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CA Immobilien Anlagen AG

Annual Report Mar 15, 2012

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Annual Report

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ANNUAL FINANCIAL REPORT 2011 IN ACCORDANCE WITH THE § 82 (4) OF THE AUSTRIAN STOCK EXCHANGE ACT

CONTENT

MANAGEMENT REPORT

Holdings and funds 4
Economic environment 6
Property markets 8
Property Assets 12
The Investment Property Area 15
The Investment Property Under Development Area 20
Property Valuation 28
Financing 31
Results 35
Outlook 43
Supplementary report 44
Research and development 44
Personnel 45
Value Management 47
Risk Management Report 49

CONSOLIDATED FINANCIAL STATEMENTS

A. CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31.12.2011 60
B. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31.12.2011 61
C. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31.12.2011 62
D. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR 2011 63
E. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31.12.2011 64
F. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31.12.2011 66
ANNEX I TO THE CONSOLIDATED FINANCIAL STATEMENTS 132
DECLARATION OF THE MANAGEMENT BOARD DUE TO SECTION 82 (4) OF THE
AUSTRIAN STOCK EXCHANGE ACT 141
AUDITOR'S REPORT 142

FINANCIAL STATEMENTS AND MANAGEMENT REPORT 145

MANAGEMENT REPORT

INVESTMENTS AND FUNDS

The listed company CA Immobilien Anlagen Aktiengesellschaft, based in Vienna, is the parent company of the CA Immo Group. The Group's activities are focused on Austria, Germany and Eastern Europe. The Group has 263 subsidiaries, of which

–42 are in Austria (including 8 joint ventures),

  • –103 are in Germany (including 20 joint ventures) and
  • –118 other companies (including 24 joint ventures) were created in connection with investment in Eastern Europe.

All tasks are performed through a network of branch offices in Austria, Germany, Hungary, the Czech Republic, Romania, Poland and Serbia; there are also offices in Russia, Ukraine and Cyprus employing a total of 390 staff members. Every site functions as a profit centre. Construction management – which encompasses project monitoring, tendering, contract awarding, construction supervision and general planning – is carried out by omniCon, the subsidiary of CA Immo Deutschland acquired in July 2008. omniCon also performs these services for third parties. In addition, DRG was founded in 2011 as a joint venture with the estate agent and property management firm ÖRAG. DRG undertakes tenant management, service charge accounting, rental revenue enhancement, cost reduction, maintenance tasks and letting for CA Immo's office investment properties in Germany. Throughout the group, external service providers are brought in to carry out certain other activities. This enables the cost structure to be adapted flexibly to varying workloads. All activity in Germany is processed via CA Immo Deutschland; business in Eastern Europe is bundled in CA Immo as well as in Europolis AG, which was acquired early in 2011. Since 2006, project development in Eastern Europe has been managed largely through the CA Immo New Europe (CAINE) special fund.

CA IMMO DEUTSCHLAND

CA Immo entered the German market in the autumn of 2006. Since 2008, CA Immo Deutschland GmbH (formerly Vivico Real Estate GmbH, a collecting society for railway properties owned by the German state) has provided the operational platform. CA Immo Deutschland has extensive expertise in developing inner city properties. Projects on these development sites are at various stages of preparation and will be rapidly progressed to construction readiness over the coming years. On completion, development projects are either sold, transferred to the company's asset portfolio or sold to property developers as construction-ready real estate. With branch offices in Frankfurt, Berlin and Munich, the organisation of CA Immo Deutschland meets the requirements of local presence. CA Immo Deutschland GmbH is fully consolidated in the consolidated financial statements of CA Immo. The company's property assets mainly comprise properties under construction and undeveloped plots alongside a portfolio of properties intended for trading or sale. As at key date 31 December 2011, the market value of this real estate portfolio was € 1,343 m (€ 1,157 m on 31.12.2010). Most of the investment properties in Germany, including the package of properties acquired from the state of Hesse in 2006, are maintained by Frankfurt-based CA Immo AG, in which CA Immobilien Anlagen Aktiengesellschaft of Vienna has direct and indirect holdings amounting to 100 %. CA Immo AG of Frankfurt is also fully consolidated in the consolidated financial statements. The market value of the property assets was € 1,019 m as at 31 December 2011 (against € 1,006 m in the previous year).

EUROPOLIS AG

Europolis AG, which was acquired from the Volksbank Group at the start of January, is also a wholly owned subsidiary of CA Immo. The Europolis Group, which has been in existence since 1990, focuses on class A office, logistical and retail buildings in Eastern Europe. The Europolis AG portfolio also includes a small number of development projects and undeveloped plots in Poland, Hungary and the Ukraine. The overall portfolio is divided into six smaller portfolios in which reputable partners such as the EBRD, AXA and Union Invest hold shares of between 25 % and 49 %. The portfolios are managed by Europolis Real Estate Asset Management GmbH of Vienna (EREAM), a wholly owned subsidiary of Europolis AG, alongside a group of regional companies in Prague, Budapest, Warsaw, Bucharest and Belgrade trading as "CA Immo Real Estate Management". As at 31 December 2011, the property assets of the Europolis Group had an approximate market value of € 1,408 m (€ 1,517 m in the previous year).

CA IMMO NEW EUROPE PROPERTY FUND

The CA Immo New Europe property fund is a project development fund structured under Luxembourg law as a SICAR (societé d'investissement en capital à risque). The fund has drawn together CA Immo's development projects in Eastern Europe since early 2007. CA Immo raised

its stake by a further 10 % in the fourth quarter and now holds 70 % of the shares in the fund. The remaining 30 % is held by three institutional investors. The planned lifespan of the fund, which is managed by a CA Immo subsidiary, is seven years in total (with the option to extend). The commitment period (in which new projects can be initiated) ended on 31 December 2009. In view of changed market conditions, investment activity fell far short of the levels originally intended; agreement was reached with the co-partners only to proceed with development projects that were already in progress. In future, new projects will be realised by CA Immo itself where the fund partner decides against individual involvement in the implementation. As at the balance sheet date, the fund portfolio had a book value of around € 142 m (compared to € 134 m in the previous year). Three projects are in progress at the present time; another three have been finalised since the fund was set up and will henceforth be held directly by the fund as investment properties.

INVESTMENT IN UBM

CA Immo holds a stake of 25 % plus four shares (vetoing minority holding) in the listed Vienna-based real estate developer UBM Realitätenentwicklung AG through a subsidiary company. The main shareholder in UBM is the PORR Group with a holding of approximately 41 %. With its track record of development expertise in the CEE region, UBM is an ideal partner to the CA Immo Group. Projects realised with UBM include the Poleczki Business Park in Warsaw and the Airport City St. Petersburg project. The investment in UBM contributed a total of € 1,640 K to the earnings of CA Immo in 2011 (previous year: € 2,751 K). CA Immo thus received a dividend for business year 2010 of € 825 K (€ 750 K in the previous year), corresponding to a return on invested capital of around 5 % or a dividend yield of approximately 4 %.

For more information, please refer to the Property Assets section and the notes.

ECONOMIC ENVIRONMENT

THE CYCLICAL TREND

Economic growth is the main factor that drives demand for office space in the real estate sector; similarly, liquidity and interest rates are the key criteria in operational business developments. The continuing debt crisis is therefore impacting on general economic stability and feeding insecurity on markets and amongst investors.

With average GDP growth of 1.6% (compared to 1.7% in 2010), the dynamism witnessed on most EU markets early in the year had tailed off dramatically by the end of 2011. Against this background of tension, economic data shows that the core markets of CA Immo performed above the EU average in 2011. Compared to most eurozone nations, economic output on the majority of CA Immo's core markets in Eastern Europe is more stable, with higher growth rates and far lower levels of debt. Poland and Germany were at the forefront of economic expansion with impressive GDP growth of 4% and 3% respectively, whilst the Hungarian economy (1.4% GDP growth) was adversely affected by the uncertain political climate.

THE MONEY MARKET AND INTEREST RATE ENVIRONMENT 1

The average inflation rate for 2011 in the eurozone was 2.7%, well above the two percent target level specified by the European Central Bank (ECB). Once again, prices were driven by energy and other commodities. The ECB responded to the rising inflation in the first six months by raising the base rate from 1.0% to 1.5%. During the fourth quarter, the bank then cut back the base rate by 50 base points to its original level of 1.0%.

Money market rates were significantly more volatile, especially in the final quarter of 2011, with major differences between the secured and unsecured markets. At the end of the year, the average monthly interest rate for term deposits in interbank transactions (3 month Euribor), which is used as the basis for variable financing, stood at 1.35%; since then it has fallen closer to 1.0%. Despite the low interest level, total financing costs are the same or higher than in previous years owing to higher bank margins. The main cause of this is restraint in interbank transactions and a greater capital requirement on the part of banks.

1 Sources: Eurostat 2012, European Central Bank, Monthly Bulletin January 2012

2011 Growth rate of the real GDP 1
2012
Annual inflation
rates 2
in %
Rate of
unemployment 3
in %
Gross public
dept
in %
Public deficit/
-surplus
in % of the
GDP 2010
Balance of
trade
in € bn
EU (27) 1.6 0.6 3.1 9.8 80.1 – 6.6 – 7.2
Euro zone (17) 1.5 0.5 2.7 10.0 85.3 – 6.2 6.9
AT 2.9 0.9 3.4 4.0 71.8 – 4.4 – 7.3
D 3 0.8 3.2 5.5 83.2 – 4.3 129.2
PL 4 2.5 4.5 10.0 54.9 – 7.8 – 12.0
CZ 1.8 0.7 2.8 6.7 37.6 – 4.8 6.5
BG 2.2 2.3 2.0 10.9 16.3 – 3.1 – 2.1
HU 1.4 0.5 4.1 10.7 81.3 – 4.2 6.0
RO 1.7 2.1 3.2 7.3 31 – 6.9 – 7.7

ECONOMIC DATA OF CA IMMO CORE MARKETS

1Change from previous year (%),

2 December 2011,

3 November 2011 (seasonally adjusted)

CURRENCIES 1

The exchange rate for the euro remained volatile as the sovereign debt crisis in peripheral European nations unfolded. The value of the euro has been falling sharply against the currencies of the 20 main trading partners since the end of August. By the end of the year, the exchange rate against the US dollar had fallen by 1.9% on the previous year's value to US\$ 1.3920 on average. However, given that CA Immo's lease contracts are all concluded in euros, this did not impact directly on rental revenue.

OUTLOOK

In 2012, economic development in Europe will be governed by the sovereign debt crisis on the continent, a weakening macro-economic environment and diminishing consumer confidence as a result. The economic stability of Europe will depend heavily on the savings and reform measures enacted by the debt-ridden member states of Greece, Italy, Spain and Portugal.

As the year progresses, the slowdown in the global economy will mean companies investing less and export ratios falling in most countries – a scenario that could seriously affect the commercial property market as demand for office premises negatively. Only core properties let for the long term are likely to benefit from the increaseing reluctance of investors to take risks.

Stability in the banking sector will spur economic activity

The lowering of the credit quality threshold for certain asset-backed securities (ABS) confirmed by the ECB in December entails credit default risk; moreover, this will not solve the problem of declining interbank transactions owing to mistrust between banks. Radical reforms on the money and capital markets are thus inevitable.

The tightening of financing conditions in particular is sure hinder economic dynamism, at least temporarily. By the middle of the year, European banks will have to comply with the requirements of the European Banking Authority and raise their core capital stock by a minimum of 9%. The stance taken by individual banks – and the effect this will have on bank lending to the real economy – remain unclear. Guaranteeing the medium-term resilience of banks within the eurozone on the one hand whilst sustaining economic development through lending to the real economy on the other will constitute a balancing act.

The limits of financing with outside capital

Since the availability of loan capital will also be limited in the real estate sector over the years ahead, the financing of development projects and other transactions will be a major challenge. In the medium term, identifying alternative forms of finance and financing partners (such as capital market financing in the form of bonds) will be critical. The extent to which insurance companies and pension funds play a greater role will surely also depend on the future patterns of savings by private households and financial asset acquisition by institutional investors.

1 Sources: European Central Bank, Monthly Bulletin January 2012, www.finanzen.net; closing rate on 30.12.2011

PROPERTY MARKETS

The core markets of CA Immo held their ground in 2011, producing not only above average economic data but also stable or improving performance indicators on the property investment and rental markets. With steady growth and large, liquid real estate markets, Germany proved a particularly safe haven in 2011, developing more strongly than many other major international markets. Generally speaking, performance on the company's main markets in Eastern Europe was also stable to above average in 2011, although investment and lettings activity slowed somewhat in the second half of the year.

Once again, security and core were central factors in the purchase decisions of investors. As a result, the gap has widened between high quality real estate in capital cities and older properties in B-class locations that fall short of modern technical standards. This trend is expected to continue in 2012.

THE REAL ESTATE MARKET IN AUSTRIA 1

The investment market

Around € 1.7 bn was invested in Austrian real estate in 2011, an increase of 7.0% on the transaction volume for 2010. Investors were strongly attracted to high quality office properties (27%) and hotels (24%). In year-on-year comparison, peak yields fell by five base points to stand at 5.20% at the turn of the year. Yields are expected to stagnate in 2012.

The office property market

During 2011, 260,000 sqm of office space was let in Vienna, around 5.4% down on the previous year and the lowest figure since the crisis began in 2008. Market activity in Vienna will continue to be characterised by smallscale new lettings in 2012. Although demand stagnated in 2011, the production of (office) premises rose by 14%. Another 178,000 sqm of office space is expected to be produced in 2012 as various projects are completed (not including general restorations). Moreover, owing to the fact that older properties are required to undergo full redevelopment prior to re-utilisation in order to attain certain rent levels, more and more fully restored properties are coming onto the market – a trend that is sure to intensify. During 2012, CA Immo will also market a restoration project comprising some 18,800 sqm of reconditioned office premises at the Lände 3 site. As a result, both competition for tenants and vacancy (espe-

1 Sources: CBRE, Vienna Office MarketView Q4 2011; EHL Market Research 2012

cially in previously occupied properties not conforming to the latest standards) will increase this year.

Peak rent levels were hovering around € 23.75/sqm at the end of 2011. Rental rates are expected to rise marginally this year in prime locations; stagnation is likely in other locations owing to excess supply.

OFFICE MARKET DEVELOPMENT IN VIENNA

2011 2010 Change in %
Take up in sqm 260,000 275,000 –5
Vacancy rate in % 6.1 5.5 11
Peak rent in €/sqm net
exclusive
23.8 23.0 3
Prime yield in % 5.2 5.3 – 1

Sources: BNP Paribas Real Estate 2012; CBRE, Vienna Office MarketView, Q4 2011, EMEA Rents and Yields Q4 2011

THE REAL ESTATE MARKET IN GERMANY 2

The investment market

Economic stability, a polycentric structure and large, liquid real estate markets are making Germany a magnet for investors. Some € 23.5 bn was invested in real estate purchases in 2011, up nearly 20% on the previous year's figure. Peak yield values were stable throughout the year in most locations. With real estate in Germany retaining its popularity despite the financial market crisis, the transaction volume for 2012 is likely to be similarly high. Demand also remained strong for high quality properties with good letting levels (core segment), especially in the usage categories of retail properties (46% of the total investment volume) and office premises (30%). At present, we expect this demand to be maintained in 2012, leading to further increases in value in this segment.

With a transaction volume of € 2.96 bn (up 58%), Frankfurt once again led the German investment market in terms of sales; it was followed by Munich (€ 2.88 bn), which experienced a boom as the investment volume exceeded the previous year's value by 70%. The transaction volume in Berlin fell 26% to € 2.34 bn; the reason for this was not a lack of demand from investors, however, but a shortage of suitable supply.

2 Sources: BNP Paribas Real Estate 2012; CBRE EMEA Rents and Yields Q4 2011; CBRE MarketView, Office Market Frankfurt/Munich Q4 2011

The office property market

As regards the office rental market in Germany, office space totalling 1.75 mn sqm was let on the core CA Immo markets of Munich, Berlin and Frankfurt in 2011 (compared to 1.52 mn sqm in 2010). Strong demand for high quality premises coupled with falling construction levels will reduce vacancy further in the quality segment during 2012. At the same time, vacancy in class B real estate that does not conform to the latest standards will continue to rise.

Owing to the fact that construction has only been carried out as required in recent years (and subject to appropriate levels of pre-letting), the supply of new premises in Berlin is moderate. Demand for modern properties in central locations is rising steadily, which in turn is pushing up office rents – a trend expected to continue in 2012.

In Frankfurt a divide opened up in 2011: while the investment market flourished, the result for the office rental market was rather average. The supply of modern premises available at short notice is limited while outside of the prime segment structural vacancy has risen markedly, producing strong competition for space. There were only few rentals in the prime segment, the peak rent declined by 16% from 38.5 €/sqm (2010) to 32.3 €/sqm (2011). In the medium term, therefore, refurbishment will form the focus of development activity in Frankfurt.

In terms of floor space, Munich has by far the highest turnover of the office centres in Germany (755,000 sqm, up 49.5% on the previous year). Rent levels have also risen in response to high demand. Vacancy has declined by around 14% compared to 2010, not least because of the diminishing completion volume.

OFFICE MARKET DEVELOPMENT IN CA IMMO CORE MARKETS IN GERMANY

2011 2010 Change in %
Berlin
Take up in sqm 1 568,000 541,000 5
Vacancy rate in % 7.7 8.3 – 7
Peak rent in €/sqm net exclusive 21.6 20.9 3
Prime yield in % 5.1 5.3 – 4
Frankfurt am Main
Take up in sqm 1 423,500 470,000 – 10
Vacancy rate in % 13.8 14.6 – 6
Peak rent in €/sqm net exclusive 32.3 38.5 – 16
Prime yield in % 5.0 5.1 – 2
Munich
Take up in sqm 1 755,000 504,877 50
Vacancy rate in % 7.3 8.5 – 14
Peak rent in €/sqm net exclusive 34.8 33.9 3
Prime yield in % 4.8 4.8 0

1 Including surrounding area and owner-occupier transactions

Sources: BNP Paribas Real Estate 2012; CBRE 2012 EMEA Rents and Yields Q4 2011; gif e.V. (German Society of Property Researchers), Annual Survey of Office Markets 2010 and 2011, Research working group; correct as of January 2012. All floor space data is rentable space (gif e.V.), conversion factor = gross floor space x 0.85.

THE REAL ESTATE MARKET IN EASTERN EUROPE 1

The investment market

In 2011, investment activity in Eastern Europe was characterised by a search for secure asset classes (especially in capital cities). Taking account of the acquisition of the Europolis portfolio by CA Immo, the total office transaction volume exceeded € 4 bn (up 60% on the prior year). The markets of Russia (42%), Poland (29%) and the Czech Republic (14%) generated the highest shares of the total volume. By contrast, very little investment activity was reported in the smaller nations of South Eastern Europe in particular owing to worsening economic conditions and the lack of financing.

A strong phase of recovery was followed by a slump in the investment volume in the fourth quarter of 2011; this

1 Sources: CBRE Market View, CEE Offices February 2012; CBRE EMEA Rents and Yields Q4 2011

was mainly due to the limited availability of core properties, for which demand was high, and constraints on financing – issues likely to remain prominent in 2012. With little construction activity on most markets, investors are falling back on investment properties. Moreover, only a few banks are prepared to provide finance in Eastern Europe. Poland and the Czech Republic have emerged as the only relatively liquid markets (unlike Hungary, the Balkan states and the Ukraine, where investment activity is likely to remain at very low levels for some time to come).

Peak yields did not vary greatly in 2011, although there was a slight trend towards compression in the second half of the year. For class A office properties in Poland and the Czech Republic, peak yields were 6.25% and 6.75% respectively. Given the limited supply of high quality prime real estate on these markets, a further fall in yields is expected for this product class.

OFFICE MARKET DEVEOLOPMENT IN CA IMMO CORE MARKETS IN CEE/SEE

2011 2010 Change in %
Budapest
Take up in sqm 394,655 312,200 26
Vacancy rate in % 19.2 20.6 – 7
Peak rent in €/sqm net exclusive 20.0 20.0 0
Prime yield in % 7.3 7.5 – 3
Bukarest
Take up in sqm 262,000 190,000 38
Vacancy rate in % 14.1 17.5 – 19
Peak rent in €/sqm net exclusive 19.5 19.5 0
Prime yield in % 8.3 9 – 8
Prague
Take up in sqm 325,564 215,700 51
Vacancy rate in % 12.0 13.2 – 9
Peak rent in €/sqm net exclusive 21.0 21.0 0
Prime yield in % 6.5 6.8 – 4
Warsaw
Take up in sqm 573,000 356,500 61
Vacancy rate in % 6.7 7.0 – 4
Peak rent in €/sqm net exclusive 27.0 25.0 8
Prime yield in % 6.3 6.3 0

Sources: CBRE 2011/2012; Jones Lang Lasalle 2011/2012

Note: floor space turnover includes owner-occupier transactions

The office market in Eastern Europe 1

Like the investment market, the office rental market also slowed down in the second six months. Compared to the first half of 2011, market absorption in Warsaw, Bucharest and Prague fell by 20-40%. Despite this, overall lettings performance in Warsaw reached a record level. Minimal levels of building activity have reduced vacancy, although the influx of new tenants has been generally low. There is a clear focus on extending and expanding existing lease contracts on portfolio buildings. For countries with strong links to Western Europe in particular, the development of the demand situation will depend largely on the economic trend in this region. However, the stable performance of the German economy gives rise to hopes of a further boost to the Czech and Slovakian markets especially.

With the exception of Warsaw, vacancy rates on most markets remain above 10% (although the trend is downward). Owing to the limited availability of financing, high levels of pre-letting on new development projects are required, and this should continue to suppress vacancy. Some cities in the SEE region in particular (including Sofia and Belgrade) are still struggling with high (22%) rates of vacancy, and this in turn is forcing down rental rates. By contrast, rent levels are stable or rising modestly on core CA Immo markets such as Warsaw.

Logistics 2

The logistics segment – a sector that traditionally has shorter lease agreement terms, higher volumes of floor space and direct links to the business environment – generally responds more quickly to international trends than the office sector. Despite the volatile climate, development for the logistics area in Eastern Europe was largely stable in the first six months of the year. Poland, the Czech Republic and Russia achieved the strongest growth on the European logistics market in terms of both transaction volumes and lettings performance.

General conditions in the second half of 2011 mirrored those for the office markets: limited supply and minimal construction in the core segment coupled with an increasingly uncertain economic outlook suppressed activity on the investment as well as the lettings markets.

Thanks to the country's strong domestic market and stable economic growth, demand expanded steadily in the logistics segment in Poland. Floor space turnover in the commercial sector increased by over 30% during 2011, driven mainly by the logistics area. The logistics vacancy rate fell marginally to around 9-15% (depending on location), with rent levels stabilising in the range of 2.8 €/sqm to 5.0 €/sqm. Peak yields were also stable at 7.75%. Rents and yields are not expected to change significantly in 2012.

Sources: Jones Lang LaSalle, European Industrial Bulletin, September 2011; CBRE Big Box Poland Industrial Market View, Q4 2011

2

BUCHAREST, Europolis Park

GROUP MANAGEMENT REPORT

1 Sources: CBRE Market View, CEE Offices February 2012; CBRE EMEA Rents and Yields Q4 2011

PROPERTY ASSETS

The CA Immo Group divides its core activity into two business areas: letting investment properties and developing real estate. In both of these business areas, CA Immo specialises in commercial real estate with a clear focus on office properties in the center of Europe. The objective is to build up a focused portfolio of high quality and sustainable investment properties within the core markets of Germany, Austria, the Czech Republic, Poland, Hungary, Romania and Slovakia. The company generates additional revenue through the utilisation of developed real estate reserves.

Expansion through acquisition of Europolis AG

Early in 2011, CA Immo acquired properties with an approximate value of € 1.5 bn in Eastern and South Eastern Europe through the takeover of Europolis AG. Investment properties on the core markets of Poland, the Czech Republic and Hungary comprise the greater part (75%) of the portfolio. With 21 % of property assets, Romania is the most important market in South Eastern Europe. Undeveloped land reserves for potential development projects make up some 7% of the Europolis portfolio.

Property assets of € 5.2 bn

As a result of the integration of Europolis, the property assets of the CA Immo Group in the consolidated statement of financial position for 2011 rose from approximately € 3.6 bn (as at 31 December 2010) to € 5.2 bn as at 31 December 2011. Of this figure € 4.2 bn (82% of the total portfolio) are investment properties1 , and € 0.9 bn (18% of the total portfolio) represent property assets under development. The proportion of the Eastern and South Eastern European segment expanded from around 20% to over 41% of the company's overall property assets, bringing it onto a par with the German segment.

1 including own use properties and properties intended for trading or sale

in € m Investment
properties 1
Investment properties
under development
Properties held as
current assets 2
Property assets Property assets
in %
Austria 692 33 0 725 14%
Germany 1,502 771 92 2,365 45%
Czech Republic 337 8 0 345 7%
Hungary 409 12 0 422 8%
Poland 660 32 0 692 13%
Romania 369 41 0 411 8%
Others 227 37 0 263 5%
CA IMMO 4,196 934 92 5,222 100.0%
Share in portfolio 80% 18% 2% 100%

PROPERTY ASSETS OF CA IMMO GROUP AS OF 31.12.2011 (BOOK VALUES)

1 Incl. own use properties

2 Incl. properties intended for trading or sale

Conserving the environment and resources

Around 40% of all carbon emissions in industrialised nations come from buildings1 – a finding that inspired CA Immo to focus on energy efficiency, product configuration and the environmental impact of its portfolio buildings and development projects. More and more investors and capital contributors are attracted by the lasting value offered by sustainable buildings. For end customers (i.e. the tenants), this approach pays dividends in terms of lower operating expenses and better living conditions, to give two examples.

1 Source: Study by the Royal Institution of Chartered Surveyors (RICS)

Sales

In 2011 building sales with an extent of € 324.7 m were completed. Building plots connected with urban district development activities (mainly in inner city areas of Germany) accounted for 56% of sales; suitably valueenhancing property use approvals had previously been obtained. Since this real estate had not been generating any rental income, the sales will not lead to falls in cash flow over the long term.

During 2011, the year under review, CA Immo also sold two shopping centres in the Czech Republic with a combined asset value of approximately € 100 m. Since 2003, both malls had been part of the C1 fund portfolio, in which the CA Immo subsidiary Europolis holds a 51% stake. The rentable floor space amounted to 21,884 sqm in the Mladá Boleslav shopping centre and 32,157 sqm in the Teplice mall. In Austria's capital cities and in the federal capital city Vienna above all small and medium apartment buildings were market placed gainfully.

Total income of € 52.8 m was generated from sales in 2011 (compared to € 44.4 m in 2010).

Forward sales

The sale to Allianz of 80% of the Skyline Plaza shopping centre in Frankfurt's Europaviertel was agreed as a forward sale in mid-September. As joint venture partners, CA Immo and ECE will each retain 10% of the property following completion. The total investment volume for this development project stands at € 360 m; groundbreaking took place early in June 2011. When completed in the autumn of 2013, the Skyline Plaza will provide some 38,000 sqm of retail space for around 180 shops.

Investment

CA Immo invested approximately € 241.6 m (2010: € 284.3 m) in its real estate portfolio in 2011. Of this figure, € 37.9 m was earmarked for modernisation and optimisation measures in the asset portfolio and € 203.7 m was devoted to the furtherance of development projects. Real estate with a value of € 1,557.7 m (incl. Europolis) was acquired. Amongst other things, CA Immo procured the 50 percent share of OFB Projektentwicklung in the SKYGARDEN office building in Munich's Arnulfpark. This property, constructed through a joint venture with OFB, was completed in August 2011. The proportionate value of real estate acquired amounts to around € 61 m.

Austria Germany Eastern Europe Total
Property assets 31.12.2010 € m 736.0 2,165.9 710.3 3,612.2
Acquisition of new properties € m 0.0 61.4 1,496.3 1,557.7
Investments in current projects € m 13.6 173.5 16.6 203.7
Investments in the portfolio stock € m 14.1 8.3 15.4 37.9
Change from revaluation/impairment/depreciation € m (4.1) 67.8 (16.7) 47.0
Capitalised rent incentive € m 0.5 (0.3) 12.5 12.6
Disposals € m (35.3) (111.7) (101.9) (248.9)
Property assets 31.12.2011 € m 724.8 2,364.9 2,132.4 5,222.2
Annual rental income1) € m 37.1 90.1 138.3 265.5
Annualised rental income € m 38.4 84.6 148.9 271.9
Economic vacancy rate for investment properties % 9.3 8.4 15.4 12.6
Yield (investment properties) % 5.6 5.2 7.4 6.3

PROPERTY ASSETS BRIDGE 2010 TO 2011

1 Incl. annual rental income of sold properties in 2011 (€ 5.5 m)

THE INVESTMENT PROPERTY AREA

Contributing around 73% of EBIT and 82% of the company's total property assets, the investment property area is CA Immo's core business and main source of income. The principle objective of the company is thus the continual quality optimisation of its portfolio and the retention and acquisition of tenants with a view to securing stable and regular rental revenue.

Assets rise to € 4.2 bn

As at key date 31 December 2011, the Group's asset portfolio incorporated a total rentable effective area of 2.5 mn sqm with an approximate book value of € 4.2 bn (compared to € 2.7 bn in 2010). Having integrated the asset portfolio of Europolis AG, which was acquired early in 2011, the Eastern Europe segment accounts for the greater part (48%) of book value, generating around 53% of rental revenue in 2011. CA Immo generated total rental income of € 265.6 m in 2011 (€ 164.4 m in 2010). On the

basis of annualised rental revenue, the asset portfolio produced a yield of 6.3% (5.8% in 2010).

Stable utilisation rate in core office segment

The utilisation rate in the core office segment was 87.4% on the key date (compared to 86.5% on 31 December 2010). Despite the drop in the overall utilisation rate of logistic premises (76.2% as at 31 December 2011) in Eastern Europe acquired along with Europolis and the take over of the two finished German buildings Skygarden and Ambigon into the investment property portfolio, the economic occupancy rate for the portfolio as a whole as at 31 December 2011 with 87.4% was similar to the rate in the year before (88.2%on 31 December 2010). In like-for-like comparisons of real estate forming part of the portfolio as at 31 December 2010, the economic occupancy rate increased from 88.2% on that date to 93.1% on the balance sheet date for 2011.

INVESTMENT PROPERTIES: KEY FIGURES BY COUNTRY1

Book value Rentable area
Rented area Occupancy rate
Rental income Yield
in € m in % in sqm in sqm in % in € m in %
Austria 682.2 16.3% 336,815 307,054 90.7% 35.9 5.6%
Germany 1,499.4 35.8% 788,740 733,867 91.6% 82.9 5.2%
Czech Republic 336.8 8.1% 173,594 140,930 82.9% 25.0 8.0%
Hungary 409.2 9.8% 305,078 243,223 79.6% 27.2 7.3%
Poland 659.9 15.8% 429,383 312,424 84.4% 37.8 6.5%
Romania 369.3 8.8% 327,533 282,906 91.5% 28.5 8.6%
Others 226.5 5.4% 120,825 99,076 85.2% 15.5 7.6%
Total 4,183.2 100.0% 2,481,967 2,119,481 87.4% 252.8 6.3%

1 Excl. own use properties

LIKE-FOR-LIKE-ANALYSIS OF PROPERTIES THAT WERE ALREADY CORE AS OF 31 DECEMBER 2010

Book values Annualised rental income
Gross yield
Occupancy rate
m 2011 2010 2011 2010 2011 2010 2011 2010
Austria 680.6 702.1 38.3 36.0 5.6% 5.1% 91% 82%
Germany 1,315.0 1,334.9 72.5 70.8 5.5% 5.3% 99% 98%
Eastern Europe 687.8 677.6 54.1 50.2 7.9% 7.4% 88% 81%
Total 2,683.4 2,714.7 164.8 157.0 6.1% 5.8% 93% 88%

Lettings performance of over 540.000 sqm

During 2011, the CA Immo Group as a whole let effective area of approximately 541,000 sqm. Lettings performance was thus equivalent to around 22% of the Group's asset portfolio, which amounts to 2.5 mn sqm. Of this total figure, new lettings were responsible for around 37% and 63% was accounted for by existing tenants extending contracts and expanding their floor space. The main impetus came from large-scale lettings in Eastern European investment properties together with various new contracts linked to recently completed development projects in Germany. As at 31 December 2011 47% of lease contracts have a term in excess of five years (including leases with unlimited duration).

EXPIRY PROFILE OF LEASE AGREEMENTS BASED ON EFFECTIVE RENTAL INCOME (€ 271.9 m)

CAST: the quality assurance tool for portfolio buildings

CA Immo holds investment properties of many different kinds in many different countries. In response to the lack of a certification scheme on the market for portfolio buildings which would adequately clarify and facilitate comparison of the sustainability of portfolio buildings across various countries, CA Immo developed its own recording system for office buildings in its portfolio in 2010. The tool was named CAST (CA Immo Sustainability Tool).

CAST not only records economic and social criteria, but also (and especially) the technical quality of installations and facilities across the Group; build quality is also recorded. This process creates transparency within the asset portfolio – a sound basis for purchase decisions and portfolio strategies.

In accordance with declared corporate strategy, 85% of office investment properties were entered into the CAST tool during 2011. By resolution of the Supervisory Board, acquisitions of office properties will in future depend on a minimum points score in the CAST system. The aim is for all office investment properties (including acquisitions) to be recorded by 2012. This database will then be used to enact specific measures designed to optimise energy efficiency.

MAJOR TENANTS

Sector Region Share 1
Hesse (state of Germany) Public administration Germany 16%
Pekao S.A banks CEE 3%
PWC Auditor Germany 3%
Hennes & Mauritz GmbH Fashion retail Germany 3%
BIM Berliner Immobilienmanagement GmbH Real estate and administration Germany 2%
Verkehrsbüro Hotellerie GmbH Hotel sector Austria 1%
IBM IT CEE 1%
Österreichische Post AG Postal services Austria 1%
ECM Hotel Operations Europort s.r.o. (final user Marriott) Hotel sector CEE 1%
Carrefour Romania SA Retail CEE 1%

1 by annualised rental income

THE AUSTRIA SEGMENT

The asset portfolio in Austria comprises rentable effective area of some 336,815 sqm with a market value of around € 682 m according to current valuations. Taking account of properties sold in 2011, this portfolio generated rental income of € 37.0 m last year (€ 38.9 m in 2010), which is equivalent to an average yield of 5.6% (2010: 5.1%).

