EANS-Adhoc: Sparkassen Immobilien AG / significant EBIT improvement of more than EUR 110m

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annual report

13.04.2011

Sparkassen Immobilien AG: significant EBIT improvement of more than
EUR 110m

0. Successful completion of development projects
0. Markets recovering at different speeds
0. Revaluation result shows trend has reversed
0. Profitable sales opportunities: gains on disposal of EUR 9.9m
0. Rental income up by 18.8%

Stock exchange listed Sparkassen Immobilien AG (Bloomberg: SPI:AV,
Reuters: SIAG.VI) is publishing its annual results for 2010. The
strategy of diversifying into different property use types and
regions has proved to be the right one, particularly in light of the
varying speeds at which property markets recovered in 2010. Thanks to
the widely diversified portfolio, S IMMO Group´s total revenues
increased to EUR 174.9m. EBIT for the year ended as at 31 December
2010 improved by more than EUR 110m to EUR 60.5m.

Development projects to the value of over EUR 500m completed
Sparkassen Immobilien AG was able to successfully complete and open
its projects according to plan during the past year - with a total
investment volume of about EUR 500m - sometimes under very
challenging market conditions.

The Group opened Sun Plaza and Serdika Center, the largest shopping
centres in Bucharest and Sofia, respectively. The residential and
office building Neutor 1010 in Vienna, with the renowned Austrian
office furniture manufacturer Bene as its main tenant, was also
officially inaugurated. Almost all of the 34 luxury apartments have
already been sold for top prices. The office complex Galvaniho 4,
located between Bratislava´s city centre and its airport, was also
completed and was fully let at its official opening on 31 March 2011.

Markets recovering at varying speeds In Germany, where the economy is
progressing very well, S IMMO Group´s refurbishment programme
produced excellent results in the form of improved occupancy rates
and increased property values. The prudence of the Group´s valuation
policies were confirmed in the Austrian market, where gains from
property disposals considerably exceeded estimated values. One of the
largest property deals in the Austrian market in 2010 was
successfully completed with the acquisition of the OMV Head Office
and the neighbouring Hotel Zwei, which is operated as a Courtyard by
Marriott.

Progress in Central and Southeastern Europe varies considerably from
country to country. While the Czech Republic and Slovakia recovered
quickly from the economic crisis, an improvement was only noticeable
in Hungary towards the end of 2010. This positive trend gave an
additional boost to the letting successes of S IMMO Hungary. Compared
with the rest of the European Union, Romania and Bulgaria are taking
longer to recover from the economic crisis. In both countries,
government measures such as increases in VAT, redundancies and wage
cuts in the public sector have all had a marked impact on sales in
our shopping centres. However, after a challenging first few months,
both shopping centres ended the year with high volume holiday season
sales.

Value of property portfolio increased Following successful
acquisitions and completions of the development projects, S IMMO
Group´s property portfolio was worth EUR 2,013.1m as at 31 December
2010 (2009: EUR 1,901m). The portfolio consists of 248 properties
with a total usable space of about 1,500,000 m². S IMMO Group
attaches great importance to long-term relationships with its
tenants, which is reflected in the length of the remaining terms for
lease and in an increase in the occupancy rate to 91.7% (2009:
90.3%). The gross rental yield remained stable at 6.6% (2009: 6.7%).

Gross profit up 13.1% to EUR 80.2m Compared with the previous year,
all key indicators used to measure the success of the Company´s
business have been up: rental income, EBIT and NAV have increased.

S IMMO Group´s rental income in 2010 improved considerably to
approximately EUR 104m (2009: EUR 87.6m). This increase of 18.8% is
mainly attributed to the successful completion and letting of the two
shopping centres, and to the additional rental income from properties
newly opened and acquired.

Income from hotel operations also reflected the market´s recovery.
European hotel business started to pick up in mid-2010 and continued
to improve throughout the rest of the year, resulting in a
significant overall improvement compared with 2009. S IMMO Group´s
income from hotel operations was up 3.8% to EUR 38.3m (2009:
EUR 36.9m). At EUR 29.6m, hotel operating expenses remained unchanged
compared with the previous year, therefore the net income from hotel
operations came out at EUR 8.7m (2009: EUR 7.2m).

Broken down by region, rental income was as follows: The largest
share came from Germany with 34.0% (2009: 38.9%), followed by SEE
with 25.1% (2009: 5.4%), Austria with 20.9% (2009: 28.6%) and CEE
with 20.0% (2009: 27.1%). Rental income by property use type shows
retail contributing 37.9% (2009: 22.3%), followed by offices with
30.2% (2009: 42.1%), residential with 26.9% (2009:32.2%), and hotels
with 5.0% (2009: 3.4%). Earnings from the Vienna and Budapest
Marriott Hotels, both leased to hotel operators, are disclosed under
revenues from hotel operations. Overall, S IMMO Group´s gross profit
in 2010 improved by 13.1% to EUR 80.2m (2009: EUR 70.9m).

Advantageous property disposals In the financial year 2010, S IMMO
Group took advantage of several attractive opportunities to dispose
of properties. During the year a total of eleven properties were
sold: nine residential properties in Vienna and Berlin and two office
buildings in Vienna. Gains on property disposals amounted to EUR 9.9m
(2009: EUR 1.9m), which helped boost EBITDA by a substantial 34.1% to
EUR 71.4m (2009: EUR 53.3m).

