28 March 2012Hansteen Holdings PLC

(“Hansteen” or “the Group” or “the Company”)

Full Year Results

Hansteen Holdings PLC (LSE: HSTN), the investor in continental European and UK real estate, announces its final results for the twelve months ended 31 December 2011.

Financial Highlights Normalised Total Profit up 29% to £34.2 million (2010: £26.5 million) Normalised Income Profit increased by 27% to £25.7 million (2010: £20.2 million) Annual dividends payable increased 14% to 4.0p (2010: 3.5p) Diluted EPRA EPS up 29% to 4.9p (2010: 3.8p) Diluted EPRA NAV per share 82p (2010: 84p) IFRS pre-tax profit £8.9 million (2010: £33.2 million) Entered FTSE 250 Index and EPRA Index in March 2011

Operational Highlights Successful capital raise of £150.0 million £176 million properties acquired and £33 million properties sold during the year Property portfolio, including HPUT, increased by 16% to £961 million (2010: £829 million) Rent roll, including HPUT, up 19.6% to £79.3 million (2010: £66.3 million)

James Hambro, Hansteen Chairman commented: “Realising and distributing profits, as well as building a portfolio that will show capital growth as the property market recovers, are key to sustaining long-term shareholder value. The Group’s property portfolio produces a high and growing income which we believe is robust due to the diversity, both geographic and numerical, of the tenant base. Vacant property and undeveloped land in the portfolio provide real opportunities for value growth, even in the current difficult market.

“The Group has significant resources available and a strong and experienced management infrastructure in place. This, together with a growing reputation for professionalism and performance with the major European banks, will provide further excellent acquisition opportunities in the future.”

See note 3 of the financial statements for a reconciliation of Normalised Income Profit and Normalised Total Profit to the IFRS measure of profit before tax.

2010 EPS and NAV figures have been restated for the issue of shares in May 2011 at a discount

A presentation for analysts and investors will be held at 9.30 am today (Wednesday 28 March) at the offices of Tavistock Communications, 131 Finsbury Pavement, London EC2A 1NT.

If you would like to attend, or dial-in to, the conference, please contact James Verstringhe (jverstringhe@tavistock.co.uk) or Jeremy Carey (jcarey@tavistock.co.uk) on 020 7920 3150.

For more information:Morgan Jones / Ian Watson Jeremy Carey / James VerstringheHansteen Holdings PLC Tavistock CommunicationsTel: 020 7408 7000 Tel: 020 7920 3150

Notes to Editors:1

HANSTEEN HOLDINGS PLCHansteen Holdings PLC (LSE: HSTN) is a European industrial REIT that invests in properties with high yields, low capital costs and opportunity for value improvement across the Netherlands, Germany, Belgium, France and the UK.

Founded by Morgan Jones and Ian Watson, the Company listed on Aim in November 2005 raising £125 million. In 2009, it raised a further £200.8 million by way of a Placing and Open Offer and moved to the Official List, converting to a REIT shortly thereafter. In April 2011, the Company raised a further £150 million by way of a Placing and Open Offer.

As 31 December 2011, Hansteen had a portfolio of some 277 assets with a value of around £961 million.

2

3

CHAIRMAN’S STATEMENTI have pleasure in presenting the results for the year ended 31 December 2011.

Since the beginning of the current downturn in European property markets the Board has pursued four key objectives:

to maintain the strong and secure financial position of the Group;

to take advantage of market weakness to assemble a portfolio of properties with significant vacancies which will show material capital appreciation when there is an upturn in the cycle;

to create an operating infrastructure in the countries in which Hansteen owns properties; and

to deliver to shareholders growing earnings and dividends.

In 2011 the Group has made good progress in all four objectives.

Results

The Board has considered its Key Performance Indicators and intends to use “Normalised Total Profit” and “Normalised Income Profit”, as explained in the Joint Chief Executives’ Review as a measure of its performance. Normalised Total Profit for the year to 31 December 2011 was £34.2 million (2010: £26.5 million). Normalised Income Profit, which excludes profits from sales of properties and the benefits of a £5.3 million insurance payment at Bremen, increased by 27.2% to £25.7 million (2010: £20.2 million). Diluted EPRA earnings per share in 2011 was 4.9p (2010: 3.8p), an increase of 28.9%. This was achieved even though for most of 2011, the equity raised in April 2011 remained un-invested. The Group’s diluted EPRA Net Asset Value (“NAV”) was 82p per shares (2010: 84p).

Under IFRS, Hansteen showed a £8.9 million pre-tax accounting profit for the year (2010: £33.2 million). In the Board’s view, this does not reflect the underlying returns of the Group’s business as it includes a deduction of £19.3 million for the fall in the valuation of the portfolio over the year which is shown in the NAV of the Group.

Dividend

The Board intends to maintain its prudently progressive dividend policy for the foreseeable future reflecting the growing realised profits of the business. Accordingly, the Board increased the interim dividend paid on 24 November 2011 by 14.3% to 1.6p per share (November 2010: 1.4p per share) and will pay a second interim dividend, also increased by 14.3%, of 2.4p per share (May 2011: 2.1p), payable on 23 May 2012 to shareholders on the register at the close of business on 27 April 2012. No PID is included in this second interim dividend payment. The total dividend relating to the year ending 31 December 2011 will therefore be 4.0p per share (2010: 3.5p per share).

The Spencer acquisition

The most significant transaction during the year was the £150 million acquisition of property assets from the Spencer Group of Companies announced on 22 December 2011. This acquisition was made jointly with the Hansteen Property Unit Trust ("HPUT”), in which Hansteen has a 33% interest. One of the great benefits of being in a position to acquire property in a downturn is the chance to buy assets which would not be available at any other stage of the cycle. This was the case with the Spencer portfolio which had been carefully assembled by the previous owners over 35 years and represents one of the best secondary multi-let industrial portfolios in the UK. Were it not for the combination of high gearing, much of which had been put in place towards the top of the cycle, and a dramatic drop in values since then, this portfolio would not have been available. Furthermore it was the combination of Hansteen’s available capital and a strong relationship with both Lloyds Banking Group and Royal Bank of Scotland that enabled the transaction to happen.

The Spencer portfolio comprises 88 assets totalling 381,000 sq m of predominately industrial property and 37 acres of development land located across the UK. The properties are particularly suitable for Hansteen’s intensive management approach. The portfolio was acquired with a high initial yield together with substantial vacancies and development land which should provide opportunities to create significant added value using our expanded UK management team. The properties purchased by the HPUT mean that the Fund is now fully invested and our investment in the HPUT should materially add to Hansteen’s earnings and future growth potential.

4

CHAIRMAN’S STATEMENT continuedGroup funding

As stated above, the Board set as an objective a strong and secure financial base for the Group. As a result, in May 2011, Hansteen announced the successful raising of £146.5 million, net of expenses, in new equity at a very small discount to the Group’s NAV and the share price at the time. The new capital was raised to pursue our second objective of opportunistic property acquisitions arising from the considerable distress in the UK and Continental European property markets. Generally, property investors with the knowledge, experience, skill and capital to take advantage of distressed property opportunities toward the bottom of the property cycle have made superior returns from those investments in the long term.

In addition, during the year the HPUT arranged new acquisition facilities, with Royal Bank of Scotland, totalling £85.0 million secured against the existing HPUT portfolio and the Spencer properties that it acquired in December 2011. On its own balance sheet, Hansteen raised a loan of £41.3 million from Lloyds Banking Group to acquire the balance of the Spencer properties.

Furthermore, the Group concluded twenty sales of its own investment and trading properties, with total proceeds of £24.4 million which showed a profit of £2.7 million over book value. The net result of this activity is that, notwithstanding the substantial Spencer acquisition during the year, the Group had, at the year end, cash on its balance sheet of £162.5 million. Assuming gearing of 50% loan-to-value and the retention of appropriate working capital, this creates potential firepower of up to £300 million for further acquisitions. The Spencer transaction has cemented Hansteen’s reputation with the banks for dealing with complex and challenging purchases in a reliable and professional manner. This reputation, together with Hansteen’s financial strengths, has and is continuing to produce a number of interesting potential property opportunities for the Group to explore.

Property portfolio

2011 was a successful year in terms of growing occupancy and rental income. The Group started the year with £744.6 million of wholly owned property, with a combined rent roll of £59.6 million, with 22% vacancy (408,563 sq m) and 262 hectares of development land. At the year-end the portfolio had a value of £792.1 million, a rent roll of £66.1 million and 19.4% vacancy (398,621 sq m). The year-end figures include the Spencer properties which were 40% vacant. The rent roll reflects a current yield of 8.4% (2010: 8.0%) compared to the Group’s average cost of borrowing of 3.6%. There is a further £3.5 million of rent contracted but not yet being received.

Were all the wholly owned vacant property to be let at current market rents, the rental income would be £85 million reflecting a yield of 10.7%. Like-for-like occupancy improved by 5.4% of the portfolio or 24.5% of the vacant properties and like-for-like rents increased by 2%.

At the beginning of the year the HPUT property portfolio was valued at £84.04 million with income of £6.76 million per annum and a vacancy of 32% (71,481 sq m). By the year end the HPUT was valued at £168.76 million with income of £13.2 million per annum and a vacancy of 23.48% (83,261 sq m) a like-for-like occupancy improvement of 7% of the portfolio or 21.9% of the vacants.

Despite the strengthening occupancy and increased rental income the valuation of the property portfolio fell by £19.3 million in the year to 31 December 2011, mainly as a result of falling values in Belgium and the Netherlands. We have strengthened our teams in these two countries and believe that this will result in improvements going forward.

Finance and Hedging

Net debt to property value, at 31 December 2011, was 39% (2010: 53%). Hansteen currently has £470 million of borrowings of which £273 million is swapped at an average rate of 2.6% and £107 million is capped at an average rate of 5.4%. The average borrowing rate at 31 December 2011 was 3.56%. Borrowings are in the same currency as the assets secured.

