Sirius Real Estate Regulatory News (SRE)

Sirius Real Estate Limited

("Sirius" or "the Company")

Trading Update

Sirius, the real estate company with a portfolio of 38 large mixed-use commercial sites in Germany, which have been upgraded into modern, flexible workspaces, is pleased to provide a trading update for the period ended 30 September 2010.

With the initial development phase of the business essentially completed at the outset of 2010, the Company's focus has been on increasing occupancy and efficiency levels across the business. To this end, the Company has been successful with 87,000 sqm of new leases being signed at €4.17 psm in the six months to 30 September 2010; this compares with 45,000 sqm in the same period last year. 74,000 sqm of space was vacated in the period, of which the expected move out by Siemens accounted for 14,000 sqm; this compares with 52,807 sqm in the same period last year. This strong sales performance over the year has led to occupancy increasing to 73% as at 30 September 2010, compared to 71% as at 30 March 2010.

Operationally the Company is performing broadly in line with the expected improvement targeted by the management team at the outset of the year. However, while the benefits of the Company's actions to reduce overheads and improve cost recoveries are coming through at an operational level, the Company incurred significant costs in relation to the recently requisitioned EGM and also expects to write down certain receivables relating to tenant debtors as a result of the difficult economic conditions last year. Any such write down would be non-recurring as the Company has been focusing on reducing and improving transparency of tenant service charge costs to allow the Company to justify and receive higher prepayments and recovery for these costs from tenants. To date the Company has been successful in both areas and has increased prepayments by close to 20% from last year.

A key operational focus in the period has been on major tenant retention. The Company has secured new leases with 10 of the 50 largest tenants on over 80,000 sqm in aggregate at a weighted average lease length of 7.5 years, which will generate a committed future income stream of over €35 million. The Company's intention is to continue to bring as many of the larger tenants as possible under longer term contracts as well as focus on driving value from the remaining more flexible tenant base.

The Company is pleased to report that it has agreed to pay down the RBS loan by €1.1m, which will take the facility out of "cash trap" and release all trapped funds into the Company's general trading accounts. The interest cover ratio on this RBS loan is now comfortably above the covenanted level of 125% and in addition, the Company continues to have strong cash balances of €28.5 million and the unencumbered assets, which together provide the Board with confidence that the Company has the flexibility to manage its borrowings.

Enquiries:

Principle Capital Sirius Real Estate Asset Management Limited

Kevin Oppenheim, CEO 020 7004 7150

Alistair Marks, CFO

KBC Peel Hunt

Capel Irwin 020 7418 8900

Nicholas Marren

Cardew Group

Tim Robertson 020 7930 0777

Catherine Maitland