The economic occupancy rate in the asset portfolio (measured on the basis of expected annual rental income) stood at 90.7% in 2011 (81.8% in 2010). The rise in the occupancy rate compared to the previous year was mainly the result of Post AG, the principal tenant taking up residence at the Erdberger Lände site in Vienna in autumn 2011 as planned.

CA Immo invested approximately € 14.1 m in its Austrian asset portfolio in 2011 (compared to € 14.4 m in 2010). Refurbishment of the portfolio building at the Lände 3 site accounted for € 9.8 m of this figure. An additional € 2.0 m or so (€ 2.4 m in 2010) was devoted to maintenance costs with a view to upholding the fabric of buildings and the quality of rental units.

INVESTMENT PROPERTIES AUSTRIA: KEY FIGURES1

in € m 31.12.2011 31.12.2010 Change
book value 682.2 703.7 -3.1%
Annualised rental income 38.3 36.1 +6.2%
Gross initial yield 5.6% 5.1% +0.5 pp
Economic vacancy rate 9.3% 18.2% -9.0 pp

1 Excl. own use properties

THE GERMANY SEGMENT

The asset portfolio in Germany comprises rentable effective area of some 788,740 sqm with a market value of around € 1,499 m according to current valuations (€ 1.335 m in 2010). Alongside landmark buildings such as the Königliche Direktion in Berlin, the company's investment property assets in Germany include a package of properties in Hesse with a value of € 806.2 m. These properties are leased to the state of Hesse on a long-term

basis, with average remaining terms of 25 years still to run on contracts.

Two finished projects became investment properties Rental income of € 82.9 m was generated in 2011 (including properties sold in 2011); the figure for 2010 was € 63.2 m. The occupancy rate for the properties averaged 91.6% in 2011 (98.2% in 2010). This decline is caused by the transfer of two finished projects in Munich, the Skygarden building (book value of € 135.6 m) and the Ambigon building (€48.8 m; see 'The project development area' for details) to the asset portfolio upon their completion in the final quarter of 2011. As at 31 December 2011, the yield on the portfolio stood at 5.2%(5.3% in 2010). CA Immo invested approximately € 2.7 m in maintaining its German investment properties in 2011.

By contrast the Tower 185 high-rise, which was completed at the end of the year, will only be incorporated in the portfolio (and reflected on the balance sheet) in the first quarter of 2012; the property is not therefore included in the key figures below.

Lettings

Significant new lettings were concluded in relation to recently completed development projects in Germany (and in other areas). Lease contracts were finalised on around 5,000 sqm of the Skygarden office building in Munich, which was completed in autumn 2011. Largescale contract extensions have also been agreed, including a 10-year lease extension on around 30,000 sqm of the Spreebogen office building by the state of Berlin. In total, new lease contracts and extensions to existing agreements accounted for almost 70,000 sqm of floor space in 2011.

in € m 31.12.2011 31.12.2010 Change book value 1,499.4 1,334.9 +12.3% Annualised rental income 77.9 70.8 +10.1% Gross initial yield 5.2% 5.3% +0.1 pp Economic vacancy rate 8.4% 1.8% +6.6 pp

INVESTMENT PROPERTIES GERMANY: KEY FIGURES1

1 Excl. own use properties

THE EASTERN EUROPE SEGMENT

CA Immo has been investing in Eastern Europe since 1999. The company now maintains investment properties in 9 countries of Central and Eastern Europe (CEE, 71%) and South Eastern Europe (SEE, 29%). The acquisition on 1 January 2011 of the Europolis AG portfolio, which is focused on (South) Eastern Europe and valued at € 1.5 bn, increased the share of Eastern Europe in the asset portfolio as a whole from 25% to around 48%. In this region, CA Immo concentrates on high quality office properties in capital cities of Eastern and South Eastern Europe; these make up 79% of the overall Eastern European portfolio.

53% of rental revenue from Eastern Europe

As at the balance sheet date 31 December 2011, investment properties had an approximate market value of € 2,001.7 m (€ 678 m on 31 December 2010). The company's Eastern European asset portfolio comprises 1,356,412 sqm of rentable effective area which generated rental income of € 134.0 m in 2011 (compared to € 45.5 m in 2010). This represents 53% of CA Immo's total rental revenue.

Quality: the basis for stable, long-term revenue

The high quality of the portfolio is expressed in landmark buildings such as the Warsaw Financial Center, Capital Square in Budapest, the three office blocks making up the River City complex in Prague and many more. By placing its faith in top quality locations and properties, CA Immo has been able to increase the utilisation rate of its office portfolio even in the time of crisis (see next page). The general overview of properties included in this report has full details on the various properties in the Eastern European asset portfolio.

Utilisation rate in core office segment rises to 86%

As at 31 December 2011, the economic occupancy rate for the asset portfolio (measured on the basis of expected annual rental income) was 85% (against 81% in 2010). The utilisation rate in the core office segment stood at 86% (79% in 2010). The overall portfolio produced an initial yield of 7.4% (7.4% in 2010), with the yield for properties in the SEE region standing at 8.2% (7.6% in 2010) and 7.1% (7.3% in 2010) for those in the CEE region. Full details of the valuation results are contained in the 'Property valuation' section.

in € m Book value Annualised Occupancy Gross yield Equivalent
rents rate Yield
Poland 659.9 43.2 84% 6.5% 7.7%
Hungary 409.2 29.8 80% 7.3% 9.0%
Romania 369.3 31.7 92% 8.6% 9.4%
Czech Republic 336.8 27.0 83% 8.0% 8.0%
Serbia 89.0 6.9 93% 7.7% 9.0%
Croatia 62.4 5.0 91% 8.0% 9.0%
Bulgaria 45.3 2.8 63% 6.3% 9.5%
Slovenia 17.6 1.5 89% 8.7% 9.3%
Slovakia 12.2 0.9 89% 7.7% 8.0%
Total 2001,7 148.9 85% 7.4% 8.5%

ASSET PROPERTIES EASTERN EUROPE: KEY FIGURES

Hungary 20%

Large-scale lettings to creditworthy tenants

Lettings performance in 2011 totalled 422,600 sqm of rentable effective area, of which 133,100 sqm was re-let or newly let; contract extensions were responsible for 52.900 sqm and expansions of premises by existing tenants accounted for 236.600 sqm (mainly in the logistics sector). Significant new and extended contracts included Puma and Deloitte (1,000 sqm in Danube House and 8,900 sqm in Nile House respectively, both office properties being located in Prague), Nokia Siemens Network (13,000 sqm of office space in City Gate, Budapest), Tetra Pak (2,160 sqm in the Poleczki Business Park, Warsaw) and IBM (3,800 sqm in the Blonie logistics park in Poland).

Investment properties are managed on site by local teams. The regional companies of CA Immo and Europolis in Prague, Budapest, Warsaw, Bucharest and Belgrade have been amalgamated into CA Immo Real Estate Management, and all activity in Eastern Europe is now carried out under the CA Immo brand.

Logistics: Europolis acquisition creates new asset class

Integration of the investment properties of Europolis introduced logistics as a new asset class in the Eastern Europe segment; logistics made up 15% of the portfolio as at 31 December 2011. In terms of lettings activity, this asset class is relatively volatile; owing to lease contract terms that are shorter on average, it is particularly exposed to the tough global economic situation. As a

result, the vacancy rate in the portfolio is deteriorating. In the medium term, the objective will be to reduce the proportion of logistics as soon as the market allows.

DISTRIBUTION OF BOOK VALUE INVESTMENT PROPERTIES

EASTERN EUROPE BY MAIN USAGE (Basis: € 2 bn)

DISTRIBUTION OF BOOK VALUE LOGISTICS PROPERTIES EASTERN EUROPE BY COUNTRIES (Basis: € 301.5 m)

THE INVESTMENT PROPERTIES UNDER DEVELOPMENT AREA

Alongside its core business of portfolio management, CA Immo acts as a project developer on its markets. CA Immo acquired the project development company Vivico Real Estate GmbH, which changed its name to CA Immo Deutschland GmbH on 1 July 2011, early in 2008; since then, the company has significantly expanded its project development activity in Germany. Vivico was formed in 2001, having previously been a collecting society for railway properties in Germany. The acquisition provided CA Immo with extensive land reserves in central locations (especially in Frankfurt, Berlin and Munich) along with a strong platform for developing these sites. All activity in Germany has been carried out under the CA Immo brand since July 2011.

82% of development activity in Germany

As at 31 December 2011, the development division represented around 18% (equivalent to approximately € 934 m) of CA Immo's total property assets. Germany is clearly the focus of project development activity, accounting for 82.5%; the remaining property assets under development are distributed between developments and land reserves in Austria and Eastern Europe (3.5% and

14.0% respectively). Of the development projects in Germany with a total market value of € 770.9 m, projects under construction account for around € 345.6 m, with plots subject to property use approval and long-term real estate reserves making up € 425.3 m.

Project development sustains portfolio quality over the long term

One objective of development activity is to raise the quality of the company's portfolio by absorbing projects as they are completed; another is to generate profit by selling dedicated building plots. To this end, the value of land reserves in Germany in particular is increased by acquiring building rights in connection with urban district development activity before they are utilised through sales to partners or the company's own development projects. CA Immo either transfers completed projects to its portfolio or sells them (through forward sales or to investors upon completion). In the course of its development activity, CA Immo covers the entire value chain through its subsidiaries: from site development and property use approval to project management and the letting or sale of completed properties.

In Zoning Landbank Projects under construction Total
in € m Book value Book value
in %
Book value Book value
in %
Book value Book value
in %
Book value Book value
in %
Austria 0.0 0.0% 14.4 4.1% 18.4 4.8% 32.8 3.5%
Frankfurt 0.0 0.0% 141.6 39.9% 273.5 70.7% 415.1 44.4%
Berlin 68.7 35.7% 81.7 23.0% 72.1 18.6% 222.5 23.8%
Munich 104.1 54.1% 6.1 1.7% 0.0 0.0% 110.1 11.8%
Rest of Germany 13.8 7.2% 9.3 2.6% 0.0 0.0% 23.1 2.5%
Germany 186.6 97.0% 238.7 67.2% 345.6 89.3% 770.9 82.5%
Czech Republic 0.0 0.0% 8.1 2.3% 0.0 0.0% 8.1 0.9%
Hungary 0.0 0.0% 12.4 3.5% 0.0 0.0% 12.4 1.3%
Poland 0.0 0.0% 17.7 5.0% 14.4 3.7% 32.1 3.4%
Romania 0.0 0.0% 41.3 11.6% 0.0 0.0% 41.3 4.4%
Serbia 0.0 0.0% 1.4 0.4% 0.0 0.0% 1.4 0.1%
Ukraine 0.0 0.0% 12.3 3.5% 0.0 0.0% 12.3 1.3%
Slovakia 5.7 3.0% 8.9 2.5% 8.6 2.2% 23.2 2.5%
Eastern Europe 5.7 3.0% 102.1 28.7% 23.0 5.9% 130.8 14.0%
CA IMMO 192.3 100.0% 355.2 100.0% 387.0 100.0% 934.4 100.0%

INVESTMENT PROPERTIES UNDER DEVELOPMENT BY COUNTRY

PROJECTS UNDER CONSTRUCTION

in € m Book
value
Book value
in %
Outstanding
construction
Planned
rentable
Expected
value 1
Yield City Main
usage
Share pre
letting
scheduled
completion
costs effective area
in sqm
rate
Silbermöwe 18.4 11% 22.3 18,860 47.6 5.7% Vienna Office 100% 0% 12/2012
Austria 18.4 11% 22.3 18,860 47.6 5.7%
Poleczki Business Park 2 14.4 9% 6.2 10,418 22.5 7.7% Warsaw Office 50% 41% 5/2012
BBC 1 Plus 8.6 5% 23.0 15,847 33.5 7.5% Bratislava Office 100% 25% 9/2012
Eastern Europe 23.0 14% 29.2 26,265 56.0 7.6%
Mercedes Benz VD 12.4 8% 57.7 26,380 76.9 5.3% Berlin Office 100% 100% 4/2013
TOUR TOTAL 42.3 26% 45.2 24,737 91.9 5.3% Berlin Office 100% 100% 7/2012
InterCity Hotel 17.4 11% 34.8 20,445 59.0 5.8% Berlin Hotel 100% 100% 9/2013
Retail,
Skyline Plaza 2, 3,, 47.6 30% 130.4 36,154 182.7 5.5% Frankfurt div. 50% 46% 8/2013
Germany 4 119.7 74% 268.1 107,716 410.5 5.4%
CA IMMO 161.1 100% 319.6 152,841 514.1 6.1%

1 Upon completion

2 All statements refer to the 50 % share

3 Incl. Congress Center

4 Excl. Tower 185 (project), which was handed over to the tenant in January 2012

Sustainability: an element in competitiveness and our responsibility to society

Through its real estate and urban district development activities, CA Immo is helping to shape the skylines of major cities like Vienna, Berlin and Munich – by collaborating on master plans and creating associated infrastructure such as public roads, cycle paths, parks, water features, cultural facilities, daycare centres and other utilities.

CA Immo only constructs energy-efficient office buildings. For over three years, the company's development projects (except hotels) in Germany have qualified for certification – an obligation extended across the Group since the end of 2011. By complying with various certification requirements (LEED, DGNB), the company makes allowance for the conservation of resources such as energy and water as well as emissions, wastewater, refuse and the transporting thereof. So the Mercedes Benz sales office in Berlin falls below the common primary energy consumption for more than 25% (calculated according to DGNB method).

Within the scope of land development, CA Immo meets its obligation to furnish proof of biodiversity etc. and aims to establish dialogue with various interest groups at an early stage. For example, contact options are provided where residents have concerns in connection with development projects.1

THE AUSTRIA SEGMENT

CA Immo's development activities in Austria are centred on Vienna and span investment assets under development with a total book value of around € 32.8 m. As at 31 December 2011, the company was realising one development project in Vienna.

Early in 2010, CA Immo launched a large-scale inner city development and restoration project known as Lände 3 on the Erdberger Lände site in the capital. The site, which currently offers some 80,000 sqm of rentable area, comprises a number of sections. Following a phase of restoration, the tenant Post AG started to occupy 31,000 sqm of office space in August 2011; by December, all of the organisation's office-based operations in Vienna had been amalgamated on the site. Sim & More GmbH also signed up as a tenant and operator of a self-service restaurant with usable space of 2,500 sqm.

1 For details on the stakeholder-dialogue see GRI Annex

Meanwhile, full-scale revitalisation work on the Silbermöwe office property began in March: by the autumn of 2012, modern and sustainable office space with rental effective area of approximately 18,800 sqm will be created within the nine-storey building, which is just under 40 metres high. An application will be made for ÖGNI sustainability certification for the building.

Project completions

Two budget MEININGER hotels were completed in 2011: on Fürbergstrasse in Salzburg (attached to the Zentrum im Berg shopping centre) and on Vienna's Rembrandtstrasse, adjacent to the Augarten park. The Salzburg hotel has 101 rooms while its Viennese counterpart has 131 rooms. MEININGER will lease both properties for a term of 20 years. The total investment volume for the two hotels was € 16 m.

THE GERMANY SEGMENT

CA Immo is focusing its development activity on the cities of Munich, Frankfurt and Berlin, aiming in particular to make progress on large-scale, mixed use urban development projects.

As at 31 December 2011, CA Immo held rentable effective area of approximately 107,716 sqm in Germany along with a total budgeted project volume of around € 410.5 m for construction (excl. Tower 185). Around 31% of the investment costs have been recovered; outstanding construction costs of around € 268.1 m, split between 2012 (€ 135.1 m) and 2013 (€ 133.0 m), are covered by loan commitments and capital resources. This extensive project pipeline together with additional land reserves and land development projects with an approximate value of € 425.3 m confirm Germany as the main driver behind the organic asset accumulation envisaged for the years ahead and CA Immo as the biggest project developer in the country1 .

Project completions

After the completion of the SKYGARDEN office building in the Munich Arnulfpark® urban district in August 2011, CA Immo took over the proprietor parts of the joint partner OFB project developer by 100%. The building realised as a green building, offers around 33,000 sqm of

gross floor space above ground; as at the balance sheet date, it was 71% pre-let. The book value is € 135.6 m. PwC, the principal tenant, has established its new Munich headquarters across some 17,500 sqm of floor space. The finalisation of this project virtually completes the development of the 18-hectare urban area close to Munich's main rail station.

At the end of the year, the AMBIGON office, commercial and medical centre was completed in the Schlossviertel Nymphenburg, a district of quality residential and office units. With a gross floor area of approximately 16,400 sqm, the complex combines a range of usage types under one roof: offices, retail outlets, a medical centre and a rehabilitation/fitness zone. Prior to completion, CA Immo was able to conclude contracts on around 45% of the rentable space, the book value is € 48 m.

1 Source: BulwienGesa AG analysis institute

The Europacity district close to the main station in Berlin

Key development activities in Germany include:

Berlin

CA Immo is implementing a number of highly significant urban planning projects in the German capital. These include the Europacity district in the vicinity of the city's main station. At 40 hectares in total, CA Immo is developing approximately half of the site.

The foundation stone for the 17-storey TOUR TOTAL office high-rise on Europaplatz – the future German headquarters of oil company TOTAL – was laid during the year under review. Occupying around 14,000 sqm of floor space, TOTAL is renting the entire tower, which was designed as a green building. The company will take up residence in the structure, which is approximately 69 metres tall, in the second half of 2012.

A 20-year lease agreement for an InterCityHotel, south of Berlin's main rail station, has been concluded with Steigenberger Hotels AG. The eight-storey building will have gross floor space of 19,800 sqm, making it the largest InterCityHotel in Germany; it is scheduled for completion in the second half of 2013. CA Immo is acting as constructor and investor.

CA Immo is also developing the new company headquarters of Mercedes-Benz sales department Germany (MBVD) in the Berlin borough of Friedrichshain-Kreuzberg. As many as 1,200 Mercedes employees will occupy around 26,000 sqm of floor space.

City project status certification
Munich Ambigon completed DGNB silver aspired
Munich Skygarden completed LEED gold aspired
Frankfurt Tower 185 completed precertificate DGNB,
LEED gold aspired
Frankfurt Skyline Plaza under
construction
precertificate DGNB
gold
Berlin Tour TOTAL under
construction
DGNB silver aspired
Berlin Intercity Hotel under
construction
DGNB silver aspired
Berlin MBVD
Headquarter
under
construction
DGNB silver aspired

SUSTAINABILITY CERTIFICATIONS OF GERMAN DEVELOPMENT PROJECTS

Development of urban district Europaviertel in Frankfurt

1

Mövenpick Hotel Frankfurt

  • Ground floor area: 16,100 sqm
  • Main usage: Hotel
  • Opened: 2006
  • Status: sold

2

Eurovenia

  • Ground floor area: 17,200 sqm
  • Main usage: Residential
  • Opened: 2009
  • Status: sold

3

MEININGER HOTEL FRANKFURt

  • Ground floor area: 4,300 sqm
  • Main usage: Hotel
  • Opened: 2010
  • Status: rented

4 CITY COLOURS

  • Ground floor area: 17,200 sqm
  • Main usage: Residential
  • Opened: 2010
  • Status: sold
  • Joint Venture with Realgrund

Property owned by CA Immo

5 EUROPA ALLEE 12–22

  • Ground floor area: 25,500 sqm
  • Main usage: Office, Retail, Gastronomy
  • Opened: 2010
  • Status: sold

6

TOWER 185

  • Ground floor area: 130,000 sqm
  • Main usage: Office
  • Opened: 2010 plinth building, 2012 tower
  • Status: rented/for rent

7

SKYLINE PLAZA

  • Ground floor area: 180,000 sqm
  • Main usage: Shopping, Congress,
  • Fitness/Wellness, Gastronomy, Parking
  • Planned completion: 2013
  • Status: under construction, 90% sold (forward sale)

8

Kongresszentrum

  • Ground floor area: 17,000 sqm
  • Main usage: Congress
  • Planned completion: 2013
  • Status: sold

ort

Europaviertel, Frankfurt

The Europaviertel is one of CA Immo's biggest urban district development projects. The new city quarter spans around 90 hectares, of which CA Immo is developing 18 hectares. This modern area of residential units, offices, restaurants, retail outlets and a conference centre is directly adjacent to the Frankfurt Exhibition Centre and the banking district. Reputable companies such as BNP Paribas, PricewaterhouseCoopers (PwC), Allianz and MEININGER have signed up as tenants or investors.

Following a construction period of 33 months, CA Immo completed Tower 185 on schedule at the end of the reporting year. The 200-metre structure in Frankfurt's Europaviertel is the fourth highest building in Germany. PwC, the auditing and consulting firm, is the biggest tenant with around 68,000 sqm of office space. Another 4,500 sqm is let to the international law firm Mayer Brown LLP. As at 31 December 2011, Tower 185 had an approximate market value of € 391.7 m; it will be incorporated in the portfolio (and reflected on the balance sheet) in the first quarter of 2012.

CA Immo started constructing the SKYLINE PLAZA shopping centre in Frankfurt in a joint venture with ECE Projektentwicklung in June 2011. The shopping mall will accommodate around 180 shops across floor space of some 38,000 sqm; it will also feature a health and fitness zone of around 8,500 sqm, a restaurant area of approximately 4,500 sqm and a roof garden spanning around 10,000 sqm. The total investment volume for the project (including the conference centre) is € 360 m. Allianz Real Estate acquired 80% of the shares in Skyline Plaza in September under the terms of a forward sale; ECE and CA Immo will each continue to hold a 10% stake in the property after completion.

Messe Frankfurt will operate the conference centre being built in parallel with the Skyline Plaza. Construction of the conference facility was a precondition of the city of Frankfurt for approval of the shopping centre; it will include halls of varying capacity on three levels plus one mezzanine.

THE EASTERN EUROPE SEGMENT

The debt crisis in Europe is having a major bearing on project development activity across Eastern Europe. In particular, restrictions on financing and protracted contract negotiations with international tenants have led to delays and even cancellations of building projects. Despite this climate, CA Immo made progress on selected development projects in the region during 2011. The total market value of land reserves and projects under construction in the Eastern Europe segment is approximately € 130.8 m.

Slovakia

Ground-breaking at the Bratislava Business Center 1 Plus took place in January 2011. The structure was designed as an extension to the present Bratislava Business Center 1; a direct link to the original building will be established. Capital resources will be used to finance the project. The new building will have 13 floors providing rentable effective area of around 15,900 sqm plus a car park with 313 spaces. BBC 1 Plus is being constructed as a sustainable building with the environmental standards that implies. An application will be made for LEED certification. Pre-letting on the project (mainly to international tenants) was around 30% (incl. LOI) as at 31 December 2012.

Poland

The Poleczki Business Park is being realised under the terms of a 50:50 joint venture between the CA Immo New Europe project development fund and UBM Realitätenentwicklung AG. The state-of-the-art office district is emerging on a site spanning some 140,000 sqm close to Warsaw Airport. The project – the largest of its kind in Poland – provides for the construction of 16 buildings in several construction phases. Construction phase one was concluded in the second quarter of 2010. Phase two, which started in December 2010, comprises two fourstorey buildings with a rentable effective area of around 21,000 sqm; this phase is scheduled for completion in quarter two of 2012. By the end of 2011, pre-letting stood at 40%.

In September, the two structures making up the current construction phase won the International Property Award (Highly Commended Best Mixed Use Development category). The International Property Award is a globally

recognised award for residential and commercial properties. Construction phase two was also awarded gold LEED for Core & Shell pre-certification by the Green Building Certification Institute (GBCI) in August.

Russia

Located adjacent to St. Petersburg's Pulkovo 2 international airport, Airport City St. Petersburg is being realised by the project development company OAO Avielen AG in a joint venture with Warimpex and UBM. The first premium class business centre for the region represents a major infrastructure project for the expanding economic area of St. Petersburg. CA Immo holds a 35% stake in the venture through the CA Immo New Europe project development fund.

The first phase of the project was finalised in December with the completion and opening of a four-star hotel along with the Jupiter and Airport office towers, which together provide 17,000 sqm of office space. Run by the InterContinental Group, the four-star Crowne Plaza is the only hotel at the airport itself. With 294 rooms and largescale conference facilities for up to 1,000 visitors, the hotel is geared to the needs of international business travellers.

In addition to the projects under construction described above, CA Immo holds real estate reserves with an approximate value of € 102.1 m in Eastern Europe. No specific construction projects are planned for these sites at present.

LAND BANK IN EASTERN EUROPE BY ZONING CLASSIFICATION

in € m Office Logistics Others Total
Czech Republic 0.0 0.0 8.1 8.1
Hungary 0.0 12.4 0.0 12.4
Poland 2.2 15.5 0.0 17.7
Romania 20.7 8.3 12.3 41.3
Ukraine 0.0 12.3 0.0 12.3
Slovakia 8.9 0.0 0.0 8.9
Others 0.0 1.4 0.0 1.4
Total 31.9 49.8 20.4 102.1

PROPERTY VALUATION

The valuation of the properties constitutes the fundamental basis on which a real estate company is assessed, and is thus the most important factor in determining the value of such a company's shares. The crisis afflicting the global financial system has caused real estate prices and values to fluctuate substantially over recent years, and the situation has also affected the CA Immo Group directly.

The fair value of real estate that is used for accounting purposes is generally determined by independent third party expert appraisers using recognised valuation methods. External valuations are carried out in line with standards defined by the Royal Institution of Chartered Surveyors (RICS). RICS defines fair value as the estimated value at which a property should be sold on the valuation date, after a reasonable marketing period, between a willing seller and a willing buyer in the usual course of business, whereby the parties each acted knowledgeably, prudently and without compulsion.

The valuation method applied by the expert appraiser in a particular case is mainly determined by the stage of development and usage type of a property.

Rented commercial real estate (which makes up the bulk of the CA Immo Group's portfolio) is generally valued according to the investment method; fair values are based on capitalised rental revenue or the discounted cash flow expected in future. In addition to current contractual rents and lease expiry profiles, the qualified assessment of the expert appraiser determines and takes account of other parameters such as, in particular, the long-term rental price achievable for a property (ERV, expected rental value) and the equivalent yield for a property.

The residual value method is applied to properties at the development and construction phase. In this case, fair values are determined following completion, taking account of outstanding expenses and imputing an appropriate developer profit of 5.0% to 20.0%. Possible risks are considered, amongst other things, in future attainable rents and the capitalisation and discounting rates. Cap rates were unchanged on the previous year in

the range of 5.0–8.5%; they are influenced in particular by general market behaviour as well as locations and usage types. The closer a project comes to the point of completion, the larger the proportion of parameters derived from actual and contractually stipulated figures. Shortly before completion and after completion, properties are valued according to the investment method (see above), taking outstanding residual work into consideration.

In the case of land reserves where no active development is planned for the near future, the comparable value method (or the liquidation, costing or residual value method) is used, depending on the property and the status of development.

In Austria, external valuations had been carried out on the key date 31.12.2011 for 99.5% of the property assets (compared to 99.4% on 31.12.2010); in Germany the figure was approximately 96.5% (around 96.0% on 31.12.2010) and in (South) Eastern Europe it was 99.9% (99.0% on 31.12.2010). The values for the remaining property assets were updated internally on the basis of previous year valuations and binding sale agreements.

The valuations as at 31 December 2011 were compiled by the following companies:

  • CB Richard Ellis (Austria, Germany, Eastern Europe)
  • Cushman & Wakefield (Eastern Europe)
  • Valeuro Kleiber und Partner (Germany)
  • Ö.b.u.v.SV Dipl.-Ing. Eberhard Stoehr (Germany)
  • MRG Metzger Realitäten Beratungs- und Bewertungsgesellschaft (Austria)

Stable environment in 2011

As in 2010, real estate values remained stable in 2011. Significant changes in value (both positive and negative) were due mainly to property-specific events such as completions of development projects and changes to occupancy rates.

For 2011 as a whole, these events produced a positive revaluation result of € 49.143 K (€ 32.052 K in 2010).

ÖSTERREICH

Für den Großteil des Portfolios in Österreich waren nur geringe Wertänderungen festzustellen. Den wesentlichsten Anteil am Neubewertungsergebnis hatte die Liegenschaft Erdberger Lände (Lände 3), bei der es insgesamt zu einer Abwertung um -3.636T€ aufgrund von nicht zur

Gänze in einer höheren Bewertung widergespiegelten unterjährig durchgeführten Investitionen kam.

Der dargestellte Anstieg der Bruttoanfangsrendite von 5,1% auf 5,6% hängt in erster Linie mit der im Vergleich zum Vorjahr deutlich erhöhten annualisierten Miete in Folge des Einzugs des neuen Hauptmieters der Liegenschaft Erdberger Lände (Lände 3) zusammen.

BEWERTUNGSERGEBNIS ÖSTERREICH

Mio. € Anschaffungs
kosten
Bilanzwert Neubewertung /Wert
minderung/Wertauf
holung
Bruttoanfangsrendite
31.12.2011 31.12.2011 31.12.2010 31.12.2011
Bestandsimmobilien 757,1 682,2 – 5,5 5,1% 5,6%
Immobilien in Entwicklung 37,9 32,8 2,0
Zur Veräußerung gehaltene Immobilien 0,1 0,1 0,0
Gesamt 795,1 715,1 – 3,4

1 Exkl. selbst genutzte Immobilien

DEUTSCHLAND

Für 2011 konnte in Deutschland insbesondere aufgrund von Neubewertungen in Folge von Projektfertigstellungen ein deutlich positives Neubewertungsergebnis erzielt werden. Die betragsmäßig wesentlichste Aufwertung ergab sich dabei bei dem in 2011 fertiggestellten Objekt Skygarden in München (+ 10,8 Mio. €). Ebenfalls bedingt durch den Baufortschritt ergab sich weiters bei der aktuell größten Projektentwicklung, dem Tower 185 in Frankfurt, eine Aufwertung um 7,0 Mio. €.

Bei der dargestellten Brutto-Anfangsrendite von rd. 5,2% ist zu beachten, dass die 2010 und 2011 fertig gestellten Objekte (erster Bauteil des Tower 185, Skygarden sowie Ambigon) noch nicht ihre Ziel-Auslastung erreicht haben, bzw. aufgrund von Staffelmieten die annualisierte Miete zum Stichtag unter der kalkulatorischen Sollmiete liegt. Ohne diese Objekte würde die Brutto-Anfangsrendite bei rd. 5,7 % liegen.

BEWERTUNGSERGEBNIS DEUTSCHLAND

Mio. € Anschaffungs
kosten
Bilanzwert Neubewertung/Wert
minderung/Wertauf
holung
Bruttoanfangsrendite
31.12.2011 31.12.2011 31.12.2010 31.12.2011
Bestandsimmobilien 1 1.498,4 1.499,4 25,3 5,3% 5,2%
Immobilien in Entwicklung 732,1 770,9 31,9
Zur Veräußerung gehaltene Immobilien 49,0 57,7 12,0
Zum Handel bestimmte Immobilien 42,0 33,9 –1,2
Gesamt 2.321,5 2.361,9 68,0

1 Exkl. selbst genutzte Immobilien KONZERNLAGEBERICHT

EASTERN AND SOUTH EASTERN EUROPE

Over the past few years, Eastern and South Eastern Europe has been affected much more severely by the turmoil of the financial crisis than other regions in our portfolio. Wide variations were reported in certain countries and asset classes. Yields fell in Poland but rose in Hungary and Romania, for example; yields on office properties in Hungary ranged from 7.5% to 9.25% (7.2– 9.0% on 31.12.2010); they ranged from 8.5% to 10% in Romania, 8.25% to 11% in Serbia and 6.8% to 9.7% in Poland. Yields on portfolio hotels in Slovenia and the Czech Republic expanded to the 8.8% to 10% range (9.0% on 31.12.2010).

The valuation result for office properties – the most important asset class for CA Immo – was positive at € 8.3 m; this resulted from an upward valuation of € 17.3 m for investment properties together with a devaluation of € -9.0 m for development sites (especially in Romania). By contrast, the valuation result for logistical real estate was clearly negative; the overall devaluation for this asset class was around € -14.9 m, of which investment properties in Romania, Hungary and Poland accounted for € -11.6 m and land reserves represented € -3.2 m. Hotels in the portfolio in the Czech Republic and Slovenia were also subject to significant negative corrections of € -7.1 m.

VALUATION RESULT EASTERN AND SOUTH EASTERN EUROPE

In € m Acquisition costs Book value Revaluation/Impair
ment
31.12.2011 31.12.2011
Investment properties 2,104.8 2,001.7 – 3.1
investment properties under development 173.2 130.8 – 13.6
Total 2,277.9 2,132.4 – 16.7

FINANCING

As a real estate company, CA Immo operates in a capital-intensive sector that relies to a large extent on the availability of debt financing. It is critical to establish the most effective possible structuring of financing; alongside successful management of the real estate portfolio, this is one of the key factors in the overall result of the CA Immo Group. As at 31 December 2011, the financial liabilities of the CA Immo Group totalled € 3,264,014 K (compared to € 2,126,355 K on 31 December 2010); financing costs for 2011 stood at € – 161,009 K (€ – 117,202 K in 2010). The main reason for the increase was the initial consolidation of the Europolis Group in 2011. In addition to financing already secured which is thus reflected on the balance sheet, the CA Immo Group has unused credit lines totalling € 150 m that can be drawn to finance development projects under construction.

Debt Expiry profile

The diagram below shows the maturity profile of the financial liabilities of the CA Immo Group as at 31 December 2011 (assuming options to extend are exercised). The due amounts shown for 2012 total € 572 m.

This number includes in particular the following largescale financings:

  • –Construction financing of € 265 m for Tower 185: the loan provided by a consortium of four banks to finance the construction of Tower 185 matures in the fourth quarter of 2012. The construction for which the loan was used was completed on time and on budget at the end of 2011, and the principal tenant has moved in. As at 31 December 2011, the LTV ratio was approximately 56%.
  • –Financing of € 50 m for the Warsaw Financial Center: the term of the investment loan granted by a German bank in 2009 in relation to the Warsaw Financial Center expires in the second quarter of 2012. This office property, which commands a prime location in central Warsaw, is almost fully let; as at 31 December 2011, the LTV ratio was around 48%.
  • –Construction financing of € 30 m for Ambigon in Munich: the loan provided by a German bank to finance construction of the Ambigon property in Munich matures in the fourth quarter of 2012. The building was completed in 2011; the LTV ratio as at 31 December 2011 was around 61%.

