Gagfah S.A. : Financial Results for the First Quarter 2012

GAGFAH S.A. Financial Results for the First Quarter 2012

Luxembourg, May 9, 2012 - GAGFAH S.A. (Frankfurt Stock Exchange: GFJ) today announced its financial results for the first quarter 2012.

• Robust operating results with above-average property investments in the first quarter of 2012
• 419 condo units for EUR 34.4 million financially closed in Q1; net profit margin of 26.6%
• Successfully extended the only 2012 debt maturity of ca. €267 million
• Key priority for remainder of 2012 will be to resolve the 2013 debt maturities

Stephen Charlton, CEO of GAGFAH S.A.'s German subsidiaries: ". Operations and sales were in line with our expectations and yielded an FFO of EUR 0.13 per share for the first three months of this year. Dresden to end the legal dispute. Rental markets in Germany are performing well, and we expect to be able to continue to grow rents in line with the markets. As appetite for German residential assets continues to increase, we intend to sell approximately 4,000 units through our condo and large multi-family home sales programs. We are making good progress on our refinancing initiatives with positive indications from banks and other lenders, and we are looking forward to updating shareholders on the progress we make throughout the year."

Highlights

• FFO per share for the first three months of 2012 from the core rental business of EUR 0.09. Including the EUR 0.04 contribution from sales, the Company delivered EUR 0.13 of FFO for the first three months of 2012. The decline over the prior-year quarter is largely due to the high contribution from sales in Q1 2011 (EUR 0.11 per share), a smaller portfolio overall and higher property investments.

• Profit from leasing was EUR 93.8 million in the first three months of 2012 compared to EUR 105.1 million in the first three months of 2011, on an average basis of about 11,000 fewer units due to sales and significantly higher property investments.

• Profit margin for the first three months of 2012 was 47.2 % including allocations charged, and 66.1 % excluding allocations charged.

• Operations during the first three months of 2012 were broadly in line with 1.1 % annualized same-store1) rent growth, turnover at about 11.5 % and a vacancy rate of 5.5 %, reflecting the seasonal pattern of an increasing vacancy rate in the first quarter of a year.

• Sales: We financially closed the sale of 419 units from our condo sales program. 296 units for EUR 23.9 million related to the 2011 sales program and the remaining 123 units for EUR 10.5 million came from the 2012 sales program.

• Cost to manage per unit was EUR 391 annualized for the first three months of 2012 compared to EUR 379 for the prior-year period. The increase is attributable to the smaller portfolio and the fact that there is a natural time lag between selling units and adjusting the cost base to reflect these sales.

• NAV of EUR 12.61 per share and gross asset value of EUR 848 per square meter as of March 31, 2012.

• Dividend: In order to retain additional flexibility and financial resources within the business and to support the Company's property investment and financing objectives, the Board has made the decision not to pay an interim dividend for the first quarter of 2012.

Same-store basis: Residential units GAGFAH owned at both dates: As of December 31, 2011, and as of March 31, 2012.

Key Financial Information

Consolidated Statement of Comprehensive Income (EUR million)	Q1 2012	Q1 2011	Q4 2011
Income from the leasing of investment property	198.9	209.4	211.2
Profit from the leasing of investment property	93.8	105.1	112.2
Profit from the sale of investment property and assets held for sale	5.7	7.4	6.9
Loss from the fair value measurement of investment property	-5.3	-4.5	-11.5
EBITDA	84.7	96.5	79.4
EBIT	83.9	94.6	72.6
EBT	21.2	32.0	10.6
FFO	26.4	54.1	48.8
Number of shares (weighted average, undiluted, in million) 1)	206.5	224.2	207.1
FFO in EUR per share 1)	0.13	0.24	0.24

Group Capitalization	03-31-2012 EUR million	03-31-2012 %	12-31-2011 EUR million	12-31-2011 %
Total equity	2,142.6	25.7	2,136.9	25.5
Financial liabilities	5,365.6	64.4	5,427.9	64.9
Other liabilities	824.9	9.9	801.6	9.6
Total equity and liabilities	8,333.1	100.0	8,366.4	100.0

