Interim Results 2015

BCRE - Brack Capital Real Estate Investments N.V.

("BCRE" or the "Company")

Interim Results

The Board of BCRE - Brack Capital Real Estate Investments N.V. releases the results of the Group for the six months period ended 30 June 2015 (the "Period").

Trading Update for the Period

· The Group generated revenue of €37.4 million from rental income (30 June 2014: €32.8 million).

· The net asset value (NAV) of the Group amounted to €267.7 million as at 30 June 2015 (31 December 2014: €267.3 million).

· As at 30 June 2015, the aggregate value of the assets in which the Group is interested (in different percentages) was approximately €2 billion (31 December 2014: €1.9 billion).

· Obtained approval of the Supreme State Court for the acquisition of the Upper West Side property in Manhattan, New York. The transaction is scheduled for closing within 90 days from the date of court approval.

· Acquired another 224 residential units in Cincinnati, Ohio bringing our multifamily portfolio in the US to over 500 units.

· BCRE Germany purchased 430 residential units in Northern Germany for a total consideration of €24.5 million bringing our multifamily portfolio in Germany to over 9,600 units.

· Issued the remaining bonds of Series C thereby placing the full amount of $60 million within the programme.

· Midroog, a subsidiary of Moody's Investors Service Inc., continues to review the Company's Series A, B and C bonds currently rated A2 on a local Israeli scale, as a result of the economic situation in Russia.

· Standard & Poor's Maalot, confirmed the rating of the bonds issued by BCRE Germany, on a local Israeli scale of A+ stable.

Harin Thaker, Chairman, said:

 "I am pleased to report the results of the Group for the first half of 2015. The Group had a solid period of performance despite the challenging situation in Russia. We are confident that the Group's broad based business with diversified revenue streams provides a strong foundation for continuing growth."

Ariel Podrojski, Chief Executive Officer, said

"We have had a good start to the current year, making good progress against the priorities we set. Our existing portfolios in Germany and the US are performing well. The recent acquisition in Germany and the approval of the major deal in the Upper West Side in Manhattan, New York are another significant steps towards achieving our objective of having a balanced global portfolio.

In Russia, the economic situation continues to be volatile and has been further deteriorating in recent months due to the extended Western sanctions and the decline in global oil prices. If continued, this is likely to drag the Russian economy into a more prolonged recession or stagnation. This situation in Russia has reflected on the Company's share price during the Period."

Enquiries

Our key markets

BCRE is pleased to announce the results of the Company and its subsidiaries and the Company's interest in associates and joint ventures (together the "Group") for the six months period ended 30 June 2015. Set out below are the highlights for the Period in relation to the Group's main regional platforms.

USA

The Group's portfolio in the US includes: holding real estate for capital appreciation, with a possibility of conversions to residential use and hotel developments, in Manhattan, New York; income producing activities comprising multifamily residential properties in Cincinnati, Ohio; and lending to smaller residential real estate developers within the greater New York area.

Our multifamily portfolio is performing well and has expanded to 516 units under management in Cincinnati, Ohio. Our experienced and skilful team is well positioned to expand our multifamily business in the US in line with our strategy of expanding our income producing activities.

Our lending business in the New York Metropolitan Area is also performing well and is expanding following the recent injection of fresh capital.

Our hotel operations and developments in Manhattan, New York are also progressing well. The 230 room CitizenM Hotel in Times Square continues to perform well receiving good reviews on different platforms. The 300 room CitizenM Hotel in Bowery started construction during the Period and completion is expected in 2017. The development of the 295 room Indigo Hotel at 180 Orchard Street is progressing and is scheduled for opening in the last quarter of the year.

The property at 627 Greenwich Street in the West Village Manhattan is under planning and design and, as previously mentioned, once the relevant permits are in place, the Group will assess whether to sell or develop the property.

As recently announced, we have obtained approval of the Supreme State Court for the acquisition of the major property in the Upper West Side in Manhattan, New York. The transaction is scheduled for closing within 90 days from the date of court approval. In addition of being another important step towards our goal of increasing our exposure to the US market, this investment is expected to contribute significant value to the Group.

Overall, it has been an active Period with the closing of the new deals, and continuing building on our strategy to balance our global portfolio, expand our income producing activities and increase our exposure to the US market in general and particularly to the multifamily sector.

Germany

The Group holds 34.76% as of 30 June 2015 in BCRE Germany.