The prolongation of these loans, respectively the transfer of the construction financings into longer term investment loans are generally routine transactions. For this reason, CA Immo is confident that discussions with banks will produce positive outcomes in good time.

FINANCING COSTS

in € m Book value Book value Occupan Annualised Gross Outstanding Financing LTV
in % cy rate rents yield financial costs in % in %
in % liabilities
Investment properties 1
Austria 691.9 13.2% 90.7% 38.3 5.5% 305.2 4.7% 44%
Germany 1,502.4 28.8% 91.6% 77.9 5.2% 788.1 4.3% 52%
Czech Republic 336.8 6.4% 82.9% 27.0 8.0% 244.0 4.0% 72%
Hungary 409.2 7.8% 79.6% 29.8 7.3% 168.8 3.9% 41%
Poland 659.9 12.6% 84.4% 43.2 6.5% 424.9 3.2% 64%
Romania 369.3 7.1% 91.5% 31.7 8.6% 225.0 4.4% 61%
Others 226.5 4.3% 85.2% 17.2 7.6% 117.9 6.5% 52%
Total 4,196.0 80.3% 87.4% 265.1 6.3% 2,273.9 4.2% 54%
Development projects 934.4 18% 6.0 410.7 4.2% 44%
Properties held as current assets 91.7 2% 0.8 0.6 5.4% 1%
Financing on parent company level 0.0 0% 0.0 578.9 4.6% n.a.
CA IMMO 5,222.2 100% 271.9 3,264.0 4.3%

1 Incl. self use properties

As the table above shows, the average cost of financing for the CA Immo Group amounts to 4.3%. In this figure those interest rate derivatives that can be directly attributed to a specific loan are already reflected. The different levels of interest rate hedges between the individual regions also explain most of the variance in the financing costs between the countries. As the financings that were taken over with Europolis are in most instances not hedged or only hedged via out-of-the money Caps, the Eastern European countries show lower costs of financing than Austria or Germany. This is despite the fact that financing margins are in generally higher in those countries than in Western Europe. In Austria and Germany, the majority of the loans have been hedged against interest rate risk by long term swap contracts. Due to this the reduction in the base rate (Euribor) has not had an effect on the level of the financing costs.

If in addition to the interest rate hedges that are directly linked to a specific loan contract one also considers those derivatives that cannot be directly attributed, the financing costs increase to 4.7%.

BASIC PARAMETERS OF THE FINANCING STRATEGY

Emphasis on secured financing

The backbone of the financing strategy are mortgage loans secured with property; the debt is taken up in the (subsidiary) companies in which the respective real estate is held. Unsecured financing at Group parent company level is limited to the three bonds placed on the capital markets. This structure offers the following key advantages:

  • –Loans secured by a mortgage on a property generally offer more favourable conditions than unsecured financings and longer terms are possible.
  • –Since financing is provided at subsidiary level, there is no recourse to the parent company or other parts of the Group.
  • –Covenants are only tested on the level of the individual asset and not on group wide ratios. This expands strategic flexibility considerably; moreover, any breaches of covenants at property level can be remedied much easier than it would be the case at overall Group level.

The outstanding volume of loans secured with property stood at € 2.7 bn as at 31 December 2011. The approximate book value of the properties serving as security on these loans was € 4.3 bn. The book value of CA Immo's unmortgaged properties as at 31 December 2011 was around € 0.8 bn, with undeveloped sites making up the majority of this. The volume of unsecured bond financing was € 0.4 bn.

Long-term interest rate hedging

Given that the interest paid makes up the biggest expense item in the income statement for most real estate companies, interest rate rises can have a serious impact – especially since the income side (rent) is usually based on long-term agreements, which means increases in financing costs cannot be counterbalanced by higher revenue. For this reason, CA Immo Group's financing policy involves hedging a substantial proportion of the debt against fluctuations over the long term. Interest rate swaps (and, to a lesser extent, interest rate caps) are used as hedging tools.

Of the derivatives deployed, swap contracts account for a nominal value of € 1,828.2 m and interest rate caps represent a nominal value of € 229.4 m. The weighted average interest rate fixed via swap contracts is 3.7%, with the average rate ceiling for the interest rate caps at 4.4%. The weighted average term remaining on derivatives used for interest rate hedging is around 4.4 years, compared to a weighted remaining term of 4.2 years on variable interest-bearing liabilities.

The fair value of the swap contracts is strongly negative on account of the sharp drop in the general interest level in recent years. The total fair value as at 31 December 2011 was € -184.1 m (for the entire nominal amount of € 1,828.2 m). In terms of the balance sheet, a distinction is drawn between those contracts directly attributable to a loan (thus meeting the criteria for hedge accounting as cash flow hedges) and those for which these preconditions are not met (fair value derivatives). For cash flow hedges, the change in the fair value on the relevant key date is recognised directly in equity; for fair value derivatives, by contrast, the change is recognised as expenditure in the income statement under 'Income/Expenses from derivative transactions'. As at key date 31 December 2011, contracts with a nominal value of € 1,366.6 m and a fair value of € -119.1 m fulfilled the preconditions for hedge accounting. The nominal value of swaps classified as fair value derivatives was € 461.5 m; the negative fair value was € -65.0 m as at 31 December 2011.

The following diagram shows the fall over recent years in the swap curve, which is critical to the valuation of swap contracts:

Bonds and other key sources of financing

CA Immo currently has three bonds outstanding, which are registered for trading on the unlisted securities market of the Vienna Stock Exchange:

ISIN Type Outstanding
volume
Maturity Coupon
AT0000A0EXE6 Corporate
Bond
150 Mio. € 2009-
2014
6,125%
AT0000A026P5 Corporate
Bond
186 Mio. € 2006-
2016
5,125%
AT0000A0FS99 Convertible
Bond
115 Mio. € 2009-
2014
4,125%

The bonds provide unsecured financing at Group parent company level; they are pari passu to one another and to all other unsecured financing of CA Immobilien Anlagen AG. The conditions of the bonds do not provide for any relevant financial covenants.

Between September 2011 and the end of the reporting year, convertible bonds with a nominal value of € 20.5 m were repurchased from the market at an average price of 94.6%; bonds from 2006 with a nominal value of € 14.0 m were bought back at a rate of 97.5%.

Key features of the convertible bond:

The conversion price of the convertible bond is € 11.58; the planned payment of a dividend will result in adjustment of the conversion price and thus the maximum number of bearer shares issued where the right of conversion is exercised. The conversion price will thereby be reduced in the magnitude of the dividend yield at the time of the dividend payment.

Early repayment of the convertible bonds by CA Immo is possible as from the end of the final quarter of 2012 provided the price of the CA Immo share (in certain periods) amounts to at least 130% of the applicable conversion price at that time.

In terms of amount, the largest financing aside from the bonds is the loan for the Hesse portfolio (real estate value of € 813.9 m as at 31 December 2011), which had an outstanding volume of € 512.2 m as at 31 December 2011. The original loan was securitised by the arranging bank and placed on the capital market ('Opera Germany 3' transaction, ISIN XS0293598495 (tranche A) and XS0293599113 (tranche B)). The financing concluded at the end of 2006 runs until the first quarter of 2017. The margin on the loan is 0.5% above the 3 month Euribor rate; the Euribor was secured through a swap with a rate of 3.94%, resulting in effective interest costs of 4.44%.

The main covenants for this financing are as follows:

Current level Covenant Ratio
>1.35x 1.05x DSCR
>1.80x 1.15x ICR
~64% <75% LTV

Financing banks

CA Immo has business relations with a large number of banks. With around 19% of outstanding financial liabilities, the main financing bank is the UniCredit Group. As the diagram below shows, the Österreichische Volksbanken-AG Group (ÖVAG) and Helaba in Germany also account for significant shares. Taken together, all of the other banks each provide less than 5% of the credit volume.

First-time recognition of Europolis Group

The Europolis Group has been included in the consolidated financial statements of CA Immo since the closing of the Europolis AG acquisition effective 1 January 2011. As explained below by referring to the key items, this consolidation has a significant impact on the financial and earnings position of the CA Immo Group. The insight provided by a comparison with the prior-year figures is therefore limited.

Gross revenues and net operating income

Measured against 2010, rental income increased by 61.5%to € 265,576 K. The advance was prompted chiefly by rental income from the Europolis Group. As illustrated by the table below, rental income advanced significantly in the Eastern/South Eastern Europe segment following the addition of the Europolis properties. The growth in rental income in Germany, in contrast, is chiefly attributable to the completion of development projects, which more than made good the reduction triggered by disposals. The rental income in the Germany segment also includes a one time amount of € 5.782 K arising from a supplementary rent charge. In Austria, sales prompted a yearon-year decrease in rental income.

Lease incentives, in particular rent-free periods, are linearised over the full term of the lease, so that the rental income reflects not the actual cash rent received in the period, but the economically effective rent. Of the rental income recognized in 2011, an amount of € 7,296 K is attributable to such linearisation.

The 49.0% rise in direct management costs for the rented properties, from € -25,827 K to € -38,490 K was less pronounced than the increase in rental income. The principal direct costs are vacancy costs and operating costs that cannot be passed on to tenants (€ -11,087 K), maintenance costs (€ -6,005 K) and allowances for uncollectible accounts (€ -8,497 K). In 2011, such allowances contain value adjustments in connection with two hotels in the Czech Republic in particular.

Net operating income attributable to letting activities after the deduction of direct management costs increased from € 138,597 K to € 227,086 K. The margin (net operating income relative to rental income) edged up from 84.3% to 85.5%.

RENTAL INCOME

RENTAL INCOME BY COUNTRY

€ m Austria Germany Eastern/South
East Europe
Total
2010 39.0 79.8 45.6 164.4
Change
Resulting from indexation 0.7 1.0 1.7 3.4
Resulting from change in vacancy rate or reduced rentals – 1.0 0.7 – 0.9 – 1.1
Resulting from new acquisitions 0.0 0.0 89.3 89.3
Resulting from whole-year rental for the first time 0.0 0.4 2.6 3.0
Resulting from completed projects 0.2 11.7 0.0 11.9
Subsequent rent payment 0.0 5.8 0.0 5.8
Resulting from redevelopment 0.0 – 2.1 0.0 – 2.1
Resulting from sale of properties – 1.8 – 7.1 0.0 – 8.9
Total change in rental income – 1.9 10.4 92.8 101.2
2011 37.1 90.2 138.3 265.6

CHANGE IN RENTAL INCOME FROM 2010 TO 2011

In connection with the scheduled sale of trading properties (mainly Germany), trading income totalled € 28,049 K in 2011 (2010: € 115,657 K). These revenues stand alongside book value disposals in the amount of € -18,722 K and other development expenses/material costs in the amount of € -760 K. The earnings contribution of the trading portfolio therefore totalled € 7,791 K (2010: € 30,490 K). The year-on-year decrease in this item is primarily attributable to the sharp decline in the total volume of the trading portfolio in recent years. At the year-end, the remaining volume of properties intended for trading stood at € 33,904 K.

Gross revenue from development services for third parties (generally performed by the Group subsidiary omniCon) totalled € 2,320 K. The prior year figure was € 2,764K. Income from development services for third parties totalled € 578K (2010: € 564K).

Direct property expenses attributable to investment properties under development increased from € -5,713 K to € -7,315 K.

These changes pushed up net operating income (NOI) year on year by 39.2%to € 228,139 K.

Result from the sale of long-term properties

Property sales contributed € 44,961 K to the result in 2011 (2010: € 13,936 K). Sales in Germany contributed around € 33,573 K, sales in Eastern/South Eastern Europe about € 9,972 K, and sales in Austria around €1,416 K.

For accounting purposes, in the case of disposals that are structured as share deals, the proceeds and book values sold are derived not from the actual property values, but the pro rata equity of the company holding the property. In the event of the disposal of a previously fully consolidated company, therefore, only the pro rata gain is recognised, so that the gain on disposal does not require adjustment in the non-controlling interests. Following these principals, the proceeds from sales shown in the accounts were € 223,715 K and the corresponding profit was € 44,961 K.

If, however, the actual asset values behind the transactions are considered, the proceeds (for a 100%) were € 296,695 K and the profit (before non controlling interests) would have been € 51,191 K. The margin over the book value sold was therefore 21%.

The difference can mainly be attributed to the largest transaction of 2011, which was the sale of the 51% shares in the Olympia Shopping Centres in the Czech Republic, which had been fully consolidated prior to the sale.

Indirect expenditures

In compliance with customary international reporting practice, the previously separate items "indirect expenditures" and "capitalised services" are now netted under a single item.

As a consequence of recognising the indirect expenditures of Europolis, this item increased by 29.8%, from € -33,923 K to € -44,045 K. The principal items included in this total are as follows:

€ 1,000 2011 2010
Staff expenses -32,220 -23,728
Office rent -2,430 -2,232
Travel expenses and transportation costs -1,347 -956
Others -4,602 -4,012
Internal management -40,599 -30,928
Legal, auditing and consultancy fees -11,343 -8,530
Other indirect expenses -4,907 -6,322
subtotal -56,849 -45,780
Capitalised services on long-term property assets 12,108 10,773
Changes to stock properties intended for trading 696 1,084
Indirect expenditures -44,045 -33,923

Capitalised services, in the amount of € 12,804 K, is to be regarded as a contra item to indirect expenditures which counterbalances the portion of the internal Vivico expense that is directly attributable to individual development projects and thus qualifies for capitalisation.

Earnings before interest, tax, depreciation and amortisation (EBITDA)

EBITDA climbed sharply by 63.8%, in particular because of the consolidation of Europolis. The figure totalled € 246,423 K (€ 150,409 K in the previous year).

The first-time inclusion in the scope of consolidation of Europolis, which operates exclusively in Eastern and South Eastern Europe, also significantly shifted the relative contributions made by the individual regional segments.

At € 111,230 K, the relative share of the Eastern and South Eastern Europe segment in consolidated EBITDA more than doubled to around 45%. The share of the Germany segment was 44%, and that of Austria 13%.

EBIT

1) A property in Switzerland is assigned to the Germany segment

Revaluation result

The revaluation result for 2011 was € 49,143K (2010: € 32,052K). From a regional perspective, the revaluation result arises from an appreciation of € 69,242 K in Germany, and negative revaluations in the Eastern and South Eastern Europe segment (€ -16,671 K) and Austria (€ -3,428 K).

For an explanation of the factors governing the valuation of properties, see also the "Property valuation" section.

Operating result (EBIT)

In combination, the forenamed factors raised EBIT substantially, from € 176,490 K in 2010 to € 285,045 K in 2011. A large portion of this turnaround is attributable to the Eastern and South Eastern Europe segment, where the EBIT increased from € 14,781K to € 93,532 K. EBIT increased also in Germany € 173,506 K (2010: € 121,791 K), while Austria generated € 25,042 K compared to € 47,173 K in 2010.

The result consists of contributions made in Q1, of € 48,439 K; Q2, of € 63,998 K; Q3, of € 91,703 K; and Q4, of € 80,904 K. The variances between the quarters is primarily explained by the unequal distribution of the capital gains.

Financial result

The financial result for 2011 totalled € -177,945K (2010: € -107,672K). The changes in the constituents of the financial result are described in detail below.

The first-time recognition of Europolis pushed up financing costs by 37.4% to € -161,009 K. Alongside the interest expenses recognised in the income statement, interest on development projects under construction, in the amount of € 9,934 K, was capitalised as well.

The year-on-year further increases valuation loss from interest-rate hedges (2011: € -22,456K, 2010: € -4,446K) also exerted a major influence. A large portion of this loss is a non-cash valuation result.

At the end of HY1 2011, the gain stood at € 3,604 K, but the yield curve that determines the valuation of interestrate hedges retracted further in the second half-year, so that the present value of the swaps was steadily eroded. For further details, see also the "Financing" section.

The decrease in the result from financial investments, from € 14,418K to € 11,557K, stems chiefly from the year-on-year decline in interest rates.

Income from associated companies (2011: € -1,696K, 2010: € -328K) represents the net amount arising from a positive contribution from the investment in UBM, in the amount of € 1,640 K (including a cash dividend of € 825 K), and a devaluation of the shares in the company managing the project at Pulkovo Airport in St. Petersburg.

Taxes on income and earnings

The developments described above gave rise to earnings before taxes (EBT) for 2011 in the amount of € 107,100 K (2010: € 68,818K). Of the taxes on income totalling € -39,429 K (2010: € -24,999 K), current taxes, mainly resulting from the sale of property in Germany, accounted for € -27,261 K. The remainder arose largely from the change in deferred taxes.

Result for the period

At € 67,671 K, the result for the period shows a profit (2010: € 43,819K). The result attributable to non-controlling interests was € 5,042K, as against € -1,596K in 2010. In 2011, the non-controlling interests were chiefly the joint venture partners in the sub-portfolios of Europolis.

The share of the result attributable to owners of the parent closed 2011 at € 62,629K. The figure for 2010 was € 45,415K.

Cash flow

The cash flow from earnings for 2011 totalled € 191,861 K (2010: € 121,422 K). The difference largely reflects the change in EBITDA between the periods, arising from the acquisition of Europolis. The increase in cash flow from operating activities, from € 172,033K to € 198,626K, was less pronounced because the cash inflows from the disposal of properties intended for trading, which are recognised in this item, were much lower than in 2010.

Cash flow from investment activities in 2011 came to € -62,623K (2010: € -251,532K). The primary cause of the reduced cash outflow is the reflection in the cash flow of the stages of the Europolis acquisition process. An instalment in the amount of € 136,000 K triggered a cash outflow in 2010, but the first-time consolidation of the cash and cash equivalents of Europolis gave rise to a positive cash effect in the amount of € 71,880 K in 2011.

The cash flow from financing activities in 2011 totalled € -134,643 K (2010: € -63,092 K). Alongside the cash outflow for interest payments (2011: € -148,181 K, 2010: -107,131 € K), the change is attributable to the fact that, unlike in 2010, the amount of new loans was only marginally higher than the redemption of borrowings (2011: € 252,226 K and € -232,786 K; 2010: € 280,291 K and € -138,831 K). In 2010, this cash flow item also contained the outflows for the increase in the investment in the then subsidiary CA Immo International.

CASH FLOW STATEMENT – SHORT VERSION

€ m 2011 2010 Change
Cash flow from
- business activities 198.6 172.0 15%
- Investment activities -62.6 -251.5 -75%
- financing activities -134.6 -63.1 >100%
Changes in cash and cash equivalents 1.4 -142.6 >100%
Cash and cash equivalents
- beginning of the business year 354.8 497.2 -29%
- changes in the value of foreign
currency -2.3 0.2 >100%
- the end of the business year 353.8 354.8 0%

FFO – funds from operations

Funds from operations before taxes (FFO) came to € 93,423.6 K in 2011. The doubling of the amount compared to 2010 is mainly attributable to the forenamed rise in EBITDA.

FUNDS FROM OPERATIONS (FFO)

€ m 31.12.2011 31.12.2010
Net income before taxes before minorities 107.1 68.8
Depreciation and amortisation 10.6 6.0
Revaluation results -49.1 -32.1
Foreign currency gain/loss -0.3 -0.7
Corr. At-Equity result 2.6 1.2
Valuation of financial instruments 22.6 3.1
Funds from Operations before taxes 93.4 46.4
Corporate income tax (actual tax) -27.3 -25.9
Funds from Operations 66.2 20.5
2011 2010 Change
€ m in % € m in % in %
Properties 5,130.4 87 3,520.4 80 46
Prepayments made on investments in properties 2.2 0 136.2 3 -98
Intangible assets 39.1 1 31.5 1 24
Financial and other assets 119.6 2 79.8 2 50
Deferred tax assets 11.7 0 14.1 0 -17
Long-term assets 5,303.0 90 3,782.0 86 40
Receivables 168.1 3 147.0 3 14
Assets held for sale 57.8 1 46.5 1 24
Property intended for trading 33.9 0 45.3 1 -25
Cash equivalents and securities 353.8 6 358.6 8 -1
Short-term assets 613.6 10 597.4 14 3
Total assets 5,916.6 100 4,379.4 100 35
Shareholders' equity 1,809.5 31 1,659.9 38 9
shareholders' equity as a % of statement of financial
position total 31% 38%
Liabilities from bonds 444.8 7 475.6 11 -6
Long-term interest-bearing liabilities 2,042.1 35 1,412.7 32 45
Short-term interest-bearing liabilities 777.1 13 238.0 5 >100
Other liabilities 651.3 11 477.0 11 37
Deferred tax assets 191.8 3 116.2 3 65
Total liabilities and shareholders' equity 5,916.6 100 4,379.4 100 35

CONSOLIDATED STATEMENT OF FINANCIAL POSITION – SHORT VERSION

Statement of financial position: assets

Measured against the situation as of 31 December 2010, significant changes occurred on the assets side in 2011 as a consequence of the consolidation of the Europolis Group. The greatest impact was on the "investment properties" item, which increased from € 2,716,211 K to € 4,183,202 K.

Besides the addition of the Europolis properties, some properties were also reclassified from the "properties under development" item, because of completions. The principal reclassifications (additions) arose from two properties that were completed in 2011, namely Skygarden (book value as of 31 December 2011: € 135,600 K) and Ambigon (book value as of 31 December 2011 (€ 48,800 K) in Munich. As regards the largest individual property belonging to the Group, Tower 185, only the pedestal building that was completed in 2010 was

recognised as an investment property as of the reporting date. As of 31 December 2011, the tower itself remained part of the "properties under development" item, with a book value of € 225,900 K.

Total property assets – consisting of investment properties, properties under development, and properties forming part of current assets – closed the year at € 5,222,183.0K, which reflects an increase of around 44.6%.

In 2011, an amount of € 203,654 K was invested in the properties under development.

Cash and cash equivalents as of 31 December 2011 stood at € 353,778 K, which was only marginally lower than the figure posted at the start of the year. Total assets increased by 35.1% to € 5,916,576K.

Statement of financial position: liabilities and shareholders' equity

Shareholders' equity

The company's share capital stands at € 638,713.6K, and the number of ordinary shares outstanding remains unchanged at 87,856,060.

As of the reporting date, 31 December 2011, according to the company, around 82% of the shares were in free float, and the remaining 18%, as well as the four registered shares that entitle each of the holders to nominate one member of the Supervisory Board, were held by UniCredit Bank Austria AG.

As of the reporting date, 31 December 2011, capital authorised but not issued (pursuant to Section 169 AktG (Austrian Stock Corporation Act)) existed in the amount of € 312.8 m (up to 43,031,840 no-par shares); the closing date for the issue of the capital against cash or non-cash contribution is 8 August 2012. Authority for a contingent capital increase (pursuant to Section 159 AktG) in the amount of € 317.2 m (up to 43,629,300 no-par shares) also existed. In 2011, the company did not hold any treasury shares.

Shareholders' equity (including non-controlling interests) increased by 9.0%, from € 1,659,939K to € 1,809,455K, in 2011. Apart from the annual result, the other principal factor influencing this change was the recognition of the non-controlling interests in the subportfolios of the Europolis Group. This increase stood alongside a negative influence from the valuation of interest-rate hedges recognised as cash flow hedges. As of 31 December 2011, the negative valuation result of these cash flow hedges recognised in equity stood at € -93,022 K, which represented a year-on-year deterioration of € -20,306 K.

Financial liabilities

Financial liabilities rose by 53.5% to € 3,264,014K. Net debt (financial liabilities less cash and cash equivalents) increased year-on-year from € 1,724,166 K to € 2,854,171 K; gearing (ratio of net debt to shareholders' equity) rose from 104% as of 31 December 2010 to 158% as of 31 December 2011.

The Group also has access to credit facilities for the projects under development; amounts are made available by the banks as construction work progresses. The balance of financial liabilities contains the amount currently drawn; joint ventures are recognised in the amount of the holding.

Around 99% of the financial liabilities are denominated in euros. CA Immo operates a comprehensive hedging strategy against interest rate risk. For further details concerning the financial liabilities, see the "Financing" section.

KEY FINANCING FIGURES

€ m 2011 2010
Shareholders' equity 1,809.5 1,659.9
Short-term interest-bearing liabilities 777.1 238.0
Long-term interest-bearing liabilities 2,486.9 1,888.3
Cash equivalents (including short-term
securities)
-353.8 -358.6
restricted cash -56.1 -43.6
Net debt 2,854.1 1,724.1
Gearing 158% 104%
EBITDA / net interest (factor) 1.6 1.4

Net asset value

NAV (shareholders' equity excluding non-controlling interests according to IFRS) closed 31 December 2011 at € 1,684.6 m (€ 19.2 per share), representing a rise of 2.6%. This change reflects both the annual result and the forenamed other changes in shareholders' equity. The table below shows how the NNNAV is calculated from the NAV in compliance with the best practice policy recommendations of the European Public Real Estate Association (EPRA).

Given that the CA Immo share price on the reporting date was lower than the conversion price of the convertible bond, the EPRA NAV was calculated without giving consideration to a dilutive effect arising from a hypothetical exercise of the conversion option. As of 31 December 2011, the (diluted = undiluted) NNNAV per share stood at € 19.8 per share, representing a year-on-year increase of 4.6%. This disproportionate increase, measured against the change in the NAV, is chiefly attributable to the rise in deferred tax liabilities following the Europolis acquisition, which are added to equity on a discounted basis to derive the NNNAV. The number of shares outstanding as of 31 December 2011 remained unchanged at 87,856,060.

ASSET VALUE (NAV AND NNNAV AS DEFINED BY EPRA)

€ m 31.12.2011 31.12.2010
undiluted undiluted
Equity (NAV) 1,684.6 1,641.8
NAV/share in € 19.17 18.69
Computation of NNNAV
NAV after exercise of options 1,684.6 1,641.8
Value adjustment for
- own use properties 3.5 1.7
- properties held as current assets 7.6 8.6
- Financial instruments 93.0 72.7
Deferred taxes 141.0 70.6
EPRA NAV after adjustments 1,929.7 1,795.4
Value adj. for financial instruments (93.0) (72.7)
Value adjustment for liabilities (2.9) (15.4)
Deferred taxes (91.4) (42.4)
EPRA NNNAV 1,742.3 1,664.9
EPRA NNNAV per share in € 19.8 19.0
Change of NNNAV against previous year 4.6% 2.6%
Price (31.12.) / NNNAV per share – 1 (58.2) (37.2)
Number of shares 87,856,060 87,856,060

OUTLOOK

During the year 2011 the focus was on the integration of Europolis. Now the emphasis has switched to the careful implementation of our corporate strategy, stage by stage.

Our main expectations for 2012 are thus:

  • Modest rise of around 2% in rental income: additional rent from project completions in particular will more than compensate for losses of rental income due to sales
  • Sales of approximately € 300 m € 350 m, split more or less equally between Eastern Europe and Germany
  • Start of preparations for the sale (or partial sale) of Tower 185
  • Utilisation of released funds primarily for the purposes of debt reduction; in particular, opportunistic repurchasing of outstanding bonds
  • Investment of around € 300 m, especially in current development projects

In general, conditions on the rental and transaction markets are not expected to change significantly compared with last year. Given the reduction in the credit volume proposed by the banks, however, the financing market is likely to pose challenges in 2012.

The main threats to our forecasts for 2012

Our predictions for 2012 are subject to certain assumptions on general conditions as well as parameters specific to the real estate sector. The economic picture remains unpredictable, which means more uncertainty as to whether we will meet our targets for investment volumes, realisation timeframes and revenue.

We believe the main factors influencing our business plans will be:

  • Trends on international capital markets and the effects of these on economies in our active regions.
  • The accessibility (and cost) of financing with outside capital.
  • The extent of the impact of economic developments on demand for rental premises and rental prices across our various regions.
  • Developments on the real estate investment market, the associated price trend and the resultant effects on the value of our portfolio.
  • The speed at which planned development projects are realised (which will largely depend on the availability of necessary external loan capital and equity).
  • Political, fiscal, legal and economic risks; the transparency and development level on our real estate markets.
  • The general development of interest rates.

SUPPLEMENTARY REPORT

The following activities are reported for the opening months of business year 2012:

Frankfurt

PwC AG (PricewaterhouseCoopers) rented two additional office floors of Tower 185 with total floor space of 2,800 sqm in February. The new lease contract means that PwC now rents an approximate total of 71,000 sqm of office space in the building. The occupancy rate for the high rise, which was completed at the turn of the year 2011/2012, has thereby risen to around 75%.

Slovakia

Two international firms have signed up as tenants of the Bratislava Business Center 1 (BBC 1) investment property: Henkel is renting 1,500 sqm of floor space, with Kapsch renting 362 sqm. The occupancy rate for the building is now 85% as a result.

Vienna

In Vienna, Update Training GmbH has rented the investment property on Klosterneuburger Strasse 23-27, occupying usable space of around 1,050 sqm.

RESEARCH AND DEVELOPMENT

To facilitate the ongoing redevelopment and modernisation of the real estate portfolio, staff qualification is an investment priority for CA Immo; the support of external experts is selectively enlisted as required.

During the winter semester of 2011, CA Immo supported a series of events entitled 'Future way of working' by futureLAB of the UCLA (University of California, Los Angeles). FutureLAB is concerned with the experimental testing and implementation of innovative solutions and new technologies in architecture. The events were conducted with the cooperation of the interior design programme at the Academy of Fine Arts in Munich (product design module).

Numerous architects, designers and real estate experts set out their views and visions to students in a series of lectures and workshops. It is hoped that the work of the students will provide food for thought and offer fresh perspectives on future development projects at CA Immo.

FRANKFURT, Tower 185: 75 % occupancy rate

EMPLOYEES

As at 31 December 2011, the CA Immo Group had a total of 3901 employees at its headquarters in Vienna and its sites in Frankfurt, Berlin, Munich, Budapest, Warsaw, Prague, Belgrade and Bucharest; the comparable figure for 31 December 2010 was 318.

Integration of Europolis completed

The Europolis team has relocated to CA Immo headquarters in Vienna and local branch offices have been amalgamated in Eastern Europe. As a result of this, the staffing level has changed: a total of 64 new employees2 joined the Group in 2011.

Shared corporate culture

Corporate acquisitions in recent years and the associated increase in employee numbers have given rise to the need for measures that will enable all staff to identify with the values and objectives of CA Immo. Accordingly, the Management Board of CA Immo have initiated a process aimed at raising awareness of a shared corporate culture. The aims of this process are as follows:

  • –To foster a shared identity across the Group by means of active team building
  • –To enhance the commitment of staff to the company
  • –To create an agreeable and productive working environment for all employees
  • –To improve internal information flows and communication channels with a view to making working practices more efficient

1 Of these, 7 % were part-time staff members

2 Excl. employees taken over with Europolis

In the autumn of 2011, a staff survey was conducted throughout the Group in partnership with Great Place To Work. Evaluation of this wide-ranging analysis of corporate culture, which included suggestions on the improvement of internal information flows as well as sustainable human resources development, will provide a basis for necessary change processes.

Uniform human resources management

Another project aimed at standardising principles and processes in the human resources area across the Group was initiated in 2011. At the end of the year, the Management Board approved a comprehensive staff concept with a view to guaranteeing equal treatment for all employees as regards opportunities for promotion and training, remuneration and other conditions. From 2012 onwards, structures in the personnel area – non-uniform in some instances owing to corporate acquisitions – will be gradually aligned across the Group on the basis of the new guidelines; the main emphasis in this process will be on transparency and clarity for employees.

Synergy between countries will be utilised and processes simplified in the following areas:

  • –Recruitment: requirements planning, acquisition and appointment processes
  • –Staff support and development: retaining and developing employees, remuneration, training and incentives
  • –Personnel management and organisation: processes, time management, payroll accounting, etc.
31.12.2011 31.12.2010
Change
Fluctuation
Total thereof women Total Absolute
in %
rate
in %
employees in % employees
Austria 86 53 64 22 34 24
Germany 176 44 175 1 1 17
Eastern Europe 128 62 79 49 62 9
Total 390 52 318 72 23 16

PERSONNEL DISTRIBUTION WITHIN THE CA IMMO GROUP

1 Fluctuation rate: new personnel x 100 / average number of employees

Profit sharing scheme to encourage entrepreneurship

The commitment to sustainability at the heart of CA Immo strategy is mirrored in the company's remuneration model. To promote strong identification with its objectives and ensure employees have a stake in the success of CA Immo, the company plans to introduce variable remuneration for all staff alongside fixed salaries. The precondition will be achievement of budgeted quantitative and qualitative annual targets, and in particular positive consolidated net income after minorities. Executive bonuses will also be linked to the attainment of specific operational annual targets.

Since business year 2010, Management Board members and other managerial employees have also been able to join the LTI (long term incentive) share scheme and thereby participate in the success of CA Immo over the medium to long term (subject to appropriate personal investment; see also 'Remuneration report').

Staff provisions and safety at work

CA Immo contributes to pension provision for its staff by paying voluntary contributions into a company pension fund. In addition, all employees are covered by collective accident insurance that offers permanent coverage, both at work and outside of work.

No serious occupational work-related injuries1 , illness or absences from work were reported in the Group in 2011. On building sites, safety guidance is regularly communicated to CA Immo staff members and health and safety plans are drawn up. Commissioned companies are responsible for the safety of subcontractor employees.

AVERAGE ABSENCES FROM WORK BY REGIONS

in days vacation illness training
Women 21 8 0.8
Austria Men 21 5 0.4
Women 28 10 0.6
Germany Men 27 4 0.4
Women 23 5 0.1
Eastern Europe Men 25 3 0

1 Occupational injuries: injuries which require medical attendance

White-collar employees 1)
317 employees $<28$ $29 - 48$ 49<
W 13% 43% $5\%$
M $2\%$ 26 % 11%
Blue-collar staff
19 employees < 28 $29 - 48$ 49<
W $0\%$ $0\%$ $5\%$
M $0\%$ 42% 53%
Management Board
3 employees < 28 $29 - 48$ 49<
W $0\%$ $0\%$ $0\%$
M $0\%$ $0\%$ 100%
Executives 2)3)
51 employees < 28 $29 - 48$ 49<
W $0\%$ $12\%$ $4\%$ 1) thereof 1% with handicap 2) thereof 2% with handicap
M $0\%$ 65% 19% $3$ thereof 16% female executives
Employees with handicap are not subdivided for reasons of data protection

FINANCIAL AND NON-FINANCIAL PERFORMANCE INDICATORS

In strategic terms, the business activity of CA Immo revolves around raising the value of the company over the long term. Central financial performance indicators are an important tool as regards identifying the main factors that contribute to the long-term increase in shareholder value and quantifying those factors for the purposes of value management.

