Half-Yearly Results

Duet Real Estate Finance Limited

(the "Company")

Half-Yearly Results

Duet Real Estate Finance Limited (LSE: DREF), a registered closed-ended collective investment scheme incorporated in Guernsey, today announces its half-yearly results for the period from 1 January 2013 to 30 June 2013, and its quarterly dividend.

Highlights

Ø The Company is 95% drawn against its commitment to the European Real Estate Debt Fund LP (the "Master Fund"), which has completed its investment programme. 5% retained for potential Follow-On Investments

Ø Net Asset Value ("NAV") as at 30 June 2013 of 98.2 pence per share (31 December 2012: 98.5 pence per share) equating to a NAV total return for the six month period to 30 June 2013 of 3.8% (30 June 2012: 2.8%) based on dividends paid in the period

Ø Dividends totalling 3 pence per share payable in respect of the six month period to 30 June 2013, equating to an annualised yield of 6.4% on 28 June 2013 share price of 93.5 pence (30 June 2012: 2 pence per share equating to an annualised yield of 4.3% on 29 June 2012 share price of 92.5 pence)

Ø Based upon a share price of 93.5 pence at the period end, the total shareholder return was 7.7% (30 June 2012: -1.6%) based on dividends paid in the period

Ø Dividend of 1 pence per share announced, payable on 27 September 2013 to members on the Company's register on 6 September 2013

Ø Following the completion of the Master Fund's investment programme, the Company is on track to provide Shareholders with distributions which, taken over the course of a 12 month period, should exceed 7 pence per share per annum

Chairman's Statement

I am pleased to present to the shareholders the Company's half-yearly financial report and unaudited condensed interim financial statements for the period ended 30 June 2013, and to announce a dividend of 1 pence per ordinary share for the quarter to 30 June 2013, payable on 27 September 2013to those shareholders on the register on 6 September 2013.

The dividend for the quarter is lower than prior periods as the European Real Estate Debt Fund L.P. (the "Master Fund") posted additional collateral to support its currency hedges, due to the weakening of Sterling against the Euro towards the end of July, and due to the timing of interest receipts on its loans. The Master Fund hedges its Euro loans back to Sterling in order to protect its Sterling balance sheet and cash flows. Despite the short term fluctuations in the collateral required, the Company continues to believe it can make cash distributions in excess of 7 pence per share over the course of the next year and beyond. Due to the nature of the cash flows of the Master Fund and the Company's commitment to distribute its net income (subject to working capital requirements) on a quarterly basis, shareholders should expect that distributions will fluctuate from quarter to quarter.

Economic Backdrop and Completion of Master Fund Investment Programme

The efforts of the Central Banks were rewarded in the first half of the year with a period of relative stability and rallying stock markets. The real estate market participated in this improvement in sentiment which resulted in generally increased activity in both new acquisitions and refinancings. Whilst occupier activity remains somewhat subdued, we have witnessed international investment activity into Europe pick up as Euro breakup concerns recede. The increased market activity has brought more investment opportunity to the Investment Adviser, and through this period the Master Fund completed its investment programme, investing a further £77.3 million in the first half of the year.

Investment Performance, Capital Management and Dividends

The Company's NAV at 30 June 2013 was 98.2 pence per share (31 December 2012: 98.5 pence) and so was in excess of the 98.0 pence NAV per share upon the IPO. This equates to a NAV total return for the six month period to 30 June 2013 of 3.8% (30 June 2012: 2.8%). Based upon a share price of 93.5 pence at the period end, the total shareholder return for the period was 7.7% (30 June 2012: -1.6%).

During the period, the Company bought back and cancelled 122,500 of its own shares for £109,248, taking the total shares acquired and cancelled by the Company to 1,051,140, at a cost of £945,156. All purchases were made at discounts to the prevailing NAV and so were accretive to NAV per share.

Including the dividend of 1.0 pence per share to be paid to shareholders on 27 September 2013, in respect of the period ended 30 June 2013 the Company will have paid a total of 3.0 pence per share which, based upon the share price at the period end of 93.5 pence, equates to an annualised yield of 6.4%.

Outlook

Following the completion of the Master Fund's investment programme, your Board anticipates that it will deliver on its targeted returns and lead the Company to be in a position to make cash distributions in excess of 7 pence per share per annum.

