First Property Regulatory News (FPO)

First Property Group plc

Interim Results for the six months to 30 September 2012

First Property Group plc (AIM: FPO), the commercial property fund management group, today announces its interim results forthe six months to 30 September 2012.

Financial Highlights:

Notes:

Negative impact of foreign currency translation on:

·; Assets under management £19.9m decrease

·; Profit before tax £296,000 decrease

Group Properties in 2011 benefitted from a one-off foreign currency exchange gain of £213,000

Operational Highlights:

·; Funds under management have performed well in a difficult market environment. The total pre-tax income return earned by our funds under management in Poland was 21.1% on an annualised basis. The total pre-tax income return earned by our funds under management in the UK, which are un-geared was 6.5% on an annualised basis.

Current Developments

·; We are working on raising a new UK fund to mimic the investment strategy of the UK Pension Property Portfolio LP (UK PPP) fund.

·; New funds are being raised into FOP to fund the purchase of a number of properties in Poland. We plan to close this fund raising exercise during the first quarter of 2013.

Commenting on the results, Ben Habib, Chief Executive of First Property, said:

"The difficulties in the euro zone continue to overhang all European capital markets, although the recent announcement by the ECB of its outright monetary transactions has somewhat stabilised markets."

"Our earnings have been impacted by these macro-economic conditions, most notably as a result of a weakening Euro and our decision last year to suspend investment purchases in Poland. We are now in the process of acquiring a number of new properties on behalf of FOP, which should result in earnings growth in due course."

A briefing for analysts will be held at 09:30hrs today at the headquarters of First Property Group plc, 35 Old Queen Street, London, SW1H 9JA. A conference call facility will also be available on +44 20 8817 9301 (pin 9232569), a recorded copy of which will subsequently be posted on the company website, www.fprop.com.

For further information please contact:

Notes to investors and editors:

First Property Group plc is a commercial property fund manager with operations in the United Kingdom and Central Europe. The performance of its funds under management ranked No.1 versus the Investment Property Databank (IPD) Central & Eastern Europe (CEE) Benchmark over the three, four, five and six years to 31 December 2008, 2009, 2010 and 2011.

·; The business model of First Property Group is to:

o Raise third party funds to invest in income producing commercial property;

o Co-invest in these funds and thereby earn a return on its own capital invested; and

o Earn fees for the management of these funds. Fees earned are a function of the value

of assets under management as well as the performance of the funds.

·; Further information about the Company can be found at: www.fprop.com.

CHIEF EXECUTIVE'S STATEMENT

Financial Results

I am pleased to report interim results for the six months to 30 September 2012.

Revenue during the period amounted to £6,553,000 (2011: 4,587,000), yielding a profit on ordinary activities before taxation of £2,207,000 (2011: £2,539,000) and diluted earnings per ordinary share of 1.46 pence (2011: 1.61 pence). The total reduction in the Group's profit before tax as a result of a weaker Euro was £296,000. Last year's figures also benefitted from a one-off foreign exchange gain of £213,000.

The Group ended the period with net assets of £17.84 million (2011: £16.79 million), and a cash balance of £11.77 million (2011: £8.97 million).

Dividend

The Board has recommended that the interim dividend be maintained at 0.33 pence per share (2011: 0.33 pence per share) which will be paid on 11 January 2013 to shareholders on the register at 14 December 2012, with an ex-dividend date of 12 December 2012.

Review of operations

Property fund management (First Property Asset Management Limited or FPAM)

At 30 September 2012 assets under management stood at £347 million (2011: £374 million). Of these, 69% were located in Poland, 28% were located in the UK and 3% in Romania. There was one property purchase (in the UK) at a cost of £3.9 million during the period and no property sales on behalf of managed funds.

Revenue earned from our fund management activities amounted to £2,003,000 (2011: £2,112,000), generating a profit before central overhead costs of £1,455,000 (2011: £1,624,000). This represents 55% of the Group's profit before central overhead costs. Our fund management fee income is currently running at circa £4.0 million per annum on an annualised basis.

The decline in our fund management fee income of some £109,000 during this period is principally due to adverse movements in the foreign exchange rate from an average of €1.249/£1 during the period compared to €1.135/£1 during the same period last year.

Funds under management have performed well in a difficult market environment. The total pre-tax income return earned by our funds under management in Poland was 21.1% on an annualised basis. The total pre-tax income return earned by our funds under management in the UK was 6.5% on an annualised basis.