The primary financial performance indicator in this context is the net income generated with the equity shareholders have invested (return on equity, RoE). The aim is to produce a ratio higher than the imputed cost of equity (we assume a medium-term rate of around 7.0%) and thereby generate shareholder value. The return on equity of around 3.8% was below the target value for 2011; despite a significant rise on the previous year, one main reason for the target not being reached was the negative contribution to earnings from the valuation of interest-rate hedges. Despite this, we remain confident that the measures defined under our strategy will enable us to return to an acceptable return on equity in the medium term.

The other quantitative factors used to measure and manage our shareholders' long-term yield are the change in NAV per share, the operating cash flow per share, return on capital employed (ROCE) and economic value added (EVA; see table).

Since the financial indicators ultimately demonstrate the operational success of our property business, they are preceded by a series of other non-financial performance indicators which are key to measuring and managing our operational business:

Vacancy rate and average rent

Sound economic data feeds the demand for commercial premises and invigorates both building activity and the property market. Cyclical discrepancies between supply and demand are reflected in the utilisation rate and attainable rents. Viewed over time, the vacancy rate and average rent are key indicators of a portfolio's quality and its successful management; they are also indicative of the asset managers' ability to respond in a timely fashion to economic influences.

Location quality

The quality of a site is a major criterion in property marketing: the accessibility of a location, determined by infrastructure, plays a particularly crucial role. Changes in the quality of a location take place gradually and are eventually reflected not only in price, but also in the difficulty of attracting new tenants.

Local presence

Local knowledge and familiarity with markets are key to the effective cultivation of highly diverse regional markets. For this reason, CA Immo maintains branch offices in the company's main markets of Germany and Eastern Europe (the latter have been consolidated by the recent influx of Europolis staff members).

Expertise and synergy

The competitive edge of CA Immo stems from the local knowledge of its employees and the utilisation of synergies in the Group, especially in the fields of project development and property marketing.

VALUE-INDICATORS

2011 2010 2009 2008
Key figures per share
NAV/share 19.2 18.7 17.9 18.9
Chance in NAV/share % 2.7 4.5 – 5.3 – 14.1
Operating cash flow / share 2.18 1.38 1.40 1.32
RoE 1
in %
% 3.8 2.8 – 4.8 – 13.4
ROCE 2
in %
% 5.5 4.8 0.10 Negativ
EVA 3 € m 44.0 Negativ Negativ Negativ

1 Return on equity = consolidated net income after minorities/Ø shareholders' equity (excluding minority interests)

2 Return on capital employed (ROCE) = net operating profit after tax (NOPAT)/capital employed

3 EVA (economic value added) is a registered trademark of Stern Stewart & Co; EVA = capital employed * (ROCE – WACC); WACC 2011 = 4.51% GROUP MANAGEMENT REPORT

Statement of Value Added

Having integrated GRI reporting (in line with the global reporting initiative) into the annual report in 2011, a value added statement must now be included. The aim of the table below is to give the reader an overview of the sources of value generated in the company and the utilisation of that value according to recipients:

STATEMENT OF VALUE ADDED

in € 1,000 in %
Gross revenues 332,222
Result from the sale of long-term properties 251,764
Result from revaluation 49,143
other income 17,368
operating expenses – 308,070
Depreciation and impairment – 10,521
other expenses – 14,485
incurrence 317,421
to non-controlling interest – 5,042 2%
to staff – 33,164 10%
to state 1 – 43,797 14%
to non-profit organisations – 2 0%
to lender – 172,787 54%
to company/shareholders – 62,629 20%
allocation – 317,421 100%

1 thereof Germany (€ – 34,671K), Austria (€ 1,737K), Eastern/South East Europe (€ -10.855K), others (€ -7K)

RISK MANAGEMENT REPORT

The persistently tough economic climate is posing significant risks to CA Immo and its business activities. The main risks to the Group derive from the market-linked danger of rising vacancy rates, tenant insolvency, the difficult environment for real estate transactions created by the restrictive lending policy of banks, associated increase in yields and the decline in property values. The risk categories outlined below were re-evaluated following a risk assessment carried out in 2011; the major risks facing the Group have not changed significantly from the previous year.

RISK MANAGEMENT

General

Systematic risk management is a key element of the CA Immo Group's internal controlling process with a direct bearing on strategic and operational decisionmaking within the company. Therefore, the objective of risk management is to identify at an early stage and continually monitor potentially hazardous developments as well as opportunities so that suitable measures can be implemented as necessary. To be able to evaluate the company's risk position at all times, CA Immo is constantly evaluating the level of risk by means of quarterly reporting that takes account of the current situation of the company and the market. In these reports, risks are documented in relation to specific properties and projects but also to (sub-)portfolio level. Other aspects of risk reporting involve simulations and depictions of scenarios as regards the value trend for the portfolio as well as exit strategies and liquidity planning. In addition, specific risk types are assessed at regular intervals, with external advisors consulted. CA Immo assesses risk according to substance, effect and the likelihood of occurrence. On that basis, risk management is implemented at every level of the company and is therefore binding on all organisational divisions. From a strategic viewpoint, risk management includes the compilation of compulsory guidelines on investment policy.

Operational risk management is concerned with countering property-specific and general business risks. The company circumvents unexpected risk by means of early warning indicators such as rent forecasts and vacancy analyses as well as the continual monitoring of lease agreement periods and the possibility of terminations. The Management Board is involved in all risk-relevant decisions and bears overall responsibility for such decisions. At all process levels, decisions are subject to the dual verification principle. Clear internal guidelines and strategies, business and investment plans and the continuous reporting systems have made it possible to monitor and control the economic risks associated with everyday business activity. Measures are applied to all Group subsidiaries. Investment plans are also subject to scrutiny by the Supervisory Board or its investment committee. The Controlling department supports the realisation of risk management by providing structured information and data; individual matters are also spot-checked by the Internal Auditing division.

THE INTERNAL MONITORING SYSTEM (IMS)

The accounting specific internal monitoring system (IMS) is a conglomeration of systematically structured measures designed to ensure compliance with guidelines and prevent errors; the guidelines include both specific company rules (Group manual, allocation of responsibilities, authority to sign, dual verification principle, regulations for release, etc.) as well as legal provisions. The objectives of the IMS are to preclude (preventive monitoring) and identify (detective monitoring) errors in accounting and financial reporting, thus enabling amendments or countermeasures to be introduced in good time. The operational divisions are involved to ensure a complete overview of the process of financial reporting. CA Immo defines preventive monitoring as those checks undertaken by responsible administrators as they carry out business processes prior to and/or within specific systems (e.g. accounting and consolidation software). Detective monitoring refers in particular to controls carried out by responsible heads of department or the head of finance and accounting on the basis of analyses derived from such systems. In accordance with the organisational structure of the CA Immo Group, responsibility for the implementation and supervision of the internal monitoring system lies with the appropriate local management teams, i.e. the managing directors of the various subsidiaries are required to perform self-checks in order to assess and document compliance with the monitoring measures

making up the IMS, which has been standardised across the Group. Alongside the Risk Management division, CA Immo has set up an Internal Auditing unit under the control of the full Management Board with a view to consolidating the internal monitoring system. Both units now oversee compliance across the Group with legal provisions, internal guidelines and rules of conduct on the basis of annually compiled auditing plans, or in response to ad-hoc assessments performed as needs dictate. On an operational level, the units review the functioning of (business) processes as regards possible risk and costeffectiveness and assess the potential for efficiency improvements. The Internal Auditing unit also supervises the observance of checking procedures by local management teams and determines the dependability of operational information as well as the effectiveness of the internal monitoring system. Finally, the results of these assessments are reported to the responsible executive boards as well as the full CA Immo Management Board. The Supervisory Board is informed as to the auditing plan and the assessment results at least once a year. Furthermore, the proper functioning of the risk management system is evaluated annually by the Group auditor, with the findings presented to the Management Board and the Supervisory Board or its audit committee.

STRATEGIC RISKS

Capital market and financing risk

Refinancing on the financial market is one of the most important measures open to CA Immo. However, developments have shown that the erosion of trust in a functioning capital market can make the procurement of capital much more difficult. Due to the implementation of Basel III an increasing number of banks reconsider their mortgaging. Therefore, it is assumed that lending will be handled extremely restrictive in future. In addition, some banks currently make market stress test of scattered Eastern European countries or are preparing their exit from the region. Especially in Hungary and Romania refinancing could become more difficult in the upcoming months; however, in Poland and the Czech Republic willingness to finance is a little more stable. Above all, German banks have announced their plans to stop lending outside their home market temporarily, by implication, vice versa in the following years there will be sufficient liquidity in the German market. With the introduction of Solvency II it is assumed that insurance companies will occur increasingly in the financing business, which could provide a slight improvement on the financing sector. For this reason, it is essential that the company has the ability to plan and secure liquidity. As an alternative and supplement to established means of (equity) capital procurement, the company enters into equity partnerships (joint ventures) at project level. Given that the risk of (re)financing may remain a latent factor, detailed liquidity planning has been drawn up for the years ahead. This planning takes particular account of the financial consequences of strategic targets (such as the steady depletion of the project pipeline and real estate sales). The expiry profile of financial liabilities for the CA Immo Group is reasonably stable until business year 2014; loans maturing by that date are linked solely to financing at property or project level. The refinancing of the 6.125% CA Immo bond 09-14 (ISIN: AT0000A0EXE6) and the convertible bond are scheduled for 2014, provided conversion rights are not exerted.

Concentration (cluster) risk

A certain level of concentration (cluster) risk in the portfolio arises where a single investment exceeds a defined upper value in the total portfolio as regards location or investment volume. In such cases, the potential market risk is heightened significantly and the prospect of selling these properties can be diminished (especially where the market environment is constricted). On the other hand, exceptionally small properties raise the danger of excessive administration costs (in relation to rental revenue). For this reason, CA Immo seeks joint venture partners or an early (partial) exit for large-scale investment initiatives as this substantially lessens the burden of risk on the company. To bring about a suitable balance between expenditure and revenue, small properties (which are generally acquired through portfolio purchases) are regularly sold off and the composition of the portfolio is assessed on a quarterly basis. Concentration risk is also created where certain investments lead to overrepresentation of a particular region, country and specific usage type or tenant structure in the overall portfolio: this is because changes in the market can affect levels of demand which will impact negatively on the company's profitability. Concentration risk as regards tenants generally arises where individual tenants are over-represented in terms of rental revenue and rentable space and thus have a significant bearing on the earnings of the CA Immo Group. As a countermeasure, especially on the target markets of Eastern and South Eastern Europe, CA Immo applies regional investment limits according to the size of the overall portfolio and, in the case of individual properties, the size of the respective market. Aside from regional distribution, efforts are made to ensure diversification in

the tenant structure and usage types. In terms of tenants a concentration risk will only be accepted in case of longterm leases and an excellent credit rating.

If we define the limit value for concentration/cluster risk at 5% of the total portfolio, only one investment (Tower 185) falls into this category. Given the current equity commitment of € 190 m on this project, an (partial) exit is planned following completion. Construction financing until is valid until the end of 2012. Due to the difficult market environment negotiation about the prolongation are already initiated. Although the package of investment properties acquired from the state of Hesse in 2006 makes up some 15% of the overall portfolio, it comprises a total of 36 properties that the company could sell individually. In view of the long-term nature of existing lease contracts and the satisfactory creditworthiness of the tenant (the state of Hesse), this portfolio represents a calculated risk. Alongside Tower 185 and the Hesse portfolio, three more individual properties have an IFRS market value of over € 100 m. In terms of location, Prague (River City) and the logistics park in Bucharest have created concentration risk within the portfolio. As regards our land reserves and land development projects, risk arises from the high associated capital commitment; the prevailing market climate is also hampering development projects. For this reason, further property sales are in the pipeline for 2012, measures have been put in place to accelerate land development projects where possible and joint venture partners are being involved at an early stage with a view to cutting the capital commitment.

Country-specific risk and transfer risk

Country-specific and transfer risk incorporate the dangers of economic and political instability. Given the CA Immo Group's high level of investment activity abroad – and particularly in Eastern Europe – inflows of capital and liquidity to which the company is undoubtedly entitled can fail to materialise owing to a lack of foreign currency or transfer restrictions in other countries. There is no generally effective way to hedge against this kind of transfer risk. CA Immo counters country-specific risk by concentrating on a defined core region with local subsidiaries and on-site staff, and through appropriate regional allocation within that core market. The company ensures it is able to respond quickly to economic and political events through continual portfolio monitoring and specific portfolio management. CA Immo negates transfer risk by repatriating liquid assets from investment markets with a low credit standing.

PROPERTY-SPECIFIC RISKS

General

The real estate sector is closely intertwined with the macroeconomic developments on its markets. Any worsening of the debt and financial crisis in Europe poses the greatest risk to the real estate area as such a scenario has the potential to make financing conditions significantly harder for businesses. It seems ever more probable that the European economy will shrink even further during 2012; most indicators point to a slowdown in growth rates across the continent. This would have a particularly serious effect on the commercial property market, depressing the demand for office space whilst rendering access to finance more restrictive and costly. Only core properties let for the long term look like benefiting from the increasing reluctance of investors to take risks.

Market and liquidation risk

From a financing point of view, the risk to property investment markets remains considerable as more and more banks become ever more reluctant to finance large-scale investment in real estate. A deceleration in the transaction rate in 2012, which cannot therefore be ruled out, could impact negatively on CA Immo's sales targets for the year. There is also a danger that owing to rising yields, CA Immo will either be unable to sell properties, or only able to sell them at a discount. This could adversely affect the company's liquidity. To prevent such risks arising, CA Immo performs its own exhaustive market analyses prior to any investment decision and as a regular part of portfolio management; the company also maintains constant contact with leading experts in the sector. To minimise regional risks, the ideal resale times for the largest properties in the portfolio are considered as part of regular discussions concerning location quality, property quality, market changes and emerging trends. Through this approach, key early indicators of market risk are systematically applied to evaluations of investment and project plans, and thus to medium-term liquidity and corporate planning.

Letting risk, loss of rent risk

The opportunities and risks posed by trends on the rental markets are closely linked to economic development, one of the factors that drive demand for commercial real estate. Given the economic outlook for the eurozone and the CEE/SEE markets in the medium term, the high degree of uncertainty will persist throughout 2012. Rental markets will remain at risk of a downturn despite low levels of building activity. We expect rent prices to

pick up slowly in the months ahead; in some subsegments rent prices will decline, as potential tenants will be reserved in making their decision about investments or locations. Significant reduction in vacancy rates – particularly in Eastern Europe – is therefore not expected in 2012.

Within the CA Immo portfolio, vacancy increased particularly sharply in (South) Eastern Europe following the takeover of Europolis; the negative trend has been especially acute in the area of logistics. Although vacancy was reduced moderately in the office area, lettings activity in Hungary was persistently problematic. In Austria too, CA Immo still has high vacancy relative to total available rental space despite the handover of rental premises at the Lände 3 site to Österreichische Post AG. Reducing the vacancy level is likely to remain a challenge in 2012: on the office rental market in Vienna, office space (and rent prices) outside the prime segment are still coming under pressure owing to the rising production of new premises and the high availability of modern, energy-efficient office units. The lettings situation thus continues to be characterised by protracted decision-making on the part of potential tenants. By comparison, vacancy rates in the German asset portfolio are low; here, the only vacancy risk is linked to recently completed development projects Tower 185, Ambigon (both being in the stabilisation phase) and Skygarden. Nonetheless, office tenants continue to favour prime real estate in top locations, and are especially keen to secure first occupancy of new buildings. The fact that the supply of such properties remains limited is helping CA Immo to market its modern office premises in Germany.

Aside from greater vacancy risk, it is also possible that existing tenants will be unable to meet their rent payments given the economic circumstances (loss of rent risk). This risk is generally countered by demanding securities (bank guarantees). To keep vacancy and rent losses to an absolute minimum, CA Immo screens the creditworthiness and reputation of potential tenants. The budgeted and actual revenues generated by all properties are continually monitored, and structured quality checks are carried out. Properties with heightened risk potential are managed by a specially formed restructuring unit with a view to securing their sale at the earliest opportunity after restructuring. The only rental payments outstanding are in the Eastern Europe segment, particularly in relation to hotels, three logistics parks and a shopping centre. The value of all outstanding receivables has been adjusted, taking account of the risk of lost rent to a sufficient degree in the valuation of properties. Reduced income following contract extensions remains a risk where rent levels have to be reduced or greater incentives are offered. Overall, however, the aforementioned problematic cases do not pose a noteworthy risk potential to the company.

Project development risks

The realisation of projects is associated with higher risk. Risks can arise from imponderables such as delays in the property use approval or planning permission processes, cost/deadline overruns, construction defects, low demand for rental premises and similar factors. Nonetheless, given the high value that can be created through development projects, this business area also offers the chance of generating additional revenue. For projects to be realised, it is essential that equity or additional loan capital (project financing) is available. Delays in credit lending can lead to delays in construction work, which has a negative knock-on effect on project valuation; where pre-letting has been secured, this can result in the imposition of contractual penalties. Loss of rental revenue can in turn have serious implications for the company's cash flow. Moreover, financing conditions can be tightened where construction costs increase. With all of this in mind, CA Immo takes various steps to control the risks associated with project development (cost monitoring, variance analyses, long-term liquidity planning and observance of minimum pre-letting quotas, and so on). In general, CA Immo is countering project development risk by choosing partners and service providers with care whilst maintaining stringent controlling, both internally and externally. Controlling involves regular cost monitoring, variance analyses and appropriate reporting. The start-up losses that typically arise in connection with project development also have a detrimental effect on earnings with the accrual of non-capitalisable costs. Over the project lifecycle, these losses are offset against revenue from lettings and sales; accordingly, projects are only launched after comprehensive and long-term liquidity planning. CA Immo invariably seeks to secure pre-letting (50–60% in Germany, for example) before actually commencing a project. In Eastern and South Eastern Europe in particular, however, this may not be achievable (or only possible to a limited degree) on account of the specific market situation. In this region, lease contracts tend to be signed as soon as there is a sufficient likelihood of project completion and projects are sometimes initiated even with low levels of pre-letting, but ever having a secured funding in place.

CA Immo also faces the risk of significant cost variation linked to price trends in the raw materials sector (steel, aluminium, copper, etc.). With this in mind, cost pools are formed for large-scale projects to pass on the risk of rising commodity prices or production costs to the contractor. All current projects are being implemented within their approved budgetary frameworks. Pressure on development earnings results primarily from the market-driven extension of the stabilisation phase (initial renting) and from the risk of rising yields due to restrictive lending.

Property valuation risk

Owing to changing framework conditions, property prices can fluctuate considerably. CA Immo subjects its properties to annual valuation by an outside party; value changes during the year are identified by internal specialists.

The rise in yields over recent years continues to be reflected in valuation reports owing to the discount and capitalisation rates assessed and directly influences consolidated net income through the changes in market value that must be recognised under IAS 40; shareholders' equity is also reduced. Developments in the second half of 2011 especially have shown that Eastern Europe, having been unable to evade the turbulence given the region's close economic ties with Western Europe (especially in the banking sector), is coming under renewed pressure. In core markets such as Poland and the Czech Republic, yields remained stable and sporadically even a decline in yields was observed. With banks significantly reducing their exposure in these markets, it is likely that the property investment market will bottom out partially in 2012, which could lead to a rise in yields. The demand for core properties in core markets, however, continues unabated. The diminishing prospect of rental growth also poses the danger that starting yields for commercial real estate will be adjusted upwards. Changes in value will continue to represent a significant risk in 2012 in view of the expected market trend. If yields fall by an average of 25 base points in the short term and rent levels remain the same, losses in the Eastern Europe portfolio alone could potentially amount to € 50-70 m (in the worst case scenario).

GENERAL BUSINESS RISKS

Legal risks

In addition to the usual legal disputes that arise in the sector (especially against tenants), CA Immo faces the risk of disputes with, for example, joint venture and project partners. There is also potential for disputes arising over past and future sales of real estate as well as annulment actions brought by shareholders in connection with resolutions of the Ordinary General Meeting or review of the exchange ratio applied in the 2010 merger of CA Immo International AG and CA Immo. Legal disputes are monitored and managed centrally by the legal department. At present, no lawsuits or arbitration proceedings that could threaten the company's survival are imminent or pending. Almost all pending actions relate to conventional operational business activity. Sufficient provisions are formed as necessary; as at 31 December 2011, these amounted to approximately € 7,726 K (CA Immo Group). In addition, the joint venture partner of the 'Maslov' project has filed an arbitration claim for € 48,097 K (including interest). CA Immo considers the chances of this action succeeding as minimal. For the expected cash outflow an adequate provision has been made.

Environmental risk

The CA Immo Group can incur significant costs from its responsibility to prevent certain kinds of damage to the environment (from toxic substances and materials in built structures and contamination); there is also a risk that the legal changes may require previously acceptable materials and substances to be eliminated. It is not possible to predict changes to legal provisions, case law or administrative practice, or the consequences that such changes will have on the earning power of real estate; changes could adversely affect real estate values and thus the company's assets, financial and revenue positions. To minimise the risk, CA Immo incorporates these considerations into its wide-ranging assessments prior to every purchase. Appropriate guarantees are also required from sellers. The CA Immo Group makes use of environmentally sustainable materials and energy-saving technologies wherever possible. Environmental risks associated with investment properties are assessed by the CA Immo Sustainability Tool (CAST).

Taxation risk

National taxation systems are subject to ongoing amendment on the target markets of the CA Immo Group. The company monitors all relevant debates and decisions taken by national legislators. Despite this, tax rises linked to changing legal frameworks pose a constant risk to revenue. Sufficient financial provisions have been made for established risks.

FINANCIAL RISKS

Risks linked to liquidity, credit, interest rates and currencies make up the main financial risks.

Liquidity risk

Owing to a clear reluctance on the bank of banks to extend credit at present, short-term liquidity risks cannot be ruled out. Liquidity risk is potentially created where negative market trends prevent or lead to delays in planned sales activity. Other risks arise from unforeseen additional funding obligations in relation to project financing and breaches of covenant in the property financing area. CA Immo is highly skilled at planning and securing liquidity in order to counter these risks and ensure the Group can meet unexpected cash flow requirements as well as its financing commitments on projects and investments. To this end, various liquidity deployment measures have been identified; amongst other things, these provide for the early redemption of loans with very high margins. Loans are invariably agreed on a long-term basis in accordance with the investment horizon for real estate. Even with meticulous planning, however, liquidity risk cannot be eliminated, particularly where capital requests linked to joint venture partners and fund partners are not viable. Capital commitments are typical in the case of development projects; the Group company CA Immo Deutschland has a particularly high commitment in the case of the Tower 185 project. Financing has been secured for all projects under construction; additional financing is required for new project launches, however.

Given the refinancing scheduled for 2012/13, partner risks pose a particular threat; project-related and countryspecific risks will also persist, especially with regard to further developments in Hungary. Additional reserves are needed to cover any breaches of covenant. The refinancing risk and the risk of a breach of contract terms are monitored continuously. The worst case resulting from the potential hazard is included in the current liquidity planning.

Interest rate risk

Interest rate risk stems from market-related fluctuations in the interest rate. This risk affects both the level of

financing costs and the fair value of interest hedging transactions concluded, which influences the company's earnings and equity. Moreover, where new loans are agreed or loans are extended in particular, there is a danger that credit margins will rise substantially. The base rate was cut from 1.5% to 1.25% early in November 2011 and again to 1% at the start of December in a bid to combat the worsening recession. According to the latest interest rate forecasts, the base rate is likely to remain at its present level of 1% until the end of 2012. Swap rates (which have stayed highly volatile as the critical situation persists) are also unlikely to rise significantly.

CA Immo generally opts for a mix of long-term fixedrate and floating-rate loans; in some cases, the latter are secured by means of derivative financial instruments (interest rate caps/swaps), which without exception are used to hedge against the risk of interest rate changes arising from underlying transactions. With the incorporation of Europolis, the risk of rate changes is 60% hedged on all variable-rate loans of the CA Immo Group. Continuous monitoring of the interest rate risk is imperative. No risks constituting a serious and sustained threat to the company exist at the present time. Sufficient provisions have been formed for all risks identified.

Currency risk

Since CA Immo invests in various currency areas, the company is exposed to certain currency risks. CA Immo counters currency risk from the inflow of rental income and rents receivable in BGN, CZK, HUF, PLN, RON and RSD by pegging rents to a hard currency (EUR or USD). No significant currency risk exists at present. Since incoming payments are mainly received in local currency, however, free liquidity is converted into euros upon receipt. The pegging of rents to the EUR/USD affects the creditworthiness of tenants and thus produces an indirect currency risk that can result in payment bottlenecks and loss of rent. Loans are taken out in the currency underlying the relevant lease (this mainly applies to financing in CZK and USD). Currency risks are hedged in connection with construction projects if possible.

RISK EFFECT COUNTERMEASURE
UNFORESEEABLE
LIQUIDITY REQUIREMENT
- Lack of liquidity
- Capital requests linked to joint
venture partners not viable
- Non-utilisation of opportunities
- Distress sales
- Insolvency
- Continual analysis, planning
and monitoring of liquidity
- Optimisation of investment
- Cash pooling
FINANCING
- Breach of covenants
- Non-extension of expiring credit
- Follow-up financing not secured
after project phase
- Cost disadvantages during
credit term
- Additional requirement for equity
or liquidity
- Continual monitoring of the viability
of real estate and the fulfilment of
covenants from loan agreements
- Conclusion of project-related loan
agreements, ideally for the long term
- Establishment of a liquidity reserve
DEVELOPMENT OF
EXCHANGE RATES
- Evaluation of EUR/foreign
currency relations
- Significant fluctuation in earnings
owing to exchange rate gains/losses
- Harmonising of loan and rental
agreements
- Rapid conversion of free liquidity
into EUR
- Forward cover, especially for
construction contracts
- Restrictive approach to foreign
currency loans
INTEREST RATE CHANGES/
EVALUATION OF INTEREST
RATE HEDGING
- Evaluation of interest rate
developments
- Significant fluctuation in earnings
and change in equity ratio due to
changing interest level (financing
costs, evaluation of interest-rate
hedges)
- Mix of long-term fixed-rate and
floating-rate loans
- On-schedule use of derivatives
(swaps/caps)
- Continuous monitoring of interest
rate forecasts

CA IMMO

CONSOLIDATED FINANCIAL STATEMENTS

CONTENT

CONSOLIDATED FINANCIAL STATEMENTS

A. CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31.12.2011 60
B. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31.12.2011 61
C. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31.12.2011 62
D. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR 2011 63
E. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31.12.2011 64
F. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31.12.2011 66
GENERAL NOTES 66
1. Information concerning the company 66
2. Accounting principles 66
3. Scope of consolidation 66
4. Accounting methods 69
a) Changes in presentation and classification 69
b)
c)
Consolidation methods
Foreign currency translation
72
73
d) Properties 74
e) Intangible assets 76
f) Impairments 76
g) Financial instruments 77
h) Construction contracts 79
i) Other non-financial instruments 79
j) Assets held for sale and disposal groups 79
k) Payment obligations to employees 79
l) Other provisions and contingent liabilities 81
m) Taxes 81
n) Segment reporting 82
o)
p)
Recognition of revenues
Result from the sale of long-term properties
82
83
q) Financial result 84
r) Material discretionary decisions, assumptions and estimates 84
s) New and revised standards and interpretations 86
NOTES TO THE CONSOLIDATED INCOME STATEMENT, CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME, CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND
CONSOLIDATED CASH FLOW STATEMENT
88
1. Segment reporting 88
2. Rental income 93
3. Operating result and other expenses directly related to let properties 94
4. Result from property transactions 95
5. Result from development services 95
6. Other expenses directly related to investment properties under development 95
7.
8.
Result from the sale of long-term properties
Indirect expenditures
96
96
9. Other operating income 97
10. Depreciation and impairment/reversal 97
11. Financing costs 97
12. Result from interest derivative transactions 97
13. Result from financial investments 98
14. Impairment of financial investments 98
15. Income from associated companies 98
16. Net results from categories of financial instruments 99
17. Taxes on income and earnings 99
18. Other income 100
19. Long-term investment properties and office furniture, equipment and other assets 102
20. Intangible assets 104
21. Prepayments made on investments in properties 104
22. Investments in associated companies 105
23. Financial assets 106
24. Deferred taxes 108
25. Assets held for sale and liabilities related thereto 109
26. Properties intended for trading 110
27. Receivables and other assets 110
28. Securities 112
29. Cash and cash equivalents 112
30. Shareholders' equity 112
31. Provisions 113
32. Interest-bearing liabilities 114
33. Other liabilities 116
34. Liabilities on taxes on income and earnings 116
35. Cash flow 117
36. Financial instruments 117
37. Derivative financial instruments 119
38. Financial risks 123
39. Other liabilities and contingent liabilities 127
40. Leases 128
41. Business relationships with related companies and parties 129
42. Key figures per share 132
43. Payroll 133
44. Costs for the auditor 133
45. Events after the close of the business year 133
ANNEX I TO THE CONSOLIDATED FINANCIAL STATEMENTS 134
DECLARATION OF THE MANAGEMENT BOARD DUE TO SECTION 82 (4) OF THE AUSTRIAN STOCK EXCHANGE
ACT 141
AUDITOR'S REPORT 142

A. CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31.12.2011

€ 1,000 Notes 2011 2010
Rental income 2 265,576 164,424
Operating costs passed on to tenants 3 64,326 30,204
Operating expenses 3 – 75,413 – 35,547
Other expenses directly related to property rented 3 – 27,403 – 20,484
Net rental income 227,086 138,597
Income from the sale of properties intended for trading 4 28,049 115,657
Book value of properties intended for trading 4 – 20,259 – 85,167
Result from property transactions 7,790 30,490
Gross revenues from development services 5 2,320 2,764
Expenditures on development services 5 – 1,742 – 2,200
Result from development services 578 564
Other expenses directly related to investment properties under development 6 – 7,315 – 5,713
Net operating income 228,139 163,938
Result from the sale of long-term properties 7 44,961 13,936
Indirect expenditures 8 – 44,045 – 33,923
Other operating income 9 17,368 6,458
EBITDA 246,423 150,409
Depreciation and amortisation of long-term properties – 9,282 – 4,268
Change in value of properties intended for trading – 1,239 – 1,703
Depreciation and impairment/reversal 10 – 10,521 – 5,971
Revaluation gain 133,509 101,631
Revaluation loss – 84,366 – 69,579
Result from revaluation 49,143 32,052
Operating result (EBIT) 285,045 176,490
Financing costs 11 – 161,009 – 117,202
Foreign currency gain/loss 16 334 652
Result from interest derivative transactions 12 – 22,456 – 4,446
Result from financial investments 13 11,557 14,418
Result from other financial assets 14 – 4,675 – 766
Result from associated companies 15 – 1,696 – 328
Financial result 16 – 177,945 – 107,672
Net result before taxes (EBT) 107,100 68,818
Income tax 17 – 39,429 – 24,999
Consolidated net income 1 67,671 43,819
thereof attributable to non-controlling interests 5,042 – 1,596
thereof attributable to the owners of the parent 62,629 45,415
Earnings per share in € (undiluted equals diluted) 42 € 0.71 € 0.52

B. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31.12.2011

€ 1,000 Notes 2011 2010
Consolidated net income 67,671 43,819
Other comprehensive income
Valuation cash flow hedges – 30,209 – 18,008
Raclassification cash flow hedges 4,892 378
Other comprehensive result of associated companies 194 – 110
Exchange rate differences – 391 – 36
Income tax related to other comprehensive income 5,151 2,532
Other comprehensive income for the year 18 – 20,363 – 15,244
Comprehensive income for the year 47,308 28,575
thereof attributable to non-controlling interests 5,232 – 2,368
thereof attributable to the owners of the parent 42,076 30,943

C. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31.12.2011

€ 1,000 Notes 31.12.2011 31.12.2010 1.1.2010
ASSETS
Investment properties 19 4,183,202 2,716,211 2,409,589
Investment properties under development 19 934,482 790,582 962,459
Own used properties 19 12,760 13,575 14,248
Prepayments made on properties 19 0 0 544
Office furniture, equipment and other assets 19 10,470 1,638 1,939
Intangible assets 20 39,103 31,468 39,529
Prepayments made on investments in properties 21 2,217 136,200 200
Investments in associated companies 22 34,719 37,096 38,242
Financial assets 23 74,308 41,075 36,899
Deferred tax assets 24 11,739 14,133 24,606
Long-term assets 5,303,000 3,781,978 3,528,255
Long-term assets as a % of statement of financial position total 89.6% 86.4% 81.8%
Assets held for sale 25 57,835 46,509 6,020
Property intended for trading 26 33,904 45,339 122,902
Receivables and other assets 27 168,059 147,019 149,325
Securities 28 0 3,854 6,949
Cash and cash equivalents 29 353,778 354,764 497,199
Short-term assets 613,576 597,485 782,395
Total assets 5,916,576 4,379,463 4,310,650
LIABILITIES AND SHAREHOLDERS' EQUITY
Share capital 638,714 638,714 634,370
Capital reserves 1,062,184 1,061,464 1,013,988
Other reserves – 93,288 – 72,735 – 58,262
Retained earnings 76,954 14,325 – 31,091
Attributable to the owners of the parent 1,684,564 1,641,768 1,559,005
Non-controlling interests 124,891 18,171 170,155
Shareholders' equity 30 1,809,455 1,659,939 1,729,160
Shareholders' equity as a % of statement of financial position total 30.6% 37.9% 40.1%
Provisions 31 9,182 6,239 522
Interest-bearing liabilities 32 2,486,925 1,888,306 1,852,194
Other liabilities 33 373,489 230,402 217,077
Deferred tax liabilities 24 191,813 116,157 129,788
Long-term liabilities 3,061,409 2,241,104 2,199,581
Income tax liabilities 34 36,839 59,894 82,292
Provisions 31 79,292 58,809 57,083
Interest-bearing liabilities 32 777,089 238,049 124,902
Other liabilities 33 152,492 115,814 117,632
Liabilities relating to disposal groups
25 0 5,854 0
Short-term liabilities 1,045,712 478,420 381,909

D. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR 2011

€ 1,000 Notes 2011 2010
Operating activities
Net result before taxes 1 107,100 68,818
Revaluation loss – 49,143 – 32,052
Depreciation and impairment/reversal 10 10,521 5,971
Result from the sale of long-term properties and office equipment 7 – 44,866 – 13,945
Taxes paid excl. taxes for the sale of properties 35 – 9,696 – 15,042
Interest income/expense 11, 13 149,452 102,784
Foreign currency gain/loss 16 – 334 – 652
Result from interest derivative transactions 12 22,456 4,446
Result from other financial assets and from investments in associated companies 15, 11 6,371 1,094
Operating cash flow 191,861 121,422
Property intended for trading 26 10,250 77,200
Receivables and other assets 23, 27 – 4,732 – 19,881
Provisions 31 717 – 347
Other liabilities 33 530 – 6,361
Cash flow from change in net current assets 6,765 50,611
Cash flow from operating activities 198,626 172,033
Investment activities
Acquisition of and investment in properties – 243,618 – 300,440
Acquisition of property companies, less incl. cash and cash equivalents in the amount
of € 128,308 K (2010: € 2,206 K) incl. Prepayments
35 71,880 – 137,317
Acquisition of office equipment and intangible assets – 1,382 – 670
Acquisition of financial assets – 12,926 – 7,062
Disposal of short term securities 28 4,653 6,014
Financing of joint ventures 41 9,929 0
Disposal of long-term properties and other assets 7 131,459 216,199
Disposal of companies with long-term properties, less incl. cash and cash equivalents
in the amount of € 2,696K (2010: € 366 K) 29,998 – 362
Taxes paid relating to the sale of long-term properties – 49,291 – 29,563
Dividend payments of associated companies and securities 891 857
Interest paid capitalised on properties under development 19 – 9,934 – 6,851
Interest received from financial investments 13 5,718 7,663
Cash flow from investment activities – 62,623 – 251,532
Financing activities
Cash inflow from financing 32 252,226 280,291
Cash inflow from related companies and from non-controlling interests 41 4,861 1,788
Payments of subsidiaries to and purchase of non-controlling interests – 10,763 – 99,209
Repayment of loans – 232,786 – 138,831
Interest paid 11 – 148,181 – 107,131
Cash flow from financing activities – 134,643 – 63,092
Net change in cash and cash equivalents 1,360 – 142,591
Cash and cash equivalents as at 1.1. 354,764 497,199
Changes in the value of foreign currency – 2,346 156
Cash and cash equivalents as at 31.12. 29 353,778 354,764

E. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31.12.2011

As at 1.1.2010
634,370
1,013,988
– 31,091
Valuation cash flow hedge
18
0
0
0
Income recognised directly in the associates'
equity
18
0
0
0
Reserves from foreign currency translation
18
0
0
0
Consolidated net income
1
0
0
45,415
Comprehensive income for 2010
0
0
45,415
Purchase of shares in CAIIAG
0
41,429
0
Capital increase as the result of the merger of
CA Immo International AG
4,344
6,047
0
Payments from and purchase of non
controlling companies
0
0
0
As at 31.12.2010
30
638,714
1,061,464
14,325
As at 1.1.2011
638,714
1,061,464
14,325
Valuation cash flow hedge
18
0
0
0
Income recognised directly in the associates'
equity
18
0
0
0
Reserves from foreign currency translation
18
0
0
0
Consolidated net income
1
0
0
62,629
Comprehensive income for 2011
0
0
62,629
Acquisition of Europolis AG
35
0
0
0
Disposal due to sale of companies
0
0
0
Dividend payments of subsidiaries to non
controlling interests
0
0
0
Capital payments to non controlling interest
0
0
0
Payments from non-controlling companies
0
0
0
Purchase of non-controlling interest
0
1,301
0
Repurchase convertible bond
0
– 581
0
€ 1,000 Notes Share capital Capital reserves Retained earnings
As at 31.12.2011 30 638,714 1,062,184 76,954
Other reserves Shares held by the Non-controlling Shareholders'
shareholders of the interests equity (total)
parent company
Valuation result Reserves from Reserves from
(hedging) associates foreign
currency
translation
– 58,291 27 2 1,559,005 170,155 1,729,160
– 14,425 0 0 – 14,425 – 715 – 15,140
0 – 11 0 – 11 – 57 – 68
0 0 – 36 – 36 0 – 36
0 0 0 45,415 – 1,596 43,819
– 14,425 – 11 – 36 30,943 – 2,368 28,575
0 0 0 41,429 – 140,463 – 99,034
0 0 0 10,391 – 10,401 – 10
0 0 0 0 1,248 1,248
– 72,716 15 – 34 1,641,768 18,171 1,659,939
– 72,716 15 – 34 1,641,768 18,171 1,659,939
– 20,306 0 0 – 20,306 190 – 20,116
0 144 0 144 0 144
0 0 – 391 – 391 0 – 391
0 0 0 62,629 5,042 67,671
– 20,306 144 – 391 42,076 5,232 47,308
0 0 0 0 131,866 131,866
0 0 0 0 – 24,179 – 24,179
0 0 0 0 – 1,225 – 1,225
0 0 0 0 – 4,098 – 4,098
0 0 0 0 4,564 4,564
0 0 0 1,301 – 5,440 – 4,139
0 0 0 – 581 0 – 581
– 93,022 159 – 425 1,684,564 124,891 1,809,455

F. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31.12.2011

GENERAL NOTES

1. Information concerning the company

CA Immobilien Anlagen Aktiengesellschaft, together with its subsidiaries (the "CA Immo Group"), is an internationally active property group. The parent company is CA Immobilien Anlagen Aktiengesellschaft ("CA Immo AG"), which has its head office at Mechelgasse 1, 1030 Vienna. As of 31.12.2011, the CA Immo Group owned office, hotel, commercial and residential properties in Austria and Germany, and in Eastern and South East Europe. CA Immo AG is listed in the prime market segment of the Vienna Stock Exchange and belongs to the ATX (Austrian Traded Index of leading companies).

2. Accounting principles

The consolidated financial statements of CA Immo AG were prepared in accordance with the provisions of the International Financial Reporting Standards (IFRS), to the extent that these standards are applicable to companies within the European Union. When the consolidated financial statements are prepared, the acquisition cost principle is applied as a general rule. Excepted from this rule are the investment properties (including properties under development), properties held for sale, securities, derivative financial instruments and provisions for cash-settled share-based payment plans, which are measured at fair value. The net item for plan assets arising from pension obligations recognises the fair value of the plan assets less the present value of the obligations.

The consolidated financial statements are presented in one thousand euros ("€K", rounded according to the commercial rounding method). The use of automatic data processing equipment may lead to rounding differences in the addition of rounded amounts and percentage rates.

3. Scope of consolidation

The consolidated financial statements include the supreme parent company CA Immo AG and the companies listed in Annex I.

Companies under Companies under Companies
full consolidation proportional consolidated at
consolidation equity
As at 1.1.2011 121 27 4
Acquisitions 101 2 0
Share deals – 2 – 3 – 1
New establishments 13 8 0
Company disposal from liquidation or restructuring – 8 0 0
Reclassification within basis of consolidation 2 – 2 0
As at 31.12.2011 227 32 3
thereof foreign companies 187 29 2

Changes in scope of consolidiation

Acquisition an disposals

The closing date of the transaction to acquire all the shares in Europolis AG, Vienna, was 1.1.2011. This acquisition gave the CA Immo Group interests in 100 companies in 11 countries (see Annex I). Payment of a portion of the cash purchase price of € 283,614K, a part in the amount of € 136,000K, has been deferred until 2015. The shares in Europolis AG, Vienna, have been pledged in favour of the seller as security. The acquisition of the Europolis Group has significantly reinforced the presence of the CA Immo Group in the key market of Eastern and South East Europe. Another major outcome of the transaction is the rise in the share of investment properties in the portfolio as a whole.

Company name/domicile Purpose Interest in % Purchase price
in € 1,000
First-time
consolidation
date
Project company for
distribution centre
CA Immo Berling MBVD Verwaltungs GmbH, Frankfurt Mercedes Benz 100 27 25.1.2011
Mahler Property Services Sp.z.o.o., Warschau (in prior Property management
years interest of 50%) company 50 50 1.4.2011
Flottwellpromenade Verwaltungs GmbH, Berlin Property company 50 14 24.5.2011
SKYGARDEN Arnulfpark GmbH & Co. KG, Grünwald
(in prior years interest of 50%) Project company 50 22,660 1.10.2011
CA Immo Berlin Stadthafenquartier Europacity General partner company
Verwaltungs GmbH, Frankfurt for project company 50 28 9.11.2011
Pannonia Shopping Center Kft., Györ (in prior years
interest of 50%) Property company 50 425 31.12.2011
23,204

In business year 2011, the CA Immo Group also acquired the following companies:

These purchase prices were paid in full in cash.

In the business year, the company acquisitions gave rise to legal consulting and company valuation expenses in the amount of € 39K (2010: € 546K). These were recognised in the consolidated income statement under the indirect expenditures.

The CA Immo Group disposed of the following companies in business year 2011:

Company name/domicile Interest
in %
Sales price
€ 1,000
Deconsolidatio
n date
Log Center d.o.o., Belgrade 50 2,100 1.1.2011
Starohorska Development s.r.o., Bratislava 50 0 1.1.2011
Einkaufszentrum Erlenmatt AG, Basel 50 42 1.4.2011
OLYMPIA Mladá Boleslav s.r.o., Prague 51 14,697 1.7.2011
OLYMPIA Teplice s.r.o., Prague 51 15,855 1.7.2011
SOFTWARE PARK KRAKÓW Sp.z.o.o., Warschau 50 0 30.9.2011
Soravia Center OÜ, Tallinn 40 0 31.12.2011
Total sales price 32,694

The disposal prices were paid in full in cash.

The forenamed acquisitions and disposals (measured as of the initial group consolidation or deconsolidation date, as appropriate) affected the composition of the consolidated financial statements as follows:

€ 1,000 Acquisition of Other Sales at book
Europolis Group acquisitions at values
at market values market values
Properties 1,507,051 69,377 – 104,682
Cash and cash equivalents 127,300 1,008 – 2,696
Other assets 41,012 187 – 2,256
Deferred taxes – 80,857 2 9,716
Financial liabilities – 1,118,981 – 35,334 40,351
Provisions – 13,914 – 573 1,305
Other liabilities – 196,356 – 604 31,617
Receivables/payables of affiliated companies 0 – 10,929 – 141
Net assets 265,255 23,134 – 26,786
Goodwill 18,359 0 0

The recognised goodwill (non tax deductible) represents the benefit resulting from the later maturity of the acquired and undiscounted deferred tax liabilities.

The acquired other assets contain receivables and other assets with a fair value of € 26,972 K (nominal amount of € 31,991K less impairments of € 5,019K).

Rental income of the acquired companies totalled € 121,991K from the time of acquisition (from 1.1.2011: € 122,952K), and the result for the period came to € 23,548K (from 1.1.2011: € 25,321K). Thereof € 121,633K gross revenue and € 23,675K net income result from acquisition of Europolis Group.

Joint ventures

The proportional values for the companies that are consolidated proportionally are as follows:

€ 1,000 31.12.2011 31.12.2010
Properties as per IAS 40 247,212 264,733
Other long-term assets 38 0
Property intended for trading 11,887 17,983
Other short-term assets 32,977 29,106
Deferred tax assets 1,272 645
Total assets 293,386 312,467
Long-term liabilities 103,769 97,071
Short-term liabilities 104,579 103,214
Deferred tax liabilities 15,495 21,902
Liabilities 223,843 222,187
€ 1,000 2011 2,010
Rental income 11,520 8,189
Income from the sale of properties intended for trading 18,852 19,021
Result from revaluation 3,265 6,475
Other income 1,622 1,100
Other expenses incl. book value of assets disposed – 23,629 – 19,294
Operating result (EBIT) 11,630 15,491
Financial result – 5,769 – 4,472
Net result before taxes (EBT) 5,861 11,019
Income tax – 3,052 – 4,357
Consolidated net income 2,809 6,662

Associated companies

The following information concerning assets, liabilities, rental income and results for the period is available for the companies included in the consolidated financial statements by way of at-equity consolidation:

€ 1,000 31.12.2011 31.12.2010
Properties as per IAS 40 456,603 356,146
Other long-term assets 123,357 120,443
Short-term assets 194,134 166,359
Long-term liabilities 451,584 429,447
Short-term liabilities 182,509 72,659
Group's share in net assets 35,008 34,754
2011 2010
Gross revenues 92,252 162,237
Net income 3,325 16,746
Group's share in net income 832 4,187

As of 31.12.2011, the accumulated total amount of unrecognised losses from associated companies is € 0 K (31.12.2011: € 196K).

4. Accounting methods

a) Changes in presentation and classification

In order further to improve the clarity of the consolidated financial statements, their presentation was thoroughly revised in the business year. The format of the annual financial statements and the recognition of individual items were also adjusted. To enhance comparability, the prior-year figures were restated as well for the items affected by changes.

Changes to the consolidated income statement

The CA Immo Group generates gross revenues from renting, trading and development services. Since various direct expenses arise in connection with the income streams, the net operating income from the relevant revenue category is now recognised directly in the consolidated income statement.

Tenants who wish to dissolve their leases before a contractually agreed termination date are required to pay settlements. Since these amounts represent anticipated rental income, they are now recognised under the gross revenues from renting. For the reference period, namely business year 2010, an amount of € 90 K was therefore reclassified from other operating income to rental income.

The CA Immo Group measures the property assets as of each quarterly reporting date. The market values are determined values recognised in the consolidated income statement as the result from revaluation (revaluation gain/loss), or as an impairment/reversal. When property assets are sold during the business year, the valuation gain/loss recognised in the business year is reclassified as a gain/loss on disposal. This applies to both the result from the sale of long-term properties and the result from property transactions (under book value of properties intended for trading). For the reference period, namely business year 2010, the impairments and impairment reversals for properties intended for trading that were sold in the business year were reclassified, so that an impairment in the amount of € -393K and a reversal in the amount of € 866K are recognised under book value of properties intended for trading in the total amount of € 473K. An amount of € 14,664 K was likewise reclassified from the result from revaluation to the item for revaluation of properties sold in the current business year.

In view of their direct apportionability, the staff expenses for development services are disclosed as expenditures on development services. The amount for 2010, namely € 1,575K, was reclassified from the indirect expenses to the result from development services.

The CA Immo Group has amended the disclosure of own work capitalised in the present consolidated financial statements. Since this item refers exclusively to indirect expenditures that are capitalised as the acquisition, construction or production cost of properties, it is no longer recognised separately. For the reference period, business year 2010, the amount of € 11,857K was therefore netted against the indirect expenditures item.

Goodwill impairment is now recognised in the consolidated income statement under depreciation and amortisation (impairments), if the goodwill impairment concerns the current year. Goodwill of disposals of investment property is also recognised as disposal under result from the sale of properties. Prior year income tax, in the amount of € 6,844 K, was reclassified to depreciation and amortisation (impairments) in the amount of € 2,701K and to the result from the sale of long-term properties in the amunt of € 4,143K.

The change in deferred taxes arising from exchange rate differences is no longer recognised under the foreign currency gain/loss item, but in the income tax expense. An amount of € 97K was accordingly reclassified from taxes on income to foreign currency gain/loss for the reference period 2010.

The net income attributable to as liabilities recognised non-controlling interests is now recognised under the financing costs. The prior-year item, in the amount of € 244 K, was reclassified to the financing costs.

Changes to the consolidated statement of financial position

The classification of individual items in the statement of financial position has been fundamentally revised. In the long-term assets, loans are now grouped together with the other financial assets. In the short-term assets, receivables from joint ventures are reported together with the receivables and other assets in a single sum. On the liabilities side, the interest-bearing liabilities now encompass bonds, financial liabilities, loans to joint ventures and subordinated liabilities. In addition, the non-controlling interests classified as loan capital, trade creditors, non-interest-bearing liabilities to joint ventures, and other liabilities are recognised under the other liabilities item. The previous year's figures have been adjusted accordingly.

Changes to the consolidated cash flow statement

The presentation of the consolidated cash flow statement has been revised to reflect the amended recognition of items in the consolidated income statement.

Pre tax income of 2010 has been decreased in the amount of € 6,491 K, as in consolidated income statement for the year ended 31.12.2010 reclassifications of income tax, depreciation and amortisation in the amount of € 2,701K, to profit from the sale of long-term properties in the amount of € 4,143 K and foreign currency gain/loss in the amount of € 97K have been made.

Realised impairments/reversals have been reclassified from depreciation and amortisation (impairments), and reversal of impairments, to changes in properties intended for trading. The prior-year figure, in the amount of €-473K, has been reclassified from the cash flow from change in net current assets to the operating cash flow.

The acquisition of non-controlling interests was reclassified from the cash flow from investment activities to the cash flow from financing activities. The previous year's figure, in the amount of € 99,045K, concerning the acquisition of the shares in CA Immo International AG, including the cost of the capital increase, has been reclassified.

Interest paid that is recognised under properties under development is now reported in the cash flow from investment activities. The prior-year figure, in the amount of € 6,851K, has been reclassified from cash flow from financing activities.

Changes to segment reporting

In view of a change in the internal reporting to the Management Board of the CA Immo Group in business year 2011, the segment reporting has been modified. To enhance comparability, the prior-year figures were restated as well.

The issues addressed under the segmentation by regions are treated likewise under the segmentation by sectors. Changes in structure of the consolidated income statement have been also made in segment reporting.

For 2010, rental income attributable to other segments, in the amount of € 889K are now disclosed in the net rental income and eliminated by way of the "consolidation" column.

The general activities of CA Immo that are not directly related to the property portfolio are now disclosed in the Holding segment.

Intra-Group revenues and settlements with other segments are now being disclosed separately, so that the figures are brought into line with the consolidated income statement by way of a "consolidation" column.

In addition, in 2010, management fees paid by the holding company to the property company, in the amount of € 3,392K, and € 937K of other companies in Germany and South and South East Europe were passed on to other segments. Management fees were disclosed in the individual segments as indirect expenses. Furthermore rent of property companies in other segments have been recognised as indirect expense of the Holding in amount of € 671K and € 218K was recognized in the segment development Germany (indirect expense in total € 5,218K).

Because of internal financing among the segments, financing costs and the result from financial investments are shown separately for each segment in 2010. An amount of € 19,025 K is eliminated by way of the "consolidation" column.

The underlying financing is similarly assigned to the relevant segment as other assets or interest-bearing liabilities, and then consolidated in the Group.

The holding company posts deferred tax assets in the amount of € 38,563K. In view of the group of companies in Austria and the existence of a common taxable entity, however, the amount is disclosed as a decrease in deferred tax liabilities in the Group.

b) Consolidation methods

All companies under the controlling influence of the parent company are fully consolidated in the consolidated financial statements. A company is first consolidated as of the time at which the controlling influence passes to the parent. It is deconsolidated when the control lapses. All Group-internal transactions between companies belonging to the scope of full and proportional consolidation, and the relevant income and expenses, receivables and payables, as well as unrealised interim profits, are eliminated in full (or pro rata in the case of proportional consolidation).

The CA Immo Group acquires companies that hold property assets. At the time of acquisition, it must be determined whether only assets are being purchased or an entire business operation is being acquired. If an entire business operation is purchased, the acquisition encompasses not only properties and other assets and liabilities, but also an integrated company. In detail, the assessment is performed according to the following criteria:

  • –Number of properties and sites belonging to the subsidiary
  • –Purchase of other major areas of activity by way of the acquisition, such as property or asset management, accounting etc.
  • –Existence of own employees for managing the properties

If the transaction bringing about the acquisition of a property company is not classified as a "business combination", the purchase encompasses only assets and liabilities. The acquired company's identifiable assets and liabilities are recognised at fair value. This takes place by allocating the acquisition costs to the revalued assets (especially properties) and liabilities of the subsidiary. Goodwill is not recognised.

If an acquired company is a business operation, the acquisition is classified as a business combination. In this event, the subsidiary is consolidated for the first time by the purchase method, by recognising its identifiable assets and liabilities at fair value.

Non-controlling interests are recognised according to the categorisation of the capital interest as either shareholders' equity or loan capital, namely under the non-controlling interests in shareholders' equity or under the other liabilities in loan capital. The interests of non-controlling shareholders are measured upon recognition at the relevant portion of the acquired company's identifiable net assets. When subsequently measured, the book value of the non-controlling interests is amortised according to the changes in shareholders' equity attributable to the non-controlling interests. The total comprehensive income is attributed to the non-controlling interests even if such interests then have a negative balance.

Changes in the parent's ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The book values of the controlling and non-controlling interests are adjusted to reflect the changes in the relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the company.

If a business operation is acquired, goodwill arises from a comparison of the fair value of the consideration and the amount recognised for the non-controlling interests on the one hand, and the fair value of the acquired company's identifiable assets and liabilities (net assets) on the other. The amount exceeding the net assets is recognised as goodwill.

Joint ventures

In the context of property rental and project development partnerships, the CA Immo Group forms joint ventures with one or several partner companies. Joint management of these ventures is established by contract. Interests in such jointly managed ventures are included proportionally in the consolidated financial statements of the CA Immo Group. The Group's interests in the assets, liabilities, income and expenses of jointly managed ventures are assigned to the relevant items of the consolidated financial statements.

Associated companies

An associated company is one on which the Group exerts a significant influence and is neither a subsidiary nor an interest in a joint venture.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting (AE – at equity). Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost, including directly apportionable ancillary costs, as adjusted for postacquisition changes in the Group's share of the net assets of the associate, giving due consideration to the pro rata income as per the income statement, the pro rata

other comprehensive income as per the statement of comprehensive income, and dividend payouts and contributions, and less any impairment in the value of individual investments.

Once the book value of the holder's interests in an associated company has decreased to zero, additional losses are recognised as a liability only to the extent that the holder has incurred legal or constructive obligations or made payments on behalf of the associate.

c) Foreign currency translation

Business operations in foreign currency

The individual Group companies record foreign currency transactions at the rate of exchange ruling on the day of the relevant transaction. Monetary assets and liabilities in foreign currency existing on the reporting date are translated into euros, the Group currency, at the rate of exchange ruling on that date. Any resulting foreign currency gains or losses are recognised in the income statement of the relevant business year.

The foreign currency translation of business operations (transactions) was based on the following rates of exchange:

Acquisition
31.12.2011
Sale
31.12.2011
Acquisition
31.12.2010
Sale
31.12.2010
Switzerland CHF 1.2090 1.2218 1.2428 1.2556
USA USD 1.2905 1.3005 1.3341 1.3441

Translation of individual financial statements denominated in foreign currency

The Group currency is the euro (EUR). Since the euro is also the functional currency of the companies in Eastern and South Eastern Europe outside the European Monetary Union that are included in the consolidated financial statements, the financial statements prepared in foreign currency are translated in accordance with the temporal method. Under this method, investment property (including properties under development) as well as monetary assets and liabilities are translated at closing rates, whereas other non-monetary assets are translated at historical exchange rates. Items of the income statement are translated at the average exchange rates of the relevant reporting period. Any gains and losses resulting from foreign currency translation are recognised in the income statement.

For the subsidiaries in Ukraine, the management companies in Eastern and South East Europe, and the subsidiary in Switzerland that was sold in 2011, the functional currency is the relevant local currency. The figures in the statement of financial position are translated at the exchange rate applying on the reporting date. Only the shareholders' equity is translated at historical rates. Items of the income statement are translated at the average exchange rates of the relevant reporting period. Gains and losses arising from application of the closing rate method are included in the comprehensive other income in the statement of comprehensive income, and recognised under the reserves from foreign currency translation.

Individual financial statements were translated on the basis of the following rates of exchange:

Closing rate Closing rate Average exchange Average exchange
rate rate
31.12.2011 31.12.2010 2011 2010
Bulgaria BGN 1.9558 1.9558 1.9558 1.9558
Croatia HRK 7.5250 7.3800 7.3209 7.2985
Poland PLN 4.4168 3.9670 4.1457 4.0041
Romania RON 4.3197 4.2890 4.2313 4.2248
Russia RUB 41.7000 40.9000 41.0177 40.2238
Switzerland (until 1.4.2011) CHF n/a 1.2492 1.2910 1.3694
Serbia RSD 106.0000 105.5000 101.9208 103.5958
Czech Republic CZK 25.8000 25.0800 24.5788 25.2633
Ukraine UAH 10.3624 n/a 11.1648 n/a
Hungary HUF 311.1300 278.0000 280.6958 276.7133

d) Properties Classification

The "investment properties" item consists of investment properties and properties under development that are held neither for own use, nor for sale in the ordinary course of business, but to generate rental income and appreciate in value.

Properties under development are reclassified as investment properties once the main construction services are completed.

Properties are recognised as held or intended for trading if the property concerned is intended for sale in the ordinary course of business or under construction for subsequent sale in the ordinary course of business. Properties held for administration purposes are allocated to the own used properties item.

Some properties are mixed-use – they are used to generate rental income and appreciate in value on the one hand, and for administration purposes on the other. If the relevant portions can be sold separately, the CA Immo Group also recognises them separately. If the portions cannot be separated, the entire property is classified as an investment property only if the own use occupies less than 5.0% of the total useful area. Otherwise, the entire property is classified as for own use.

Valuation

All investment properties are measured according to the fair value model specified as an option under IAS 40. Under this model, the property assets are measured at the fair value prevailing on the relevant reporting date. Differences compared with the current book value prior to revaluation (fair value of previous year plus subsequent/additional acquisition or production cost less subsequent acquisition cost reductions, paying due regard to the change in agreed incentives) are recognised in the income statement under "Result from revaluation".

The properties held for trading are measured at the lower of cost and net realisable value as of the relevant reporting date.

The own used properties and the office furniture, equipment and other assets items are measured in accordance with the cost method; in other words, at acquisition or production cost less regular depreciation and impairments. Investment grants are recognised as reductions of acquisition costs from the time a binding agreement exists.

Regular depreciation of office furniture, equipment and other assets is done on a straight-line basis over the estimated useful life, which is generally 3 to 40 years. The estimated useful life of the own used properties, applying the principle that each part of an item with a significant cost shall be depreciated separately, is 70 to 75 years for the carcass, 15 to 50 years for the façade, 20 years for the building services, 15 to 20 years for the roof, and 10 to 20 years for the tenant's finishing works.

Financing (borrowing) costs arising during property construction are allocated to the production costs if they can be directly attributed to a qualifying asset. In this context, a qualifying asset is an asset that takes a substantial period of time to get ready for its intended use or sale. In cases in which loan capital was obtained not directly for the procurement of an individual qualifying asset, the pro rata amount of the capitalisable general borrowing costs is attributed to the qualifying assets. All other financing costs are recognised in profit or loss in the period in which they arise.

Determination of fair value

The relevant fair value of properties is established, if a value is not indicated by binding purchase agreements, largely by external independent experts applying recognised valuation methods. The external valuations are carried out in accordance with the standards defined by the Royal Institution of Chartered Surveyors (RICS). The RICS defines the fair value as the estimated amount for which a property could be exchanged on the valuation date, after a reasonable period

on the market, between willing parties in an arm's length transaction in the normal course of business in which both the buyer and the seller act knowledgeably, prudently and without compulsion.

The valuation method applied by the expert in an individual case depends, in particular, on the property's stage of development and type of use.

Rented commercial properties, which constitute the largest portion of the CA Immo Group's portfolio, are valued largely by the investment method. In such cases, the fair values are based on capitalised rental income and discounted, expected future cash flows. Alongside the current contractual rents and lease expiration profile, the value appraiser in this context establishes and gives consideration to further parameters on the basis of a professional assessment including, in particular, the long-term expected rental value (ERV), and equivalent yields. The equivalent yields fell slightly in Austria and Germany, which are regarded as exceptionally stable markets. In Germany the capitalisation/discount interest rates range from 4.0% to 8.25% as at 31.12.2011 (31.12.2010: 4.0% to 7.75%), in Austria they range from 4.25% to 10.7% and the same as in the previous year. The trends in Eastern/South Eastern Europe differ greatly. While the equivalent yields continue to decline in Poland, increases are being posted in Hungary and Romania. Enormous variances in development potential exist in Romania and Ukraine. The yields for office properties, for example, range from 7.5% to 9.25% (31.12.2010: 7.2% to 9.0%) in Hungary, 8.5% to10.0% in Romania, 8.25% to 11.0% in Serbia and 6.8% to 9.7% in Poland. For the hotel properties in the portfolio in Slovenia and the Czech Republic, the yields climbed above 8.8% to 10.0% (31.12.2010: 9.0%).

For properties under development and construction, the residual value method is applied. In this case, the fair value is based on the established market value upon completion, giving due consideration to the outstanding expenditure and the application of an imputed reasonable, not changed compared to the previous year, profit for the developer in the range of 5.0% to 20.0%. Due regard is given to any risks, including in the future expected rents and/or the capitalisation/discount rates. The interest rates range from 5.0% to 8.5%, the same as in the previous year. They vary in particular according to the general market climate, location and type of use. The nearer a project is to completion, the greater the portion of parameters that are based on actual or contractually fixed figures. Either after or just before completion, the properties are valued by applying the investment method (see above), paying due regard to the outstanding works.

Land banks, consisting of land that is not earmarked for active development in the near future, are valued, depending on the property and the stage of development, on the basis of comparable transactions or by the liquidation value, cost or residual value method.

Around 99.5% (31.12.2010: 99.4%) of the properties in Austria, about 96.5% (31.12.2010: around 96.0%) of the properties in Germany, and about 99.9% (31.12.2010: 99.0%) of the properties in Eastern/South Eastern Europe were subject to an external valuation as of the reporting date 31.12.2011. The values for the other properties were established internally on the basis of the previous year's valuations or binding purchase agreements.

e) Intangible assets

In the case of business combinations pursuant to IFRS 3, the goodwill item mainly corresponds to the difference arising from the allocation of acquisition cost to the fair values of the acquired properties and the relevant deferred tax liabilities not discounted in line with IAS 12. It represents the benefit resulting from the later maturity of the acquired deferred tax liabilities. The goodwill is not amortised regularly, but tested for impairment at least annually. The impairment test focuses on the discounted cash flows arising from the properties as of the relevant reporting date, paying due regard to the change in expected tax payments. An impairment is recognised if the book value of the cash generating unit exceeds the present value of the related cash flows. It is reported in the consolidated income statement under depreciation and impairment/reversal.

Other intangible assets chiefly comprise software and are recognised at acquisition cost less straight-line amortisation and impairments. For the amortisation of computer software, a useful life of 3 to 5 years was assumed.

f) Impairments

If signs of a value impairment are evident, the CA Immo Group determines the recoverable amount for the own used properties; office furniture, equipment and other assets; and intangible assets. The recoverable amount is the higher of the fair value less the cost of selling (net realisable value) and the utility value or value in use. The value in use is the present value of the expected future cash flows that are likely to be generated by the continued use of an asset and its retirement at the end of its useful life.

If this recoverable amount is lower than the carrying value of the asset, the asset is written down to the lower value.

If at a later date an impairment ceases to exist, the impairment loss is reversed to profit or loss – except in the case of goodwill – up to the carrying amount of the amortised original acquisition or production cost.

Goodwill is tested for impairment annually, with the cash generating unit representing individual properties. Since the recoverable amount for the cash generating unit cannot be determined without taking account of the expected tax effects directly attributable to individual properties owing to the specific nature of the recognised goodwill, in addition to the allocatable goodwill the book value of the cash generating unit includes the directly attributable deferred tax liability of the property at the time of the company's acquisition. The recoverable amount is determined on the basis of fair value. The fair value for a property is determined on the basis of external valuation reports as well as the underlying property yields and expected rental revenue. The cash value of cash flows in relation to tax effects was determined with due regard to post-tax interest rates, i.e. the respective yield less the effect of the tax rate in a particular country. The impairment test assumes a retention period for properties in the CA Immo Group of 15 or 25 years for land/land reserves from the time of acquisition. Since the end of the retention period is approaching under this assessment model and the discounting period is thus shortening, further value decreases in the amount of the lower cash value benefit are likely in the years ahead.

g) Financial instruments

Securities

Securities are attributed to the category "at fair value through profit and loss" (FV/PL) because the securities are controlled on the basis of the fair values. The securities are measured as of the acquisition date at fair value excluding transaction costs directly attributable to the securities' acquisition. In subsequent periods they are measured at the fair value as of the reporting date, as indicated by stock market prices. Gains or losses are recognised in profit or loss. The result of the market valuation and realisation is recognised under the result from financial investments. Securities purchases and sales are recognised at the trading date.

Other interests in companies

Interests in companies which, owing to a lack of control, are not consolidated, and upon which a material influence is not exerted, are assigned to the category "available for sale/at cost" (AFS/AC). Since a listed price on an active market is not available and the fair value cannot be reliably established, the interests are measured at acquisition cost.

Loans and prepayments made on investments

Loans granted by the company and prepayments made on property investments are assigned to the category "loans and receivables" (L&R). They are measured at fair value upon recognition, and subsequently at amortised cost, applying the effective interest-rate method.

Receivables and other financial assets

Trade receivables from the provision of services, other receivables and other financial assets are primary financial instruments that are not listed on active markets and not intended for sale. They are assigned to the measurement category "loans and receivables" (L&R). They are measured initially at fair value, and thereafter at amortised cost, applying the effective interest-rate method and allowing for impairments.

An impairment for receivables and other assets is formed depending on the status of the dunning procedure, the past due date, and the individual credit rating of the relevant debtor, paying due regard to the security received, and is recognised if there is an objective indication that the receivables cannot be collected in full. Uncollectible receivables are derecognised. Subsequent payments in respect of receivables for which impairment losses have been recognised are recognised in profit and loss under the other operating income.

Receivables from the sale of properties having a period for payment of greater than one year are recognised as noncurrent receivables at present value as of the relevant reporting date.

Cash and cash equivalents

Cash and cash equivalents include cash, sight deposits with banks, as well as fixed-term deposits with an original term of up to three months. This item also encompasses bank balances subject to drawing restrictions of not more than 3 months. Bank balances subject to drawing restrictions with a longer time limit are recognised under the receivables and other assets.

Interest-bearing liabilities

Interest-bearing liabilities are assigned to the category "financial liabilities at amortised cost" (FLAC) and recognised upon disbursement at the amount actually received, less transaction costs. Any difference between the amount received and the repayment amount is allocated over the term of the financing according to the effective interest-rate method and recognised under financing costs or, if the conditions set forth in IAS 23 are met, capitalised as part of the acquisition, construction or production cost.