4

5

CHAIRMAN’S STATEMENT continuedFinance and Hedging continued

Hansteen reports its results in Sterling although, at present, of the total net assets of £509 million approximately 47% are denominated in Euros. To mitigate the risk of a substantial fall in the Sterling value of the portfolio arising from devaluation of the Euro Hansteen has hedged €200 million at a level of €1.2 to the pound until June 2013. The Board will continue to review the Sterling/Euro balance of net assets and consider appropriate hedging strategies.

The Group manages its Euro revenues to ensure that it always has adequate Sterling resources to meet dividends.

Governance Overview

Details of how the Company has implemented the UK Corporate Governance Code are provided in the Corporate Governance Report.

As stated in our 2010 Annual Report, the Executive Director and senior management remuneration framework was reviewed this year in consultation with our major shareholders. Details of the review are contained in the Remuneration Report.

Outlook

The Board believes that realising and distributing profits, as well as building a portfolio that will show capital growth as the property market recovers, are key to creating long-term shareholder value. The Group’s property portfolio produces a high and growing income which we believe is robust, due to the diversity, both geographic and numerical, of the tenant base. Vacant property and the undeveloped land in the portfolio provide real opportunities for value growth even in the current difficult market. The Group has significant resources available and a strong and experienced management infrastructure in place. This together with a growing reputation for professionalism and performance with the major European banks will provide further excellent acquisition opportunities in the future.

James HambroChairman27 March 2012

5

6

JOINT CHIEF EXECUTIVES’ REVIEW continued

INTRODUCTION

Our aim at Hansteen is to generate high and growing total returns to shareholders whilst maintaining a robust balance sheet. Our strategy is to buy property at a low point (in terms of occupancy, value and management), intensively manage the property to improve income and value, then when the time is right, realise that added value.

Market background

The investment market for property is cyclical but the timing and depth of the cycles are unpredictable. Our current working assumption is that the sector could be in the doldrums for the period from 2008 to 2013, then in a slow recovery phase between 2013 and 2018, and eventually reaching new highs between 2018 and 2023. We believe that our business model, which aims to generate high realised income profit irrespective of movements in market rents and yields, is the ideal one for this environment.

The likelihood is that the next five or six years will be a period for acquiring and intensively managing. Whilst there will be selective sales there are unlikely to be large scale realisations. Most likely, the bulk of the returns to our shareholders will be from a growing income and dividends. Later in the cycle capital returns will become more significant.

Business approach

The business is based on two key strengths:

an entrepreneurial and opportunistic approach to buying and selling property, funding and deal structuring; and

an efficient, extremely focussed professional management and marketing platform.

Acquiring property well is key to our success. Properties acquired which are multi-unit with a high initial vacant proportion have performed best for Hansteen. Selling in today’s market is difficult but is still important. We will however, only consider selling property under certain circumstances; if the business plan for the property has been implemented, where the maximum added value has been achieved and we can crystallise a profit reusing the capital elsewhere, or where the property was vacant and the occupier demand is to buy as opposed to rent.

We are building our own in-house marketing teams which are highly motivated to let or sell properties and have the skills and support to meet occupier requirements. We operate a detailed and effective property management approach which enables us to quickly absorb new acquisitions and manage them effectively.

Overview of performance and KPIs

Since the end of 2007, property values have been volatile and limited liquidity has meant the valuation process has been particularly difficult and subjective. This is especially true in relation to the opportunistic type of property purchases in which the Group specialises. It is for this reason that over the last few years the Board has sought to emphasise realised returns as the most important measure of the performance of the Group. We have particularly focused on what we have called 'normalised profit', effectively, income less costs, the traditional measure of profit. However, as the business has grown over the last few years we have carried out an increasing number of sales of investment properties. Although these sales have generated realised profits and, we believe, are likely to be a regular, if fluctuating, feature of our business, they were not included in our definition of normalised profits. Furthermore, the nature of our business lends itself to occasional ‘exceptional’ profits such as the Bremen insurance receipt, which are realised and included within our definition of normalised profit. Going forward therefore we intend to slightly amend the definition of normalised profit to also include profits and losses on property sales and any “exceptional profits”. The constituent parts will be separately identified and we will then use the Normalised Total Profit as a Key Performance Indicator.

6

7

JOINT CHIEF EXECUTIVES’ REVIEW continued

We set out below a re-configuration of the income statement to clearly identify Normalised Income Profit, (generated mainly from rental income and fee income), profit from the sale of properties and one-off gains and losses. The table below shows strong Normalised Total Profit over the last two years and steady growth of the Normalised Income Profit.

Other Key Performance Indicators are dividends, which, as noted below, have increased, and property values for which we set out below the Net Asset Value (“NAV”) indicators.

2011 2010£’000s £’000s

Rental income 61,715 52,583Cost of sales (11,895) (10,927)Management fees 1,436 1,161Share of associates 955 (132)Overheads (11,483) (9,564)Net interest payable (14,981) (12,882)

Normalised Income Profit 25,747 20,239

Profit on sales of investment and trading properties 3,089 6,231

Other operating income 5,337 -

Normalised Total Profit 34,173 26,470

Dividends payable relating to the year 25,553 15,878

The table below sets out total Property Assets (including 100% of the HPUT), Net Assets of the Group and EPRA NAV per share.

2011 2010£’000s £’000s

Property assets (including HPUT) 960,830 828,676Net assets of the Group 509,404 380,223EPRA NAV (2010 restated) 82p 84pDividends payable per share 4.0p 3.5p

7

8

JOINT CHIEF EXECUTIVES’ REVIEWSince flotation we have seen substantial growth in the business, in the Normalised Total Profits and in the dividends. The EPRA NAV has been disappointing so far, having fallen by 18p per share (IPO: 100p), matched by dividends paid to date of 18p per share. Throughout, we have maintained a strong balance sheet. We have assembled an excellent management team and portfolio of properties, which will enable us to continue to grow and benefit from value improvement when the market recovers.

The economic backdrop during this period has been extraordinarily hostile. Of 58 Real Estate IPOs on the London market in 2005 and 2006 only about 36 are still listed today with many having delisted after losing substantially all of their value and those 36 still listed have lost on average around 70% of their shareholders’ equity.The quoted and un-quoted industrial real estate investors in the UK of any size in existence in 2005 have largely met a similar fate. We believe that our outperformance is a testament to the strength of our business model.

2011 REPORT

At 31 December 2011, Hansteen's total portfolio, both owned and under management, including the properties owned by the HPUT, comprised 2.4 million sq m), with 20% vacant and had a rent roll of £79.3 million per annum and a value of £960.8 million. The yield on the portfolio is 8.3%, generated from 277 estates, with 2,500 tenants in five different countries, the analysis of which is set out in the table below:

Hansteen Property Portfolio: Summary as at 31 December 2011

  Number of

Built area Vacant area

Passing rent Value Yield

properties sq m   Euros Sterling Euros Sterling    €m £m €m £m  

UK 88 267,894 38.26% 10.74 8.99 154.80 129.54 6.94%

Germany 84 1,313,492 12.88% 53.95 45.15 597.87 500.31 9.02%

Netherlands, Belgium & France

48 471,511 26.93% 14.34 12.00 193.85 162.22 7.39%

Total wholly owned 220 2,052,897 19.42% 79.03 66.14 946.52 792.07 8.35%

HPUT * 57 354,533 23.48% 15.77 13.20 201.67 168.76 7.82%

Total under management 277 2,407,431 20.02% 94.80 79.34 1,148.1

9 960.83 8.26%

HPUT figures represent 100%

9Hansteen Holdings PLC - Report & Accounts 2011

JOINT CHIEF EXECUTIVES’ REVIEW continuedIn 2011, the portfolio has grown by 17% to 2.4 million sq m (2010: 2.1 million sq m), the rent roll has increased by 20% to £79.3 million per annum (2010: £66.3 million), the value grown by 16% to £960.8 million (2010: £828.7 million), the yield has risen from 8.0% to 8.3% and vacancy has fallen from 23% to 20%.

On a like-for-like basis, allowing for acquisitions, sales and currency movement the asset management performance of the portfolio has been positive. Net occupancy has improved by 116,000 sq m, 5.6% of the portfolio or 24% of the vacants. This is calculated by taking the vacancies at the start of the year plus purchased vacancy during the year and comparing it with vacancies at the end of the year.

Like-for-like rental improvement has been £1.2 million per annum. The passing rent in 2010 was £66.3 million per annum, the net effect of acquisition and sales was £13.1 million per annum, the loss due to exchange rate movements was £1.3 million per annum and the closing rent was £79.3 million per annum, a net like-for-like improvement of 2%.

The like-for-like movement in the portfolio value has been a reduction of £19 million or 2% of the portfolio, partly offset by the profit from sales of £3.1 million. The loss was largely due to an adverse valuation movement in the Netherlands and Belgium.

In addition to the financial performance during the year, considerable progress has been made on building the teams in each of our three core regions where we now have an in-house marketing and asset management capability. We believe that this will enhance our occupancy performance and generate a better outcome than the traditional out house model used more widely in the sector. These teams also provide the platform on which new additions to the portfolio can quickly be absorbed and marketing improved. We set out below a report on the 2011 performance for each of our core regions.

UK

Including the HPUT properties, on a like-for-like basis net occupancy has improved by 19,162 sq m or 21% of the portfolio although like-for-like rental income decreased by £0.6 million per annum from the passing rent which was £10.0 million in 2010. The net effect of acquisition and sales was £12.7 million per annum and the closing rent was £22.1 million per annum.

The like-for-like movement in the portfolio value has been a gain of £2.0 million or 1.6% of the portfolio in addition to profit from sales of £0.2 million.