David Staples

Chairman

23 August 2013

Interim Board Report

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company, which have not materially changed and which are expected to apply to the remaining period to 31 December 2013, are considered to fall into the following categories:

General market, economic, fiscal and regulatory environment:

· The Company's and the Master Fund's targeted returns are based on estimates and assumptions that are inherently subject to significant business and economic uncertainties and contingencies, and the actual rate of return may be materially lower than the targeted returns.

· Declaration, payment and the amount of any future dividends by the Company are subject to the discretion of the Directors and will depend upon, among other things: the performance of the Master Fund, the ability of the Master Fund to make further investments, distributions made by the Master Fund and the size of any such distributions as well as the Company's financial position and cash requirements.

· The ordinary shares may trade at a discount to NAV.

· The Company and the Master Fund are exposed to changes in tax and other laws, accounting standards or regulation and any potential costs arising, potentially with retrospective effect.

· The Master Fund is exposed to the commercial real estate market. The value of underlying real estate and the rental income it produces may fluctuate as a result of factors which are outside the Company's control.

Concentration and other risks due to the investment strategy of the Company:

· The Company is not able to participate in the investment decisions of the Master Fund, in which it has invested substantially all of its capital.

· It may not be possible for the Company to dispose of its interest in the Master Fund if it wished to do so.

· The value of an investment can go down as well as up and, as a result, a Limited Partner in the Master Fund (including the Company) may lose some or all of its commitment or the value of its investment.

· There is currency risk in the Master Fund from material movements in the exchange rate between Sterling and the currency in which certain investments are made. To limit currency risk the Master Fund uses currency derivatives to hedge its exposure, but there is no guarantee that the hedges will be completely effective.

· There is credit risk in the Master Fund from borrower default.

· Borrowers from the Master Fund may repay loans early leading to different returns, and a loss of further returns from that investment.

· Repayments from loans may lead to early repayments of capital to shareholders.

Reliance on the Investment Adviser:

· The Investment Adviser is dependent upon the expertise of key personnel in providing investment advisory services to the Company and the Master Fund.

· Failure by the Investment Adviser or other third-party service providers of the Company and/or the Master Fund to carry out its or their obligations could materially disrupt the business of the Company and/or of the Master Fund.

The principal risks and uncertainties in relation to financial instruments are disclosed in note 11 to the audited financial statements for the year ended 31 December 2012.

Related Parties

Related party disclosures are given in note 15.

Going Concern

The Directors, after due consideration, have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the unaudited condensed interim financial statements are prepared on a going concern basis. In forming this expectation, the Directors have considered the key supporting assumptions including the level of cash cover for commitments made to invest in the Master Fund, projected cash inflows by way of distributions from the Master Fund and the level of ongoing expenses of the Company.

Statement of Directors' Responsibility

The Directors confirm that, to the best of their knowledge, these unaudited condensed interim financial statements for the period have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union and give a true and fair view of the assets, liabilities, financial position and profit of the Company as required by Disclosure and Transparency Rule DTR 4.2.4. The Chairman's Statement, Interim Board Report and the Investment Adviser's Report (together constituting the Interim Management Report) include a fair review of the information required by the Disclosure and Transparency Rules DTR 4.2.7R and DTR 4.2.8R, namely:

a. an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and

b. material related party transactions that have taken place in the first six months of the current financial year that have materially affected the financial position or performance of the Company during that period.

By order of the Board:

John Falla

Director

23 August 2013

Investment Adviser's Report

Further to the completion of its investment programme, the Master Fund consists of 15 investments with an original acquisition cost of £264.7 million. Based on the respective acquisition cost of each investment, the fully invested portfolio has a blended loan-to-value ratio of 69.6%, along with a blended cash pay coupon and payment-in-kind coupon of 9.8% and 2.1% respectively. The portfolio provides the income and total return as targeted in the Company's prospectus, whilst maintaining a resilient risk profile.

As at 30 June 2013, the portfolio stands at £271.6 million of outstanding principal, accrued payment-in-kind interest along with market value of CMBS investments, with a blended loan-to-value ratio of 70.2%, a cash pay coupon of 9.9% and a payment-in-kind coupon of 2.2%.

A summary of the key performance and investment activity of the Master Fund is as follows:

Performance - for the six month period to 30 June 2013

· January 2013 - the Master Fund received a repayment of £5.9 million on its CMBS 2 investment, representing 60.8% of the acquisition cost of the bonds following the sale of assets by the borrower, and in April 2013 received a further £420,000 from an unscheduled amortisation of the bonds as part of a cash sweep.