EBIT up by EUR 110m Operating results (EBIT) improved by more than
EUR 110m from a loss of EUR 53.1m in 2009 to a profit of EUR 60.5m in
2010. Net financing costs increased to EUR 41.2m, reflecting higher
financing volumes. In 2010, income entitlements of participating
certificate holders resulted in expenses of EUR 10.2m, compared with
an income side item of EUR 11.2m in 2009. After a loss before taxes
of EUR 77.5m in 2009, the financial year 2010 generated a profit
before taxes (EBT) of EUR 9.1m - a highly satisfactory result
considering the state of the market. For 2010 the Group reported a
net profit of EUR 2.1m (2009: net losses of EUR 78.9m). As at
31 December 2010, Sparkassen Immobilien AG´s cash reserves stood at
EUR 129.7m.

Revaluation results reflect market improvement The revaluation
results reflect the differing speeds of economic recovery in the
various regions. Properties in Austria and Germany increased in value
thanks to the positive performance of the real estate markets and
their recovering economies. In comparison, Romania and Bulgaria are
taking longer to recover from the economic crisis, and in 2010 their
economic growth was still slightly negative. This made a small
overall writedown of EUR 0.8m necessary, which corresponds to
approximately 0.04% of the portfolio´s total value. When compared
with the previous year´s writedown of EUR 97.2m, however, this is
clearly a reversal of the decline, and a positive trend that will
continue in the current financial year.

Substantial increase in operating cash flow Funds from operations
(FFO) in 2010 amounted to EUR 28.9m (2009: EUR 22m). This encouraging
outcome is directly attributable to the completion of the development
projects. Net operating income (NOI) improved from EUR 62.7m in 2009
to EUR 75.2m in 2010. Operating cash flow for the year rose from
EUR 49.4m in 2009 to EUR 59.2m in 2010. This improvement was closely
related to the completion of development projects in the past
financial year. S IMMO Group´s EPRA net asset value (EPRA NAV) as at
31 December 2010 amounted to EUR 8.34 per share (2009: EUR 8.13).

S IMMO Share currently at 40% discount to NAV The S IMMO share price
increased by 5.6% during 2010 and closed the year with a slight gain
compared with the end of 2009. The Company is working hard to
convince the market of the obvious upside potential and to close the
gap between the current share price and NAV. The current share price
of EUR 5,00 (closing price on 12 April 2011) shows a discount to EPRA
NAV of EUR 8.34 as at 31 December 2010 amounting to 40%. The Group´s
other objectives are to have the share included in major stock market
indices and to simplify the capital structure. The repurchase
programme for S IMMO INVEST participating certificates that ended on
08 April 2011 represents a first step in this direction.

Positive three-year outlook The Company looks forward to the future
with considerable confidence. In recent months the European property
market has experienced a noticeable recovery. Overall, Sparkassen
Immobilien AG expects a distinct upwards trend in 2011 and
significant gains beginning in 2012/2013. Spreading the portfolio
between different property use types and across regions has proved to
be the correct diversification policy, and the one that shall be
followed in the coming years.

In Germany, Sparkassen Immobilien AG will complete its refurbishment
programme by 2013, which will progressively enhance the value of its
properties there. In 2011 the group will be selling German properties
to the value of at least EUR 30m. In Austria, too, it will continue
to take advantage of opportunities to realise disposals at a profit,
while at the same time looking for attractive and profitable
development projects. Management expects operating cash flow to
continue to increase and to reach EUR 100m by 2013.

Sparkassen Immobilien AG will also be focusing its attention on its
development land in capital cities across the European Union. The
present task is to secure zoning and building permits. Once these are
available and local market conditions permit, construction of the
various projects can begin. Consolidated income statement for the
year ended 31 December 2010 EUR m / fair value basis

| |01 - 12/2010 |01 - 12/2009 |
|Revenues |174.9 |153.6 |
| Rental income |104.0 |87.6 |
| Revenues from service charges |32.6 |29.1 |
| Revenues from hotel operations |38.3 |36.9 |
|Other operating income |5.0 |8.2 |
|Property operating expenses |-70.1 |-61.2 |
|Hotel operating expenses |-29.6 |-29.7 |
|Revenues less directly attributable expenses |80.2 |70.9 |
|Income from property disposals |102.7 |152.2 |
|Carrying values of property disposals |-92.8 |-150.3 |
|Gains on property disposals |9.9 |1.9 |
|Management expenses |-18.7 |-19.5 |
|Earnings before interest, taxes, depreciation and |71.4 |53.3 |
|amortisation (EBITDA) | | |
|Depreciation and amortisation |-10.1 |-9.1 |
|Losses on property valuation |-0.8 |-97.2 |
|Operating result (EBIT) |60.5 |-53.1 |
|Financing costs |-41.2 |-35.5 |
|Participating certificates result |-10.2 |11.2 |
|Net income before tax (EBT) |9.1 |-77.5 |
|Taxes on income |-7.0 |-1.4 |
|Net income / (loss) for the year |2.1 |-78.9 |
| of which attributable to shareholders in parent |1.8 |-78.6 |
|company | | |
| of which attributable to minority interests |0.3 |-0.3 |
| | | |
|Earnings per share (EUR) |0.03 |-1.15 |

|Property indicators | |31.12.2010 |
|Standing properties |units |248 |
|Total usable space |m2 |1,465,500 |
|Gross rental yield |% |6.6 |
|Occupancy rate |% |91.7 |

end of announcement euro adhoc
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ots Originaltext: Sparkassen Immobilien AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Investor Relations:
Sylwia Milke
Phone: +43(0)50100-27402
Fax: +43(0)05100-927402
E-mail: sylwia.milke@simmoag.at
www.simmoag.at

Corporate Communications:
Bosko Skoko
Phone: +43(0)50100-27522
Fax: +43(0)05100-927522
E-mail: bosko.skoko@simmoag.at
www.simmoag.at

Branche: Real Estate
ISIN: AT0000652250
WKN: 065225
Index: ATX Prime, IATX
Börsen: Wien / official market