At 31 December 2011, the wholly owned UK portfolio had an annual rent of £8.9 million and a value of £129.5 million. This is a yield on the built portfolio of 8.3% with a vacancy rate of 38% by floor area. There are also thirteen development sites totalling 262 hectares valued at £21 million. During 2011, £6.3 million of profitable sales were completed including the disposal of a 2,138 sq m vacant office building in Perth. Since the year end, we have completed the profitable sale of Shipton quarry, our single largest land holding, comprising 182 hectares of quarry and agricultural land, for £6 million.

The HPUT had a very active year. 2010 saw the deployment of most of the £90 million of equity that had been raised and subsequently, in line with the business plan, the first half of 2011 saw the first of two loan facilities from Royal Bank of Scotland being introduced. The second facility was entered into as part of the Spencer acquisition (detailed below) and leaves the HPUT with £76 million of debt at a cost of 3.9% including loan and cap fees.

On 22 December 2011 we announced the acquisition of the entire property assets of The Spencer Group for £150 million. The Spencer Group was a privately owned group of industrial property companies which had been formed in 1974. The portfolio, comprising 88 assets totalling 381,000 sq m of predominantly industrial property throughout England and Wales, had been the subject of a Lloyds Banking Group loan.

Hansteen acquired on its own balance sheet 44 of the Spencer assets which have a current rent roll of £6 million per annum and a vacancy rate of 41.6%, for £75.2 million, including acquisition costs, representing an initial yield of 8% or 8.51% excluding development land. LBG provided a debt facility of £41.3 million to assist in the purchase at an all-in cost post-hedging, of 4.24% per annum. The acquisition required approximately £40 million of Hansteen’s unallocated equity.

9

10Hansteen Holdings PLC - Report & Accounts 2011

JOINT CHIEF EXECUTIVES’ REVIEW continuedUK continued

The HPUT acquired the remaining 44 Spencer assets which have a current rent roll of £6.4 million per annum and a vacancy rate of 17.2%, for £74.8 million, including acquisition costs, representing an initial yield of 8.5% entirely financed by its existing and new debt facilities provided by RBS at an all-in post hedged cost of 3.9%. This transaction means the HPUT is now fully invested.

The trend of making small opportunistic sales continued from 2010 into 2011 and the year saw us make £8.5 million of profitable disposals. Highlights included the disposal of a 9,333 sq m listed industrial building, at Treforest. At Vernon Park, Wolverhampton, a vacant 3,793 sq m unit was sold to an owner occupier and a 5,202 sq m unit was let to a German manufacturer on a 12 year lease without any rent free period, which will commence in mid-2012 on completion of a fit-out refurbishment. In September 2011 a 2,322 sq m unit was let at Saltley Business Park, Birmingham, where an extensive refurbishment programme, centred on security upgrading, has recently been completed. We have now created a sound foundation from which to re-launch the estate.

In October 2011, the HPUT acquired two industrial estates and an office building at Aztec West, Bristol which had been in institutional ownership since its development in the 1980s. It provides a strong income stream together with opportunities to enhance value. Activity during the year means that, at the end of 2011, the HPUT has property assets of £168.8 million. It closed the year with a NAV of £1.087 per unit (£1 par), a rise of 8.17% in the year, and made its first distribution in the fourth quarter of 2011. The HPUT has an initial yield of 7.8% with a void rate of 23% by floor area.

The Group‘s investment in Warner Estates Holdings PLC (“Warner”) has now been written down to nil reflecting the statement by Warner in their recent Interim Management Statement that any position reached in the ongoing negotiations with their lenders will deliver “little or no value to existing shareholders, other than the opportunity to participate in an equity raise were that solution to be feasible and pursued”.

Whilst the commercial environment for 2012 will no doubt be challenging, we are well placed in the UK as a business. We now have an established track record in corporate and asset transactions and have created a portfolio with critical mass and a high income return. This critical mass has allowed us to extend our regional office network which as a platform will allow us to manage our existing assets more efficiently and quickly absorb any new portfolio acquisitions that we conclude in the future.

Benelux and France

On a like-for-like basis net occupancy fell in Benelux and improved in France. The passing rent in 2010 was €16.9 million and closing rent was €14.3 million per annum a net fall of €2.6 million per annum, a decrease of 15.3% on a like-for-like rent roll. The like-for-like movement in the Benelux portfolio value has been a reduction of €31.7 million or 14% of the portfolio.

The Benelux countries have endured a difficult economic environment in the last three years, however as at the year-end our portfolio provides good opportunity for growth. The portfolio has a current yield of 7.4% with approximately 27% vacant. As the market conditions improve we believe that we will see occupancy, the rent roll and values increase.

During 2011, we have restructured and strengthened our local team in Amsterdam. We have also implemented an aggressive direct marketing campaign, generating and taking control of all our property enquiries. This has achieved immediate results with over 33,000 sq m of vacant space let in the last three months of 2011. Although we expect further vacancies we are working on new enquiries which we believe will start to reduce the current vacancy level by the end of 2012.

In France we sold one of our vacant Lyon properties comprising 17,312 sq. m for €3.1 million. In October 2011 we agreed a new 25 year lease at our Bordeaux property with Altus, a Photovoltaic operator, for a 30,000 sq m solar power facility which is now operational. The French portfolio now stands at 61,730 sq m across three properties providing an annual income of €1.6 million.

10

11Hansteen Holdings PLC - Report & Accounts 2011

JOINT CHIEF EXECUTIVES’ REVIEW continuedGermany

Like-for-like performance of our German portfolio during 2011 was excellent with net occupancy improving by 89,345 sq m, 7% of the portfolio or 35% of the vacants.

Like-for-like rental improvement has been equally impressive. The passing rent in 2010 was €48.7 million per annum. The net effect of acquisitions and sales was €0.5 million per annum and the closing rent was €53.9 million per annum, a net improvement of €4.7 million per annum or a 9.7% improvement in the like-for-like rent roll.

The value of the German portfolio increased by €7.2 million or 1.2% of the portfolio in addition to profit from sales of €3.1 million.

Hansteen now has 11 direct marketing and management personnel in Germany as well as a sizeable team of contracted partners who help us manage the business. Management of the HBI portfolio and of the original portfolio is now fully integrated and in future years we will report on Germany as a single entity. However, for the year ended 31 December 2011 the analysis of the two portfolios is set out separately below. During the current year the intention is to rationalise the geographic focus of the asset managers and property managers who will manage the properties on a regional rather than portfolio basis.

Non-HBI Portfolio in Germany

The portfolio started 2011 with a value of €231.6 million, a rent of €19.32 million per annum and vacancy of 17.72% (76,730 sq m). The portfolio ended the year with a value of €259.3 million, a rent roll of €22.19 million per annum and a vacancy of 14.55% (70,001 sq m). On a like-for-like basis the occupancy and the rent roll increased by 14% and £1.2 million per annum respectively.

In September 2011 we acquired a 26,500 sq m multi-let industrial estate and car dealership in Hilden for a total of €14.5 million with a rent roll of €1.7 million per annum a vacancy of 4,190 sq m, and a net initial yield of 11.3%.

Two properties were sold profitably during the year; at Hötensleben, a vacant property of 843 sq m was sold for €375,000 and at Allmersbach, a fully let property of 770 sq m was sold for €300,000. Two further profitable sales were notarised but not completed until the current year. These were Heilbronn, a fully let property with a rent at December 2011of €1.07 million per annum which was sold for €13.4 million and land and buildings at Offenburg, which sold for €2.2 million.

In addition to the successful property sales another particular success was the progress made with the Hanau property which was originally bought at auction from I.K.B Bank in 2008 for just over €5 million. It was valued at December 2010 at €14 million and subsequently valued at the end of 2011for substantially more. The driver for growth has been a succession of refurbishments and redevelopments combined with new lettings. Since the year end we have completed the pre-letting of a derelict building at the front of the site to a neighbouring occupier, Hereaeus, which has committed to a 10 year lease at a rent of circa €900,000 per annum subject to a complete strip-back to the shell and refurbishment of the building.

The HBI portfolio in Germany

The annualised rent for the HBI portfolio in Germany increased from €29.45 million per annum at 31 December 2010 to €31.76 million per annum at the year end. This increase was gained despite selling properties which generated €1.29 million of income in 2011. A further €0.7 million of rent was contracted but due to rent incentives and delayed starts is not yet passing. This income growth can be largely attributed to letting successes in the year which saw 78,426 sq m of net new occupancy delivered across the portfolio. At the year end the vacancy rate had been reduced to 12% from 21% at the start of the year although an element of this improvement relates to short term leases which are expected to fall away in 2012.

11

12Hansteen Holdings PLC - Report & Accounts 2011

JOINT CHIEF EXECUTIVES’ REVIEW continuedThe HBI portfolio in Germany continued

Enquiry levels across most regions of Germany have remained strong throughout 2011 with increasing levels of take-up. Tenants continue to prudently compare the available competition in the market and seek a “value for money” product. The market sentiment amongst tenants remains largely optimistic about future business in Germany with no immediate concerns about a reduction in economic activity. However, this relies heavily on demand for German exports remaining strong and the continuing turmoil in the Eurozone area not deteriorating.

A multi let estate in Glinde was profitably sold in December 2011 for £10.4 million. In the first half of 2011, the Dieselstrasse property was sold to the anchor tenant of the Reinbek estate, Amandus Kahl GmbH, for €2.4 million reflecting the book value of the asset. In Paderborn, a small satellite estate to our main holding was sold profitably to the anchor tenant, Paderstahl Gmbh, for €1.9 million.

We continue to review the assets held within the portfolio and consider profitable sales opportunities where our business plan targets have been achieved.

In May 2011, we received a €14.0 million cash settlement in respect of the outstanding insurance claim at the Bremen. The financial benefit to the Hansteen balance sheet was partly credited in 2010 and the remaining €6.1 million in 2011.

Considerable effort has been made since acquisition of the HBI portfolio to rationalise costs and improve our marketing effectiveness. This is now starting to deliver income benefits across most estates and this, coupled with the strengthening of our team in Germany, provides a solid foundation for further asset management initiatives, which we expect will deliver additional value throughout 2012.

