141106 CN Q3 Polis Immobilien stays on the growth track Corporate News

POLIS Immobilien stays on the growth track

- Rental income climbs 8 percent to EUR 13.80 million in first nine months
- Funds from operations up by 86 percent to EUR 5.25 million
- Occupancy rate improves by one percentage point to 93 percent
- Guidance for 2014 confirmed

Berlin, 6 November 2014 -POLIS Immobilien AG [ISIN: DE0006913304] stays on the growth track. In the first nine months of the year, rental income was up by 8 percent on the prior year period to EUR 13.80 million. As this positive trend continues in the final quarter, the company, which specialises in the modernisation and management of office properties, confirms its guidance for the full year. "We will improve the key performance indicators," said POLIS CEO Dr. Alan Cadmus. The planned acquisition of further properties at established locations in major German business centres could

lead to additional growth.
Between January and the end of September, net rental income increased by 11 percent to EUR 10.88 million. The increased rental income is primarily attributable to the good letting performance of the previous years and the property in Berlin's Rankestrasse acquired in 2013.
To streamline the portfolio, two smaller properties in Mainz were sold. The modernisation- related vacancy of the property at Gutleutstraße in Frankfurt is also weighing on the bottom line. After the exit of the sole tenant, the property will be modernised until 2015
and prepared for several tenants. In the year to date, the vacancy has been fully offset by lettings in other investment properties.
The Berlin-based company increased its occupancy rate by one percentage point to 93 percent. The level of take-up rose to 23,800 square metres (previous year: 12,990). The

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company signed new lease agreements for a total of 4,560 square metres in Cologne Dresden and Stuttgart and renewed leases for 19,230 square metres. At roughly 7,650 square metres, the biggest lease was signed for Weyerstraße in Cologne. All existing leases have a remaining duration of 3.9 years, with the average rent amounting to EUR
11.74 per square metre.
Modernisation investments of EUR 2.86 million (previous year: 5.33) and revaluations increased the market value of the investment properties by EUR 2.37 million in the first nine months (previous year: 1.23). Other income improved to EUR 0.89 million (previous year: -0.33) thanks to income from a guarantee payment.
As the company made greater use of bank loans, interest expenses increased by 2 percent to EUR 4.34 million. An extraordinary repayment made as of 30 June 2014 will reduce these expenses for the full year, however. The sharp drop in long-term interest rates led to a non-cash impact of EUR 0.28 million from the valuation of the interest rate hedging instruments, compared to a positive valuation result of EUR 2.18 million in the prior year period. Earnings before taxes rose by 4 percent to EUR 7.04 million, while earnings after taxes improved by 7 percent to EUR 5.93 million.
Funds from operations (FFO), which are adjusted for all extraordinary results, soared by 86 percent to EUR 5.25 million.

Growth plans supported by comfortable capitalisation

An equity ratio of 49 percent reflects the very solid financial situation of POLIS. "This comfortable capitalisation will allow us to continue our growth," said Chief Financial Officer Michael Piontek. In addition, liquid funds of EUR 8.4 million, considerable financing scope and stable operating cash flow form the basis for planned acquisitions in the short term. The supply of suitable properties remains limited, though.

Outlook

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In view of the successful performance in the first nine months of the year, POLIS confirms the guidance for the financial year 2014. Regardless of potential acquisitions and despite the modernisation-related vacancy of the property in Frankfurt, the occupancy rate should pick up moderately towards the end of the year and net rental income should increase. In spite of initial charges resulting from the reconstruction of the Frankfurt property, which relate to construction costs and rental losses, and increased maintenance expenses for individual properties, this improvement will lead to a moderate increase in funds from operations. By contrast, earnings before taxes (EBT) will be down by approx. EUR 2 million on the previous year due to the much lower valuation result from financial derivatives.
The quarterly report is available for downloading on the company's website at www.polisag.de/IR/zwischenberichte.php.

POLIS Immobilien AG, which was founded in Berlin in 1998, is a listed real estate company that buys, refurbishes/revitalises, and manages office properties for its own portfolio. The company focuses on one market segment: office properties in inner-city locations at the most important German office centres. The company acquires properties that are either already renovated and are completely let, thereby generating stable cash flow, or properties that are vacant or require modernisation, and which offer specific value appreciation potential. This potential may be realised by corresponding modernisation measures or full revitalisation. As of September 30 2014, POLIS real estate portfolio comprised a total of 23 properties with a market value of around EUR 311 million. POLIS Immobilien shares are listed on the regulated market (Prime Standard, ISIN: DE0006913304) of the Frankfurt Securities Exchange. Further information can be found at http://www.polis.de/www.polis.de.

Investor Relations: Press contact:

Dr. Alan Cadmus POLIS Immobilien AG Tel: +49 30 225 00 250

E-Mail: ir@polis.de

URL: http://www.polis.de/www.polis.de

Britta Cirkel

HOSCHKE & CONSORTEN Public Relations GmbH Tel: +49 40 36 90 50-56

E-Mail: b.cirkel@hoschke.de

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