· The Master Fund is in the process of enforcing its rights under the loan security package to recover outstanding amounts owed under Loan 4, and the Investment Adviser expects that these actions will result in full recovery of principal, accrued interest and expenses.

· During April and May 2013 - the Master Fund received total repayments of capital of £889,384 on Loan 9, following the partial sale of assets of the borrower.

· As a result of the intragroup financing structure of the Master Fund, smaller repayments of capital at investment level may be repatriated as 'income' (through interest accrued on intragroup loans) via the Master Fund and ultimately to the Company.

Performance - post 30 June 2013

· July 2013 - the Master Fund received an expected repayment of capital of £342,000 on Loan 10, following the partial sale of the borrower's assets.

· July 2013 - the Master Fund received a further repayment of £370,000 on its CMBS 2 investment.

Investment Activity - for the six month period to 30 June 2013

· January 2013 - a €7 million mezzanine loan secured by an office tower in Brussels ("Loan 11").

· March 2013 - a €37.5 million mezzanine loan backed by a portfolio of 20 hotels located across Germany ("Loan 12").

· May 2013 - a £39.5 million mezzanine loan backed by a prime office in London ("Loan 13").

All new loans made during the period are structured with LTV's and projected IRR's in line with the investment criteria of the Master Fund.

The make-up of the portfolio as at 30 June 2013 is detailed in the table that follows:

1. As at 30 June 2013 including accrued payment-in-kind interest where applicable

2. Including accrued cash interest

3. Fair value

Following the completion of the Master Fund's investment programme, the Investment Adviser continues to assess and monitor investments, with a particular focus on such aspects as debt servicing arrangements, compliance with loan covenants and the asset management of the underlying real estate.

ERED Investment Adviser LLP

August 2013

Independent review report to Duet Real Estate Finance Limited

Introduction

We have been engaged by the Company to review the unaudited condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2013, which comprises the Condensed Statement of Comprehensive Income, Condensed Statement of Financial Position, Condensed Statement of Changes in Equity, Condensed Statement of Cash Flows and associated notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors of the Company. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority (previously the Financial Services Authority).

As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the International Auditing and Assurance Standards Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the unaudited condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

PricewaterhouseCoopers CI LLPChartered AccountantsGuernsey, Channel Islands

23 August 2013

Condensed Statement of Comprehensive Income

for the period ended 30 June 2013

The notes form an integral part of these condensed interim financial statements.

Condensed Statement of Financial Position

as at 30 June 2013

The notes form an integral part of these condensed interim financial statements.

The unaudited condensed interim financial statements were approved by the Board of Directors on 23 August 2013 and were signed on its behalf by:

John Falla

Director

Condensed Statement of Changes in Equity

for the period ended 30 June 2013

The notes form an integral part of these condensed interim financial statements.

Condensed Statement of Cash Flows

for the period ended 30 June 2013

The notes form an integral part of these condensed interim financial statements.

Notes to the interim financial statements for the period ended 30 June 2013

1. General information

The Company was incorporated in Guernsey on 7 January 2011 and is a registered closed-ended collective investment scheme registered pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, and The Registered Collective Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission. The Ordinary Shares were admitted for trading on the Main Market of the London Stock Exchange on 14 March 2011.

The Company is a feeder fund and invests in the European Real Estate Debt Fund L.P. (the "Master Fund").

These condensed interim financial statements were approved for issue on 23 August 2013. These condensed interim financial statements do not constitute statutory accounts under Guernsey Company Law and have been reviewed by the independent auditors but not audited.

2. Basis of preparation

The condensed interim financial statements for the six months ended 30 June 2013 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34 "Interim Financial Reporting" as adopted by the European Union. These condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2012, which were prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

The preparation of condensed interim financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Directors to exercise judgement in the process of applying the Company's accounting policies. Changes in assumptions may have a significant impact on the financial statements in the period the assumptions change. The Directors believe that the underlying assumptions are appropriate and that the Company's financial statements therefore present the financial position and results fairly. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 10.

3. Significant accounting policies

The accounting policies adopted are consistent with those of the previous financial year. Statutory audited annual financial statements of the Company are prepared in accordance with IFRS as adopted by the European Union. These condensed interim financial statements do not contain all the information and disclosures as presented in the annual financial statements.

New IFRS standards, amendments and interpretations

The Company has adopted all relevant and below mentioned standards since 1 January 2013.