2012 Outlook

In the first three months of 2012 we have concluded three sales in Germany and the UK all at or above the 2011 balance sheet value. As reported more fully in the Finance Review below, we have also agreed an extension of our FGH loan facility in the Netherlands to April 2017.

The industrial property investment market has traditionally been predominately financed by businesses and funds with the use of bank debt. As a result of the financial crisis of the last three or four years the sector has been hit hard and the values have fallen substantially. Restructuring and refinancing in the sector has been very slow and banks have yet to fully crystallise their positions. In many cases they have supported these assets for longer than expected. Despite this, we have succeeded in carrying out a number of substantial acquisitions arising from the distressed market and are aware of a number of further such situations which will have to be resolved in the foreseeable future.

We see the coming year as continuing to be tough in relation to occupancy and property values but believe that we will be one of the few companies in the sector that has the capital and management expertise to acquire and turn around property assets. We therefore believe 2012 will be a year in which we will continue to generate strong and growing income and continue to add assets which will have the capacity to grow as the markets recover.

We are particularly pleased that we now have sufficient critical mass in each of our principal markets to enable us to have a powerful in-house management platform that can cope with growth and we believe, outperform the market.

Morgan Jones and Ian WatsonJoint Chief Executives27 March 2012

12

13

FINANCE REVIEWNet Asset Value

At 31 December 2011, net assets were £509.4 million (2010: £380.2 million); the increase of £129.2 million in the year includes the net proceeds of £146.5 million from the share issue in May 2011. Total comprehensive income for the year increased net assets by a further £2.4 million, after allowing for a £19.3 million deficit on revaluation of investment properties and adverse foreign currency movements on overseas net assets of £6.7 million. Dividends of £19.7 million paid in the year account for the remainder of the movement in net assets.

Following the issue of 185.2 million ordinary shares in May 2011 there are currently 638.8 million ordinary shares in issue and the diluted EPRA NAV basis this is 82p per share (2010: 84p). The comparative per share amounts have been restated to account for the share issue that was undertaken at a small discount.

Gearing

At 31 December 2011 net debt was £306.9 million (2010: £394.2 million), a reduction of £87.3 million. The main reason for the reduction in net debt was the £146.5 million net inflow from the share issue. In addition to which there was £29.8 million from operating profits and £1.4 million of interest received which more than covered the £19.7 million dividends paid during the year. Net inflows from sales of properties amounted to £23.4 million, whilst property acquisitions accounted for an outflow of £97.5 million.

As a result of these movements the net debt to value at 31 December 2011 was reduced to 39% compared with 53% at 31 December 2010.

The reduction in net debt to shareholders equity at 31 December 2011 to 60% compared with 104% at 31 December 2010 is also largely the result of the share issue during the year.

Cash resources at the year-end amount to £162.5 million and there were undrawn committed facilities of £5 million. The covenants on all of the Group’s bank loans currently have significant headroom. The average all-in interest rate for the Group at 31 December 2011 was 3.56%. Analysis of the Group’s bank loan facilities is set out below.

Bank loan facilities

Lender Facility

millions

Amount undrawnmillions

Unexpired term

Years

All-in-interest

rate

Loan to Value

Covenant

Interest cover

covenant

Lloyds Banking Group €150.0 €6.0 2.8 3.44% 75% 1.75:1FGH €109.1 - 1.4 4.32% - 1.55:1UniCredit €238.9 - 3.1 3.18% 95% 1.44:1Fortis €14.6 - 9.1 3.05% - -ING €1.1 - 10.2 2.42% - -Dexia €1.0 - 9.7 2.48% - -Total Euro facilities €514.7 €6.0

Total Euro facilities in GBP £430.7 £5.0

Lloyds Banking Group £41.3 - 4.0 4.24% 70% 1.6:1

Total facilities £472.0 £5.0

In addition to these bank loan facilities, the Group has a €4.1 million finance lease in place to fund a property in Belgium. As at 31 December 2011, the lease has an unexpired term of 14 years and an interest rate implicit in the lease of 4.78%.

13

14

FINANCE REVIEW continuedThe £41.3 million four year facility with Lloyds Banking Group was completed in December 2011 secured on the properties acquired in the Spencer portfolio in the UK. The loan to value covenant is 70% for the first two years, reducing to 65% at the end of the second year and 55.1% at the end of the third year.

At 31 December 2011, the Group’s properties in the Netherlands were financed by a €109.1 million loan from FGH Bank which was originally due to expire in June 2013. However, in February 2012 a loan extension was agreed. In exchange for a reduction in the facility to €94.0 million, the loan term has been extended for a further five years until April 2017. The margin on the extended loan will be 280 basis points with a loan to value covenant of 80% until 1 July 2013 reducing by 2% pa thereafter. The interest cover covenant under the terms of the extended loan facility will be 165%.

The loan to value covenant on the UniCredit loan is currently 95% reducing to 85% from February 2013 and to 75% from February 2014.

All of our debt facilities currently have significant headroom on their loan to value and interest cover covenants

Of the Group’s £467 million bank borrowings, at 31 December 2011, 58% was fixed at an average rate of 2.6% with a further 23% capped at an average of 5.4%. The weighted average debt maturity at 31 December 2011 was 3.0 years and the weighted average maturity of the hedging was 2.6 years. The weighted average debt maturity will extend to 3.7 years after the extended FGH loan facility commences on 1 April 2012.

The Group has maintained its £30 million investment in the HPUT. The HPUT acquired properties to the value of £87 million during the year and achieved its target of being fully invested by the end of its investment period which ended in February 2012. During the year the HPUT entered into a new four year £85 million loan facility which runs to June 2015. As at 31 December 2011 the amount drawn under the facility was £76 million at an all-in rate of 3.9%. The loan to value covenant is 50% and the interest cover covenant is 2:1.

The Board expects that bank debt will become increasingly difficult to secure and has therefore determined that alternative sources of potential debt finance should be investigated during the coming year.

Currency

Hansteen reports its results in Sterling although, at present, approximately 47% (£240.4 million or €287.3 million) of its net assets are denominated in Euros. The Group’s investments in Europe are partly matched with Euro borrowings and to that extent there is a natural currency hedge. In order to mitigate the risk of a substantial fall in the Sterling value of the portfolio arising from devaluation of the Euro, Hansteen purchased currency options in July 2010 to substantially hedge the equity invested in the Eurozone. The hedge, to sell €200 million was effective at €1.42 to £1 over a three year period. In June 2011, Hansteen sold those options and purchased replacement options to sell €200 million at a level of €1.20 to £1. This provides a more effective currency hedge for the next two years. The net cost to the Group of the new hedging arrangements, after selling the old options, was £5.4 million. The Board regularly reviews the Sterling/Euro balance of net assets and considers appropriate hedging strategies.

The Group manages its Euro revenues and cash balances to ensure that it always has adequate Sterling resources to meet dividend payments.

SUMMARY

Hansteen begins 2012 with a strong balance sheet and secure financing at relatively low interest rates, the majority of which is fixed or capped at rates significantly below the running yield on our property portfolio.

Richard LowesFinance Director27 March 2012

14

15

PRINCIPAL RISKS AND UNCERTAINTIESRisk management is an important part of the Group’s system of internal controls. Senior management staff and the Board regularly consider the significant risks, which it believes are facing the Group, identify appropriate controls and if necessary instigate action to improve those controls. There will always be some risk when undertaking property investments but the control process is aimed at mitigating and minimising these risks where possible. The key risks identified by the Board, the steps taken to mitigate them and additional commentary is as follows:

Changes in the general economic environment exposes the Group to a number of risks including falls in the value of its property investments, loss of rental income and increased vacant property costs due to the failure of tenants to renew or extend leases as well as the increased potential for tenants to become bankrupt. The Board believes these risks are reduced due to its policy of assembling a portfolio with a wide spread of different tenancies in terms of actual tenants, industry type and geographical location as well as undertaking thorough due diligence on acquisitions. The level of exposure to individual tenants is regularly monitored to ensure they are within manageable limits. Rent deposits or bank guarantees are requested where appropriate to mitigate against the effect of tenant defaults. Where possible, purchases are achieved at low capital values and with due investigation of tenant finances.

A further significant risk relates to the Group’s treasury operations. Over-borrowing by the Group, insufficient credit facilities, significant interest rate increases or facility covenant breaches could represent a significant risk to the Group. In response to these risks Hansteen maintains a prudent approach to its borrowing levels by seeking to maintain headroom within its debt facilities. The Board actively monitors current debt and equity levels as well as considering the future levels of debt and equity required to sustain the business. Loan covenants are monitored and compliance certificates are prepared on a regular basis. For all money borrowed consideration is given to procuring the appropriate hedging instruments to protect against increases in interest rates.

By investing in property in mainland Europe the Group is exposed to a foreign currency exchange rate risk. In response to this risk the Group’s borrowings are in Euro denominated loan facilities and therefore, to the extent that investments are financed by debt, a self hedging mechanism is in place. In relation to the equity element of the Group’s Euro investments the Board monitors the level of exposure on a regular basis and considers the level and timing of when to take out the appropriate hedging instruments to cover this exposure. There is a risk that one or more of the countries that the Group operates in leaves the Euro which may affect the nature of the Group’s loans and derivatives or introduce new volatility and currency exposures for the Group to manage.

A further risk identified by the Board encompasses environmental risks. In addition to the need to act as a responsible landlord there may, in some circumstances, be occasions when pollution on a site owned by a property investment company becomes its responsibility. Each acquisition undertaken by the Group includes an environmental report from a specialist consultancy. These reports may highlight the need for further investigation and in some cases remediation. The Group’s policy is then to either undertake such investigations or remediation or potentially reject the purchase as no longer viable.

The Board considers the loss of REIT status and payment of additional corporation tax as a risk to the Group. Loss of REIT status and payment of additional corporation tax would arise from a breach of REIT compliance requirements. Breach of certain limits imposed by REIT legislation may be mitigated through regular review of the Group’s actual and forecast performance against REIT regime requirements. Management have sufficient discretion to manage and meet the REIT requirements and apply mitigating actions where required.