Other financial liabilities

Other financial liabilities, such as trade creditors, are assigned to the category "financial liabilities at amortised cost" (FLAC) and measured upon receipt at fair value, and thereafter at amortised acquisition cost..

For current other liabilities, the fair value generally corresponds to the estimated sum of all future payments. For noncurrent other liabilities, the acquisition cost of the liabilities corresponds to their present value, determined by discounting the future payments with a reasonable market interest rate giving due consideration to the maturity and risk. Interest rates with matching maturities for bearer debt securities or government bonds, plus a premium, are used as the discount rates.

Derivative financial instruments

The CA Immo Group uses derivative financial instruments, such as interest rate caps, floors and swaps, and forward exchange transactions, in order to hedge against interest and currency risks. These derivative financial instruments are recognised at fair value at the time the contract is concluded and remeasured at fair value in the following periods. Derivative financial instruments are recognised as financial assets if their fair value is positive, and as financial liabilities if their fair value is negative. The fair value of the derivative financial instruments corresponds to the amount that would be payable by or to the CA Immo Group if the position were closed on the balance sheet date.

Derivative financial instruments are recognised as non-current assets or liabilities if the remaining term of the instrument is more than twelve months and realisation or settlement within twelve months is not expected. The other derivative financial instruments are recognised as current assets or liabilities.

The method applied by the CA Immo Group when recognising gains and losses from derivative financial instruments depends on whether or not the criteria for cash-flow hedge accounting (hedging of future cash flows) are met.

In the case of derivative financial instruments serving the purpose of hedging future cash flows and thus qualifying as cash flow hedges, the effective portion of the change in fair value is recognised in the other comprehensive income; in other words, directly in equity. The ineffective portion is immediately recognised as an expense under the item "Result from interest derivative transactions". The measurement gains or losses from cash flow hedges recognised in equity are

reclassified into profit or loss in the period in which the hedged underlying is recognised in profit or loss and/or the conditions for (cash flow) hedge accounting are no longer satisfied. The hedging relationship between the instrument and the hedged item is documented when the hedge is undertaken and afterwards on an ongoing basis.

In order to make a clear distinction from cash flow hedges, the CA Immo Group describes derivative financial instruments that do not satisfy or no longer satisfy the criteria for cash flow hedge accounting as "fair value derivatives". This applies, for example, to interest rate caps, floors and swaps without a concurrent credit agreement. Pursuant to IAS 39, derivatives not qualifying for hedge accounting are assigned to the category "held for trading" (HFT). The change in the fair value is therefore recognised in the full amount in profit or loss under the item "Result from interest derivative transactions".

The fair values of the interest rate swaps, caps and floors are calculated by discounting the future cash flows from variable payments on the basis of generally recognised models of financial mathematics.

h) Construction contracts

Pursuant to the applicable percentage of completion method, the contract revenue and contract costs associated with construction contracts and arising from the performance of services (such as project management, building works, interior works, site development, decontamination) are recognised as receivables by reference to the stage of completion of the contract activity at the end of the reporting period. The stage of completion is established according to the ratio of contract costs incurred as of the reporting date to the estimated total contract costs as of the reporting date (costto-cost method). An expected loss from a construction contract is immediately recognised as an expense.

i) Other non-financial instruments

Other non-financial instruments largely consist of prepayments made on properties, receivables from fiscal authorities, and prepaid expenses. They are measured at cost less impairments.

Other non-financial liabilities refer to liabilities to fiscal authorities and prepaid rents. These are measured on initial recognition at the amount corresponding to the likely outflow of funds. When measured subsequently, value changes arising from new information are recognised in profit or loss.

j) Assets held for sale and disposal groups

Non-current assets and disposal groups are classified as held for sale if the relevant book value is expected to be realised from a disposal and not from continued use. This case applies if the relevant non-current assets and disposal groups are available for immediate sale in their current condition and a disposal is very probable. Furthermore, the sale must be highly probable within one year of the classification as held for sale. Disposal groups consist of assets that are to be sold together in a single transaction and the associated liabilities that are also to be transferred by way of the transaction.

Non-current assets and disposal groups that are classified as held for sale are recognised at the lower of book and fair value less disposal costs as a general rule. Excepted from this policy are investment properties, which continue to be measured according to the fair value model.

k) Payment obligations to employees

Variable remuneration

In business year 2010, the members of the Management Board were for the first time invited to take part in an LTI (long-term incentive) programme with a term of three years. Participants are required to invest funds of their own, subject to a ceiling of 50% of their annual basic salary. This first investment was measured at the closing rate on 31.12.2009, and the number of underlying shares was calculated accordingly. Performance is measured according to several indicators, namely NAV growth, ISCR (interest coverage ratio) and TSR (total shareholder return). Employees belonging to the first tier of management were also invited to join the LTI scheme. Their own investment is restricted to 35% of their basic salary. In business year 2011, the LTI programme was continued. The members of the Management

Board and employees belonging to the first management tier were again invited to take part. In keeping with the 2010 LTI programme, the key indicators were NAV growth, ISCR and TSR, but the weighting of these factors was revised and the target values were raised.

For such cash-settled share-based payments, the incurred liability is recognised as provisions during a qualifying period of 3 years in the amount of the fair value. Until the liability is settled, the fair value is remeasured on each annual reporting date and on the settlement date. All changes are recognised in profit and loss in the relevant business year.

Defined benefit plans upon termination of employment

The CA Immo Group has the legal obligation to make a one-off severance payment to staff employed in Austria before 1.1.2003 in the event of dismissal or retirement. The amount of this payment depends on the number of years of service and the relevant salary at the time the settlement is payable. It varies between two and twelve monthly salary payments. A provision is formed for this defined benefit obligation.

In addition, obligations arising from defined benefit pension plans exist for four persons in the CA Immo Germany Group. The commitments concern four pension expectancies, three thereof are for managing directors who have already retired. In respect of the reinsurance cover obtained in previous years for defined benefit pension obligations, plan assets are recognised according to IAS 19.59 under the non-current receivables and other assets to the extent that the plan assets exceed the present value of the future obligations and the claims are due to the CA Immo Group.

External actuarial opinions are obtained annually for the defined benefit pension obligations. The projected cover funds (liability) are calculated according to IAS 19 by the projected unit credit method based on the following parameters:

31.12.2011 31.12.2010
Interest rate 4.75% 4.5%
Salary increases expected in the future 2.0% 2.0%
Accumulation period 25 years 25 years
Forecast income from plan asset 3.0% 6.0%

The actual return on the plan assets for 2011 is 3.2% (2010: 2.4%).

The expected return on the plan assets is established on the basis of the actuarial calculations performed by a major insurer. As at 31.12.2011, the expected return on the plan assets was recognised at the mean of 3.0% observed in recent years.

The entire service cost and amount of actuarial gains and losses in connection with the obligation is recognised in profit and loss in the staff expenses – and therefore in the indirect expenditures – in the year in which they arise. The interest expenses are recognised in the financing costs. Both actuarial gains and losses in connection with the plan assets and the expected return on the plan assets are fully recognised in profit and loss under the result from financial investments in the year in which they arise.

Defined contribution plans

The CA Immo Group has the legal obligation to pay 1.53% of the monthly salary of all staff joining companies in Austria after 31.12.2002 into a staff pension fund. No other obligations exist. The payments are considered as staff expenses and are included in the indirect expenditures.

Based on agreements with two different pension funds in Austria and a benevolent fund for small and medium-sized enterprises in Germany, a defined contribution pension commitment exists for employees in Austria and Germany after a certain number of years of service (Austria: 1 or 3 years, depending on age; Germany: immediately upon reaching the age of 27). The amount of the contribution is a percentage of the relevant monthly gross salary, namely 2.5% or 2.7% in Austria, and 2.0% in Germany. After a certain period (Austria: 5 or 7 years; Germany: 3 years) the contributions paid accrue as a vested pension right, and the entitlement is paid out as a monthly pension upon retirement.

l) Other provisions and contingent liabilities

Other provisions are recognised if the CA Immo Group has legal or actual obligations towards a third party due to a past event and the obligation is likely to lead to an outflow of funds. Such provisions are stated at the value which can be determined by the best possible estimate at the time the consolidated financial statements are prepared. If the cash value of the provision determined on the basis of prevailing market interest rates differs substantially from the nominal value, the cash value of the obligation is stated.

If the amount of an obligation cannot be established reliably, it is classified as a contingent liability. These are possible obligations arising from past events, whose existence depends on the occurrence or non-occurrence of one or several future events that are not entirely within the Group's control. In such cases, a provision is not formed and an explanation of the facts is given in the Notes. Contingent liabilities are also recognised if a future outflow of funds is not probable and a provision is not formed for that reason, but is likewise not improbable. The recognised amounts are measured at the present value of the best estimate.

m) Taxes

The income tax expense reported for the business year contains the income tax of the individual subsidiaries, calculated from their taxable income and the tax rate applicable in the relevant country ("current tax"), and the change in deferred taxes recognised in profit and loss ("deferred tax"), as well as the tax effect arising from equity capital postings not giving rise to temporary differences and recognised in equity (e.g. taxes concerning issuing costs of capital increases and subscription rights to convertible bonds, the measurement and sale of treasury shares, and – in some cases – the measurement of derivative transactions).

In line with IAS 12, all temporary differences between the statement of financial position for tax purposes and the consolidated statement of financial position are given consideration in the calculation of deferred taxes. Deferred taxes on losses carried forward are capitalised paying due regard to their restricted or unrestricted eligibility for carrying forward and their future usability. The recognition of the deferred tax claim arises first from existing projections for the next 5 to 7 years that show a utilisation in the foreseeable future of the tax losses carried forward, and second from the existence of adequate taxable temporary differences, arising chiefly from property assets.

The deferred taxes are measured according to the following tax rates, being those expected to apply at the time the differences are reversed:

Country Tax rate Country Tax rate
2011 2010 2011 2010
Bulgaria 10.0% 10.0% Switzerland 31.9% 31.9%
Germany 15.8% to 31.9% 15.8% to 31.9% Serbia 10.0% 10.0%
Croatia 20.0% 20.0% Slovakia 19.0% 19.0%
Luxembourg 28.6% 28.6% Slovenia 20.0% 20.0%
Netherlands 20.0% 20.0% Czech Republic 19.0% 19.0%
Austria 25.0% 25.0% Ukraine 21.0% 25.0%
Poland 19.0% 19.0% Hungary 10.0% / 19,0% 10.0% / 19,0%
Romania 16.0% 16.0% Cyprus 10.0% 10.0%
Russia 20.0% 20.0%

A group and tax compensation agreement for the formation of a group of companies as defined by Section 9 of the Austrian Corporation Tax Act (KStG) exists in Austria for selected companies of the CA Immo Group. The head of the group is CA Immobilien Anlagen Aktiengesellschaft, Vienna. All of the Austrian companies belonging to the Europolis Group are included in the group of companies.

A tax consolidation arrangement for income taxes exists under the law of each country for some companies in the Europolis Group and CA Immo Germany Group. The controlling enterprise is Europolis AG, Vienna, or CA Immo Deutschland GmbH, Frankfurt. Profit and loss transfer agreements oblige the controlled companies to transfer to the controlling enterprise their entire profit (the annual surplus before the profit transfer, less any loss carried forward from the previous year – giving due consideration to the formation or reversal of reserves). The controlling enterprise is obliged to make good any annual deficit arising for the duration of the agreement to the extent that such deficits are not equalised by drawings on amounts allocated to the retained earnings during the term of the agreement.

n) Segment reporting

The business segments subject to mandatory reporting were identified on the basis of the information regularly used by the company's principal decision maker when deliberating on the allocation of resources and assessing earning power. The principal decision-making body of the CA Immo Group is the full Management Board. It controls the individual properties that are combined in business segments. The presentation of business segments is done by region and division, and corresponds to the CA Immo Group's internal reporting system.

The segments are formed according to property category and the main activities of the management/holding companies. Items that cannot be directly attributed to a property or segment management structure are disclosed in the Holding business segment. The following segments have been established:

–Properties: Let investment properties, own used properties and investment properties pursuant to IFRS 5

  • –Development: Properties under development and land banks, completed development properties (investment properties) until the second annual reporting date after completion (depending on the tenancy rate), development services for third parties, properties under development pursuant to IFRS 5, and properties intended for trading
  • –Holding: General management and financing activities of CA Immo AG, Vienna

o) Recognition of revenues

Rental income is recognised on a straight-line basis over the term of the lease unless a different method is more appropriate to the circumstances. Agreed incentives, such as rent-free periods, reduced rents for a certain period, or oneoff payments, form part of the rental income. In this respect as well, therefore, the amounts are recognised on a straightline basis over the entire term.

For leases envisaging a regular rent adjustment over the term (graduated rents), such adjustments are likewise recognised on a straight-line basis over the term of the lease. Any adjustments attributable to inflation, in contrast, are not distributed over the term.

Conditional rent payments, such as those depending on the sales of business premises, are recognised in profit or loss at the time of accrual.

The full term of a lease over which the entire rental income is apportioned on a straight-line basis encompasses the non-terminable period, as well as further periods for which the tenant can exercise an option, with or without making additional payments, provided that the exercise of the option is sufficiently likely upon the inception of the lease.

Rental income is measured at the market value of the consideration received or outstanding, less direct sales allowances.

Payments on account received from tenants for the premature termination of a lease and payments for damage to rented premises are recognised in profit or loss at the time of accrual.

Operating costs incurred by the CA Immo Group for properties rented to third parties and which are charged to tenants and recognised in profit and loss under the operating costs passed on to tenants.

Income from service contracts is recognised in proportion to the services performed as of the reporting date.

Income from the sale of properties is recognised if

–all the material economic opportunities and risks associated with ownership have passed to the buyer,

  • –the CA Immo Group does not retain any rights of disposal or effective power of disposition in respect of the object sold,
  • –the amount of the revenues and the costs incurred or to be incurred in connection with the sale can be reliably determined, and
  • –it is sufficiently likely that the economic benefit from the sale will accrue to the CA Immo Group.

Non-current, deferred payments received in advance (prepayments received) are discounted at the time of receipt with a reasonable market interest rate giving due consideration to the maturity and risk, and marked up when subsequently measured. The accrued interest is recognised in profit and loss under the financial result.

Income from the sale of properties under construction is to be assessed according to IFRIC 15 in order to establish whether IAS 11 or IAS 18 applies and thus to determine when, during the construction period, the income from the sale is to be recognised. This investigation is subject to the condition that the disposing enterprise neither retains rights of disposal, as are usually associated with ownership, nor holds effective power of disposition in respect of the constructed property. This would be the case, for example, if the CA Immo Group were to retain the right to rental or disposal income, or could influence the design of the property. If this does not apply, the facts are to be investigated to establish whether they fall within the scope of IAS 11 or IAS 18.

If a contract for the construction of a property is recognised as a construction contract, the income arising therefrom is recognised – in compliance with IAS 11 – in proportion to the services performed according to the stage of completion as of the reporting date. The stage of completion of an individual construction contract is established according to the ratio of contract costs incurred for work performed as of the reporting date to the estimated total contract costs as of the reporting date.

A key criterion for accounting in compliance with IAS 11 is the customer's influence on the design. The criterion is met if the buyer is able to specify the major structural elements of the design before construction begins and once construction is in progress. If, in contrast, an agreement for the construction of real estate gives buyers only limited ability to influence the design of the real estate, for example to select a design from a range of specified options, or to specify only minor variations to the basic design, it is an agreement for the sale of goods within the scope of IAS 18.

When revenues from property transactions are being realised, IAS 18 requires that contracts are separated into individual services if material different services are combined in a single contract. Such multiple element transactions are deemed to exist if a contract contains several complementary but different elements, such as a service provided alongside a sale of real estate. These different elements give rise to the separate realisation of revenues. The purchase price of the property is recognised according to the criteria for realising revenues from sales. The revenues arising from the service are realised according to the stage of completion.

p) Result from the sale of long-term properties

In compliance with IAS 40, investment properties are measured as of each quarterly reporting date and, as a general rule, changes in market values are recognised in the consolidated income statement as the result from revaluation (revaluation gain/loss). When property assets are sold during the business year, the valuation gain/loss realised in the business year to date is reclassified and recognised as a gain/loss on disposal together with the other gain/loss on disposal. The economic annual gain/loss arising from a property sold in the business year is thus recognised in the full amount in the result from the sale of long-term properties.

q) Financial result

Financing costs comprise interest payable for external funds (if not eligible for capitalisation according to IAS 23), interest recognised by the effective interest-rate method, interest for committed external funds not yet received, current interest on hedging transactions, the interest costs arising from the calculation of retirement benefits, the net income attributable to non-controlling interests in limited partnerships and expenses similar to interest. Interest is deferred over time. The share of net income attributable to non-controlling interests in limited partnerships contains the pro rata net income of non-controlling partners in German limited partnerships, whose capital contribution is recognised as loan capital in the statement of financial position under other liabilities.

The foreign currency gains and losses arising chiefly in connection with financing and investment transactions, and the changes in measurement and the result arising from the realisation of forward exchange transactions are recognised in the exchange rate differences.

The income from derivative transactions consists of gains and losses from the sale or measurement of interest rate swaps, caps and floors unless same are recognised in equity as cash flow hedges. The non-effective portion of the cash flow hedge relationships is also recognised in the result from derivative transactions.

The result from financial investments includes interest, dividends and other income from the investment of funds and investments in financial assets, gains and losses from the measurement and sale of securities, actuarial gains and losses in connection with plan assets, and the expected return on plan assets.

The expenses from financial investments chiefly refer to the valuation of loans and prepayments on investments in properties.

r) Material discretionary decisions, assumptions and estimates

When preparing the consolidated financial statements, senior management is required to make discretionary decisions, assumptions and estimates that affect both the recognition and measurement of the assets, liabilities, income and expenses, and the information contained in the Notes. Future actual values can be at variance with the original assumptions.

Property valuation

The crisis in the global financial system in recent years has triggered considerable uncertainty in the commercial property markets. Therefore, prices and values are subject to significant fluctuation. In particular, restricted liquidity in the capital markets can make it more difficult to sell the properties in the short term.

All valuations represent an estimate of the price that could be obtained in a transaction taking place on the valuation date. Valuations are based on assumptions, such as the existence of a regulated market in the region concerned. Unforeseen macroeconomic or political crises can exert a main influence on the market. Such events can trigger panic buying or selling, or a general reluctance to conclude business transactions. If a valuation date immediately follows an event of this kind, the data underlying the valuation may be questionable, incomplete or inconsistent, which affect inevitably the reliability of the estimate.

For properties that currently have a high vacancy rate or short-term leases, the influence of the valuer's assumptions on the property value is greater than it is in the case of properties with cash flows that are secured by long-term contracts. It is likewise true that the influence exerted by the valuer's assumptions on the established property value is greater, the more distant the scheduled completion date.

The property values established by external valuers depend on an abundance of parameters, some thereof influence each other in a complex way. For the purposes of analysing the sensitivity of entire sub-portfolios to the effect of changes in a parameter on the valuation, simplified assumptions are made below in order to reveal possible changes.

The table below illustrates the sensitivity of the fair value to a change in rental income (for the purposes of this model, defined as sustainable (reversionary) rent) and yield. It is based on a representative section of the Group portfolio of investment properties that contains the 10 highest-value investment properties of Germany as well as of Eastern/South East Europe and the 5 highest-value investment properties of Austria. In total the market value of these 25 investment properties amounts to € 1,852m and represents 44.3% of the investment property portfolio.

Change of sustainable rent

10.0% 5.0% 0,0% -5,0% 10,0%
-0.55% 14.0% 10.4% 6.8% 3.2% -0.4%
-0.25% 10.2% 6.7% 3.3% -0.2% -3.6%
0.00% 6,6% 3.3% 0.0% -3.3% -6.6%
0.25% 3.3% 0.2% -3.0% -6.2% -9.4%
0.50% 0.3% -2.8% -5.9% -8.9% -12.0%

The scenarios show that a change in the gross rental income has a disproportionate effect on the fair values while a change of yield has an important effect on fair values. The table below, for the development projects, illustrates the sensitivity of the fair value to an increase or decrease in the calculated outstanding development and construction costs. It is based on the development projects under construction in Germany. The portion of CA Immo Group of the total calculated investment costs for these projects is estimated at around € 370 m.

Still outstanding capital expenditures
in € m – 10% – 5% Initial value 5% 10%
Outstanding capital expenditures 210 222 233 245 257
Fair values 142 130 118 106 95
Changes to initial value 19.7% 9.9% 0.0% – 9.9% – 19.7%

The calculated scenarios indicate that a clear disproportionate relationship exists at present between a change in the outstanding investment costs and the fair values. This relationship represents only a snapshot, however, because the book values as of the reporting date are clearly lower to the expected outstanding investment costs as the relevant development projects are still at the beginning of construction. As the stage of completion advances, the relationship will become more disproportionate because the ratio of the outstanding investment costs to the invested capital will gradually diminish.

Taxes

Change of Yield (in % point)

All companies with property holdings are, as a general rule, liable in the country concerned for income tax on both rental income and capital gains. Material discretionary decisions must be made concerning the amount of tax provisions that are to be formed. An examination must also be performed to establish the extent to which deferred tax assets are to be recognised.

Income from the disposal of investments in companies in Germany, Switzerland and Eastern/South Eastern Europe is wholly or partially exempt from income tax subject to compliance with certain conditions. Even if it is intended to comply with the conditions, the full amount of deferred tax liabilities is recognised for the properties.

The probability that deferred tax assets arising from temporal differences and losses carried forward can be offset against taxable profits is to be assessed. In this connection, uncertainties exist concerning the interpretation of complex tax regulations and as regards the amount and effective date of future taxable income. The impairment test applied to deferred tax assets depends on enterprise-specific forecasts concerning, among other things, the future earnings situation in the relevant Group company. In particular against the background of an existing web of diverse international alliances, differences between the actual results and the assumptions on the one hand, and future changes to these assumptions on the other, can influence future tax expenses and refunds. The CA Immo Group forms appropriate provisions for probable charges arising from current tax audits by the relevant national revenue authorities.

Measurement of interest rate derivatives

The CA Immo Group uses interest rate swaps, caps and floors in order to counter the risk of interest rate fluctuations. These Interest rate derivatives are recognised at fair value. The fair value is the value which the CA Immo Group would receive or pay upon liquidation of the deal on the reporting date. This value was determined by the bank with which the transaction was concluded.

The fair values are calculated by discounting the future cash flows from variable payments on the basis of generally recognised models of financial mathematics. The interest rates for discounting the future cash flows are estimated by referencing an observable market yield curve. The calculation is based on interbank middle rates.

s) New and revised standards and interpretations

First-time application of new and revised standards and interpretations not materially influencing the consolidated financial statements

The following standards and interpretations, already an integral part of EU law, were to be applied for the first time in business year 2011:

Standard / interpretation Content Entry into force1)
IAS 24 Revised IAS 24: Related Party Disclosures 1.1.2011
IAS 32 Amended IAS 32: Classification of Rights Issues 1.2.2010
IFRS 1 Amended IFRS 1: Limited Exemption from Comperative IFRS 7 Disclosures 1.7.2010
IFRIC 14 Amended IFRIC 14: Prepayments of a Minimum Funding Requirement 1.1.2011
IFRIC 19 New Interpretation: Extinguishing Financial Liabilities with Equity Instruments 1.7.2010
Various Improvements to IFRS 2010 Various

1) The standards and interpretations are to be applied to business years commencing on or after the effective date.

New and revised standards and interpretations that are not yet compulsory

The following amendments and new versions of standards and interpretations have been issued, but are not yet applicable as of the reporting date:

Standard / interpretation Content Entry into force1)
IAS 1 Amended IAS 1: Presentation of Items of Other Comprehensive Income 1.7.20122)
IAS 12 Amended IAS 12: Deferred Tax: Recovery of Underlying Assets 1.1.20122)
IAS 19 Amended IAS 19: Employee Benefits 1.1.20132)
IAS 27 Revised IAS 27: Separate Financial Statements 1.1.20132)
IAS 28 Revised IAS 28: Investments in Associates and Joint Ventures 1.1.20132)
IAS 32 Amended IAS 32: Offsetting Financial Assets and Financial Liabilities 1.1.20142)
IFRS 1 Amended IFRS 1: Severe Hyperinflation and Removal of Fixed Dates for First 1.7.20112)
time Adopters
IFRS 7 Amended IFRS 7: Disclosures - Transfers of Financial Assets 1.7.2011
IFRS 7 Amended IFRS 7: Offsetting Financial Assets and Financial Liabilities 1.1.20132)
IFRS 9 New Standard: Financial Instruments 1.1.20152)
IFRS 10 New Standard: Consolidated Financial Statements 1.1.20132)
IFRS 11 New Standard: Joint Arrangements 1.1.20132)
IFRS 12 New Standard: Disclosures of Interests in Other Entities 1.1.20132)
IFRS 13 New Standard: Fair Value Measurement 1.1.20132)
IFRIC 20 New Interpretation: Stripping Costs in the Production Phase of a Surface Mine 1.1.20132)

1) The standards and interpretations are to be applied to business years commencing on or after the effective date.

2) Not yet adopted by the EU as of the reporting date. The effective date envisaged by an EU Regulation may differ from the date indicated by the IASB.

The forenamed new versions and interpretations are not being applied prematurely by the CA Immo Group. The expected changes arising from IAS 19 and IFRS 9 to IFRS 13 will have a material influence on the presentation of the CA Immo Group's financial and earnings position. The new IFRSs will require the CA Immo Group in future, from the date the new standards take effect, to include jointly managed ventures in the consolidated financial statements at equity, rather than by the proportional method applied thus far. As of the reporting date, these standards had not been adopted by the EU and were therefore not (prematurely) applicable. The other anticipated changes are not expected to have any material effects.

NOTES TO THE CONSOLIDATED INCOME STATEMENT, CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND CONSOLIDATED CASH FLOW STATEMENT

1. Segment reporting

€ 1,000 Austria
2011 Income Development Total Income
producing producing
Rental income 36,918 197 37,115 71,229
Revenues with other operating segments 622 0 622 312
Operating costs passed on to tenants 7,947 43 7,990 6,104
Operating expenses – 9,650 – 49 – 9,699 – 6,870
Other expenses directly related to property rented – 3,314 0 – 3,314 – 4,346
Net rental income 32,523 191 32,714 66,429
Result from property transactions 0 0 0 0
Result from development services 0 0 0 0
Other expenses directly related to investment properties under
development 0 – 515 – 515 0
Net operating income 32,523 – 324 32,199 66,429
Result from the sale of long-term properties 3,619 – 2,203 1,416 – 818
Indirect expenditures – 935 – 709 – 1,644 – 3,914
Other operating income 421 11 432 4,874
EBITDA 35,628 – 3,225 32,403 66,571
Depreciation and impairment/reversal – 3,873 – 60 – 3,933 – 74
Result from revaluation – 6,713 3,285 – 3,428 13,606
Operating result (EBIT) 25,042 0 25,042 80,103
Financing costs – 18,361 – 1,194 – 19,555 – 37,095
Foreign currency gain/loss 0 0 0 0
Result from interest derivative transactions – 2,849 0 – 2,849 – 2,347
Result from financial investments 2,138 15 2,153 1,600
Result from other financial assets 0 0 0 0
Result from associated companies 0 0 0 0
Net result before taxes (EBT) 5,970 – 1,179 4,791 42,261

31.12.2011

Properties2) 680,938 43,900 724,838 1,152,014
Other assets 23,644 5,569 29,213 152,778
Deferred tax assets 0 0 0 2,444
Total assets 704,582 49,469 754,051 1,307,236
Interest-bearing liabilities 383,135 33,934 417,069 709,253
Other liabilities 8,483 1,024 9,507 102,635
Deferred tax liabilities incl. income tax liabilities 52,008 523 52,531 9,941
Liabilities 443,626 35,481 479,107 821,829
Shareholders' equity 260,956 13,988 274,944 485,407
Capital expenditures3) 18,157 9,617 27,774 1,373
Germany1) Eastern/South Total Total
Development1) Total Income Development East Europe Holding segments Consolidation
producing Total
18,922 90,151 132,282 6,028 138,310 0 265,576 0 265,576
0 312 0 0 0 0 934 – 934 0
4,738 10,842 43,226 2,268 45,494 0 64,326 0 64,326
– 3,896 – 10,766 – 50,897 – 4,051 – 54,948 0 – 75,413 0 – 75,413
– 4,458 – 8,804 – 14,021 – 1,264 – 15,285 0 – 27,403 0 – 27,403
15,306 81,735 110,590 2,981 113,571 0 228,020 – 934 227,086
7,790 7,790 0 0 0 0 7,790 0 7,790
578 578 0 0 0 0 578 0 578
– 5,970 – 5,970 0 – 830 – 830 0 – 7,315 0 – 7,315
17,704 84,133 110,590 2,151 112,741 0 229,073 – 934 228,139
34,391 33,573 9,044 928 9,972 0 44,961 0 44,961
– 11,991 – 15,905 – 16,777 – 4,480 – 21,257 – 11,714 – 50,520 6,475 – 44,045
2,887 7,761 7,720 2,053 9,773 4,943 22,909 – 5,541 17,368
42,991 109,562 110,577 652 111,229 – 6,771 246,423 0 246,423
– 5,224 – 5,298 – 704 – 322 – 1,026 – 264 – 10,521 0 – 10,521
55,636 69,242 – 342 – 16,329 – 16,671 0 49,143 0 49,143
93,403 173,506 109,531 – 15,999 93,532 – 7,035 285,045 0 285,045
– 29,700 – 66,795 – 73,895 – 8,645 – 82,540 – 17,852 – 186,742 25,733 – 161,009
515 515 246 – 427 – 181 0 334 0 334
– 13,728 – 16,075 – 2,307 – 12 – 2,319 – 1,213 – 22,456 0 – 22,456
3,607 5,207 8,390 1,351 9,741 20,189 37,290 – 25,733 11,557
0 0 0 – 4,675 – 4,675 0 – 4,675 0 – 4,675
– 2 – 2 0 – 1,694 – 1,694 0 – 1,696 0 – 1,696
54,095 96,356 41,965 – 30,101 11,864 – 5,911 107,100 0 107,100
1,212,884 2,364,898 1,900,229 232,218 2,132,447 0 5,222,183 0 5,222,183
286,751 439,529 231,172 103,838 335,010 303,445 1,107,197 – 424,543 682,654
6,518 8,962 2,316 461 2,777 39,083 50,822 – 39,083 11,739
1,506,153 2,813,389 2,133,717 336,517 2,470,234 342,528 6,380,202 – 463,626 5,916,576
739,562 1,448,815 1,521,031 232,756 1,753,787 67,933 3,687,604 – 423,590 3,264,014
228,570 331,205 199,428 10,324 209,752 64,944 615,408 – 953 614,455
90,394 100,335 111,988 2,881 114,869 0 267,735 – 39,083 228,652
1,058,526 1,880,355 1,832,447 245,961 2,078,408 132,877 4,570,747 – 463,626 4,107,121
447,627 933,034 301,270 90,556 391,826 209,651 1,809,455 0 1,809,455
242,886 244,259 1,379,253 176,626 1,555,879 157 1,828,069 0 1,828,069
€ 1,000 Austria
2010 Income Development Total Income
producing producing
Rental income 39,000 50 39,050 62,544
Revenues with other operating segments 671 0 671 218
Operating costs passed on to tenants 7,990 6 7,996 7,314
Operating expenses – 10,107 – 7 – 10,114 – 7,312
Other expenses directly related to property rented – 4,093 – 71 – 4,164 – 7,822
Net rental income 33,461 – 22 33,439 54,942
Result from property transactions 0 0 0 0
Result from development services 0 0 0 0
Other expenses directly related to investment properties under development 0 – 101 – 101 0
Net operating income 33,461 – 123 33,338 54,942
Result from the sale of long-term properties 5,769 – 5 5,764 100
Indirect expenditures – 1,020 – 683 – 1,703 – 4,491
Other operating income – 38 0 – 38 417
EBITDA 38,172 – 811 37,361 50,968
Depreciation and impairment/reversal – 1,708 0 – 1,708 – 80
Result from revaluation 13,350 – 1,830 11,520 – 2,276
Operating result (EBIT) 49,814 – 2,641 47,173 48,612
Financing costs – 18,918 – 769 – 19,687 – 37,479
Foreign currency gain/loss 0 0 0 0
Result from interest derivative transactions – 766 0 – 766 – 1,337
Result from financial investments 2,769 14 2,783 958
Result from other financial assets 0 0 0 0
Result from associated companies 0 0 0 0
Net result before taxes (EBT) 32,899 – 3,396 29,503 10,754

31.12.2010

Properties2) 714,442 21,640 736,082 1,137,916
Other assets 91,729 391 92,120 163,843
Deferred tax assets 0 0 0 2,129
Total assets 806,171 22,031 828,202 1,303,888
Interest-bearing liabilities 387,005 19,765 406,770 764,124
Other liabilities 6,936 277 7,213 79,571
Deferred tax liabilities incl. income tax liabilities 58,015 – 433 57,582 5,473
Liabilities 451,956 19,609 471,565 849,168
Shareholders' equity 354,215 2,422 356,637 454,720
Capital expenditures3) 14,401 640 15,042 14,405
Germany1 Eastern/South Total Total
Development1) Total) Income Development East Europe Holding segments Consolidation
producing Total
17,215 79,759 45,150 465 45,615 0 164,424 0 164,424
0 218 0 0 0 0 889 – 889 0
2,056 9,370 12,646 192 12,838 0 30,204 0 30,204
– 2,396 – 9,708 – 15,297 – 428 – 15,725 0 – 35,547 0 – 35,547
– 2,492 – 10,314 – 5,672 – 334 – 6,006 0 – 20,484 0 – 20,484
14,383 69,325 36,827 – 105 36,722 0 139,486 – 889 138,597
30,490 30,490 0 0 0 0 30,490 0 30,490
564 564 0 0 0 0 564 0 564
– 5,291 – 5,291 0 – 321 – 321 0 – 5,713 0 – 5,713
40,146 95,088 36,827 – 426 36,401 0 164,827 – 889 163,938
8,072 8,172 0 0 0 0 13,936 0 13,936
– 10,507 – 14,998 – 8,198 – 3,298 – 11,496 – 10,944 – 39,141 5,218 – 33,923
3,937 4,354 2,044 413 2,457 4,014 10,787 – 4,329 6,458
41,648 92,616 30,673 – 3,311 27,362 – 6,930 150,409 0 150,409
– 3,654 – 3,734 – 204 0 – 204 – 325 – 5,971 0 – 5,971
35,185 32,909 – 15,988 3,611 – 12,377 0 32,052 0 32,052
73,179 121,791 14,481 300 14,781 – 7,255 176,490 0 176,490
– 25,108 – 62,587 – 31,696 – 4,324 – 36,020 – 17,933 – 136,227 19,025 – 117,202
1,247 1,247 – 949 356 – 593 – 2 652 0 652
– 2,010 – 3,347 – 111 – 58 – 169 – 164 – 4,446 0 – 4,446
2,324 3,282 4,388 2,249 6,637 20,741 33,443 – 19,025 14,418
0 0 0 – 766 – 766 0 – 766 0 – 766
0 0 0 – 328 – 328 0 – 328 0 – 328
49,632 60,386 – 13,887 – 2,571 – 16,458 – 4,613 68,818 0 68,818
1,027,938 2,165,854 623,575 86,705 710,280 0 3,612,216 0 3,612,216
305,167 469,010 240,403 95,158 335,561 247,437 1,144,128 – 391,014 753,114
12,003 14,132 1 0 1 38,563 52,696 – 38,563 14,133
1,345,108 2,648,996 863,979 181,863 1,045,842 286,000 4,809,040 – 429,577 4,379,463
515,898 1,280,022 618,488 81,466 699,954 125,318 2,512,064 – 385,709 2,126,355
239,946 319,517 25,471 13,638 39,109 56,584 422,423 – 5,305 417,118
118,299 123,772 31,306 1,954 33,260 0 214,614 – 38,563 176,051
874,143 1,723,311 675,265 97,058 772,323 181,902 3,149,101 – 429,577 2,719,524
470,965 925,685 188,714 84,805 273,519 104,098 1,659,939 0 1,659,939
239,528 253,933 38,640 18,702 57,342 352 326,668 0 326,668
  • 1) Incl. a property in Switzerland
  • 2) Properties include investment properties, investment properties under development, own used properties, properties intended for trading and prepayments made on properties.
  • 3) Capital expenditures include all acquisitions of properties (long-term and short-term) including from first-time consolidation, office furniture, equipment, other assets and intangible assets; thereof € 7,514K (31.12.2010: € 7,383K) in properties intended for trading.

