Interim Management Statement

2 November 2011

Hansteen Holdings PLC

("Hansteen" or, the "Company", the "Group")

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 July 2011 to 1 November 2011.

Highlights:

·; Completion of €14.9 million acquisition in Hilden, Germany, representing net initial yield of 11.3%

·; Acquisition of three buildings at Aztec West Business Park, Bristol for £11.0 million

·; £3.7 million of disposals in the UK and €14.0 million of sales in Continental Europe, all sales at a combined yield of 6%.

·; Like-for-like vacancy in Q3 reduced by 16,000 sq m to 445,033 sq m

·; Like-for-like rent roll increase of £1.1 million in Q3 (rising to £2.6 million including the rent from Hilden)

For further information:

Overview

In the past few months, there has been increased uncertainty in the economic outlook across Europe and growing concern regarding the strength and functionality of the European banking sector. This has been reflected in stock market volatility and worsening sentiment across the board.

During this period Hansteen has focused on two prime objectives. Firstly, improving occupancy and the rent roll and secondly, pursuing the value opportunities which inevitably arise in such difficult times.

Since 30 June, both net occupancy and the rent roll have improved on a like for like basis and the Company is talking to a number of banks regarding sizeable potential acquisition opportunities. Generally over the period there was a lot of positive activity with acquisitions, lettings, renewals, sales and purchases.

Acquisitions

In August, the Group announced two notarisations of a substantial multi-let industrial estate and a Mercedes car dealership investment in Hilden, Germany for a total of €14.0 million excluding costs with a combined initial rent roll of €1.7 million, representing a net initial yield of 11.3%. The industrial estate provides 26,500 sq m of modern good specification space of which approximately 4,000 sq m is vacant. The Mercedes car dealership was subject to a tenant's pre-emption right but this was not taken up and both the acquisitions were completed on 21 September 2011.

On 4 October HPUT completed the acquisition of sections 200, 1100 and 1200 Aztec West Business Park, Bristol for £11.0 million including acquisition costs. The property comprises a 4,160 sq m landmark office building at the main entrance of the scheme, and two very strong multi-let industrial estates 8,842 sq m. The property was acquired from SWIP and has been in Institutional ownership for approximately 20 years. It has a current vacancy rate of approximately 14% and an annual rent of £965,000 which rises to £1.16 million pa in May 2012 following expiry of rent free periods.

The combination of available capital, a good reputation and an appetite for and expertise in secondary property means Hansteen is particularly well placed to pursue value opportunities today and in the foreseeable future.

Disposals

In the UK, Hansteen has completed two disposals. On 29 September 2011 the HPUT sold Unit A, Vernon Park in Wolverhampton, acquired in 2010. The 3,793 sq m vacant unit was sold to J Banks & Co Limited for £2.3 million representing an uplift on both the acquisition cost and the current valuation.

From its own portfolio, Hansteen has sold Earn House in Perth for £1.37 million representing a profit over both acquisition cost and current valuation. The 2,140 sq m vacant office building was acquired by an occupier.

In the Netherlands, Hansteen has sold a vacant 585 sq m industrial unit at Ondernemersweg, Emmeloord for €180,000, a surplus over book cost.

Hansteen has also notarised a further €13.8 million of disposals in Germany at Heilbronn and Allmersbach. The sale of Heilbronn in particular is the culmination of a text book asset management value add strategy where land adjoining the existing building was acquired, the facility extended and the lease re-geared with the existing tenant to create an institutional quality investment which is now being sold to an open-ended fund.

Vacancy Levels/Lettings

Hansteen reduced vacancy on a like-for-like basis in Q3 by 16,000 sq m (0.8% of the entire portfolio), however overall vacancy only decreased by 12,000 sq m due to the 4,000 sq m of vacant space at Hilden acquired during the period under review. In Q3 some 117 new lettings and lease renewals were completed across the portfolio.

New lettings in the UK included 1 Penine Way, a 2,311 sq m unit at Saltley Business Park, Birmingham, let to Brunei Halal at £105,727 pa; a 2,156 sq m unit at Treforest Industrial Estate, South Wales let to Brecon Pharmaceuticals on a stepped rent rising from £55,000 to £105,000 pa over a five year period and a 452 sq m retail unit at York Place, Perth let to Co-Op Funeral Care at £30,000 pa rising to £45,000 in five years.

In Germany, new lettings included a 7,367 sq m unit at Gross-Rohrheim let to SCHUECO at €370,000 pa; a 4,242 sq m unit at Wurmlingen, let to Siegfried Fischer Baulogistik at €150,000 pa; 400 car parking spaces at Hanau let to Heraeus at €288,000 pa and a 4,529 sq m unit at Geldern, North Rhine-Westphalia let to Nacke Logistik at €146,772.

In the third quarter vacancy in Netherlands increased due to tenant vacancies at Ede (10,800 sq m) and Tiel (5,270 sq m), however in October new lettings totaling 11,206 sq m have been concluded at Winterswijk and Nimegen, at a total contracted rent of €325,000 pa.

Currency

Since 30 June the Euro has weakened against Sterling. Were this to be the case at the year-end there will be an adverse currency effect on our earnings and NAV, as we report in Sterling. However, any currency movements only actually bite when, and if, the Company changes Euros into Sterling. Hansteen has substantial cash reserves in both Sterling and Euros allowing any currency exchange to be at a time of the Company's choosing. Furthermore, Hansteen's currency exposure is substantially ameliorated by a €200 million currency hedge at €1.20 to the £1.

Markets

The pattern of occupier demand we have reported so far this year is largely unchanged. Occupational demand in Germany is good, the tone of rent is stable if not growing and tenants incentives are reducing. It may be that this picture will change as global growth decelerates but we are not seeing any change yet. There have, at last, been examples of purchase interest from investors as well as occupiers and we believe that international investors, in particular, are starting to appreciate the investment case for high yielding industrial property in Germany.

In the Benelux, the occupational market continues to be very poor, with limited demand, and a large supply of vacant space for occupiers to choose from. However we have concluded lettings and a sale in the last few months and have significantly added to our marketing programme in the belief that occupancy in our Benelux portfolio will stabilise with the prospect of occupational improvement over the next year.

In the UK, commercial life goes on. Occupiers are cautious and in many areas there is a wide choice of properties to let, but lettings and sales are happening and our vacancy is reducing.

Overall, in all our markets, the flexibility and value of industrial property continues to give the resilience to the rent roll seen from industrial property in previous downturns.

Outlook

No business can be totally immune to the financial turmoil threatening both the UK and Continental Europe today. However, Hansteen's balance sheet is strong, its business model is clear and its chosen property type, high yielding and resilient. It is producing and distributing a growing income stream and acquiring properties which, when the cycle turns, will show significant growth. Finally, because of its financial strength, expertise and professional reputation, it is well placed to participate as the banks seek to resolve the many problems in their commercial property loan books.