15

16

RESPONSIBILITY STATEMENT OF THE DIRECTORS ON THE ANNUAL REPORTThe responsibility statement has been prepared in connection with the Company’s full Annual Report for the year ended 31 December 2011. Certain parts of the Annual Report are not included in this announcement, as described in note 1.

Responsibility statement We confirm that to the best of our knowledge:

the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

the Chairman’s Statement, the Joint Chief Executives’ Review and the Finance Review, which are incorporated into the Directors' Report, include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

By order of the Board

M L JONES I R WATSONDirector Director27 March 2012

16

17

Consolidated income statementfor the year ended 31 December 2011

Note2011

£’0002010

£’000

Revenue 2 63,792 67,827Cost of sales 2 (12,704) (22,011)

Gross profit 2 51,088 45,816

Other operating income 5,337 -Administrative expenses (11,483) (9,564)Negative goodwill recognised on acquisition of subsidiaries - 11,532Costs relating to acquisition of subsidiaries (627) (2,724)Administrative expenses (net) (12,110) (756)Share of results of associates 2,741 588

Operating profit before (losses)/gains on investment properties 47,056 45,648

Profit on sale of investment properties 5 2,722 2,978Fair value (losses)/gains on investment properties 5 (19,324) 1,016

Operating profit 30,454 49,642

Profit on sale of available for sale investment - 1,184Impairment of available for sale investment (2,901) -Changes in fair value of foreign currency derivatives 429 (2,306)Finance income 6 1,391 600Finance costs 6 (16,372) (13,482)Change in fair value of interest rate derivatives 6 (5,156) (293)Foreign exchange gains/(losses) 6 1,044 (2,162)

Profit before tax 8,889 33,183

Tax 7 (1,169) (2,604)

Profit for the year 7,720 30,579

Attributable to:Equity holders of the parent 7,735 30,503Non-controlling interest (15) 76

Profit for the year 7,720 30,579

Earnings per share

Basic 9 1.3p 6.6p

Diluted 9 1.3p 6.6p

All results derive from continuing operations.

18

Consolidated statement of comprehensive incomefor the year ended 31 December 2011

2011£'000

2010£'000

Profit for the year after tax 7,720 30,579

Other comprehensive income/(expense):

Exchange differences arising on translating foreign operations (6,714) (7,991)

Movement in fair value of available for sale investment (1,219) (1,286)

Movement in fair value of available for sale investment recycled to profit or loss on impairment 2,615 -

Movement in fair value of available for sale investment recycled to profit or loss on disposal - (870)

Income tax relating to available for sale investment recycled to profit or loss on disposal - 244

Total other comprehensive expense for the year, net of income tax (5,318) (9,903)

Total comprehensive income for the year 2,402 20,676

Total comprehensive income/(expense) attributable to:

Equity holders of the parent 2,436 20,621Non-controlling interest (34) 55

2,402 20,676

18

19

Consolidated balance sheet31 December 2011

Note2011

£'0002010£'000

Non-current assetsGoodwill 2,188 1,946Property, plant and equipment 226 237Investment property 10 762,143 728,239Investment in associates 11 32,852 30,372Other investments - 1,505Deferred tax assets 13 2,737 1,453Derivative financial instruments 8,221 2,648

808,367 766,400Current assetsInvestment property held for sale 10 12,452 -Trading properties 17,476 16,397Trade and other receivables 21,920 24,110Cash and cash equivalents 162,503 67,442

214,351 107,949Total assets 1,022,718 874,349

Current liabilitiesTrade and other payables (19,826) (16,999)Current tax liabilities (5,733) (2,709)Borrowings 12 (3,287) (2,511)Obligations under finance leases (322) (330)

(29,168) (22,549)Non-current liabilitiesBorrowings 12 (462,733) (455,496)Obligations under finance leases (3,070) (3,304)Derivative financial instruments (9,921) (5,636)Deferred tax liabilities 13 (8,422) (7,141)

(484,146) (471,577)Total liabilities (513,314) (494,126)

Net assets 509,404 380,223

EquityShare capital 14 63,883 45,365Share premium account 112,731 112,731Translation reserve 30,118 36,813Retained earnings 301,854 184,462Equity attributable to equity holders of the parent 508,586 379,371

Non-controlling interest 818 852Total equity 509,404 380,223

Approved by the Board of Directors and authorised for issue on 27 March 2012.

19

20

Consolidated statement of changes in equityfor the year ended 31 December 2011

Sharecapital

£'000

Sharepremium

£'000

Translation

reserves£'000

Merger reserve

£’000

Retainedearnings

£'000Total£'000

Non-controlling

interest£'000

Total£'000

Balance at 1 January 2010 45,365 112,731 44,783 - 176,692 379,571 611 380,182

Dividends - - - - (20,868) (20,868) - (20,868)

Share-based payments - - - - 47 47 - 47

Profit for the year - - - - 30,503 30,503 76 30,579

Other comprehensive expense for the year - - (7,970) - (1,912) (9,882) (21) (9,903

Non-controlling interest acquired in the year - - - - - - 30 30

Capital invested by non-controlling interest - - - - - - 156 156

Balance at 31 December 2010 45,365 112,731 36,813 - 184,462 379,371 852 380,223

Ordinary shares issued at a premium 18,518 - - 131,482 - 150,000 - 150,000

Transfer to retained earnings - - - (131,482) 131,482 - - -

Cost of issue of shares at a premium - - - - (3,528) (3,528) - (3,528)

Dividends - - - - (19,748) (19,748) - (19,748)

Share-based payments - - - - 55 55 - 55

Profit/(loss) for the year - - - - 7,735 7,735 (15) 7,720

Other comprehensive (expense)/income for the year - - (6,695) - 1,396 (5,299) (19) (5,318)

Balance at 31 December 2011 63,883 112,731 30,118 - 301,854 508,586 818 509,404

The merger reserve created in 2011 comprised the share premium on shares issued under the arrangement for the Placing and Open Offer in May 2011. No share premium was recorded in the Company’s financial statements through the operation of the Merger Relief provisions of the Companies Act 2006. The subsequent redemption of these shares gave rise to distributable profits of £131,482,000, which were transferred to retained earnings. Costs of £3,528,000 in relation to this share issue were written off against retained earnings as permitted by the Companies Act 2006.

20

21

Consolidated cash flow statementfor the year ended 31 December 2011

Note2011

£’0002010

£’000

Net cash inflow from operating activities 16 29,836 6,210Investing activitiesInterest received 1,391 600Additions to property, plant and equipment (75) (254)Additions to investment properties (38,652) (67,568)Proceeds on sale of investment properties 23,407 29,487Net cash inflow on acquisition of subsidiaries - 8,692Acquisition of associates - (14,992)Income distributions received from associates 261 -Proceeds from sale of available for sale investment - 7,034Net cash used in investing activities (13,668) (37,001)Financing activitiesDividends paid (19,748) (20,868)Proceeds from issue of shares at a premium net of expenses 146,472 -Repayments of obligations under finance leases (319) (154)New bank loans raised (net of expenses) 47,394 100,694Bank loans repaid (net of expenses) (61,428) (46,175)Additions to derivative financial instruments (6,946) (4,817)Proceeds from sale of derivative financial instruments 1,436 -Settlement of derivative financial instruments (27,301) (30,752)Capital contribution from non-controlling shareholders - 159Net cash generated by/(used in) financing activities 79,560 (1,913)Net increase/(decrease) in cash and cash equivalents 95,728 (32,704)Cash and cash equivalents at beginning of year 67,442 100,970Effect of foreign exchange rates (667) (824)Cash and cash equivalents at end of year 162,503 67,442

21

22

Notes to the financial statementsfor the year ended 31 December 2011

1. General information

Hansteen Holdings PLC is a company which was incorporated in the United Kingdom and registered in England and Wales on 27 October 2005. The Company is required to comply with the provisions of the Companies Act 2006. The address of the registered office is 6th Floor, Clarendon House, 12 Clifford Street, London W1S 2LL.

The Company was listed on AIM on 29 November 2005 and subsequently moved from AIM to the Official List on 6 October 2009.The Group’s principal activities are those of a property group investing mainly in industrial properties in Continental Europe and the United Kingdom.These financial statements are presented in Pounds Sterling because that is the currency of the primary economic environment in which the Company operates. Foreign operations are included in accordance with the policies described below.

Basis of preparation

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2011 or 2010, but is derived from those accounts. Statutory accounts for 2010 have been delivered to the Registrar of Companies and those for 2011 will be delivered following the company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) Companies Act 2006.

The statutory accounts  have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted for use in the European Union and therefore comply with Article 4 of the EU IAS Regulation and with those parts of the Companies Act 2006 that are applicable to companies reporting under IFRS.  The Group has applied all accounting standards and interpretations issued by the International Accounting Standards Board and International Financial Reporting Interpretations Committee as endorsed by the EU relevant to its operations and effective for accounting periods beginning on 1 January 2011. 

Subject to changes of accounting policy noted below, the accounts are prepared on the basis of the accounting policies as set out in the previous annual financial statements.

Standards, amendments and interpretations that became effective and were adopted in 2011 but have no effect on the Group’s operations:

IAS 24 (revised) Related Party DisclosuresIFRIC 14 (amendment) Prepayments of a Minimum Funding Requirement

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

Other Various amendments from the Annual Improvements 2010

23

Notes to the financial statements continuedfor the year ended 31 December 2011

2. Revenue and cost of sales

An analysis of the Group's revenue and cost of sales is as follows:2011

£'0002010£'000

Investment property rental income 61,715 52,583Trading property sales 641 14,083Property management fees 1,436 1,161

Revenue 63,792 67,827

Direct operating expenses relating to investment properties that generated rental income (11,702) (10,927)Direct operating expenses relating to investment properties that did not generate rental income (193) -Direct operating expenses (11,895) (10,927)Cost of sales of trading properties (809) (11,084)

Cost of sales (12,704) (22,011)

Gross profit 51,088 45,816

Total revenue as defined in IAS 18 of £65,183,000 (2010: £68,427,000) includes £1,391,000 (2010: £600,000) interest income.