The Directors have assessed the impact of these amendments and concluded that these new accounting standards do not affect the Company's results of operations or financial position.

Impact of standards issued but not yet applied

IFRS 9, 'Financial instruments', issued in November 2009. This standard is the first step in the process to replace IAS 39, 'Financial instruments: recognition and measurement'. IFRS 9 introduces new requirements for classifying and measuring financial assets and may affect the Company's accounting for its financial assets. The standard is not applicable until 1 January 2015 but is available for early adoption. However, the standard has not yet been endorsed by the EU. The Company is yet to assess IFRS 9's full impact. However, initial indications are that it should not materially affect the Company's accounting for its financial instruments.

IFRS 10, 'Consolidated financial statements'; IFRS 11, 'Joint arrangements' and IFRS 12 'Disclosures of interests in other entities' have also been issued. All of these new standards are effective from 1 January 2014. The Company has yet to assess the full impact of these new standards. However, initial indications are that they should not impact materially on the Company's financial statements.

4. Taxation

The Company is domiciled in Guernsey, Channel Islands. Under the current laws of Guernsey, there are no income, estate, corporation, capital gains or other taxes payable by the Company. The Company does not currently incur any withholding tax in respect of its dividend income received.

The Company has obtained exemption from Guernsey Income Tax under The Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 and accordingly is subject to an annual fee of £600.

5. Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors as it is the body that makes strategic decisions. The Board is of the opinion that there is only a single operational segment, being the investment in the Master Fund and the associated investment of cash awaiting calls from the Master Fund.

6. Seasonality of operations

The nature of the entity is such that the effect of seasonality is not considered to impact the operations and results of the Company.

7. Expenses

8. Earnings per share and net asset value per share

The earnings per share calculation is based on profit for the period and total comprehensive income of £2,784,273 (30 June 2012: £2,071,673) and the weighted average number of shares in issue for the period of 75,001,960 (30 June 2012: 75,966,619).

Net asset value per share is based on net assets of £73,581,201 (31 December 2012: £73,905,630) divided by the 74,925,109 (31 December 2012: 75,047,609) Ordinary Shares in issue.

9. Dividends

10. Financial assets at fair value through profit or loss

The non-current investment comprises an investment in the Master Fund. The Company has a committed investment of £75,333,953 (31 December 2012: £75,333,953) of which £71,451,201 (31 December 2012: £63,898,919) had been drawn down as at the period end. The undrawn commitment to the Master Fund at 30 June 2013 was £3,882,752 (31 December 2012: £11,435,034). The undrawn commitment will not be drawn in its entirety by the Master Fund, as Limited Partners are proportionally drawn on their commitment, other than for advisory fees, which the Company pays at a reduced rate. The level of commitment that will not be drawn down is £1,254,000 as at 30 June 2013 (31 December 2012: £1,234,000).

Equalisation is paid to or received from the Master Fund when additional investors are admitted to the Master Fund, including the initial investment by the Company. Amounts are paid to or received from the Master Fund so as to equalise (in percentage terms) the net amount drawn from all investors after taking into account any amounts distributed by the Master Fund to prior existing investors. Equalisation paid to the Master Fund is included as part of the purchase cost of the investment and equalisation received from the Master Fund represents a temporary return of capital which can be called again by the Master Fund from the Company as part of its commitment to invest.

The Company's investment in the Master Fund is subject to the terms and conditions set out in the Master Fund's offering documents and is accounted for by the Company as at fair value as determined by the Directors at the period end date, this fair value being primarily based on the latest available coterminous reported information from the Master Fund. The Directors review the details of the reported information obtained from the Master Fund and consider: (i) the liquidity of the Master Fund and/or its underlying investments, (ii) the type of investments held within the Master Fund, (iii) the date of the net asset value (NAV) provided, (iv) any restrictions on redemptions, and (v) the basis of accounting adopted by the Master Fund in valuing the investments held and in reporting to investors (the Master Fund reports to investors using IFRS principles). If necessary, the Directors make adjustments to the NAV of the Master Fund so as to obtain the best estimate of fair value as at the period end date. No such adjustments have been made to the reported NAV of the Master Fund as at 30 June 2013. In addition to normal short term receivables/payables and cash balances, the investment portfolio held by the Master Fund as at 30 June 2013 included:

i) originated debt with fixed or determinable payments that are not quoted in an active market and classified as "loans and receivables" measured at amortised cost less any impairment; and

ii) debt instruments comprising of commercial mortgage backed securities which are classified at fair value through profit or loss and valued by the Master Fund based on a combination of quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs.

