Sirius Real Estate Regulatory News (SRE)

Sirius Real Estate Limited

("Sirius" or "the Company")

Trading Update

Sirius Real Estate Limited, the real estate company with a portfolio of 38 large mixed-use commercial sites in Germany, which have been significantly upgraded into modern, flexible workspaces, today provides an update on trading.

The Company expects its trading performance for the 12 months to 31 March 2010 to be in line with market expectations. During the period the Company completed the development phase of the business and has moved on to focusing primarily on increasing occupancy and efficiency levels across the portfolio.

Under the direction of Andrew Coombs, CEO of Sirius Facilities GmbH, the Manager's local subsidiary, who was appointed in December 2009, a number of structural changes have been made in Germany. The lettings team has more than doubled from 20 to 50 people, whilst the total headcount decreased from 190 to 150. This has had an immediate impact on lettings in Q4 and will produce an annual cost saving of approximately €1 million to Sirius.

The expansion of the lettings teams has been further augmented with the introduction of new marketing initiatives, including a significantly expanded online strategy. This has resulted in the doubling of sales inquiries from 500 in October to 1,000 in the month of March producing a strong uplift in lettings in Q4, totalling circa 43,000 sqm (against move outs of 19,500 sqm) at above the passing rent for the portfolio. This compares with 17,534 sqm let (against 44,290sqm of move outs) in Q3, which is traditionally a quieter period. As at 31 March 2010, occupancy was 71% (1 January 2010: 68%).

In February 2010 we reported that large tenant move outs at two sites reduced the Company's interest cover ratio ("ICR") on its RBS loan facility. The ICR cover, as tested in January, remained above the covenanted level of 125% but fell below the 'cash trap' level of 130%. The Company has been in close discussions with RBS, the result of which is the enforcement of the cash trap on the rent accounts of the companies within the RBS facility. However it has been agreed that funds in the rent accounts of companies with surpluses can be transferred to those with deficits so that the impact of the cash trap will be minimal.

The team is closely monitoring any potential future tenant move outs to ensure it proactively manages any impact should move outs occur. Importantly, should the interest cover in the RBS loan facility fall further, the Company has cash of €32 million and €48.7 million of uncharged properties which can be used to avoid any potential covenant breach and therefore the Board is confident that it has the flexibility to manage the Company's financial position.

In summary, market conditions have remained broadly stable during the period, with the German SME sector showing a resilience which has translated into steady levels of demand; however, since the beginning of 2010 substantial improvements have been made in the way the portfolio is marketed, and the Company is able to offer well located workspace which has been upgraded to suit the flexible needs of the Company's core SME client base. The board looks forward to providing a more detailed analysis of the Company's trading performance in its final results in June 2010.

Enquiries:

Principle Capital Sirius Real Estate Asset Management Limited

Kevin Oppenheim, CEO 020 7632 4130

Alistair Marks, CFO

Mark Whitfeld, Investor Relations 020 7240 3222

J.P. Morgan Cazenove

Robert Fowlds 020 7588 2828

Bronson Albery

Cardew Group

Tim Robertson 020 7930 0777

Catherine Maitland