23

24

Notes to the financial statements continuedfor the year ended 31 December 2011

3. Normalised Income Profit and Normalised Total ProfitNormalised Income Profit and Normalised Total Profit are adjusted measures intended to show the underlying earnings of the Group before fair value movements and other non-recurring or otherwise non-cash one-off items. A reconciliation of the Normalised Income Profit and Normalised Total Profit reconciled to the profit before tax prepared in accordance with IFRS rules is set out below.

Group£'000

Share of associate

£’000

2011

Total£’000

Group£'000

Share of associate

£’000

2010

Total£’000

Investment property rental income 61,715 2,351 64,066 52,583 374 52,957

Direct operating expenses (11,895 (750 (12,645 (10,927 (200 (11,127

Property management fees 1,436 - 1,436 1,161 - 1,161

Administrative expenses (11,483 (525 (12,008 (9,564 (435 (9,999

Net interest (payable)/receivable (14,981 (121 (15,102 (12,882 129 (12,753

Normalised Income Profit 24,792 955 25,747 20,371 (132 20,239

Profit on sale of investment properties 2,722 535 3,257 2,978 254 3,232

(Loss)/profit on sale of trading properties (26 - (26) 3,114 - 3,114Direct costs relating to trading properties (142 - (142 (115 - (115Total profits on sale of investment and trading properties 2,554 535 3,089 5,977 254 6,231

Other operating income 5,337 - 5,337 - - -

Normalised Total Profit 32,683 1,490 34,173 26,348 122 26,470

Negative goodwill recognised on acquisition of subsidiaries - 68 68 11,532 - 11,532Costs relating to acquisition of subsidiaries (627 (201 (828 (2,724 (114 (2,838Fair value (losses)/gains on investment properties (19,324 1,438 (17,886 1,016 580 1,596Profit on sale of available for sale investment - - - 1,184 - 1,184Impairment of available for sale investment (2,901 - (2,901 - -Change in fair values of derivatives (4,727 (52 (4,779 (2,599 - (2,599

Foreign exchange gains/(losses) 1,044 - 1,044 (2,162 - (2,162

Share of associate’s tax charge - (2 (2 - -

Profit before tax 6,148 2,741 8,889 32,595 588 33,183

24

25

Notes to the financial statements continuedfor the year ended 31 December 20114. Operating segments

Segment revenues and results

Information reported to the Group's Directors for the purposes of resource allocation and assessment of segment performance is focused on the Group's level of investment in property assets and the related net rental income according to geographic location. The Group's reportable segments under IFRS 8 are therefore determined by geographic location.

The following is an analysis of the Group's revenue and results by reportable segment:

2011 2010Revenue

£'000Result£'000

Revenue£'000

Result£'000

Belgium 2,177 1,931 2,874 2,608France 1,288 1,197 1,566 1,020Germany 45,145 36,250 34,606 26,495Netherlands 9,947 8,331 10,769 9,686UK 5,235 3,379 18,012 6,007

63,792 51,088 67,827 45,816

Other operating income 5,337 -Administrative expenses* (11,483) (9,564)Negative goodwill recognised on acquisition of subsidiaries - 11,532Costs relating to acquisition of subsidiaries (627) (2,724)Administrative expenses (net) (12,110) (756)Share of results of associate 2,741 588

Operating profit before (losses)/gains on investment properties 47,056 45,648

(Losses)/gains on investment properties by segment:

Belgium (4,420) (2,699)France 78 (642)Germany 6,171 11,316Netherlands (23,186) (9,289)UK 2,033 2,330

Total (losses)/gains on investment properties (19,324) 1,016Profit on disposal of investment properties 2,722 2,978

(16,602) 3,994

Operating profit 30,454 49,642Profit on sale of available for sale investment - 1,184Impairment of available for sale investment (2,901) -Fair value gains/(losses) on foreign currency derivatives 1,344 (2,306)Loss on sale of foreign currency options (915) -Net finance costs* (19,093) (15,337)

Profit before tax 8,889 33,183

* Administrative expenses and net finance costs are substantially managed as central costs and are therefore not allocated to segments.

25

26

Notes to the financial statements continuedfor the year ended 31 December 2011

4. Operating segments continued

Segment assets

2011

Investment properties

£'000

Trading properties

and investment

property held for

sale£'000

Totalproperties

£'000

Otherassets£’000

Totalassets£’000

Additionsto

investmentproperties

£’000

Non-current

assets£’000

Belgium 29,044 - 29,044 3,389 32,433 136 30,944France 13,910 - 13,910 1,473 15,383 - 13,910Germany 487,858 12,452 500,310 25,767 526,077 25,248 488,648Netherlands 119,266 - 119,266 6,390 125,656 320 119,924UK 112,065 17,476 129,541 5,377 134,918 75,799 112,352

Total segment assets 762,143 29,928 792,071 42,396 834,467 101,503 765,778

Unallocated assets 188,251 42,589

Total assets 1,022,718 808,367

2010

Investment properties

£'000

Trading properties

£'000

Totalproperties

£'000

Otherassets£’000

Totalassets£’000

Additionsto

investmentproperties

£’000

Non-currentassets£’000

Belgium 33,936 - 33,936 3,939 37,875 86 35,882France 17,060 - 17,060 642 17,702 - 17,060Germany 491,396 - 491,396 27,689 519,085 293,485 491,787Netherlands 145,882 - 145,882 5,540 151,422 488 146,851UK 39,965 16,397 56,362 3,203 59,565 62,819 39,965

Total segment assets 728,239 16,397 744,636 41,013 785,649 356,878 731,545

Unallocated assets 88,700 34,855

Total assets 874,349 766,400

For the purposes of monitoring segment performance and allocated resources between segments, the Directors monitor the investment and trading properties attributable to each segment. All assets are allocated to reportable segments with the exception of investments in associates and elements of cash, derivatives and tax balances that are managed centrally.

26

27

Notes to the financial statements continuedfor the year ended 31 December 20115. (Losses)/gains on investment properties

2011£’000

2010£’000

(Decrease)/increase in fair value of investment properties (19,324) 1,016Profit on disposal of investment properties 2,722 2,978

(16,602) 3,994

6. Net finance costs2011

£’0002010

£’000

Interest receivable on bank deposits 1,304 501Other interest receivable 87 99

Finance income 1,391 600

Interest payable on bank loans and overdrafts (16,193) (13,281)Interest payable on obligations under finance leases (163) (173)Other interest payable (16) (28)

Finance costs (16,372) (13,482)

Net interest payable (14,981) (12,882)

Decrease in fair value of interest rate swaps and caps (5,156) (293)

Foreign exchange gains/(losses) 1,044 (2,162)

Net finance costs (19,093) (15,337)

7. Tax2011

£’0002010

£’000

UK current taxOn net income of the current year 126 531(Credit)/charge in respect of prior years (35) 95

91 626

Foreign current taxOn net income of the current year 1,249 757(Credit)/charge in respect of prior years (324) 14

925 771

Total current tax 1,016 1,397Deferred tax (see note 13) 153 1,207

Total tax charge 1,169 2,604

UK Corporation tax is calculated at 26.5% (2010: 28%) of the estimated assessable profit for the year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

27

28

Notes to the financial statements continuedfor the year ended 31 December 2011

7. Tax continued

The tax charge for the year can be reconciled to the profit per the income statement as follows:2011

£’0002010

£’000

Profit before tax 8,889 33,183

Tax at the UK corporation tax rate of 26.5% (2010: 28%) 2,356 9,291

Tax effect of :UK tax not payable due to REIT exemption (2,488) (3,006)Foreign exchange differences 126 (73)Deferred tax assets not recognised 3,642 (350)Effect of different tax rates in overseas subsidiaries (1,873) (4,601)Expenses that are not deductible in determining taxable profit (232) 1,223Change in deferred tax due to change in tax rate 62 -Short-term timing differences 6 (62)Adjustment in respect of prior years (430) 182

1,169 2,604

The Group elected to be treated as a UK REIT with effect from 6 October 2009, following admission to the Official List. The UK REIT rules exempt the profits of the Group’s property rental business from UK corporation tax. Gains on UK properties are also exempt from tax, provided they are not held for trading. The Group’s UK activities are otherwise subject to UK corporation tax. To remain a UK REIT there are a number of conditions to be met in respect of the principal company of the Group, the Group’s qualifying activity and its balance of business which are set out in the UK REIT legislation in the Corporation Tax Act 2010.

8. Dividends2011

£’0002010

£’000

Amounts recognised as distributions to equity holders in the period:Dividend for the year ended 31 December 2009 - 14,517Second dividend for the year ended 31 December 2010 of 2.1p (2009: £nil) per

share 9,527 -Interim dividend for the year ended 31 December 2011 of 1.6p (2010: 1.4p) per

share 10,221 6,351

19,748 20,868

As a REIT, the Company is required to pay Property Income Distributions (‘PIDs’) equal to at least 90% of the Group’s exempted net income, after deduction of withholding tax at the basic rate (currently 20%). £8,883,000 of the dividends paid during the year ended 31 December 2011 is attributable to PIDs (2010: £4,082,000), of which £3,258,000 is in respect of the year ended 31 December 2011 and £5,625,000 in respect of the year ended 31 December 2010.

28

29

Notes to the financial statements continuedfor the year ended 31 December 20119. Earnings per share and net asset value per share

The calculations for earnings per share (‘EPS’), based on the weighted average number of shares, are shown in the table below. The European Public Real Estate Association (‘EPRA’) has issued recommended bases for the calculation of certain per share information and these are included in the following tables. Following the Placing and Open Offer in May 2011, where shares were issued at a discount to fair value, the comparative earnings per share and NAV per share calculations have been restated. The restatement has not impacted the balance sheet; since it has not changed from previously reported figures, a balance sheet as at 31 December 2009 has not been presented.

