HSTN.L Regulatory News (HSTN)

19 May 2011 

Hansteen Holdings PLC

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

INTERIM MANAGEMENT STATEMENT

Hansteen Holdings (LSE: HSTN), the UK and Continental European property investment company, announces its Interim Management Statement for the period from 1 January 2011 to 18 May 2011.

Highlights of the period:

·; Placing and Open Offer raising £150 million to allow Hansteen to take advantage of continuing opportunities to buy predominantly industrial properties in the UK and Continental Europe.

·; £2.6 million of disposals

·; Rent roll in the first quarter increased by £1.1 million to £60.7 million

·; Overall vacancy in Q1 reduced by 13,133 sq m to 466,912 sq m

For further information:

Overview

Hansteen has been very busy during the first part of the year, continuing the high level of activity in 2010. During the period under review, the Group enhanced its financial strength with a Placing and Open Offer to take advantage of the market's weakness; sold two properties for a total of £2.6 million; reduced voids and increased the rent roll.

Placing and Open Offer

On 13 April 2011, Hansteen announced its intention to raise approx. £150.0 million (approx. £147.0 million net of expenses) by way of a fully underwritten Placing and Open Offer at a price of 81p per share representing a discount of 4.2p (4.9%.) to mid market price of 85.2p per share immediately ahead of the announcement and a discount to the Group's EPRA NAV of 5p per share (5.8%). There was a take up of over 77% of the Open Offer shares by existing shareholders.

The Placing and Open Offer was carried out to allow Hansteen to take advantage of the continuing opportunities to buy predominantly industrial properties in the UK and Continental Europe at attractive prices arising from the current financial downturn.

During 2010, Hansteen acquired approx. £460 million of property in ten transactions either directly or through its investment in HPUT, the ultimate driver for the majority of which was a bank seeking to resolve an impaired loan. The Directors believe banking problems with real estate loans will continue in 2011 and 2012, providing attractive investment opportunities, of which Hansteen can take advantage, due to its good track record and the significant increase in its equity resources from the Placing and Open Offer.

Disposals

During the period under review, Hansteen has sold two properties for a total of £2.6 million. In the UK, It has sold Broxden House in Perth to I&H Brown Limited for £2.3 million. The 21,574 sq ft (2,004 sq m) office building, producing a rent of £325,000 per annum, was acquired in August 2010 as a part of the Kilmartin portfolios and sold at a small premium to book value. Hansteen owns an adjacent vacant office of a similar size and the group is also in negotiations with a purchaser for this building.

In Germany, Hansteen has sold an 843 sq m vacant supermarket property in Hötensleben for €375,000.

Vacancy Levels/Lettings

Hansteen reduced vacancy in its portfolio by 13,133 sq m to 466,912 sq m, during the three months to 31 March 2011. Activity levels are high and the group has completed 108 new lettings or lease renewals in the first quarter.

New lettings in Germany included: 7,173 sq m at Braunschweig let to Volkswagen for €248,574 per annum; 4,180 sq m at Weiden let to Witt Weiden GmbH at €153,000 per annum; and 3,455 sq m in Remseck, let to Transporte u. Lagerung for €161,000 per annum. In the Netherlands, Hansteen let a 13,058 sq m warehouse and office complex in Tilburg to Lidl for €420,000 per annum.

Rent Roll

During the three months to 31 March 2011, Hansteen's rent roll has increased by £1.1 million to £60.69 million; the main increase coming from Germany.

Markets

As predicted, continued improvement in business sentiment in Germany, where over 60% of the Hansteen portfolio is located, has resulted in increasing levels of enquiries with greater competition for properties and a number of new lettings.

In the Netherlands and to a lesser extent Belgium, there is evidence of an improved level of enquiries, although the increased take up seen in Germany has not yet materialised in these countries and the market remains difficult.

In the UK, the occupational market remains tough. The Group continues to successfully progress its Asset Management initiatives. In the Hansteen Property Unit Trust for example two freehold sales of vacant industrial warehouses were sold at a premium to owner occupiers.

Outlook

Following the Placing and Open Offer Hansteen now has potentially more than £400 million of purchasing power to build its portfolio, both in the UK and Continental Europe.

The Group continues to track several substantial portfolios where it believes it can provide a mutually beneficial outcome with the current owners and their funders.

The current market represents an exciting opportunity for the Group to build its portfolio by acquiring property at distressed values and using its active management expertise to achieve a high return.