Business relationships within a business segment are consolidated within the segment. Business relationships with other business segments are shown, and the figures are brought into line with the consolidated income statement and consolidated statement of financial position by way of the "consolidation" column.

The accounting principles of the reporting business segments correspond to those described under "Accounting methods".

Transactions between business segments are attributed as follows:

  • –The staff costs that are directly attributable to a business segment are recognised in the relevant segment.
  • Management fees for services performed by the holding segment (e.g. accounting, controlling, general expenses) correspond to the actual costs and are assigned to the individual business segments on the basis of the invoiced services. They are recognised in the Holding segment as other operating income.
  • –The segments are formed according to the main activities of management companies. Management fees of these companies are attributed based on the invoiced services to the individual business segments of the applicable region and are recognised in the management company' segments as other operating income.
  • –Interest expenses and income are attributed based on the corresponding financing agreements.
  • –Additionally, financial liabilities in the amount of € 265,699 K (31.12.2010: € 265,090 K) and the related interest expenses and derivative transactions resulting from the acquisition of CA Immo Deutschland Group are attributed to the German development segment. The Holding segment is credited in the same amount.
  • –Furthermore, financial liabilities in the amount of € 218,640 K (31.12.2010: € 216,030 K) and the related interest expenses/income relating to the acquisition of Europolis AG, Vienna, and the acquisition of shares in CA Immo International AG, Vienna, are attributed to the Eastern/South East Europe income producing segment. The Holding segment is credited in the same amount.

The segments generate gross revenues from letting activities, the sale of properties intended for trading as well as from development services. The gross revenues are attributed to the country in which the investment properties are situated. Most of the revenues are generated in Germany so that they are presented as a separate segment. A material portion of the total rental income is generated in the four core regions of the Eastern/South East Europe segment, and a material portion of the investment properties of the CA Immo Group is situated in this segment:

2011 2010
€ 1,000 Share in % € 1,000 Share in %
Rental income
Poland 37,846 14.3 7,330 4.5
Romania 28,494 10.7 9,443 5.7
Czech Republic 29,313 11.0 6,755 4.1
Hungary 27,163 10.2 11,321 6.9
Market value of properties
Poland 628,997 12.0 171,357 4.7
Romania 410,581 7.9 114,941 3.2
Czech Republic 344,920 6.6 57,920 1.6
Hungary 421,570 8.1 192,140 5.3

2. Rental income

€ 1,000 2011 2010
Continuous rental income 254,126 160,499
Conditional rental income 3,006 3,835
Amendments of the rental income of incentive agreements 7,296 0
Income from cancellation of rent agreements 1,148 90
Rental income 265,576 164,424

In 2010, the amount of rental income of incentive contracts was immaterial and therefore not considered.

The CA Immo Group generates the rental income through the following types of property:

2011 Austria Deutschland Ost-/Südosteuropa Gesamt
€ 1,000 Share in % Tsd. € Anteil Tsd. € Anteil Tsd. € Anteil
in % in % in %
Offices 14,233 39 73,228 82 99,568 72 187,029 70
Hotel properties 4,910 13 882 1 7,022 5 12,814 5
Retail 10,836 29 365 0 9,172 6 20,373 8
Logistic 143 0 7,273 8 21,686 16 29,102 11
Residental 4,023 11 45 0 0 0 4,068 1
Other properties 2,970 8 8,358 9 862 1 12,190 5
Rental income 37,115 100 90,151 100 138,310 100 265,576 100
2010 Austria Deutschland Ost-/Südosteuropa Gesamt
€ 1,000 Share in % Tsd. € Anteil Tsd. € Anteil Tsd. € Anteil
in % in % in %
Offices 17,095 44 59,053 74 35,941 79 112,089 68
Hotel properties 4,031 10 152 0 8,158 18 12,341 8
Retail 9,273 24 412 1 689 1 10,374 6
Logistic 139 0 7,275 9 0 0 7,414 5
Residental 5,489 14 64 0 0 0 5,553 3
Other properties 3,023 8 12,803 16 827 2 16,653 10
Rental income 39,050 100 79,759 100 45,615 100 164,424 100

The CA Immo Group generates rental income from a number of investment property lessees: There is one tenant in Germany (Fed. State Hessen) from which the CA Immo Group generates a material portion of the total rental income. The portion of this tenant in Hessen in the total rental income is as follows:

€ 1,000 2011 2010
Rental income Fed. State Hessen 43,297 42,553
Principal tenant as a % of the rental income total 16.3% 25.9%
Market value properties leased to Fed. State Hessen 813,850 787,600
Principal tenant as a % of the investment properties 19.5% 29.0%

3. Operating result and other expenses directly related to let properties

€ 1,000 2011 2010
Operating costs passed on to tenants 64,326 30,204
Operating expenses – 75,413 – 35,547
Own operating costs – 11,087 – 5,343
Maintenance costs – 6,005 – 8,245
Bad debt losses and reserves for bad debts – 8,497 – 4,464
Agency fees – 2,369 – 1,736
Other directly related expenses – 10,532 – 6,039
Other expenses directly related to property rented – 27,403 – 20,484
Total – 38,490 – 25,827

4. Result from property transactions

€ 1,000 2011 2010
Income from sales 28,049 115,657
Book value of properties intended for trading – 18,722 – 84,767
Reversal of impairment of properties intended for trading sold within the
business year 20 866
Impairment of properties intended for trading sold within the business year – 121 – 393
Other development expenses/materials expenses – 760 – 310
Own operating costs (vacancy costs) – 675 – 564
Book value of properties intended for trading – 20,258 – 85,168
Result from property transactions 7,791 30,490
Result from property transactions as a % of the income from sales 27.8% 26.4%

The other development expenses/materials expenses include non-capitalisable project costs at the CA Immo Germany Group, in particular advertising and public relations expenses.

5. Result from development services

€ 1,000 2011 2010
Gross revenues from commissioned work as per IAS 11 702 1,609
Gross revenues from service contracts 1,618 1,155
Other material costs – 798 – 625
Staff expenses – 944 – 1,575
Result from development services 578 564
Result from services as a % of the development revenues 24.9% 20.4%

The costs incurred for commissioned work as defined in IAS 11 in projects in process at the balance sheet date total € 602 K (2010: € 1,172 K) . The prepayments received total € 742 K (31.12.2010: € 3,029 K). Profits registered according to progress of performance in the 2011 financial year amount to € 197 K (2010: € 142 K).

6. Other expenses directly related to investment properties under development

€ 1,000 2011 2010
Operating expenses related to investment properties under development – 4,466 – 3,715
Property advertising costs – 1,427 – 1,469
Project development and project execution – 1,422 – 529
– 7,315 – 5,713
€ 1,000 Austria Germany Eastern/- 2011 Austria Germany 2010
South East
Europe
Purchase prices for interests 0 42 32,958 33,000 0 0 0
Book value of sold net assets 0 530 – 26,474 – 25,944 0 0 0
Goodwill of disposed property 0 0 – 1,472 – 1,472 0 0 0
Revaluation result 0 226 5,183 5,409 0 0 0
Subsequent costs and additional
costs 0 – 111 – 307 – 418 0 0 0
Results from share deals 0 687 9,888 10,575 0 0 0
Profit from the sale of long-term
properties 38,259 152,032 424 190,715 37,536 169,210 206,746
Book value of properties – 37,334 – 114,008 – 340 – 151,682 – 36,006 – 147,853 – 183,859
Goodwill of disposed property – 709 – 1,401 0 – 2,110 – 2,150 – 1,993 – 4,143
Revaluation result 1,917 19,561 0 21,478 6,900 7,764 14,664
Subsequent costs and additional
costs – 717 – 23,298 0 – 24,015 – 516 – 18,956 – 19,472
Results from asset deals 1,416 32,886 84 34,386 5,764 8,172 13,936
Result from the sale of long-term
properties 1,416 33,573 9,972 44,961 5,764 8,172 13,936

7. Result from the sale of long-term properties

The book value of the sold net assets (= equity) includes investment properties in the amount of € 3,270 K (2010: € 0 K) in Germany and € 33,573 K (2010: € 0 K) in Eastern/South East Europe, wherefore purchase prices in the amount of total € 105,980K (2010: € 0K) were agreed.

8. Indirect expenditures

€ 1,000 2011 2010
Staff expenses – 32,220 – 23,728
Office rent – 2,430 – 2,232
Travel expenses and transportation costs – 1,347 – 956
Others – 4,602 – 4,012
Internal management – 40,599 – 30,928
Legal, auditing and consultancy fees – 11,343 – 8,530
Other indirect expenses – 4,907 – 6,322
subtotal – 56,849 – 45,780
Capitalised services on long-term property assets 12,108 10,773
Changes to stock properties intended for trading 696 1,084
Indirect expenditures – 44,045 – 33,923

The staff expenses comprise payments to the staff provision fund in the amount of € 114 K (2010: € 99 K) and payments to pension and relief funds in the amount of € 373 K (2010: € 254 K) .

9. Other operating income

€ 1,000 2011 2010
Management fees 3,966 893
Payment of compensation 3,380 0
Release of provisions 2,901 1,280
Release of value adjustments 2,220 522
Others 4,901 3,763
17,368 6,458

10. Depreciation and impairment/reversal

€ 1,000 2011 2010
Scheduled depreciation – 2,381 – 1,566
Goodwill – 6,901 – 2,701
Impairment loss of properties intended for trading – 1,284 – 1,705
Reversal of impairment of properties intended for trading 44 0
Depreciation and impairment/reversal – 10,521 – 5,971

11. Financing costs

€ 1,000 2011 2010
Interest expenses banks – 120,766 – 80,778
Bond interest – 19,871 – 20,242
Interest on non-current liabilities – 8,235 – 7,321
Convertible bonds interest – 6,582 – 7,803
Interest expenses of joint venture partners – 511 – 823
Interest expenses of joint ventures – 146 – 24
Non-controlling interests held by limited partners – 164 244
Other interest and financing costs – 4,734 – 455
Financing costs – 161,009 – 117,202

12. Result from interest derivative transactions

€ 1,000 2011 2010
Valuation interest rate derivative transactions (not realised) – 17,645 – 3,963
Reclassification from prior years valuations recorded in equity – 4,892 – 378
Ineffectiveness of interest rate swaps – 111 – 105
Realised result from interest derivative transactions 192 0
Result from interest derivative transactions – 22,456 – 4,446

The item "Valuation derivative transactions (not realised)" breaks down as follows:

€ 1,000 2011 2010
Valuation cash flow hedges on account of premature termination of cash flow hedge relation 1,558 350
Valuation of interest rate swaps without cash flow hedge relation – 16,436 – 6,704
Valuation result from counter-swaps – 1,874 2,479
Valuation of interest rate caps and interest rate floors – 893 – 88
Valuation interest rate derivative transactions (not realised) – 17,645 – 3,963

13. Result from financial investments

€ 1,000 2011 2010
Realised income from securities 815 1,722
Valuation securities (not realised) 0 1,304
Income from bank interest 3,896 6,255
Interest income from loans to associated companies and joint ventures 3,480 3,276
Income from investments 35 0
Other interest income 3,331 1,861
Result from financial investments 11,557 14,418

14. Impairment of financial investments

The impairment of financial investments amounts to € 4,675 K in 2011 (2010: € 766 K). It relates to a reversal of impairment for prepayments made on investment in properties in the amount of € 325K (2010: € 0K) and a value adjustment of loans for business operations in Eastern and South East Europe in the amount of € 5,000K (2010: € 766K).

15. Income from associated companies

€ 1,000 2011 2010
UBM Realitätenentwicklung AG, Vienna 1,640 2,751
OAO Avielen AG, St. Petersburg – 3,334 – 3,079
Isargärten Thalkirchen GmbH & Co. KG, Grünwald – 2 0
– 1,696 – 328
€ 1,000 Category1) 2011 2010
Interest expenses FLAC – 134,556 – 92,196
L&R – 26,453 – 25,006
Foreign currency gain/loss
Valuation
HFT 5,100 916
Realisation HFT – 3,267 329
Forward foreign exchange transactions
Valuation
HFT – 1,432 – 910
Realisation HFT – 67 317
Interest rate swaps
Valuation
HFT – 21,644 – 4,253
CFH – 111 – 105
Realisation HFT 192 0
Interest rate cap and interest rate floor
Valuation
HFT – 893 – 88
Securities
Valuation
FV/PL 0 1,304
Realisation FV/PL 815 1,722
Interest income L&R 10,707 11,392
AFS/AC 35 0
Result from other financial assets L&R – 4,675 – 766
Result from associated companies AE – 1,696 – 328
Financial result – 177,945 – 107,672

16. Net results from categories of financial instruments

1) FLAC – financial liabilities at amortised cost, L&R – loans and receivables, HFT – held for trading, CFH – cash-flow hedge, FV/PL – at fair value through profit or loss, AFS/AC - available for sale/at cost, AE – at equity

17. Taxes on income and earnings

€ 1,000 2011 2010
Income tax (current year) – 27,619 – 28,496
Income tax (previous years) 358 2,600
Corporate income tax (actual tax) – 27,261 – 25,896
Tax quota (actual tax) 25.5% 37.6%
Change in deferred tax liabilities (deferred tax) – 17,645 757
Tax income on valuation of derivative transactions 5,477 140
Tax expenses – 39,429 – 24,999
Tax quota (total) 36.8% 36.3%

The reasons for the difference between the expected tax expenditure and the effective tax expenditure can be derived from the following table:

€ 1,000 2011 2010
Net result before taxes 107,100 68,818
Expected tax expenses (tax rate Austria 25.0% / prior year 25.0%) – 26,775 – 17,205
Non-usable losses carried forward – 17,221 – 17,652
Amortisation of investment affecting tax 5,493 9,911
Impairment goodwill – 2,940 – 1,917
Non-tax deductible expense and permanent differences – 977 – 2,839
Utilisation of in prior years unrecorded losses carried forward 6,988 2,500
Differing tax rates abroad 5,039 1,749
Adjustment of preceeding periods – 7,797 1,697
Exchange rate differences not affecting tax – 2,817 – 1,127
Tax-exempt income 3,019 975
Change in tax rate – 1,748 71
Trade tax effects 881 55
Others – 574 – 1,217
Effective tax expense – 39,429 – 24,999

18. Other income

2011
------
€ 1,000 Valuation result Reserves from Reserves from Total
(hedging) associates foreign
currency
translation
Other income before taxes – 25,317 194 – 391 – 25,514
Income tax related to other comprehensive income 5,201 – 50 0 5,151
Other comprehensive income for the year – 20,116 144 – 391 – 20,363
thereof: attributable to the owners of the parent – 20,306 144 – 391 – 20,553
thereof: attributable to non-controlling interests 190 0 0 190

2010

€ 1,000 Valuation result Reserves from Reserves from Total
(hedging) associates foreign
currency
translation
Other income before taxes – 17,630 – 110 – 36 – 17,776
Income tax related to other comprehensive income 2,490 42 0 2,532
Other comprehensive income for the year – 15,140 – 68 – 36 – 15,244
thereof: attributable to the owners of the parent – 14,425 – 11 – 36 – 14,472
thereof: attributable to non-controlling interests – 715 – 57 0 – 772

The reserves from associates comprise currency translation effects and cash flow hedge valuations.

The reclassifications in the amount of € 4,892 K (2010: € – 378 K) relate to the fair values for cash flow hedges recorded in equity at the balance sheet date of the previous year where the loans on which they are based were repaid prematurely during the 2011 financial year.

The reasons for the difference between the expected tax expenditure/tax income and the disclosed effective tax expenditure/tax income on the valuation result (hedging) are outlined in the following table:

€ 1,000 2011 2010
Valuation of cash flow hedges – 30,209 – 18,008
Reclassification swaps 4,892 378
Valuation results (hedging) – 25,317 – 17,630
Expected tax income (tax rate Austria: 25.0 % / prior year 25.0 %) 6,329 4,408
Not considered tax expense on the valuation of negative interest derivative transactions – 959 – 1,011
Utilisation of in prior years unrecorded losses carried forward 1,172 0
Differing tax rates abroad – 1,211 – 740
Tax rate changes – 130 – 167
Effective tax income 5,201 2,490
19.Long-term investment properties and office furniture, equipment and other assets
------------------------------------------------------------------------------------- --
€ 1,000 Investment
properties
Properties under
development
Own used
properties
Prepayments for
properties
Office furniture
and
Total
equipment
Book values
As at 1.1.2010
2,409,589 962,459 14,248 544 1,939 3,388,779
Addition company
acquisitions
34,430 0 0 0 0 34,430
Addition property
acquisitions 7,046 0 0 0 0 7,046
Current
investments/productions 20,724 250,974 17 5,210 457 277,382
Disposals –37,900 –148,552 0 –7 –16 –186,476
Depreciation and
amortisation 0 0 –690 0 –669 –1,359
Transfers 281,884 –276,048 0 –5,746 –73 17
Transfers to assets held
for sale –336 –44,462 0 0 0 –44,798
Revaluation 774 45,942 0 0 0 46,716
Currency conversion 0 269 0 0 0 269
As at 31.12.2010 =
1.1.2011 2,716,211 790,582 13,575 0 1,638 3,522,006
Addition company
acquisitions 1,455,909 111,212 40 0 9,268 1,576,428
Current
investments/productions 32,403 191,545 0 0 1,078 225,028
Disposals –132,682 –73,772 0 0 –180 –206,634
Depreciation and
amortisation 0 0 –762 0 –1,370 –2,132
Transfers 65,558 –65,006 –93 0 –443 15
Transfers to assets held
for sale 0 –49,124 0 0 0 –49,124
Revaluation 33,171 29,135 0 0 479 62,785
Currency conversion 0 –90 0 0 0 –90
Addition of incentives
agreements company
acquisitions 8,939 0 0 0 0 8,939
Modification of
incentives agreement 3,693 0 0 0 0 3,693
As at 31.12.2011 4,183,202 934,482 12,760 0 10,470 5,140,914
€ 1,000 Investment
properties
Properties
under
development
Own used
properties
Prepayments
for
properties
Office
furniture
and
equipment
Total
As at 1.1.2010
Acquisition costs incl. valuation of
properties 2,409,589 962,459 16,672 544 3,564 3,392,828
Accumulated depreciation 0 0 –2,424 0 –1,625 –4,049
Market value/book value 2,409,589 962,459 14,248 544 1,939 3,388,779
As at 31.12.2010 = 1.1.2011
Acquisition costs incl. valuation of
properties 2,716,211 790,582 16,689 0 3,845 3,527,328
Accumulated depreciation 0 0 –3,115 0 –2,207 –5,322
Market value/book value 2,716,211 790,582 13,575 0 1,638 3,522,006
As at 31.12.2011
Acquisition costs incl. valuation of
properties 4,170,570 934,482 16,637 0 13,895 5,135,583
Accumulated depreciation 0 0 –3,877 0 –3,425 –7,301
Net book value 4,170,570 934,482 12,760 0 10,470 5,128,282
Incentives agreements 12,633 0 0 0 0 12,633
Market value/book value 4,183,202 934,482 12,760 0 10,470 5,140,914

The below table gives an overview of the composition of the book values at the respective balance sheet date:

The additions from company acquisitions mainly relate to the acquisition of the Europolis Group as well as the aquisiton of the SKYGARDEN Arnulfpark GmbH & Co KG in Munich.

The current capital expenditure for existing investment properties under development mainly relates to the "Tower 185" project (€ 66,899 K), "Ambigon", Munich (€ 19,751K), "Europaplatz", Berlin (€ 18,809K ), as well as further projects in Vienna, Berlin, Frankfurt, Bratislava and Warsaw. The capital expenditure for existing properties mainly relates to the project "Lände 3" in Vienna as well from the completion of the object SKYGARDEN in Munich.

The disposals mainly relate to the projects "Flottwellpromenade, Berlin" (€ 12,819K), "Europaallee Nord 3, Frankfurt" (€ 11,180K), the disposal of the two Czech companies "Olympia Teplice s.r.o." and "Olympia Mladà Bolslav s.r.o. and various sales transactions in Vienna, Basel, Berlin, Munich and Düsseldorf.

The market value of the properties assigned as collateral for external financings totals € 4,315,776 K (31.12.2010: € 2,850,722 K) thereof € 176,181 K (31.12.2010: € 180,854 K) relate to joint ventures.

In the 2011 financial year, a total of € 9,934 K (2010: € 6,851 K) in borrowing costs were recognised at a weighted average interest rate of 2.8% (2010: 4.1%) on the acquisition cost for the construction of properties.

20. Intangible assets

€ 1,000 Goodwill Software Total
Book values
As at 1.1.2010 39,181 348 39,529
Current additions 237 233 470
Disposals –5,623 0 –5,623
Depreciation and amortisation 0 –208 –208
Impairment –2,701 0 –2,701
As at 31.12.2010 = 1.1.2011 31,094 373 31,468
Addition company acquisitions 18,019 76 18,094
Current additions 0 334 334
Disposals –3,581 –28 –3,610
Depreciation and amortisation 0 –268 –268
Impairment –6,901 0 –6,901
Transfers 0 –14 –14
As at 31.12.2011 38,631 473 39,103

The below table gives an overview of the composition of the book values at the respective balance sheet date:

€ 1,000 Goodwill Software Total
As at 1.1.2010
Acquisition costs 68,364 846 69,210
Accumulated depreciation –29,182 –498 –29,681
Book values 39,181 348 39,529
As at 31.12.2010 = 1.1.2011
Acquisition costs 62,960 1,079 64,039
Accumulated depreciation –31,866 –706 –32,572
Book values 31,094 373 31,468
As at 31.12.2011
Acquisition costs 64,464 1,377 65,841
Accumulated depreciation –25,834 –905 –26,738
Book values 38,631 473 39,103

21. Prepayments made on investments in properties

The item "Prepayments made on investments in properties" relates to contracts with the closing to be effected at a later point in time. The CA Immo Group has cancelled this contract. This item includes the prepayment made on a project company in Prague (forward purchase) in the amount of € 2,217 K (31.12.2010: € 200 K).

Moreover, as at 31.12.2010, a partial amount of € 136,000 K related to the prepayment made on the acquisition of the Europolis Group.

22. Investments in associated companies

€ 1,000 Region 1) 1.1.2011 Capital
contribution
Dividend
distribution
Result from
associated
companies
Changes of
associated
companies
reserve
31.12.2011
UBM
Realitätenentwicklung
AG, Vienna CEE 33,739 0 –825 1,641 143 34,698
OAO Avielen AG, St.
Petersburg CEE 3,335 0 0 –3,335 0 0
Isargärten
Thalkirchen GmbH &
Co. KG, Grünwald Germany 22 0 0 –1 0 21
37,096 0 –825 –1,695 143 34,719
€ 1,000 Region 1) 1.1.2010 Capital
contribution
Dividend
distribution
Result from
associated
companies
Changes of
associated
companies
31.12.2010
reserve
UBM
Realitätenentwicklung
AG, Vienna CEE 31,806 0 –750 2,751 –68 33,739
OAO Avielen AG, St.
Petersburg CEE 6,414 0 0 –3,080 0 3,335
Isargärten
Thalkirchen GmbH &
Co. KG, Grünwald Germany 22 0 0 0 0 22
38,242 0 –750 –329 –68 37,096

1) CEE – Eastern and South East Europe

Associated companies relate entirely to development segment.

Reserves from associates comprise the changes in equity with no effect on the income statement of one company consolidated at equity, in which the valuation of cash flow hedges and the change in reserves from foreign exchange gains/losses are included.

The share price of UBM Realitätenentwicklung AG, Vienna, was at € 25,00 as at 31.12.2011 (31.12.2010: € 32,01). Hence, the stock market value of 750,004 shares held by CA Immobilien Anlagen AG amounted to € 18,750 K (31.12.2010: € 24,008 K).

23. Financial assets

€ 1,000 31.12.2011 31.12.2010
Other financial assets 39,684 25,702
Long-term receivables and other assets 32,751 13,435
Net position plan assets from pensions obligations 1,873 1,938
74,308 41,075

Other financial assets

€ 1,000 Acquisition Changes in value Changes in the Book value
costs recognised in profit value accumulated 31.12.2011
31.12.2011 or loss 2011 31.12.2011
Loans to joint ventures 8,710 1,048 1,048 9,758
Loans to associated companies 20,932 –453 –453 20,480
Other loans 32,076 –3,979 –23,018 9,058
L&R 61,719 –3,384 –22,423 39,296
AFS/AC 331 –1 –1 330
Interest rate caps 659 –601 –601 58
Other financial assets 62,709 –3,985 –23,025 39,684
€ 1,000 Acquisition Changes in value Changes in the Book value
costs recognised in profit value accumulated 31.12.2010
31.12.2010 or loss 2010 31.12.2010
Loans to joint ventures 27,068 –15,926 –15,926 11,142
Loans to associated companies 18,296 1,183 –3,746 14,551
L&R 45,365 –14,742 –19,671 25,693
AFS/AC 8 –1 –1 7
Interest rate caps 32 –31 –31 1
Other financial assets 45,405 –14,774 –19,703 25,702

1) L&R – loans and receivables, AFS/AC – available for sale/at cost

The disclosed interest rate caps relate to maximum interest contractually agreed-upon.

In 2011 a reclassification of loans to joint ventures and of short term receiveables to the other loans was made.

Long-term receivables and other assets

€ 1,000 Book value Book value
31.12.2011 31.12.2010
Cash and cash equivalents with drawing restrictions 32,171 7,260
Receivables from property sales 0 4,000
Positive market value of derivative financial instruments (hedge accounting) 0 2,175
Other receivables and assets 580 0
32,751 13,435

Net item plan assets from pension obligations

The CA Immo Group obtained a reinsurance policy for pension obligations (= plan assets).

€ 1,000 31.12.2011 31.12.2010 31.12.2009 31.12.2008
Cash value of obligation –4,269 –4,084 –3,033 –2,343
Fair value of plan asset 6,141 6,022 5,966 2,343
Net position recorded in consolidated statement of
financial position 1,873 1,938 2,933 0
Experience adjustments of cash value of obligation 63 –815 –138 583
Experience adjustments of fair value of plan asset –242 –216 13 –583

The pension obligations and plan assets developed as follows:

€ 1,000 2011 2010
Scope of obligation as at 1.1. 4,084 3,033
Current service costs 59 65
Past service costs 207 0
Interest expenses 184 171
Actuarial gains/losses –265 815
Scope of obligation as at 31.12. 4,269 4,084
Plan asset as at 1.1. 6,022 5,966
Forecast income from plan asset 361 358
Actuarial losses –242 –216
Outpayments 0 –86
Plan asset as at 31.12. 6,141 6,022

The following expense was recorded in profit and loss:

€ 1,000 2011 2010
Service costs –59 –65
Interest expenses –184 –171
Forecast income from plan asset 361 358
Actuarial gains/losses from pension obligation 265 –815
Actuarial losses from plan asset –242 –216
Pensions costs 141 –909

24. Deferred taxes

€ 1,000 31.12.2011 31.12.2010
Long-term properties 25,787 46,985
Intangible assets 1,550 1
Office furniture, equipment and other assets 2,126 772
Financial assets 0 5
Receivables and other assets 6,718 5,164
Cash and cash equivalents 170 72
Property intended for trading 0 808
Trade creditors 46,174 37,419
Deferred tax assets 82,525 91,226
Long-term properties 260,214 197,069
Assets held for sale 10,776 7,757
Property intended for trading 2,358 0
Provisions 22,854 27,342
Deferred tax liabilities 296,202 232,168
Non-capitalised deferred tax assets –25,594 –9,529
Deferred taxes on losses carried forward 59,197 48,447
Tax deferral (net) –180,074 –102,024
thereof deferred tax assets in statement of financial position 11,739 14,133
thereof deferred tax liabilities in statement of financial position 191,813 116,157

The deferred taxes developed as follows at the respective balance sheet date:

€ 1,000 2011 2010
Deferred taxes as at 1 January (net) –102,024 –105,182
Change due to company acquisitions/purchase price arrears –80,857 –237
Change due to sale of companies 9,716 0
Change due to exchange rate fluctuations 117 106
Changes recognised in equity 10,619 2,630
Changes recognised in the income statement –17,645 659
Deferred taxes as at 31 December (net) –180,074 –102,024

The non-capitalised deferred taxes on losses carried forward amount to € 119,826 K (31.12.2010: € 81,345 K). The loss carryforwards for which no deferred taxes were recognised total € 522,719 K (31.12.2010: € 351,060 K); they are forfeited after the following periods:

€ 1,000 2011 2010
In the following year 4,784 1,119
Thereafter 4 years 87,913 24,044
More than 5 years 35,632 37,185
Without limitation in time 394,390 288,712
Sum total unrecorded losses carried forward 522,719 351,060
thereof non-capitalised deferred taxes 119,826 81,345

The temporary differences related to investments in affiliated companies, joint ventures and associated companies for which no deferred tax liabilities were recorded pursuant to IAS 12.39 are as follows:

The total temporary differences related to investments in Austrian affiliated companies, joint ventures and associated companies for which no deferred taxes were recorded pursuant to IAS 12.39 amount to € 38,596 K (31.12.2010: € 7,601 K). Loss carryforwards of the Austrian companies that were not recognised amount to € 219,845 K (31.12.2010: € 131,866 K) - including € 70,484 K (31.12.2010: € 36,364 K) of depreciation of the seventh part that has not yet been recognised at all or asserted for tax purposes.

The total temporary differences related to investments in foreign affiliated companies, joint ventures and associated companies for which no deferred taxes were recorded pursuant to IAS 12.39 amount to € 452 K (31.12.2010: € 1,253 K). Non-capitalised loss carryforwards of foreign entities amount to € 302,874 K (31.12.2010: € 219,194 K). When fulfilling special requirements, gains from the disposal of investments in a foreign company are partially or completely exempted from income taxes.

25. Assets held for sale and liabilities related thereto

As at 31.12.2011, assets at a fair value of € 57,835 K (31.12.2010: € 46,509 K) were classified as assets held for sale. For those assets the disposal has been agreed by the adequate management board of CA Immo Group as well as the contract of sale has been terminated until the preparation of the consolidated financial statements.

€ 1,000 31.12.2011 31.12.2010
Austria - Investment properties 100 336
Germany - Properties under development 57,735 41,160
Properties held for sale 57,835 41,496

The result from revaluation includes the amount of € 3,302 K (2010: € 0 K) related to investment properties after their reclassification as properties held for sale.

As at 31.12.2011, no assets and liabilities were reclassified and attributed to disposal groups. The major groups of assets and liabilities classified as held for sale are as follows:

€ 1,000 31.12.2011 31.12.2010
Investment properties under development 0 3,302
Property intended for trading 0 1,250
Receivables and other assets 0 461
Assets in disposal groups held for sale 0 5,013
Provisions 0 55
Interest-bearing liabilities 0 5,611
Other liabilities 0 188
Liabilities relating to disposal groups 0 5,854
Net-assets/liabilities included in disposal groups 0 –841

€ 100 K (31.12.2010: € 2,630 K) of the properties classified as IFRS 5 (individual assets and disposal groups) are mortgaged as a collateral for loan liabilities.

26. Properties intended for trading

31.12.2011 31.12.2010
€ 1,000 Acquisition / Accumulated Book values Acquisition / Accumulated Book values
production impairment production impairment
cost cost
At production costs 25,276 0 25,276 30,048 0 30,048
At realisable value 16,715 –8,087 8,628 22,644 –7,353 15,291
Total properties intended for trading 41,990 –8,087 33,904 52,692 –7,353 45,339

The fair value of the properties intended for trading which are recorded at acquisition/production cost amounts to € 32,861 K (31.12.2010: € 38,673 K).

Properties intended for trading in the amount of € 20,159 K (31.12.2010: € 20,910 K) are expected to be realised within more than 12 months. This applies to 19 real estates (31.12.2010: 18 real estates) in Germany.

€ 397 K (31.12.2010: € 8,148 K) of the properties intended for trading are mortgaged as a collateral for loan liabilities.

In the 2011 financial year, a total of € 130 K (2010: € 90 K) in borrowing costs were recognised at a weighted average interest rate of 4% (2010: 3.5%) on the acquisition cost for properties intended for trading.