2011 2010

Earnings£’000

Weightedaverage

number ofshares000

Earnings per

sharepence

Earnings£’000

Weightedaverage

number ofshares000

Earnings per

sharepence*

Basic EPS 7,735 575,932 1 30,503 459,466 6.6Dilutive share options - - -Diluted EPS 7,735 576,087 1 30,503 459,536 6.6

Adjustments:Revaluation losses/(gains) on investment properties 19,324 (1,016)Profit on the sale of investment properties (2,722) (2,978)Loss/(profit) on sale of trading properties 26 (3,114)Negative goodwill recognised on acquisition of subsidiaries (11,532Cost of acquiring subsidiaries 2,266Change in fair value of financial instruments 4,727 2,599Adjustment in respect of associates

(1,786) (834)

Deferred tax on the above items 548 1,745Diluted EPRA EPS 28,479 4.9 17,639 3.8

The calculations for net asset value (‘NAV’) per share are shown in the table below:2011 2010

Equityshareholders’

funds £’000

Numberof

shares000’s

Net assetvalue

per sharepence

Equityshareholders’

funds £’000

Numberof

shares000’s*

Net assetvalue

per sharepence*

Basic NAV 508,586 638,833 80 379,371 459,466 83Unexercised share options 563 850 n/a 570 850 n/aDiluted NAV 509,149 639,683 80 379,941 460,316 83

Adjustments:Goodwill (2,188) (1,946)Fair value of interest rate derivatives 9,880 5,328Deferred tax 5,627 5,328Diluted EPRA NAV 522,468 82 388,651 84

*As restated

29

30

Notes to the financial statements continuedfor the year ended 31 December 201110. Investment property

2011£’000

2010£’000

At 1 January 728,239 417,974

Additions – direct property purchases 25,364 352,130 – properties acquired through business

combinations 62,840 - – capital expenditure 13,935 4,748

Revaluations included in income statement (19,324) 1,016

Disposals (20,685) (26,888)

Transfer to investment property held for sale (12,452) -

Exchange adjustment (15,774) (20,741)

At 31 December 762,143 728,239

Investment property held for sale:2011

£’0002010

£’000

At 1 January - -

Transfer from investment property 12,452 -

At 31 December 12,452 -

Included within the property valuation is £1,637,000 (2010: £1,000,000) in respect of tenant lease incentives granted.

Investment property includes £3,452,000 (2010: £4,645,000) property held under finance leases.

All investment properties are stated at market value as at 31 December and have been valued by independent professionally qualified external valuers, Jones Lang LaSalle or Knight Frank LLP. The valuations have been prepared in accordance with the Valuation Standards (7th Edition) published by The Royal Institution of Chartered Surveyors and with IVA1 of the International Valuation Standards.

The valuations are based on a number of assumptions, the significant ones of which are the appropriate discount rates, estimates of future rental income and capital expenditure. Rental income and yield assumptions are supported by market evidence where relevant.

The Group has pledged certain of its investment properties to secure bank loan facilities and a finance lease granted to the Group (see note 12).

As at 31 December 2011, the Group had entered into a contract for £6,628,000 building works to take place in Germany in 2012. At 31 December 2011 these works had not yet commenced.

30

31

Notes to the financial statements continuedfor the year ended 31 December 2011

11. Investment in associates

Total£'000

Cost and net book value:

Balance at 1 January 2011 30,372

Share of profit after tax for the year 2,741

Less income distributions payable for the year (261)

At 31 December 2011 32,852

Details of all of the Group’s interests in associates at 31 December 2011 are as follows:

Placeof

establishment

Proportionof

ownershipinterest

%

Proportionof

voting powerheld

%

Hansteen UK Industrial Property Unit Trust Jersey 33.3 30

Hansteen UK Industrial Property Unit Trust is involved in property management. The interest in Hansteen UK Industrial Property Unit Trust is held indirectly via Hansteen LP Limited. The interest in Hansteen UK Industrial Property Unit Trust is stated at cost adjusted for movement in the Group’s share of net assets post acquisition.

Aggregated amounts relating to associates

2011£'000

Total assets 182,397Total liabilities (83,843)

2011£’000

Revenues 7,053Profit 8,225

31

32

Notes to the financial statements continuedfor the year ended 31 December 2011

12. Borrowings

2011£'000

2010£'000

Secured at amortised costBank loans 466,978 458,360Unamortised borrowing costs (958) (353)

466,020 458,007

Total borrowingsAmount due for settlement within 12 months 3,287 2,511Amount due for settlement after 12 months 462,733 455,496

Bank loans 466,020 458,007

On 25 July 2006 Hansteen Holdings PLC and certain of its subsidiary undertakings entered into a five year €230,000,000 revolving bank loan facility with an expiry date of 25 July 2011. On 29 May 2008, following the re-financing of the Dutch portfolio of investment properties, this facility was reduced to €200,000,000. On 30 October 2009, the facility was extended and reduced to €150,000,000. The revised facility has an expiry date of 30 October 2014 and has a loan to value covenant of 75% and an income cover covenant of 175%. The loan is secured on the shares of the borrowing subsidiaries and their investment properties and is guaranteed by Hansteen Holdings PLC and the borrowing subsidiaries. Interest on the amounts drawn under the original loan facility was charged at EURIBOR plus 0.80%. Following renegotiation of the facility, interest on amounts drawn down from 30 October 2009 is charged at EURIBOR plus 1.75%. Interest of 1.00% (previously 0.30%) is charged on undrawn amounts. The Group has drawn down €144,000,000 under this facility at 31 December 2011 (2010: €139,000,000).

On 25 May 2008 Hansteen Netherlands B.V. and Hansteen Ormix B.V., both Dutch subsidiaries, entered into a five year €130,000,000 bank loan facility with an expiry date of 1 June 2013. The €130,000,000 drawn down under the facility was used to repay existing borrowings of the Dutch subsidiaries. The loan is secured on the properties of Hansteen Netherlands B.V. and Hansteen Ormix B.V. The net sales proceeds arising from sales of investment properties are required to be used to reduce the bank loan unless re-invested in investment properties. Interest on the amounts drawn under the loan facility is charged at EURIBOR plus 1.55%. There is no loan to value covenant on this loan and the interest cover covenant is 155%. At 31 December 2011 the Group has drawn down €109,000,000 under this facility (2010: €117,000,000) and no further amounts can be drawn.

On 8 April 2010, as part of the acquisition of the HBI portfolio, the Group became party to a €300,000,000 loan facility. Immediately after acquisition, the Group repaid €40,000,000, reducing the facility to €260,000,000. The facility has an expiry date of 20 February 2015. The loan is secured on the shares of the borrowing subsidiaries and their investment properties and is guaranteed by Hansteen Holdings PLC and the borrowing subsidiaries. Interest on the amounts drawn under the loan facility is charged at EURIBOR plus 1.10%. The Group has drawn down €238,860,000 under this facility at 31 December 2011 (2010: €260,000,000). The 5 year loan did not have any loan to value covenants for the first year, but has a loan to value covenant of 95% in years two and three, 85% in year four and 75% in year five. The interest cover covenant was set at 132% in year one, 144% in year two and 155% thereafter.

On 21 December 2011, in conjunction with the acquisition of the Spencer portfolio, the Group entered into a £41,321,000 loan agreement with Lloyds TSB Banking Group plc. The facility has an expiry date of 20 December 2015. The loan is secured on the shares of the borrowing subsidiaries and their investment properties and is guaranteed by Hansteen Holdings PLC and the borrowing subsidiaries. Interest on the amounts drawn under the loan facility is charged at LIBOR plus 3.0%. The Group has drawn down £41,321,000 under this facility at 31 December 2011 (2010: £nil). The loan to value covenant is 70% for the first two years, reducing to 65% at the end of year two and further reducing to 50% at the end of year three. The interest cover covenant is 160%.

The Belgian subsidiaries have a number of facilities secured on the Belgian investment properties with expiry dates ranging from 13 August 2018 to 31 March 2026 and interest charged at EURIBOR plus 0.75% to 2.25%. The aggregate amount outstanding at 31 December 2011 in respect of these bank loans is €16,679,000 (2010: €18,907,000).

32

33

Notes to the financial statements continuedfor the year ended 31 December 2011Security for secured borrowings at 31 December 2011 is provided by charges on property with an aggregate carrying value of £718,000,000 (2010: £670,000,000).

12. Borrowings continued

The Directors estimate that the book value of the Group’s bank loans approximates to their fair value.

2011£'000

2010£'000

MaturityThe bank loans are repayable as follows:Within one year or on demand 3,588 2,743Between one and two years 94,286 2,632In the third to fifth years inclusive 360,788 443,245Over five years 8,316 9,740

466,978 458,360

Undrawn committed facilitiesExpiring after more than two years 5,021 9,426

%2011

£’000 %2010

£’000

Interest rate and currency profileEuros 3.46 425,657 3.28 458,360Sterling 3.82 41,321 - -

3.50 466,978 3.28 458,360

A number of interest rate caps and swaps have been entered into in respect of the amounts drawn under the loan facilities at 31 December 2011 to hedge Euro borrowings at an average rate of 3.39% (2010: 3.60%). At 31 December 2011, the Sterling borrowings were not hedged.

13. Deferred tax

Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

2011£'000

2010£'000

Deferred tax assets 2,737 1,453Deferred tax liabilities (8,422) (7,141)

(5,685) (5,688)

33

34

Notes to the financial statements continuedfor the year ended 31 December 2011

13. Deferred tax continued

The following are the major deferred tax liabilities and assets recognised and movements thereon during the reporting period.

