Interim Management Statement

For release: 16 May 2014

Hansteen Holdings PLC

("Hansteen" or the "Company")

Interim Management Statement

Hansteen Holdings (LSE: HSTN), the UK and Continental European property investment company, announces its Interim Management Statement for the period from 1 January to 15 May 2014.

Ian Watson, Joint Chief Executive of Hansteen, said:

"The positive shift in the investment and funding markets has resulted in an active and successful period for Hansteen. The rent roll is continuing to rise amid strengthening occupational markets and growing investment demand for industrial and logistics property in our core regions is moving values forward. Increased investor appetite for industrial property is increasing competition for acquisitions, however our regional office network continues to identify interesting opportunities that still offer value."

For further information:

Overview

The first four months of 2014 have been a busy and productive period with several significant transactions, increases in rent and occupancy as well as 13 profitable sales and further purchases into HPUT II.

£47.1 million was raised from the placing of 44.8 million shares at 105 pence, a 15.4% premium to the 31 December 2013 EPRA NAV per share of 91 pence and a 2.8% discount to the closing share price on 27 March 2014. Part of the proceeds were used for the acquisition of a further 9.2% stake in AIF for £26.0 million and the remaining proceeds will be used to pursue potential near-term acquisitions in both the UK and Continental Europe.

Hansteen now holds a 36.7% stake in AIF following the original acquisition of 27.5% announced in August 2013 and the additional 9.2% stake referred to above. The additional stake was purchased from three vendors at a price of 46.5 pence per unit, the March 2014 property valuation. Following this acquisition, Hansteen has an attributable property ownership (representing its wholly owned portfolio plus its interest in AIF, HPUT I and HPUT II) of approximately £1.1 billion or 31.3 million sq ft.

Hansteen has completed the refinancing of both its HBOS and UniCredit facilities which were due to expire in October 2014 and February 2015 respectively, which was announced in March 2014. A five-year, €235 million facility has been provided by a consortium of lenders including Landesbank Hessen-Thüringen Girozentrale (Helaba). 80% of the interest on the loan has been fixed, resulting in an interest cost of 3.5% per annum, excluding fees. HSBC has provided a five-year, €108 million facility which, with a €55 million interest rate hedge, has given an interest cost of 2.9% per annum, excluding fees. The combined terms equate to an all in average rate of 3.8% per annum, including fees.

In December 2013, Hansteen completed the purchase of 50% of a loan secured against a portfolio of mainly multi-let light industrial properties in the Netherlands. Since the year end, Hansteen has successfully purchased two swaps, related to the loan, at a significant discount to the mark-to-market valuation, which was over €7 million at the end of February 2014. Hansteen will receive the interest due on the swaps on the next interest payment date at the end of May. Negotiations are ongoing with ING (which holds the other 50% of the loan) and with the existing borrower. Ultimately, it is Hansteen's intention to acquire the property assets upon which the loan is secured.

The like-for-like rent roll on the total portfolio (wholly owned properties plus 100% of the three UK funds) has increased by £2.0 million per annum from 31 December 2013, following 548 new leases and lease renewals in the period. 385 new leases have been completed adding £7.3 million per annum of rent to the rent roll and 163 lease renewals adding £4.6 million per annum. Each of the three core regions of the business have contributed to this like-for-like gain. This excellent performance by the asset management team was offset by a 1.5% adverse movement in the €/£ exchange rate in the first four months of the year, reducing the rent roll by £0.9m. The like-for-like occupancy of the portfolio has increased by 15,100 sq m since 31 December 2013 with increases in Germany (6,500 sq m) and the UK (13,600 sq m) being offset by a decline in the Benelux (5,000 sq m).

13 sales were completed in the period, 11 of which were from the various UK portfolios and two were from the German portfolio. 27,500 sq m of space was sold for £10.5 million at an average yield of 8.3%, and £0.6 million above the 31 December 2013 valuation. Hansteen's share of this profit was £0.3 million. HPUT II has completed the purchase of a portfolio of 16 properties spread across England and Wales, for £41.2 million, and a further property located in the Midlands was purchased in a separate transaction for £2.4 million. In total, the purchases have added £3.8 million to the annual rent roll and increased the value of property held by HPUT II to approximately £124.0 million.

Markets

UK

The dramatic improvement in investor sentiment toward light industrial property reported in the last quarter of 2013 has continued into 2014. Potential purchasers for industrial property include UK institutions, private equity and opportunity funds, private purchasers and occupiers, most of which are well capitalised but with limited acquisition opportunities. In addition, the borrowing environment has improved significantly, with many banks keen to lend against sensible industrial property propositions.

Regional markets are now at the forefront of investors' minds as regional economies begin to show signs of growth. The most sought after portfolios over the last 12 months have been those offering asset management opportunities as investors are looking for a chance to work assets and drive returns. Hansteen is well placed to capture this investor interest in the coming months.

Germany

The industrial occupational market has picked up since the end of March with enquiry levels strong in most regions of the country. Tenants continue to negotiate on rental terms and lease incentives however, they are becoming increasingly prepared to take a slightly longer term view on lease lengths.

There is increased investment interest in the light industrial market from new and historic (but re- capitalised) competition and there is a greater degree of liquidity being witnessed across the sector, from both banks and equity providers. The logistics market continues to be well covered by institutions and some of this capital is beginning to look at light industrial opportunities as the growth potential of this sector is becoming better understood. As in the UK, Hansteen is well positioned to take advantage of this interest and is in advanced discussions with several parties regarding the sale of various assets. However, although investment interest in light industrial in Germany is growing, there are still very few operators with the ability and infrastructure to maximise value from the sector. As a result there continue to be opportunities to acquire.

Benelux and France

Compared to the UK and Germany, these markets are at a different stage in the cycle. Although still a difficult occupational market, enquiry levels have increased in the last two months resulting in meaningful leads and positive viewings. These increased enquiry levels are most notably for larger logistics properties and as a result void erosion and rent roll growth are realistic targets for the remainder of 2014. There are growing signs that liquidity is starting to return to the investor market after years of decline and several significant trades of logistics and multi-let industrials were seen in late 2013 and early 2014. This market recovery is still in its early stages and the feeling remains that the main opportunity in the Benelux is to acquire and intensively manage assets rather than sell at this time.

Outlook

Having witnessed a positive shift in the investment and funding markets in the second half of 2013, we reported that 2014 would be an active and successful year for Hansteen. The first four months of the year have not disappointed and the pace of activity is continuing to grow as the year progresses.

The rent roll is continuing to rise amid strengthening occupational markets and improving investor sentiment towards industrial and logistics property in all three of Hansteen's core regions. Part of this gain has been offset by the weakening of the Euro in the first four months of 2014. Each region has presented several sales opportunities that are currently being pursued. The vacant properties acquired by Hansteen over the last few years are providing a tangible driver for growth and in the UK and Germany there are the first signs of rising rents. It is increasingly clear that the asset management platform that Hansteen has assembled is rare and attractive in its ability to extract growing value from a substantial and granular pan-European portfolio. There is little doubt that there is increased competition for the type of property historically acquired by Hansteen as investors show an increased appetite for the sector and the attractive risk/return profile and relatively low volatility that industrial property provides. However, despite this increased competition, Hansteen's solid platform continues to source exciting opportunities that still offer value.