Limited

Interim Management Statement and Dividend Announcement

Alpha Real Trust Limited ("ART" or the "Company") today publishes its interim management statement for the quarter ending 31 December 2012 and the period up until the date of this announcement. The information contained herein has not been audited.

Reflecting the progress made by the Company in making income producing investments, the Board has decided to declare a dividend of 1.05p per share to all shareholders out of earnings. The current intention of the Company is to pay a dividend semi-annually.

Highlights

·; NAV per share 105.8p (103.8p: 30 September 2012)

·; Adjusted earnings per share of 4.3p for the nine months to 31 December 2012

·; Completion of the Property Investment Portfolio PLC investment portfolio acquisition

·; Europip: Refinancing of the £59.4 million (NOK 536 million) portfolio of Norwegian commercial real estate with a senior debt facility of £37.7 million (NOK 340 million)

·; Europip: £1.6 million (€2.0 million) of net proceeds from the sale of the Paris office asset at above book value

·; H2O: Nike is in the process of fitting out its new destination outlet store at the H2O shopping centre; store opening anticipated at the end of February 2013; market beating visitor footfall increases recorded in 2012

·; AURE: extension of the term for £32.5 million of senior debt finance on its portfolio of UK commercial real estate until 31 December 2013

·; 93% of the Company's investment portfolio is in income producing investments in the UK and Europe

Investment market commentary

There are some grounds for optimism that improving foundations are being laid for sustainable economic growth but it is too early to rule out some more bumps on the road to recovery during the year ahead.

Financial market strains in the eurozone appeared to soften in the latter part of 2012 and this has continued into the first part of 2013.

There are some bright spots in the economic data (e.g. UK office-based jobs numbers at record levels), which are yet to manifest themselves in any substantial rental growth in the real estate sector, however they may reinforce the embryonic consumer recovery which could boost underlying economic growth.

There are still risks of increasing inflation but levels are generally subdued across Europe. This suggests that central banks are placing greater focus on economic growth versus inflation control.

In Spain, the newly created state sponsored "bad bank", Sareb, is considered a positive step. A successful Spanish bond auction at reduced yields in January reflects improved investor sentiment.

Norway´s economy outperformed the majority of European economies in 2012 with GDP growth of approximately 3%. Its comparatively strong economy and the relative scarcity of quality property assist continued levels of positive occupier take-up across property sectors and supports rental levels.

In the UK, real estate investment transaction volumes remain relatively muted, with overseas investors continuing to support demand in prime sectors and markets. Reflecting the perceived safe haven status of the UK market, over 60% of UK investment transactions are generated from foreign investors.

There is increasing investor interest in opportunistic investments, including recapitalisation of property investment vehicles, that offer scope for defensive capital positions with high risk adjusted returns.

Investment summary

* Position as at 31 December 2012, following the re-investment of Europip income (see below), as of today's date the loan has been repaid down to £8.7 million

1 Based on coupon plus redemption premium annualised

2 Asset returns to be included after the first full reporting period

3 Over 12 months to 31 December 2012

4 Annualised quarterly return

ART has also acquired, at an ascribed zero value, Property Investment Portfolio Plc's ("PIP") investments in Active Commercial Estates PLC ("ACE"), a fund invested in secondary commercial UK property and The Romulus High Income Trust ("Romulus"), a fund holding four UK business centres. Any realised value from these investments will be passed exclusively to ART A shareholders. As at 31 December 2012, the net asset value of both ACE and Romulus was zero.

Key investment updates

Further to the half year report dated 22 November 2012, the following are key investment updates:

PIP acquisition

ART´s acquisition of the investment portfolio from PIP completed on 3 December 2012. The PIP investment, which had a combined NAV of £26.4 million as at 30 June 2012, has a diversified exposure to the UK and European commercial property markets through a range of specialist fund investment vehicles, which include some of ART's existing investment vehicles. The acquisition was structured on a NAV-for-NAV basis with consideration by way of a new unlisted class of ART A shares ("A Shares"), with the holders having the option to convert A Shares one-for-one into listed ART ordinary shares. Accordingly, 23,914,323 new Class A Shares have been issued to PIP for issuance to its shareholders.

Continued active management

The Company's investments have benefited from an active management approach with successes evident in both the Company's direct and indirectly held investments.

At the H2O shopping centre asset in Madrid, following the recent letting to Nike for a large destination factory store, the tenant is in the process of fitting out its unit for an opening at the end of February 2013. Aided by the asset management initiatives implemented by ART, the H2O shopping centre recorded market beating footfall increases of 2.3% in 2012 compared to 2011 (Spain´s national index decreased by 4% for the same period).

In AURE, the terms of the £32.5 million senior loan on its portfolio of UK commercial real estate has been extended until 31 December 2013.

Fund restructuring is underway in the Company´s FIT investment which is anticipated to complete during the first quarter of 2013. The Financial Services Authority ("FSA") has approved FIT´s application to convert into an authorised fund, subject to investor consent, and the HM Revenue and Customs provided approval for FIT to enter the Property Authorised Investment Fund ("PAIF") tax regime. A PAIF is specifically designed for open ended FSA authorised investments. The tax advantages of a PAIF are similar to those of a Real Estate Investment Trust ("REIT"), including favourable capital gains tax treatment.