Revaluation

of investm

entpropert

ies£’000

Depreciation ofinvestmentproperties

£’000

Currency

contrac

ts and interest rate derivatives£’000

Losses£’000

Short-term

timingdifferen

ces£’000

Total£’000

At 1 January 2011 6,366 (14,913) 1,460

1,899 (500) (5,688)

Credit/(charge) to income 4,593 (5,864) 722 979 (584) (154)Exchange differences (241) 557 (43) (124) 8 157

At 31 December 2011 10,718 (20,220) 2,139

2,754 (1,076) (5,685)

At 31 December 2011 the Group has unutilised tax losses amounting to £88,881,000 (2010: £49,987,000) available for offset against future profits. A deferred tax asset has been recognised in respect of £9,769,000 (2010: £7,508,000) of such losses. No deferred tax asset has been recognised in respect of the remaining £79,112,000 (2010: £42,479,000) due to the unpredictability of future profit streams.

Unutilised losses carried forward at 31 December for which no deferred tax asset has been recognised can be summarised as follows:

2011£’000

2010£’000

Expiring in 2016 93 93Expiring in 2017 6,1

716,171

Expiring in 2018 2,742

2,742

Expiring in 2019 3,975

3,975

Expiring in 2020 17,65

-

34

35

Notes to the financial statements continuedfor the year ended 31 December 2011

6Carried forward without restriction 48,

475

29,498

Total 79,112

42,479

The UK Government has announced that UK corporation tax rates will fall over the period to 1 April 2014 from the current rate of 26.0% to 22.0%. The impact of the proposed rate change is not material to the Group.

14. Share capital

2011£’000

2010£’000

Issued and fully paid638,833,250 (2010: 453,648,064) ordinary shares of 10p each 63,883 45,365

On 9 May 2011 pursuant to a Placing and Open Offer the Company raised gross proceeds of £150,000,000 (£146,472,000 net of expenses) through the issue of 185,185,186 new ordinary shares at a price of 81p per new ordinary share. As a result the Company’s issued share capital was increased from 453,648,064 ordinary shares to 638,833,250 ordinary shares.

The share capital comprises one class of ordinary shares carrying no right to fixed income. There are no specific restrictions on the size of a shareholding or the transfer of shares, except for UK REIT restrictions.

15. Acquisition of subsidiaries

On 21 December 2011, for a net receipt of £82,000, which had not been received as at 31 December 2011, the Company acquired 100% of the issued share capital of Omega Business Park Limited, Spencer Industrial Estates Limited, Spencer Office Parks Limited and Spencer Trade Counters Limited (the ‘Spencer Group’). All four companies are incorporated in the United Kingdom and are engaged in property investment and management in the United Kingdom. On the same date, the four companies were renamed Hansteen OBP Limited, Hansteen SPI Limited, Hansteen SPO Limited and Hansteen STC Limited, respectively. This transaction has been accounted for in accordance with IFRS 3 (2008) and a summary of the assets and liabilities acquired is as follows:

Provisional fair value£’000

Net assets acquired:Investment properties 62,840Trade and other receivables 3,357Trade and other payables (6,544)Current tax payable (1,257)Bank loans (31,618)Derivative financial instruments (27,147)

(369)

35

36

Notes to the financial statements continuedfor the year ended 31 December 2011

Total consideration (82)

Satisfied by:Cash (82)

Goodwill 287

Net cash inflow arising on acquisitionCash consideration (82)

The net liabilities acquired exceed the consideration by £287,000. Under IFRS 3 (2008) this is considered to be positive goodwill arising on acquisition and is carried forward on the balance sheet. It is not deductible for tax purposes. Gross trade receivables acquired amount to £1,723,000, of which £1,525,000 is considered to be recoverable.

Costs directly attributable to the acquisition of £627,000 have been expensed and are included within administrative expenses in the income statement in accordance with IFRS 3 (2008).

Immediately after acquisition, the Group injected an amount of £32,386,000, by way of intercompany loans, and entered into a new £41,321,000 bank loan facility arrangement with Lloyds Banking Group. On the same date, the Group repaid all of the acquired bank loans and paid £27,147,000 to cancel the two acquired interest rate swaps.

The Spencer Group contributed £169,000 revenue and £78,000 to the Group’s profit before tax for the period between the date of acquisition and the balance sheet date.

15. Acquisition of subsidiaries continued

If the acquisition of the subsidiaries had been completed on the first day of the financial year, Group revenues for the year would have been £70,103,000. A valuation of the properties acquired was not performed as at 31 December 2010, and therefore it is not possible to reliably determine the impact revaluation movements during the year would have had on the Group’s profit before tax if the acquisition had been completed on 1 January 2011.

16. Notes to the cash flow statement

2011£’000

2010£’000

Profit for the year 7,720 30,579Adjustments for:Share-based employee remuneration 55 47Depreciation of property, plant and equipment 86 72Impairment of goodwill - 58Negative goodwill recognised on acquisition of subsidiaries - (11,532Share of profits of associate (2,741) (588Losses/(gains) on investment properties 16,602 (3,994Gain on sale of available for sale investment - (1,184Impairment of available for sale investment 2,901Fair value (gains)/losses on currency derivatives (429) 2,306Net finance costs 19,173 14,796Tax charge 1,169 2,604

Operating cash inflows before movements in working capital 44,536 33,164

Increase in trading properties (1,079) (13,401Increase/(decrease) in receivables 8,823 760

36

37

Notes to the financial statements continuedfor the year ended 31 December 2011(Decrease)/increase in payables (4,448) 2,115

Cash generated from operations 47,832 22,638

Income taxes paid (2,014) (3,383Interest paid (15,982) (13,045

Net cash inflow from operating activities 29,836 6,210

37

38

Notes to the financial statements continuedfor the year ended 31 December 2011

17. Related party transactions

Trading transactions

During the year, Group subsidiaries entered into trading transactions with related parties who are not members of the Group:

Purchase/(provision) of services

Amounts owed (to)/from related parties

2011£’000

2010£’000

2011£’000

2010£’000

Ormix B.V. 44 48 - (5)Hansteen UK Industrial Property Limited Partnership (1,171) (1,127) 158 342Treforest Unit Trust (100) (2) 30 2Hansteen Industrial Parks Limited - - 44 -

(1,227) (1,081) 232 339

Ormix B.V., a company incorporated in the Netherlands, owns 25% of the issued ordinary shares of Hansteen Ormix B.V. The remaining 75% of the issued ordinary shares of Hansteen Ormix B.V. are owned by Hansteen Netherlands B.V which is a wholly-owned subsidiary undertaking of Hansteen Holdings PLC. Ormix B.V. is therefore considered to be a related party of the Group.

Purchases of services from Ormix B.V. were made at prices comparable with those paid by the Group for similar services from unrelated parties. At 31 December 2011 the amounts outstanding in respect of these trading transactions was £nil (2010: £5,000).

Hansteen UK Industrial Property Limited Partnership, a UK limited partnership under the Limited Partnership Act 1907, is a subsidiary of Hansteen UK Industrial Property Unit Trust. Hansteen UK Industrial Property Unit Trust is an associate of Hansteen LP Limited, a wholly-owned subsidiary of Hansteen Holdings PLC. Hansteen UK Industrial Property Limited Partnership is therefore considered to be a related party of the Group.

Provision of services to Hansteen UK Industrial Property Limited Partnership were made at prices comparable to those that would be charged for similar services provided to unrelated parties. At 31 December 2011, the amount due in respect of these trading transactions was £361,000 (2010: £342,000). In addition, amounts of £203,000 (2010: £nil) are owing to Hansteen UK Industrial Property Limited Partnership by the Group.

Treforest Unit Trust, a unit trust established in Jersey, is a subsidiary of Hansteen UK Industrial Property Limited Partnership and is therefore considered to be a related party of the Group.

Provision of services to Treforest Unit Trust were made at prices comparable to those that would be charged for similar services provided to unrelated parties. At 31 December 2011, the amount due in respect of these trading transactions was £30,000 (2010: £2,000).

Hansteen Industrial Parks Limited is also a subsidiary of Hansteen UK Industrial Property Limited and therefore considered to be a related party of the Group. At 31 December 2011, amounts owing to the Group were £44,000 (2010: £nil).

38

39

Notes to the financial statements continuedfor the year ended 31 December 2011

17.Related party transactions continued

Remuneration of key management personnel

The aggregate remuneration of the Directors, who are the key management personnel of the Group, is set out below, as required by IAS 24 ‘Related Party Disclosures’. Further information about the remuneration of individual Directors is provided in the audited part of the Remuneration Report in the Annual Report and Accounts.

2011£’000

2010£’000

Short-term employee benefits 1,522 1,438Post-employment benefits 110 99

1,632 1,537

18. Going concern

The Group’s business activities, together with the factors likely to affect its future development, performance and position as well as the financial position of the Group, its cash flows, liquidity position and the borrowing facilities are described in the Joint Chief Executives’ Review and the Finance Review.

The Group has a good debt maturity profile with long-term funding in place. The current economic conditions have created uncertainty as to the principal risks and uncertainties facing the Group as noted above. In light of these risks the Group has considered its forecast cash flows and forecast covenant compliance taking into account:

the impact on the various loan covenants of further reductions in the property valuations, decline in rental income and increase in interest rates; and

the potential impacts of the current economic uncertainty over the Group’s operating cash flow generation, including tenancy failures and increased vacancies.

These forecasts show that the Group has sufficient headroom and available finance to manage its business risks successfully despite the current uncertain economic outlook. Based on this assessment, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis in preparing the Annual Report and Accounts.

19. Events after the balance sheet date

A second dividend for the year ended 31 December 2011 of 2.4p per share will be payable on 23 May 2012 to shareholders on the register on 27 April 2012.

Subsequent to year end, the FGH bank loan facility was reduced to €94,000,000 and extended, and will expire on 1 April 2017.

The UK Government has announced that UK corporation tax rates will fall over the period to 1 April 2014 from the current rate of 26.0% to 22.0%. The impact of the proposed rate change is not material to the Group.

39