Operational Figures (core portfolio)	03-31-2012	03-31-2011	12-31-2011
Group residential portfolio Units	148,269	154,987	148,694
Sqm	9,002,463	9,411,570	9,027,693
Net cold rent/sqm (in EUR)	5.12	5.08	5.11
Vacancy rate (in %)	5.5	5.4	5.1
Sold units (financial closing)	419	3,382	4,897

FFO is a non-IFRS financial measure used by our Group's management to report the funds generated from continued operations. FFO is an appropriate measure of underlying operating performance of real estate companies as it provides shareholders with information regarding the Group's ability to service debt, make capital expenditures etc. GAGFAH's calculation of FFO may be different from the calculation used by other companies and, therefore, comparability may be limited. The following is a reconciliation of EBIT to FFO for our Group:

FUNDS FROM OPERATIONS - FFO (EUR MILLION)	Q1 2012	Q1 2011	Q4 2011
EBIT	83.9	94.6	72.6
Reorganization and restructuring expenses	0.1	1.0	5.9
Depreciation and amortization	0.7	0.9	0.9
EBITDA	84.7	96.5	79.4
Loss from the fair value measurement of investment property	5.3	4.5	11.5
Realized valuation gains through sales	3.6	19.5	10.0
Expenses for share-based remuneration	0.2	1.9	0.5
Net interest expenses	-64.3	-66.3	-61.9
Current tax expenses	-3.7	-2.4	-8.7
Property development business	0.4	0.3	-0.2
Sales expenses (non-condo)	0.8	0.9	3.7
Other	-0.6	-0.8	14.5
FFO	26.4	54.1	48.8
Number of shares (weighted average, undiluted, in million) 1)	206.5	224.2	207.1
FFO in EUR per share 1)	0.13	0.24	0.24

1) Excluding treasury shares.

Management will host an earnings conference call on May 10, 2012, at 12:00 noon Luxembourg time (11:00 A.M. London time, 6:00 A.M. New York time). All interested parties are welcome to participate in the live call. You can access the conference call by dialing

• 1 866 966 9439 from the U.S.
• 0800 694 0257 from the U.K.
• 8002 7512 from Luxembourg
• 0800 101 4960 from Germany
• [phone] from all other countries

ten minutes prior to the scheduled start of the call. Please refer to "GAGFAH S.A. Q1 2012 Earnings Call." The conference ID will be 76556321.
A webcast of the conference call will be available to the public on a listen-only basis at http://www.gagfah.com/. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast. A replay of the webcast will be available for twelve months following the call on http://www.gagfah.com/. The Q1 2012 Interim Report of GAGFAH S.A. is available on http://www.gagfah.com/.

Contact
GAGFAH S.A.
Investor Relations
2-4, rue Beck
L-1222 Luxembourg
Tel.: [phone]
Mail: [e-mail]
http://www.gagfah.com/
R.C.S. Luxembourg B 109.526

About GAGFAH S.A.
GAGFAH S.A. is a joint stock corporation organized under the laws of the Grand Duchy of Luxembourg qualifying as a securitization company under the Luxembourg Securitization Law of March 22, 2004. The core business of GAGFAH S.A.'s operating subsidiaries is the ownership and management of a geographically diversified and well maintained residential property portfolio located throughout Germany. With a portfolio of almost 150,000 apartments, GAGFAH S.A. is the largest residential property company listed in Germany.

Forward-Looking Statements
This press release contains statements that constitute forward-looking statements. Such forward-looking statements relate to, among other things, future commitments to acquire real estate and achievement of acquisition targets, timing of completion of acquisitions and the operating performance of our investments. Forward-looking statements are generally identifiable by use of forward looking terminology such as "may", "will", "should", "potential", "intend", "expect", "endeavor", "seek", "anticipate", "estimate", "overestimate", "underestimate", "believe", "could", "project", "predict", "continue", "plan", "forecast" or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of results from operations or of financial conditions or state other forward looking information. Our ability to predict results or the actual effect of future plans or strategies is limited. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance may differ materially from those set forth in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from forecasted results or stated expectations, including the risk that GAGFAH S.A. will be unable to extent existing financing at suitable terms, be unable to increase rents and occupancy, to sell further units or further reduce management costs.

Percentages and figures in this press release may include rounding effects.