Due to the economic uncertainty in the period, we did not buy or sell any properties in Poland on behalf of managed funds but we are now working on the acquisition of a number of properties and expect to report more activity in this respect in the second half of the financial year.

The pace of our investment activities in the UK slowed as a result of having virtually fully invested our most recent UK fund (UK PPP LP) which was established in 2010. UK PPP LP's investment strategy presupposed a protracted period of economic weakness in the UK. Our investment activities have concentrated on discount retailers and properties let to good covenants on long leases and low rents, acquired at high yields. As a result there are no vacancies in our UK portfolio and the fund is earning an un-geared dividend yield of 6.5% per annum for its investors. We are pleased by this performance.

We are continuing discussions with prospective investors about establishing a new UK fund to follow the same investment strategy as UK PPP LP.

A brief synopsis of the value of the assets and the maturity of each of the six funds which we currently manage is set out below.

Group Properties

Group Properties comprises a 28% interest in an office building, Blue Tower, located in Warsaw's central business district and shareholdings in four of the six funds managed by FPAM. Our interest in these funds is accounted for, in the case of UK PPP LP, as "dividend income"; in the case of 5th Property Trading Ltd and Regional Property Trading Ltd, as "shares in associates"; and in the case of Fprop Opportunities plc (FOP), on a consolidated basis because of the Group's majority (84.1%) shareholding.

Shareholdings in managed funds:

* - represents dividend received

** - after non-controlling interest

Revenue from these Group Properties grew to £4,550,000 (2011: £2,475,000), resulting in a profit before central overhead costs of £1,172,000 for the period (2011: £1,371,000). This represents 45% of Group profit before central overhead costs. The bulk of this growth in revenue was attributable to the sale of a property, the office building in Mokotow, Warsaw, for PLN 11.95 million (£2.3 million) on 7 September 2012. A gain of some £120,000 was made on the sale of this property. However, the profit of this segment reduced by some £199,000, as a result of a weaker Euro. Last year's figures also benefitted from a one-off foreign exchange gain of £213,000.

The Blue Tower office block located in central Warsaw contributed £356,000 (2011: £397,000) to the Group's profit before tax prior to the deduction of unallocated central overhead costs, which equates to an annualised rate of return on equity of 40.7% (2011: 46.1%).

Fund raising outlook

We are in process of raising a new UK fund and have indications of interest from a number of institutional and private investment and wealth managers. We are in the process of constructing a fund around these investors and their various requirements. We hope to announce positive news in this respect in due course.

We are also raising new funds into FOP to finance the purchase of a number of property acquisitions we are working on. We plan to close this fund raising exercise during the first quarter of 2013.

Commercial property markets outlook

Poland

In the wake of a slowdown in European growth, Poland's GDP growth has also slowed and is expected to end the year having grown some 2.4% (2011: 4.3%). The rates of growth in consumer spending and reduction in unemployment have also slowed. Notwithstanding this slowdown, it is still one of the fastest rates of GDP growth in Europe and the bigger story of its convergence with Western Europe continues.

Poland's commercial investment property market has had a good year so far with some €1 billion of property changing hands during the nine months to 30 September 2012. Occupancy levels remain high and rents have risen in certain areas. However, the weakness in the capital markets has fed into the Polish banking sector, at least as far as lending on commercial property is concerned and a number of banks have reduced and/or restricted their exposure to commercial property. We do not expect this to reverse in the near future but we are able to raise debt capital for good investments. The tighter market has also resulted in some interesting investment opportunities coming forward.

United Kingdom

As we have mentioned in previous statements, we expect the UK economy to remain weak for a number of years. The commercial property investment market has softened during the first half of the year but income in our UK portfolio, which was acquired on a relatively high yield of 7.48% per annum has held up and the portfolio is performing well.

In the absence of a return to growth in the economy, we shall continue with the UK strategy we have adopted for UK PPP as set out above.

Current trading and prospects

The difficulties in the euro zone continue to overhang all European capital markets, although the recent announcement by the ECB of its outright monetary transactions has somewhat stabilised markets.

Our earnings have been impacted by these macro-economic conditions, most notably as a result of a weakening Euro and our decision last year to suspend investment purchases in Poland. We are now in the process of acquiring a number of new properties on behalf of FOP, which should result in earnings growth in due course.

