HSTN.L Regulatory News (HSTN)

15 November 2010

Hansteen Holdings PLC

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

INTERIM MANAGEMENT STATEMENT

Hansteen Holdings PLC (LSE: HSTN), the UK and European property investment company, today announces its Interim Management Statement for the period from 1 July to 12 November 2010.

Highlights:

·; In Q3, completed acquisition of seven properties from Kilmartin portfolios for £15 million, at a yield of 10.7%

·; Disposed of 11 properties for £21.2 million, at a yield of 4.25% and with 64% vacancy

·; The Hansteen Property Unit Trust (HPUT) acquired two new estates

·; Vacancy levels in the UK portfolio fell from 57% to 46%

·; Three Board appointments

o Richard Cotton and Humphrey Price as non-Executive Directors

o Richard Lowes as Finance Director

·; Board introduced a second annual dividend payment

o Interim dividend of 1.4 pence per share to be paid on 25 November

Hansteen Chairman, James Hambro, commented: "The Group is in a great position to deploy its £250 million of firepower on exciting opportunities still to arise out of the ongoing turbulence in real estate markets. In addition, we are focused on ensuring that the Group maintains a high recurring income profit, in keeping with our newly acquired status as a REIT."

For further information:

Overview

Hansteen has been very active during the period. In the third quarter it concluded the acquisition of a further seven properties and the sale of 11 properties. The Company has also implemented significant asset management initiatives in order to maintain occupancy in the Group's portfolio.

As at 30 September 2010, both the value and annualised rent roll of the portfolio had increased. The value of the wholly owned portfolio at that date was £758 million, producing an annualised rent roll passing of £61.2 million, compared to £58.2 million reported at the half year. There is a further £2.7 million of annualised rent contracted but not yet passing. The portfolio comprises 1.87 million sq m of property and the vacancy level is unchanged at 25%.

The Hansteen UK Industrial Property Unit Trust (HPUT) has also expanded from £18 million to £33 million with the acquisition of a further two properties.

Activity

During quarter three, Hansteen completed the acquisition of seven properties from the Kilmartin portfolios, as previously announced. The properties were acquired at a gross cost of £15 million, a yield of 10.7% and with 36% vacancy.

In the same period, Hansteen sold 11 properties for a total of £21.2 million, at an exit yield of 4.25% with 64% vacancy. Sales of an additional 10 properties for a combined price of £16 million have been exchanged or completed since 30 September 2010.

The combined effect of selling these properties above valuation and original purchase cost, and with their high vacancy profile, enhanced the yield of the Company's remaining property holdings.

HPUT acquired two new estates during the period. These were Vernon Park, Wolverhampton, an 11,800 sq m estate recently developed and fully vacant, and the Malthouse Estate, Shoreham-by-Sea, an 8,755 sq m fully occupied property. HPUT also sold five units at Buckingway Business Park in Cambridge. In each case the sales were to owner/occupiers and were at a surplus to the original purchase cost.

As a result of the profile of sales and letting activity, vacancy levels in the UK have fallen by 18,795 sq m, from 57% to 46%.

Taking the portfolio as a whole, new lettings have approximately matched new vacancies. Other than the improvement in the UK, there has been no material change in vacancy rate in each of the other countries in which Hansteen operates. The occupational markets remain tough and the steadying of vacancy masks significant asset management activity which enabled the Company to replace insolvent tenants or departing tenants with new occupiers. Hansteen does not expect that position to alter significantly in the remaining months of 2010; however, there are some potentially optimistic signs for 2011. In Germany in particular, where over 60% of the Hansteen portfolio is located, improved sentiment from businesses has resulted in an increased level of enquiries and the number of interested parties per vacant property. The Company is optimistic that this will feed through to letting activity in 2011. Despite the fact that large vacant units in the Netherlands and France are currently difficult to fill, the deterioration now appears to have stabilised and the first signs of interest and enquiries have started to flow through. Often the occupiers are looking for freehold purchases rather than lettings, and Hansteen remains flexible, assessing each situation on a case-by-case basis.

Other Milestones

Hansteen made two significant corporate announcements in October, which the Board regards as an endorsement of the Company's progress.

On 18 October 2010, Hansteen announced the appointment of three new Directors to the Board. Richard Cotton and Humphrey Price were appointed as non-Executive Directors, and Richard Lowes as Finance Director. Their depth of experience in the sector will be of great benefit to Hansteen in the next stages of the Group's development.

On 21 October 2010, the Board declared an interim dividend of 1.4 pence per share to be paid on 25 November 2010, which is in line with the introduction of two dividend payments each financial year. The second dividend for the financial year to 31 December 2010 will be payable on 26 May 2011.

Outlook

Hansteen still has over £250 million of purchasing power to acquire additional properties and believes that the current market conditions represent an exciting opportunity for the Group. Occupier and property investment conditions are tough, but the Company is focused on increasing occupancy levels to ensure that the Group maintains a high recurring income profit, appropriate for a Real Estate Investment Trust. We continue to look for opportunities for capital value improvement and believe the Group is well placed to benefit from the economic difficulties in the property sector.