During the Period, BCRE Germany continued to perform remarkably well with the rental income growing by 12% to €32.6 million (30 June 2014: €29 million), net income attributable to equity holders growing by 77% to €23.5 million (30 June 2014: €13.3 million) and funds from operations ("FFO") increasing by 19% to €5.7 million (30 June 2014: €4.8 million), €22.8 million in annualized terms. BCRE Germany's bond rating of ilA+ stable was recently confirmed by Maalot S&P.

BCRE Germany increased its multifamily portfolio during the Period through the purchase of 430 residential units (29,000 sq. m.) in Northern Germany for a total consideration of €24.5 million. The purchase was financed by a €17.6 million loan from a German bank.

BCRE Germany now holds approximately 381,000 sq. m. of commercial assets with around 96% overall occupancy and 9,630 multifamily units with a total area of around 553,000 sq. m. and around 96% overall occupancy.

During the Period, BCRE Germany's income producing portfolio generated healthy growth and has the potential to grow further organically. The residential portfolio recorded a 3.3% increase in the rental income from the same assets compared to the corresponding quarter last year.

Russia

The Russian economy has continued to weaken due to the extended Western sanctions and the decline in global oil prices. This may drag the Russian economy into a more prolonged recession or stagnation. The Group continues to monitor the situation closely and remains cautious as the situation continues to be volatile and events in Russia can still develop in various directions and magnitudes. Our team in Russia with its proactive approach continues to monitor the situation and to react to the various challenges on the ground.

The Group's wholesale and retail complex in Kazan continues to attract healthy footfall with two fully operational modules. The first module is fully leased and operational. The leasing of the second module continues and the Group is in negotiations with potential tenants for the remaining area. The third module, intended for the semi-agro business, is still to become operational.

The development of the shopping centre in Lyubertsy is projected to complete shortly and the opening is planned in the last quarter of the year. Despite the challenges presented by the current situation, we expect the shopping centre to open with fairly good occupancy levels.

The Group's other income producing properties in Russia continue to perform relatively well. However, due to the situation, rental discounts had to be offered to both existing and potential tenants and lease amendments needed to be made in order to protect and maintain occupancy levels.

Outlook

Our balanced portfolio with a wide cross section of properties and diversified approach has proven to be a successful strategy over the years. Our global experience, enables us to select the best individual opportunities from a range of regions and provides a natural hedge through the spread of our activities.

We are a profitable, balanced business with a healthy net debt to equity ratio, managing a portfolio of properties which includes a mix of income producing assets that help fund the longer term opportunities and investment in strategic assets.

During the Period and in line with our objectives, we continued to increase our exposure to the US and German markets. We are aiming to expand our US Multifamily portfolio and raise funds for its growing operations.

Recent economic and geopolitical events in Russia may have a further negative impact. However, the development of our existing projects in Russia is expected to continue as stated with a cautious approach.

Overall, the Group plans to continue with the development and handover of a number of projects which are in different construction stages.

We are planning to open two major developments before the end of the year, the 295 room Indigo Hotel on 180 Orchard Street in Manhattan, New York and the shopping centre in Lyubertsy, Moscow Region.

The Group intends to continue increasing its exposure to the US and German markets and expand its income producing activities through new acquisitions and the keeping of completed developments within its portfolio.

The Company still intends to make an annual distribution as previously stated.

Forward-looking statements

This report contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of BCRE - Brack Capital Real Estate Investments N.V. These statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements.

On behalf of the Board

Harin Thaker

Chairman

BCRE - BRACK CAPITAL REAL ESTATE INVESTMENTS N.V.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF 30 JUNE 2015

EURO IN THOUSANDS

INDEX

- - - - - - - - - -

REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

to the shareholders -

BCRE - BRACK CAPITAL REAL ESTATE INVESTMENTS N.V.

Introduction

We have reviewed the accompanying interim condensed consolidated statement of financial position of BCRE - Brack Capital Real Estate Investments N.V. (the "Company") and its subsidiaries (together the "Group") as of 30 June 2015 and the related interim condensed consolidated statements of income, comprehensive income, changes in equity and cash flows for the six-months period then ended, and explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with IAS 34 Interim Financial Reporting (IAS 34) as adopted by the European Union. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

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. A review of interim financial information consists of making inquiries, 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 accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 as adopted by the European Union.

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

*) Retrospectively application due to change in accounting policy, see note 2c.

**) Represented amounts lower than €0.01.

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

The accompanying notes are an integral part of the interim condensed consolidated financial statements.