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2014-05-26

Eastern Property Holdings Limited (EPH) : Q1 2014 Trading Update

Eastern Property Holdings Limited (EPH) / Eastern Property Holdings Limited
(EPH) : Q1 2014 Trading Update. Processed and transmitted by NASDAQ OMX
Corporate Solutions. The issuer is solely responsible for the content of this
announcement.
26 May 2014, Road Town, Tortola, BVI

FINANCIAL HIGHLIGHTS· Strong performance of wholly-owned and minority-held rental assets and
Company's interest income;

· Significant RUB weakening against US$ during the 1st quarter of 2014
led to FX loss;

· As a result, NAV is slightly higher than at 31 December 2013 (based on
the real estate valuations done as of 30 November 2013).

ASSET UPDATEThe Company's focus in 2014 remains on completion of development of the Arbat
mixed-use residential, office and retail projects, representing it's largest
investment and primary source of value creation in the short to medium term.

Arbat 1:· Completion (including the Theatre part) is scheduled for the end of
2014;

· The project is being actively marketed.

Arbat 2:· Construction is advancing according to plan;

· Completion is scheduled for Q3 2015.

Significant financial events and changes for Q1 2014 are as follows:Income·Net Rental Income

In the three months ended 31 March 2014, our wholly-owned rental properties
generated Net Rental Income of $2.02 million.

On a Like for Like (LfL) basis, net rent in Petrovsky Fort increased by 9%
mainly due to improved operating efficiency and in Magistral'naya decreased
by 6% mainly due to RUB weakening against US$ (as the lease agreement is
nominated in RUB). The overall increase in Net Rental Income is 7% compared
to the Q1 2013 ($2.02 million vs $1.89 million in Q1 2013).

·Interest Income

The Company generated $1.95 million of interest income in the first three
months of 2014 which is approximately at the same level as for the comparable
period of 2013 ($ 1.93 million).

Expenses·Net
Foreign
Exchange Loss

Significant weakening of RUB against US$ during the first three months of 2014
resulted in a $5.35 million foreign exchange loss. For the same period in
2013 the Company recognized a $2.16 million loss.

Assets·Loans and
Receivables

EPH's loans and receivables increased from $81.0 million as of 31 December
2013 to $82.87 million as of 31 March 2014 only due to accrual of interest on
existing project loans. No new loans were provided during the first three
months of 2014.

·Cash and Cash E
quivalents

A net reduction of $1.23 million in the Company's cash position in the first
three months of 2014 has been primarily due to use of cash to fund Arbat
construction and payments under the loan from UniCredit Bank Austria.

·Accounts Receivable

The $3.2 million decrease in accounts receivable is caused by the payment
received for the two Arbat apartments sold in December 2013.

·Assets Under Development (at
cost
)

Assets under development have increased from $101.83 million at 31 December
2013 to $103.32 million at 31 March 2014. The $1.49 million net increase is
the result of increased construction spending and weakening of the RUB
against the US$.

Liabilities·Loans from Banks and
Others
(LT&ST)

EPH's debt consists of a loan from UniCredit Bank Austria secured by Petrovsky
Fort mortgage, a loan from Jilford Ltd. signed in September 2013 for the
purpose of financing Arbat construction and a loan from Valartis Bank
(Liechtenstein) AG signed in December 2013.

The outstanding balance of the loan from UniCredit Bank Austria at reporting
date was $32.20 million, down $0.45 million from $32.65 million at 31
December 2013. The reduction is due to amortization during the first three
months of 2014.

The loan from Jilford is received through Vakhtangov Place Limited, the
Company's 60% joint operation company, therefore only 60% of the loan
received is reflected on EPH's balance sheet. During the first three months
of 2014 the outstanding balance of the loan remained unchanged at $9.51
million.

The loan from Valartis Bank (Liechtenstein) AG was received to fully repay
performance fees liability. During the first three months of 2014 the
outstanding balance of the loan remained unchanged at $8.52 million.

Significant Q1 2014 Income and Expense Items------------------------------------------------------------------------------------------------------
|Net Rental Income 31.03.2014 31.03.2013 Change YoY Percent Change YoY |
|Petrovsky Fort 1,765,571 1,619,716 145,854 9% |
|Magistral'naya 250,787 267,694 (16,907) -6% |
|Total 2,016,358 1,887,411 128,948 7% |
| |
| |
|Material YoY changes in Income/Expense Items 31.03.2014 31.03.2013 Change YoY |
|Interest income 1,950,392 1,927,225 23,167 |
|Net foreign exchange loss (5,347,630) (2,162,136) (3,185,494) |
------------------------------------------------------------------------------------------------------
Significant Q1 2014 Changes in Financial Position--------------------------------------------------------------------------------------
|Assets 31.03.2014 31.12.2013 Change |
| Loans and receivables (LT&ST) 82,863,248 80,995,725 1,867,523 |
| Cash&cash equivalents 5,373,270 6,648,367 (1,275,097) |
| Assets under development 103,319,156 101,833,883 1,485,273 |
| Accounts receivable 591,764 3,807,038 (3,215,274) |
| |
|Liabilities |
| Loans from banks and others (LT&ST) 50,232,500 50,682,500 (450,000) |
--------------------------------------------------------------------------------------
Q1 2014 Berlin House and Geneva House Net Rental income------------------------------------------------------------------------
|Net Rental Income 31.03.2014 31.03.2013 Change YoY Percent Change YoY |
|Berlin House 2,790,464 1,622,607 1,167,857 72% |
|Geneva House 3,674,562 3,761,148 (86,586) -2% |
|Total 6,465,026 5,383,755 1,081,271 20% |
------------------------------------------------------------------------
Eastern Property Holdings Ltd.
is an SIX Swiss Exchange-listed real estate development and investment company
focusing on Russia. The company holds interests in office, residential,
retail and parking properties and developments, principally in Moscow and St.
Petersburg. EPH is managed by Valartis International Ltd. a wholly-owned
subsidiary of Valartis Group AG.

Additional information on Eastern Property Holdings is available by contacting
Anna Bernhart Tel: +41 43 336 8111.

EPH - Q1 2014 Trading Update
http://hugin.info/139905/R/1788303/614317.pdf

---------------------------------------

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Eastern Property Holdings Limited (EPH) via Globenewswire

HUG#1788303

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