Sale of property

Eastern European Property Fund Limited

("EEP" or the "Company")

Sale of Kadife Palas

13 April 2012

On 12 April 2012, EEP completed the disposal of Kadife Palas (134-139 Susam Street, Cihangir, Istanbul), for a cash consideration of USD4.3 million (USD5.1 million including VAT).

Kadife Palas is a 1,027m2 leisure/office/residential building, 91% of which (by rental value) was let at completion. The sale of the property for USD4.3 million (approximately GBP2.7 million) has crystallised a gain (before transaction costs) of approximately USD2.7 million (GBP1.7 million).

EEP plans to utilise tax losses in Turkey to reduce the taxable gain that will arise on the disposal to nil, and expects to be able to recover approximately USD0.4 million of the USD0.8 million VAT arising on the transaction, resulting in a net cash inflow from the deal of USD4.7 million (before transaction costs).

USD4.5 million of the proceeds will be used to reduce the Company's bank loan from USD17.5 million to USD13.0 million. Only a nominal charge will be levied by the bank for the early repayment of the loan.

The sale price is approximately equal to the carrying value of the property in the 30 June 2011 half-yearly report and financial statements of GBP2.7 million, thereby substantially supporting the value at which the property was valued in the Company's financial statements.