Although the Directors use their best judgement in estimating the fair value of investments, there are inherent limitations in any estimation techniques.

The significant matters considered by the Directors in determining the fair value of the investment in the Master Fund are noted above. The investment in the Master Fund is a level 3 investment (see below) and as expected, there are significant unobservable inputs used by the General Partner to the Master Fund in assessing its own view on the values of the investments held at the level of the Master Fund. No quantitative information is provided by the Company in respect of those significant unobservable inputs as those inputs are not developed by the Company when measuring its fair value assessment for its investment in the Master Fund and those significant unobservable inputs at the Master Fund level are not reasonably available to the Company.

The Company's investment in the Master Fund is categorised as level 3 within the fair value hierarchy under IFRS 7, which indicates inputs for the asset that are not based on observable market data (unobservable inputs). The table below shows the movements in level 3 investments and the unrealised gain thereon recognised in the statement of comprehensive income.

Investments of £63,126,188 were transferred from level 2 to level 3 on 31 December 2012. Level 2 inputs, other than quoted prices included as level 1, are observable either directly (as prices) or indirectly (derived from prices).

The Company is exposed to market price risk from its holding in the Master Fund. If the NAV of the Master Fund increased (or decreased) by 5%, with all other variables held constant, net assets would increase (or decrease) by £3,539,942 (31 December 2012: £3,156,309). The Company's investment in the Master Fund gives rise to no direct exposure to currency risk or interest rate risk although the Master Fund itself is exposed to such risks.

11. Payables

12. Share capital

The authorised shares of the Company are as follows:

For the avoidance of doubt, the whole of the share capital account is distributable subject to meeting the solvency test criteria under Guernsey Company Law and any restrictions in the Articles of Incorporation of the Company.

The Company's objective when managing its capital is to follow its investment objective to provide shareholders, through its investment in the Master Fund, with regular dividends and an attractive total return whilst limiting downside risk to capital through exposure to European commercial real estate debt. The Company has a significant investment in the Master Fund and therefore the Company's financial performance when managing its capital depends almost entirely on the performance of its investment in the Master Fund. However, in addition the Company may borrow up to 20% of NAV, has the ability to suspend payment of dividends if necessary, may buy back its own shares and may issue further shares.

Purchase of own shares

During the period the Company purchased 122,500 (30 June 2012: 162,821) of its own shares for £109,248 (30 June 2012: £147,381).

The shares were bought back on the open market and were cancelled. The cancelled shares represented 0.2% of the voting rights.

13. Cash and cash equivalents

14. Financial risk management

The Company's activities expose it to a variety of financial risks. The main risks arising from the Company's financial instruments are market risk, credit risk and liquidity risk.

The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements as at 31 December 2012.

15. Related party and material transactions

The Company pays a fixed annual fee of £25,000 to the Investment Adviser, ERED Investment Adviser LLP ("ERED"), a joint venture between DRC Capital LLP and Duet Private Equity Limited. The investment advisory agreement was novated from Duet Private Equity Limited to ERED on 11 May 2012. The charge for the period was £12,500 (30 June 2012: £12,500) and £Nil (31 December 2012: £6,250) was prepaid. There are no performance fees payable at the Company level, although the Investment Adviser is incentivised by performance fees payable at the Master Fund level.

Transactions and balances with the Master Fund are disclosed in note 10. In addition distributions from the Master Fund of £2,832,857 (30 June 2012: £1,423,950) are included in investment income in the statement of comprehensive income.

Directors' interests

No Director has a material interest in any contract which is significant to the Company's business. David Staples has an interest in 7,000 shares (31 December 2012: 7,000) and David Moore has an interest in 17,978 shares (31 December 2012: Nil). David Moore's interest was acquired on 18 April 2013. No other Director who held office at 30 June 2013 had an interest in the ordinary shares of the Company.

16. Subsequent events

The Company declared a dividend of 1.0 pence per Ordinary Share payable on 27 September 2013 to those shareholders on the register on 6 September 2013.

On 14 August 2013, £752,086 was received from the Master Fund, representing a distribution of investment income.

Corporate information

For further information, please contact:

DRC Capital LLP +44 (0)20 7042 0600

Dale Lattanzio

Cyrus Korat

Oriel Securities Limited +44 (0)20 7710 7600

Neil Winward

Tunga Chigovanyika