European Property Investment Portfolio Plc

As part of the PIP transaction, ART acquired a 47% stake in European Property Investment Portfolio Plc ("Europip"), an Isle of Man domiciled open ended investment company. Europip invests in a directly owned commercial property portfolio in Norway comprising 11 assets located in the Oslo region. Europip had also owned an office asset in Paris, which was sold in December 2012 subsequent to ART´s investment (see below). In addition, Europip has a minority (23%) interest in Mosaic Property CEE Limited ("Mosaic"), a central and eastern European focussed commercial property fund.

ART has provided mezzanine finance to Europip in the form of two loans (one of which was acquired from PIP). The 12 month loans, maturing on 27 November 2013, pay a coupon of 9% per annum. The loans have similar security, with share pledges over two of the un-geared Europip Norwegian assets (valued at £5.8 million (NOK 52.3 million) as at 31 December 2012) with additional rights over proceeds released from the Mosaic investment. Following completion of the sale of the Paris office building, Europip's net proceeds of £1.6 million (€2.0 million) are to be used to partly repay ART´s mezzanine loan with a further repayment to be made of £0.2 million, following the decommissioning of committed and uncalled capital in the Mosaic investment.

Norwegian asset refinance

Europip has refinanced the £59.4 million (NOK 536 million) portfolio of Norwegian commercial real estate with a senior debt facility of £37.7 million (NOK 340 million) at a loan to value covenant of 73% over the secured assets (further details below).

The senior debt facility with Norwegian banks comprises:

·; A five year term facility for £31.0 million (NOK 280 million), at a 2.4% margin over NIBOR. This facility will be amortised at £1.1 million (NOK 10.2 million) per annum from cashflows, although the amount of required amortisation will be reduced pro-rata in the event of property sales. £23.3 million (NOK 210 million) of this facility has been fixed for five years at a NIBOR rate of 2.49% p.a..

·; A two year term facility for £6.6 million (NOK 60 million), at a 3.1% margin over NIBOR with repayment coming from the sale of two assets which are currently being marketed for sale.

Prepayment fees of 0.75% of any amount repaid apply across both tranches during the first two years if the facilities are refinanced with an alternative lender. There are no prepayment fees on asset sales. The intention is for the shorter term facility to be repaid by sales of property.

AUMP

The loan facility of £51.2 million provided by Bank of Scotland in respect of AUMP's wholly owned subsidiaries, CHIP (One) Limited, CHIP (Three) Limited, CHIP (Four) Limited and CHIP (Five) Limited expired on 31 January 2013. At the current time, no extension to the term of the loan facility has been approved by Bank of Scotland.

The loan facility of £8.65 million provided by Nationwide Building Society in respect of the Company's wholly owned subsidiary, CHIP (Two) Limited was due to expire on 23 January 2013. AUMP has announced that CHIP (Two) Limited has agreed with Nationwide Building Society to amend the loan facility agreement such that the term of the facility is extended to 31 March 2013.

Discussions with its lenders, alternative banks and providers of capital are continuing in order to pursue a further extension to, or refinancing of, the loan facilities.

Share buybacks

Further to a separate announcement, a circular has been posted to shareholders today seeking a general authority for the Company to buy back ordinary shares.

The ART Board will consider the possibility of share buybacks of up to 10% of the share capital of the Company.

Dividend

The Company´s earnings are continuing to increase as a consequence of allocation of capital to yield driven investments. Approximately 93% of the Company´s investment portfolio is in income producing investments in the UK and Europe, including exposure to the northern European market by way of the Europip portfolio located in the strong Norwegian economy.

The Board has accordingly declared a dividend of 1.05p per share to all shareholders out of earnings. The record date for this dividend is 19 April 2013 with and ex-dividend date of 17 April 2013; the dividend will be paid 3 May 2013. The current intention of the Company is to pay a dividend semi-annually.

Net asset value

The unaudited net asset value per share of the Company for all share classes was 105.8 pence at 31 December 2012 (30 September 2012: 103.8 pence).

There was no revaluation of the Company's directly owned investment properties during the period.

Foreign currency

The Company monitors foreign exchange exposures and considers hedging where appropriate. Foreign currency balances have been translated at the period end rates of £1:€1.222, £1:NOK9.023 or £1:INR88.341, as appropriate.

Strategy

ART is committed to its disciplined strategy and investment principles, which focus on opportunities that can deliver high risk adjusted total returns while seeking to manage risk through a combination of operational controls, diversification and defensive return structures. ART remains in a strong position to capitalise on further income enhancing opportunistic investments.

The Company's current focus is on investments with strong cashflows and/or defensive risk profiles.

Contact:

Alpha Real Trust Limited

David Jeffreys, Chairman, ART +44 (0)1481 231 100

Gordon Smith, Joint Fund Manager, ART +44 (0) 207 268 0300

Brad Bauman, Joint Fund Manager, ART +44 (0) 207 268 0300

Panmure Gordon, Broker to the Company

Richard Gray/Andrew Potts +44 (0)207 886 2500