Ben Habib

Chief Executive

5 December 2012

CONDENSED CONSOLIDATED INCOME STATEMENT

for the six months to 30 September 2012

CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

for the six months to 30 September 2012

 CONDENSED CONSOLIDATED BALANCE SHEET

as at 30 September 2012

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months to 30 September 2012

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

for the six months to 30 September 2012

NOTES TO THE CONDENSED CONSOLIDATED RESULTS

for the six months ended 30 September 2012

1. Basis of preparation

·; These interim condensed consolidated financial statements for the six months ended 30 September 2012 have not been audited or reviewed and do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. They have been prepared in accordance with the Group's accounting policies as set out in the Group's latest annual financial statements for the year ended 31 March 2012 and are in compliance with IAS 34 "Interim Financial Reporting". These accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and as adopted by the European Union (EU).

·; The comparative figures for the financial year ended 31 March 2012 are not the statutory accounts for the financial year but are abridged from those accounts prepared under IFRS which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matter to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

·; These interim financial statements were approved by a committee of the Board on 4 December 2012.

2. Segmental Analysis

Segment Reporting six months to 30 September 2012

Revenue from sale of inventories relates to the sale of Bacha, an office block in Warsaw, owned by the Group since November 2007.

Segment Reporting six months to 30 September 2011

Segment Reporting 12 months to 31 March 2012

Revenue for the six months to 30 September 2012 from continuing operations consists of revenue arising in the United Kingdom 7% (2011: 9%) and Central and Eastern Europe 93% (2011: 91%) and all relates solely to the Group's principal activities.

The parent holding company costs and related listing costs are shown separately under unallocated central costs. Assets, liabilities and costs that relate to Group central activities (including all cash) have not been allocated to business segments.

3. Tax expense

The tax charge is based on a combination of actual current and deferred tax charged at an effective rate that is expected to apply to the profits for the full year.

4. Earnings per ordinary share

The basic earnings per ordinary share is calculated on the profit on ordinary activities after taxation and after non-controlling interests on the weighted average number of ordinary shares in issue, during the period.

Figures in the table below have been used in the calculations.

5. Interest in associates and other financial assets

6. Trade and other receivables

7. Trade and other payables

8. Financial liabilities

Bank loans and finance leases totalling £22,632,000 (2011: £24,712,000) included within financial liabilities are secured against investment properties owned by Fprop Opportunities plc ("FOP") and properties owned by the Group shown under inventories.

Loans repayable by FOP to third party shareholders are repayable in August 2020.

There are two foreign bank loans. The first of these two is for a sum of £6,586,000 (2011: £6,809,000), is included under non-current financial liabilities and is secured against the Blue Tower office block owned by the Group. It is non-recourse and is denominated in U.S. Dollars. Capital repayments commence in November 2013 at a rate of US$17,675 per month until its maturity in November 2015. Interest payments are charged at an annualised rate of one month US Dollar Libor plus a margin of 2.15%.

The second bank loan is for a sum of £2,707,000 (2011: £3,023,000), is partly included under current liabilities and partly under non-current liabilities and is secured against the Krasnystaw shopping centre owned by FOP. It is non-recourse and is denominated in Euros. The loan was drawn down by FOP in June 2011. Capital repayments are made on a quarterly basis at a rate of approximately Eur 30,000 per quarter until its maturity in 2014. Interest payments are fixed for 30% of the loan at an annualised rate of 2.4% plus a margin of 2.8% and for the remaining 70%, charged at an annualised rate of 3 month Euribor plus a margin of 2.8%.

The finance lease outstanding is for £13,357,000 (2011: £14,880,000), is included partly under current liabilities and partly under non-current liabilities and is secured against the Lodz hypermarket owned by FOP. It is non-recourse and is denominated in Euros. Capital repayments are made on a monthly basis at a rate of approximately Eur 45,000 per month until its maturity in 2017. The monthly interest rate payable is fixed at an annualised rate of 3.58% until October 2013 when it reverts to a floating rate based on an annualised rate of one month Euribor plus an all in margin of 2.68%. Interest rate caps are in place with effect from October 2013 until maturity.

The interim results are being circulated to all shareholders and can be downloaded from the company's web site (www.fprop.com). Further copies can be obtained from the registered office at 35 Old Queen Street, London SW1H, 9JA.