27. Receivables and other assets

€ 1,000 Book value Book value
31.12.2011 31.12.2010
Accounts receivable and other financial assets 139,265 132,917
Derivative financial instruments 11 12
Other non financial assets 28,783 14,088
168,059 147,017

The receivables and other financial assets contain receivables as per IAS 11 in the amount of € 45 K (31.12.2010: € 533K).

Value adjustments were made for current receivables and other assets with a nominal value of € 19,301 K (31.12.2010: € 12,801K) in the amount of € 17,466 (31.12.2010: € 11,083 K). The allowances in the amount of € 9,369K (€ 6,228K allocated in 2011, and € 2,950K in 2010) posted against a tenant in the Czech Republic arise largely from the owed hotel rent, which is the subject of the pending insolvency proceedings against the tenant. A partial satisfaction of the registered claim is currently considered probable.

Change in value adjustments:

€ 1,000 2011 2010
As at 1.1. 11,083 5,833
Appropriation (value adjustment expenses) 11,762 6,470
Disposal deconsolidation – 177 – 292
Use – 463 – 433
Release – 2,129 – 525
Reclassification to long term financial assets – 2,099 0
Foreign currency gains/losses – 511 31
As at 31.12. 17,466 11,083

The age structure of short-term receivables and other assets, whose value has not been adjusted, is as follows:

not due overdue Total
< 30 days 31 - 180 days 181 - 360 days > 1 year
31.12.2011 152,601 6,639 3,010 790 3,184 166,224
31.12.2010 137,548 4,343 1,772 603 1,034 145,300

28. Securities

In the 2011 business year, all securities (book value as at 31.12.2010: € 3,854 K) were sold.

29. Cash and cash equivalents

€ 1,000 31.12.2011 31.12.2010
Credit balances with banks 337,493 344,035
Bank balances subject to drawing restrictions 16,261 10,708
Cash on hand 25 21
353,778 354,764

Bank balances subject to drawing restrictions comprise bank balances to which the CA Immo Group has limited access only. The bank balances subject to drawing restrictions entirely include balances that serve the purpose of securing current loan liabilities (repayment and interest). The Group cannot access the funds any other way without the express approval of the lenders. The amounts fall due within less than three months.

30. Shareholders' equity

The share capital equals the fully paid in nominal capital of CA Immobilien Anlagen Aktiengesellschaft of € 638,713,556 (31.12.2010: € 638,713,556). It is divided into 87,856,056 (31.12.2010: 87,856,056) registered shares of no par value and 4 registered bearer shares of no par value. The registered shares are held by UniCredit Bank Austria AG, Vienna, and grant the right to nominate one member of the Supervisory Board each. This right has not been exercised. All members of the Supervisory Board were elected by the General Meeting.

In November 2009, a 5-year convertible bond with a volume of € 135,000 K was issued. The coupon of the convertible bond payable every six months was fixed at 4.125%, the initial conversion price at € 11.5802. On the basis of this initial conversion price, upon exercising of the conversion right, if any, no more than 11,657,829 registered shares of no par value may be issued. The planned distribution of a divided will lead to an adjustment of the conversion price and, thus, the maximum number of registered shares of no par value that may be issued upon exercising of the conversion right. The amount of this adjustment depends on the share price directly before the ex-dividend date. According to the terms and conditions applicable to the issuance of the convertible bond, the creditors have the right to convert their bond at any time (i.e. also prior to the expiration date of the bond in 2014) into shares in CA Immobilien Anlagen Aktiengesellschaft at the conversion price. At the balance sheet date, the share price of the CA Immo share amounted to € 8.29 and was thus below the conversion price. No bond had been submitted for conversion by the balance sheet date. In 2011, the company redeemed convertible bonds with a nominal value of € 20,500 K from the market at an average redemption price of 94.6%. The convertible bond had led to an increase in the capital reserves of € 3,460 K in 2009. As at 31.12.2011, the repurchase of the convertible bond now leads to a reduction of the capital reserves of € 581 K (31.12.2010: € 0 K).

The tied capital reserves disclosed in the individual financial statements of CA Immobilien Anlagen Aktiengesellschaft total € 820,184 K (31.12.2010: € 820,184 K). As a rule, profits can only be distributed up to the amount of the net profit of the parent company disclosed in the individual financial statements in accordance with the Austrian Corporate Code (UGB). A partial amount € 18,431 K of the net profit of CA Immobilien Anlagen Aktiengesellschaft in the amount of € 98,748 K (31.12.2010: € 0 K) disclosed as at 31.12.2011 is blocked from distribution in 2011. The Management Board of CA Immo AG proposes to use part of the next retained earnings of € 98,748 K to pay a dividend of € 0,38 per share, i.e. a total of € 33,385 K to the shareholders. The rest of the net retained earnings in the amount of € 65,363 K is intended to be carried forward to new account.

As at the reporting date of 31.12.2011 there is an unused authorised capital in the amount of € 312,841,477 that can be utilised on or before 8.8.2012, as well as a conditional capital in the amount of € 317,185,011.

31. Provisions

€ 1,000 Staff Others Total
As at 1.1.2011 5,292 59,756 65,048
Use – 4,104 – 40,249 – 44,353
Release – 420 – 7,397 – 7,817
Allocation 7,186 55,580 62,766
Addition from first-time consolidation 1,490 13,364 14,854
Disposal from deconsolidation – 194 – 1,250 – 1,444
Foreign currency gains/losses – 16 – 564 – 580
As at 31.12.2011 9,234 79,240 88,474
thereof: short-term 7,000 72,292 79,292
thereof: long-term 2,234 6,948 9,182

Provision for staff

The provision for staff primarily comprises the cash value of the long-term obligations for settlement payments to employees in the amount of € 967 K (31.12.2010: € 642 K), premiums in the amount of € 6,808 K (31.12.2010: € 3,633 K), and unused holiday entitlements in the amount of € 1,080 K (31.12.2010: € 688 K). The provision for premiums comprises a long-term provision for the 2010 and 2011 LTI-(long-term incentive) programmes in the amount of € 1,266 K (31.12.2010: € 314 K) that were endowed from the 2010 business year on. Both LTI-programmes set forth a payment after the expiration of three years. In 2011 business year expenses in the amount of € 952 K (31.12.2010: € 314 K) were recognised.

The cash value of severance payment obligations developed as follows:

€ 1,000 2011 2010 2009 2008 2007
Cash value of defined benefit obligations as at 1.1 642 522 560 599 371
Addition from company acquisitions 458 0 0 0 0
Use – 45 0 – 99 – 325 0
Service cost – 171 184 – 42 491 425
Interest expenses 52 24 22 24 15
Actuarial losses/gains 31 – 88 81 – 229 – 212
Cash value of defined benefit obligations as at 31.12 967 642 522 560 599

Experience adjustments of the present value of the obligation are negligible.

Furthermore, there are performance-based pension plans in Germany; a reinsurance policy was obtained for the pension obligations. Since the plan assets at the balance sheet date exceed the cash value of the pension obligations, the net item in the amount of € 1,873 K (31.12.2010: € 1,938 K) is disclosed under long-term receivables.

Other provisions

€ 1,000 31.12.2011 31.12.2010
Construction services 34,099 26,577
Subsequent costs of sold properties 17,674 14,460
Warranty and technical risks from sales 4,092 3,774
Real estate transfer tax and registration fees 3,681 4,522
Other 19,694 10,423
Total 79,240 59,756

32. Interest-bearing liabilities

31.12.2011 31.12.2010
€ 1,000 Short-term Long-term Total Short-term Long-term Total
Convertible bond 488 112,724 113,212 793 130,538 131,331
Other bonds 4,516 332,106 336,622 4,711 345,027 349,738
Bonds 5,004 444,830 449,834 5,504 475,565 481,069
Investment loan 725,524 1,953,270 2,678,794 210,353 1,399,853 1,610,206
Subordinated liabilities 37,066 79,845 116,911 0 0 0
Loans from joint venture partners 8,059 8,980 17,039 21,053 12,888 33,941
Liabilities to joint ventures 1,436 0 1,436 1,139 0 1,139
Other interest-bearing liabilities 772,085 2,042,095 2,814,180 232,545 1,412,741 1,645,286
777,089 2,486,925 3,264,014 238,049 1,888,306 2,126,355

The subordinate liabilities relate to liabilities of the Europolis Group towards Österreichische Volksbanken-Aktiengesellschaft, Vienna and the European Bank for Reconstruction and Development (EBRD), London.

99.2% (31.12.2010: 99.6%) of interest-bearing liabilities exist in EUR, 0.6% (31.12.2010: 0,0%) in USD, and 0.2% (31.12.2010: 0.4%) in CZK.

Bonds
31.12.2011 Nominal value Book value Deferred Nominal Effective Issue Repayment
in € 1,000 Total interest interest rate interest rate
€ 1,000 in € 1,000
Convertible
bond 114,500 112,724 488 4.13% 6.15% 9.11.2009 9.11.2014
Bonds 2006-2016 185,992 182,865 2,618 5.13% 5.53% 22.9.2006 22.9.2016
Bonds 2009-2014 150,000 149,241 1,897 6.13% 6.33% 16.10.2009 16.10.2014
Total 450,492 444,830 5,004

Starting in September 2011, convertible bonds with a nominal value of € 20,500 K and bonds from 2006 with a nominal value of € 14,008 K were bought back from the market until the end of the year under review. The repurchase generated a profit in the total amount of € 1,481 K (2010: € 0K), which was recognised as a reduction in the interest expenses for bonds. Thie capital reserves declined by € 581 K (2010: € 0K).

31.12.2010 Nominal value Book value Deferred Nominal Effective Issue Repayment
in € 1,000 Total interest interest rate interest rate
€ 1,000 in € 1,000
Convertible
bond 135,000 130,538 793 4.13% 6.15% 9.11.2009 9.11.2014
Bonds 2006-2016 200,000 196,028 2,813 5.13% 5.53% 22.9.2006 22.9.2016
Bonds 2009-2014 150,000 148,999 1,897 6.13% 6.33% 16.10.2009 16.10.2014
Total 485,000 475,565 5,504

Other interest-bearing liabilities

99.3% of other interest-bearing liabilities within the CA Immo Group are subject to financial covenants. These usually are particular LTV (loan to value) and DSCR (debt service coverage ratio) figures with investment properties and particular LTC (loan to cost) and ISCR (interest service coverage ratio) figures with project financings.

Other interest-bearing liabilities in relation to which financial covenants have not been met as at 31.12.2011 and such breach of financial covenants generally entitles the lender to early termination are recorded under the short-term financial liabilities regardless of the date on which they fall due. This applies irrespective of the state of negotiations with the banks regarding a continuation or amendment of the loan agreements. As at 31.12.2011, four loans in Eastern/South East Europe in a total amount of € 69,965 K (31.12.2010: two loans in Eastern and South East Europe in the total amount of € 33,457K) were affected by this. The CA Immo Group takes according action (e.g. partial repayment of the loans, increase in equity of the relevant companies) in order to remedy the breach of the financial covenants.

As at 31.12.2011 and 31.12.2010 the terms of other interest-bearing liabilities are as follows:

Type of financing and currency Effective interest Interest Maturity Nominal Book value Fair value
rate as at variable/ value in in € 1,000 in
31.12.2011 in % fixed € 1,000 € 1,000
Investment loan / EUR 4.41% variable 01/2017 512,240 514,978 514,978
Investment loan / EUR 4.68% variable 12/2012 264,806 262,140 262,140
Loans for investments
(each below 100 m EUR) 1.40% - 7.73% variable 01/2012 - 12/2030 1,783,970 1,780,189 1,780,189
Investment loan / EUR 3.90% - 7.58% fixed 06/2013 - 12/2013 93,739 94,171 96,940
Investment loan / CZK 5.72% variable 06/2013 7,211 7,211 7,211
Investment loan / USD 2.83% - 4.08% variable 12/2012 - 12/2017 19,463 20,105 20,105
Investment loan (total) 2,681,429 2,678,794 2,681,563
Subordinated liabilities 2.30% - 2.90% variable 12/2012 - 09/2016 124,651 116,911 116,911
Loans from joint venture partners / EUR 1.10% - 5.37% variable 03/2012 - 12/2018 6,988 8,213 8,213
Loan from joint venture partners / EUR 0.00% - 7.00% fixed 12/2012 - 12/2020 7,420 8,178 8,510
Loan from joint venture partners / HUF 0.00% fixed 03/2012 648 648 646
Loans of joint venture partners (total) 15,056 17,039 17,369
Liabilities to joint ventures 2.56% variable 12/2011 - 12/2012 1,413 1,436 1,436
2,822,549 2,814,180 2,817,279
Type of financing and currency Effective interest Interest Maturity Nominal Book Fair value
rate as at variable/ value in value in
31.12.2010 in % fixed € 1,000 in € 1,000 € 1,000
Investment loan / EUR 4.41% variable 01/2017 520,161 522,687 522,687
Investment loan / EUR 4.67% variable 12/2012 151,507 147,689 147,689
Loans for investments
(each below 100 m EUR) 1.53% - 7.71% variable 02/2011 - 12/2032 923,129 919,327 919,327
Investment loan / EUR 4.25% - 5.16% fixed 05/2011 - 12/2013 12,444 12,497 13,562
Investment loan / CZK 5.72% variable 06/2013 7,675 7,675 7,675
Investment loan / USD 2.25% variable 07/2011 330 331 331
Investment loan (total) 1,615,246 1,610,206 1,611,271
Loans from joint venture partners / EUR 1.53% - 5.12% variable 03/2011 - 12/2016 14,562 14,562 14,562
Loan from joint venture partners / EUR 0.00% - 8.50% fixed 12/2011 - 12/2013 19,379 19,379 20,384
Loans of joint venture partners (total) 33,941 33,941 34,946
Liabilities to joint ventures 1.94% variable 12/2010 - 12/2011 1,125 1,139 1,139
1,650,312 1,645,286 1,647,356

Taking into account all interest hedging agreements, the average weighted interest rate stands at 4.1% (31.12.2010: 4.6%) for all EUR financial liabilities, 3.9% (31.12.2010: 2.3%) for all USD financial liabilities and 5.7% (31.12.2010: 5.7%) for the CZK financial liability.

33. Other liabilities

€ 1,000 31.12.2011 31.12.2010
Short-term Long-term Total Short-term Long-term Total
Fair value derivative transactions 5,418 181,092 186,510 1,304 137,917 139,221
Outstanding purchase invoices 2,320 136,000 138,320 8,291 0 8,291
Prepayments received 36,222 31,717 67,939 32,311 43,360 75,671
Trade creditors 53,002 8,552 61,554 25,025 37,104 62,129
Rent deposits 2,173 13,162 15,335 685 4,462 5,147
Non realized income from
deconsolidation 6,400 0 6,400 6,400 0 6,400
Settlement of operating costs 3,325 0 3,325 4,784 0 4,784
Other 7,722 2,182 9,904 3,785 2,009 5,794
Primary financial financial
instruments 111,164 191,613 302,777 81,281 86,934 168,215
Taxes 30,733 0 30,733 29,618 0 29,618
Prepaid rent 5,177 784 5,961 3,611 5,551 9,162
Non-financial financial instruments 35,910 784 36,694 33,229 5,551 38,780
152,492 373,489 525,981 115,814 230,402 346,216

34. Liabilities on taxes on income and earnings

This item includes the amount of € 35,921 K (31.12.2010: € 58,822 K) related to the CA Immo Deutschland Group and comprises corporate income tax and trade tax for the years 2008 to 2011 that have not been finally assessed, as well as potential risks from a current tax audit completed in Germany for the years 2001 to 2006.

35. Cash flow

The cash flow from the acquisition of real estate companies reduced by cash and cash equivalents is shown in detail below:

€ 1,000 2011
Purchase prices for acquisitions (for Europolis AG stated provisionally) – 306,818
Less pre-payment in prior year 136,000
Less respite of purchase price 136,000
Dividend payment to previous shareholder of Europolis AG – 21,610
Acquired funds 128,308
Acquisition of property companies, less cash and cash equivalents 71,880

36. Financial instruments

Financial instruments include both primary and derivative financial instruments. The CA Immo Group divides its financial assets and receivables into the following categories in accordance with IAS 39.9:

Financial assets

Category IAS 39 category 1) Book value Fair value
€ 1,000 HFT AFS/AC L&R Non-FI and FI 31.12.2011 31.12.2011
beyond
IAS 39
Prepayments made on
investments in properties 0 0 2,217 0 2,217 2,217
Net position plan assets from
pensions obligations 0 0 0 1,873 1,873 1,873
Cash and cash equivalents with
drawing restrictions 0 0 32,171 0 32,171 32,171
Derivative financial instruments 58 0 0 0 58 58
Primary financial instruments 0 330 39,876 0 40,206 40,206
Financial assets 58 330 72,047 1,873 74,308 74,308
Cash and cash equivalents with
drawing restrictions 0 0 23,894 0 23,894 23,894
Derivative financial instruments 11 0 0 0 11 11
Primary financial instruments 0 0 115,326 28,828 144,154 144,154
Receivables and other assets 11 0 139,220 28,828 168,059 168,059
Cash and cash equivalents 0 0 353,778 0 353,778 353,778
69 330 567,262 30,701 598,362 598,362
Category IAS 39 category 1) Book value Fair value
€ 1,000 HFT FV/PL AFS/AC L&R Non-FI and FI 31.12.2010 31.12.2010
beyond
IAS 39
Prepayments made on
investments in properties 0 0 0 136,200 0 136,200 136,200
Net position plan assets from
pensions obligations 0 0 0 0 1,938 1,938 1,938
Cash and cash equivalents with
drawing restrictions 0 0 0 7,260 0 7,260 7,260
Derivative financial instruments 2,176 0 0 0 0 2,176 2,176
Primary financial instruments 0 0 7 29,693 0 29,701 29,701
Financial assets 2,176 0 7 36,953 1,938 41,075 41,075
Cash and cash equivalents with
drawing restrictions 0 0 0 36,311 0 36,311 36,311
Derivative financial instruments 12 0 0 0 0 12 12
Primary financial instruments 0 0 0 96,075 14,621 110,696 110,696
Receivables and other assets 12 0 0 132,386 14,621 147,019 147,019
Securities 0 3,854 0 0 0 3,854 3,854
Cash and cash equivalents 0 0 0 354,764 0 354,764 354,764
2,188 3,854 7 660,303 16,559 682,912 682,912

1) HFT – held for trading, FV/PL – at fair value through profit or loss, AFS/AC – available for sale/at cost, L&R – loans and receivables, FI – financial instruments

The fair value of the primary financial instruments essentially equates to the book value due to daily and/or shortterm maturities. Since no price listed on active markets is available for the financial instruments of the AFS/AC category and the fair value cannot be calculated reliably, valuation has been carried out on the basis of their acquisition cost. Therefore, their book value is also indicated in the "Fair value" column.

Financial liabilities

Category IAS 39 category 1) Book value Fair value
€ 1,000 HFT CFH FLAC Non-FI 31.12.2011 31.12.2011
Convertible bond 0 0 113,212 0 113,212 115,760
Other bonds 0 0 336,622 0 336,622 337,492
Other interest-bearing liabilities 0 0 2,814,180 0 2,814,180 2,822,283
Interest-bearing liabilities 0 0 3,264,014 0 3,264,014 3,275,534
Derivative financial instruments 67,381 119,129 0 0 186,510 186,510
Primary financial instruments 0 0 302,777 36,694 339,471 339,471
Other liabilities 67,381 119,129 302,777 36,694 525,981 525,981
67,381 119,129 3,566,791 36,694 3,789,995 3,801,515
Category IAS 39 category 1) Book value Fair value
€ 1,000 HFT CFH FLAC Non-FI 31.12.2010 31.12.2010
Convertible bond 0 0 131,331 0 131,331 143,100
Other bonds 0 0 349,738 0 349,738 357,285
Other interest-bearing liabilities 0 0 1,645,286 0 1,645,286 1,652,860
Interest-bearing liabilities 0 0 2,126,355 0 2,126,355 2,153,245
Derivative financial instruments 45,459 93,761 0 0 139,220 139,220
Primary financial instruments 0 0 168,216 38,780 206,996 206,996
Other liabilities 45,459 93,761 168,216 38,780 346,216 346,216
Liabilities relating to disposal groups 0 0 5,854 0 5,854 5,854
45,459 93,761 2,300,424 38,780 2,478,425 2,505,315

1) HFT – held for trading, CFH – cash flow hedge, FLAC – financial liabilities at amortised cost, FI – financial instruments

37. Derivative financial instruments

31.12.2011 31.12.2010
€ 1,000 Nominal value Fair value Book value Nominal value Fair value Book value
Interest rate swaps 1,828,152 – 184,121 – 184,121 1,857,934 – 136,942 – 136,942
- thereof cash flow hedges 1,366,614 – 119,129 – 119,129 1,263,389 – 93,761 – 93,761
- thereof fair value derivatives 461,538 – 64,992 – 64,992 594,545 – 43,181 – 43,181
Interest rate caps 229,448 58 58 50,000 13 13
Interest rate floors 24,109 – 1,188 – 1,188 0 0 0
Forward foreign exchange
transactions 11,289 – 1,191 – 1,191 1,383 – 103 – 103
Total 2,092,998 – 186,442 – 186,442 1,909,317 – 137,032 – 137,032
- thereof cash flow hedges 1,366,614 – 119,129 – 119,129 1,263,389 – 93,761 – 93,761
- thereof fair value derivatives 726,384 – 67,313 – 67,313 645,928 – 43,271 – 43,271

Overall, the nominal value for the cash flow hedges directly attributable to the respective credits and concluded as at the balance sheet date stood at 48.5% (31.12.2010: 76.3%) of the nominal value of all variable-interest EUR investment credits and 100.0% (31.12.2010: 100.0%) of the variable-interest CZK investment credit. No interest rate swap agreements have been concluded for the USD investment credits.

Interest rate swaps

Interest rate swaps were terminated to hedge future cash flows. The effectiveness of the hedge relationship between hedging and underlying transactions is regularly examined using effectiveness measurements.

31.12.2011 31.12.2010
€ 1,000 Nominal value Fair value Book value Nominal value Fair value Book value
- Cash flow hedges (effective) 1,362,878 – 119,018 – 119,018 1,260,468 – 93,655 – 93,655
- Cash flow hedges (ineffective) 3,736 – 111 – 111 2,921 – 106 – 106
- Fair value derivatives (HFT) without
counter-swaps 461,538 – 64,992 – 64,992 258,145 – 43,181 – 43,181
- Fair value derivatives (HFT) with
counter-swaps 0 0 0 168,200 – 1,874 – 1,874
- Counter-swaps (HFT) 0 0 0 168,200 1,874 1,874
Interest rate swaps 1,828,152 – 184,121 – 184,121 1,857,934 – 136,942 – 136,942

The interest rate swaps have the following market values and conditions:

Currency Nominal Start End Fixed Reference Fair value Category
value in interest rate as at interest rate 31.12.2011
€ 1,000 31.12.2011 in € 1,00o
EUR 464,461 12/2006 01/2017 3.91% 3M-Euribor – 54,565 CFH
EUR 264,700 03/2010 12/2012 1.93% 3M-Euribor – 2,093 CFH
EUR (nominal
value each below 06/2012 -
100 m EUR) 609,364 03/2006 - 10/2011 12/2022 1.30% - 4.79% 3M-Euribor – 60,472 CFH
EUR (nominal
value each below 09/2012 -
100 m EUR) 461,538 09/2002 - 12/2008 12/2022 4.17% - 5.28% 3M-Euribor – 64,992 HFT
EUR 20,878 05/2006 12/2014 4.20% 6M-Euribor – 1,623 CFH
CZK 7,211 06/2008 06/2013 4.62% 3M-Pribor – 377 CFH
Total =
variable in fixed 1,828,152 – 184,121
Currency Nominal value Start End Fixed Reference Fair value Category
in € 1,000 interest rate as at interest rate 31.12.2010
31.12.2010 in € 1,000
EUR 464,461 12/2006 01/2017 3.91% 3M-Euribor – 37,222 CFH
EUR 151,400 03/2010 12/2012 1.93% 3M-Euribor – 2,492 CFH
EUR (nominal
value each below
100 m EUR) 617,947 09/2004 - 06/2009 07/2011 - 12/2022 1.93% - 4.79% 3M-Euribor – 51,953 CFH
EUR (nominal
value each below
100 m EUR) 426,345 07/2007 - 12/2008 12/2012 - 12/2022 4.01% - 4.61% 3M-Euribor – 45,055 HFT
EUR 21,905 05/2006 12/2014 4.20% 6M-Euribor – 1,603 CFH
CZK 7,675 06/2008 06/2013 4.62% 3M-Pribor – 491 CFH
variable in fixed 1,689,734 – 138,816
EUR 168,200 10/2009 - 12/2010 12/2013 - 12/2020 1.53% - 3.29% 3M-Euribor 1,874 HFT
fixed in variable 168,200 1,874
Total 1,857,934 – 136,942

Interest rate caps/interest rate floors

Interest rate caps and/or interest rate floors are exclusively used to hedge the risk of interest rate changes on existing loans:

Currency Nominal
value in
€ 1,000
Start End Fixed
interest rate as
at 31.12.2011
Reference
interest rate
Fair value
31.12.2011
in € 1,000
Category
Interest rate
caps EUR
229,448 10/2006 - 03/2011 06/2012 - 12/2014 1.22% - 6.50% 3M-Euribor 58 HFT
Interest rate
floor EUR
24,109 06/2008 12/2013 3.85% 3M-Euribor – 1,188 HFT
Total 253,557 – 1,130
Currency Nominal Start End Fixed Reference Fair value Category
value in interest rate as interest rate 31.12.2010 in
€ 1,000 at 31.12.2010 € 1,000
Interest rate
caps EUR 50,000 04/2010 - 07/2010 10/2011 - 12/2011 1.00% - 2.50% 1M-Euribor 13 HFT

Forward foreign exchange transactions

The forward foreign exchange transactions were concluded to hedge against future currency fluctuations for two longterm loans in Poland and for rental incomes in USD in Poland.

Currency Fixed Start End Nominal value Nominal value Fair Category
Exchange rate in 1,000 in € 1,000 value
as at 31.12.2011 Foreign 31.12.2011
currency in € 1,000
PLN 4.0020 - 4,6320 03/2009 - 04/2011 01/2012 - 08/2013 44,357 10,940 – 1,152 HFT
USD 1.4337 06/2009 06/2012 500 349 – 39 HFT
11,289 – 1,191
Currency Fixed Start End Nominal value Nominal value Fair Category
Exchange rate in 1,000 in € 1,000 value
as at 31.12.2010 Foreign 31.12.2010
currency in € 1,000
USD 1.4236 - 1,4337 06/2009 06/2011 - 06/2012 1,975 1,383 – 103 HFT

Changes recorded in other comprehensive income

€ 1,000 2011 2010
As at 1.1. – 73,766 – 62,480
Change in valuation of cash flow hedges – 30,320 – 18,114
Change of ineffectiveness cash flow hedges 111 106
Raclassification cash flow hedges 4,892 378
Taxes on income on cash flow hedges 5,201 2,490
Reclassification acquisition of non-controlling interests 0 3,854
As at 31.12. – 93,882 – 73,766
thereof attributable to the owners of the parent – 93,022 – 72,716
thereof attributable to non-controlling interests – 860 – 1,050

The reclassification related to the valuation of the cash flow hedges including tax on profits on non-controlling interests for capital reserves due to the acquisition of shares in CA Immo International AG, Vienna, and the subsequent merger, which was recorded as an equity transaction without an impact on net income in accordance with IFRS 3/IAS 27.

Hierarchy of fair values

The table below sets out the financial instruments, whose subsequent valuation has been carried out on the basis of their fair value. These are divided into three stages, depending on the extent to which it is possible to observe the fair value (level 1 - observable, level 2 - partially observable, level 3 - non-observable):

31.12.2011
€ 1,000 Level 1 Level 2 Level 3 Total
Financial assets HFT
Interest rate caps 0 58 0 58
Financial liabilities CFH
Interest rate swaps 0 – 119,129 0 – 119,129
Financial liabilities HFT
Interest rate swaps 0 – 64,992 0 – 64,992
Interest rate floors 0 – 1,188 0 – 1,188
Forward foreign exchange
transactions 0 – 1,191 0 – 1,191
Total 0 – 186,442 0 – 186,442
31.12.2010
€ 1,000 Level 1 Level 2 Level 3 Total
Financial assets FV/PL
Securities 0 3,853 0 3,853
Financial assets HFT
Interest rate caps 0 13 0 13
Financial liabilities CFH
Interest rate swaps 0 – 93,761 0 – 93,761
Financial liabilities HFT
Interest rate swaps 0 – 43,181 0 – 43,181
Forward foreign exchange
transactions 0 – 103 0 – 103
Total 0 – 133,179 0 – 133,179

FV/PL – at fair value through profit or loss, HFT – held for trading, CFH – Cash-flow Hedge

No transfers between the levels were made during the 2011 and 2010 reporting periods.

38.Financial risks

Interest rate risk

Risks resulting from changes in interest rates basically concern long-term loans. A mix of long-term fixed-rate and floating-rate loans are used to reduce the interest rate risk. In the case of floating-rate loans, derivative financial instruments (interest rate caps, interest rate floors and interest rate swaps) are also used to hedge against the risk of cash flow interest rate changes arising from underlying transactions.

The following analysis shows the effects of a change in interest rates by 100 basis points on the income statement and equity. The analysis assumes that all other variables, particularly foreign exchange rates, remain constant:

€ 1,000 Recognised in profit or loss Recognised directly in equity
100 bps 100 bps 100 bps 100 bps
Increase Decrease Increase Decrease
31.12.2011
Variable rate instruments – 27,019 27,019 0 0
Derivative financial instruments (interest) 20,817 – 20,817 0 0
Derivative financial instruments (valuation) 14,327 – 15,234 38,695 – 39,956
8,125 – 9,032 38,695 – 39,956
31.12.2010
Variable rate instruments – 15,969 15,969 0 0
Derivative financial instruments (interest) 18,579 – 18,579 0 0
Derivative financial instruments (valuation) 14,613 – 15,651 43,342 – 45,990
17,224 – 18,261 43,342 – 45,990

Variable rate instruments contain variable rate financial liabilities, loans and financial receivables and do not take into account hedge relationships. In the case of derivative financial instruments, an interest rate change gives rise to a component that is recognised in profit and loss (interest, valuation of fair value derivatives and ineffective portions of cash flow hedge valuation) and to the change in value of cash flow hedges recognised in equity. The market value of interest rate caps and interest rate floors is equal to the book value.

Currency risk

Currency risks result from rental income and rental receivables in foreign currencies principally BGN, CHF, CZK, HRK, HUF, PLN, RON and RSD. These foreign currency rental earnings are secured through a linkage of rents to EUR and USD, so that on balance no major risk exists. On the liabilities side risks may result from financing in CZK and USD. This risk is mainly counterbalanced by rental income in CZK and USD. Loans are taken out in the same currency as the one covering the lease in question.

The following table shows what effect a 10% increase or decrease in the Euro compared to the respective foreign currency would have. A positive number indicates an increase in the annual result if the Euro were to rise by 10% compared to the respective foreign currency. If the Euro were to fall by 10% compared to the relevant foreign currency, this would have a similarly negative effect on the annual result. The outstanding financial liabilities in foreign currencies of the CA Immo Group as at the balance sheet date serve as a basis for the sensitivity analysis assuming a 10% increase or decrease in the Euro compared to the respective foreign currency.

€ 1,000 USD Impact CZK Impact HUF Impact
Exchange rate 1.2905 25.8000 311.1300
+10% increase 1.4196 1,828 28.3800 656 342.2430 59
–10% decrease 1.1615 – 2,234 23.2200 – 801 280.0170 – 72
31.12.2010
€ 1,000
USD Impact CZK Impact HUF Impact
Exchange rate 1.3341 25.0800 278.0000
+10% increase 1.4675 30 27.5880 698 305.8000 0
–10% decrease 1.2007 – 37 22.5720 – 853 250.2000 0

Forward foreign exchange transactions have been concluded to avoid the risk of currency fluctuations; these should counteract future local fluctuations for long-term USD loans and in USD rental income. As these derivatives are in no cash flow hedge relationships, the effect on the net income corresponds to that on the equity in the sensitivity analysis.

Credit risk

31.12.2011

The amounts listed for all financial assets and the guarantees and other commitments assumed represent the maximum default risk as no major set-off agreements exist.

Trade debtors are off-set against deposits received amounting to € 15,335 K (31.12.2010: € 5,147 K) and bank guarantees. As far as it can be determined, the risk to receivables from tenants and property purchasers has been taken into consideration as part of the value adjustments. If there are objective indications of a value adjustment (e.g. through defaults in payment, litigation, insolvency), an impairment is recognised. The same applies to financing obtained by joint ventures or associated companies, should it become likely that these companies, following developments in the course of their business, will no longer be able to meet their financial obligations in full. The impairment loss is the difference between the current book value for the asset and the cash value of the future cash flow expected from the receivables. The default risk for other financial instruments listed on the assets side of the balance sheet should be seen as minimal, as the majority of financial instruments used by contractual partners have the highest credit rating scores possible and/or are provided by state authorities.

Liquidity risk

There is a liquidity risk where financial liabilities cannot be settled at the time they are payable. Guaranteeing sufficient moneys to pay liabilities due whilst avoiding unnecessary potential losses and risks forms the basis of CA Immo Group's liquidity control. Loans are usually agreed on a long-term basis in accordance with the investment horizon for real estate.

The CA Immo Group manages the liquidity risk in several different ways: firstly, the company is highly skilled at liquidity planning and safeguarding measures in order to avoid tight positions. Secondly, the CA Immo Group protects itself by entering into capital partnerships (joint ventures) for project development purposes as an alternative and extension to established sources of equity capital procurement. Outside capital is procured by the CA Immo Group not only from its principal bank, UniCredit Bank Austria AG/UniCredit Group, but also and to a growing extent through new or developing business relationships with other domestic and foreign banks. In order to improve the financing structure and strengthen the liquidity of the CA Immo Group, two bonds and one convertible bond have been issued.

The contractually agreed (non-discounted) interest payments and repayments for primary financial liabilities and derivative financial instruments can be seen in the table below.

31.12.2011 Book value Contractually Cash flow Cash flow Cash flow
€ 1,000 2011 agreed 2012-2015 2013-2016 2017 ff
cash flows
Convertible bond 113,212 – 128,669 – 4,723 – 123,946 0
Other bonds 336,622 – 411,215 – 18,720 – 392,495 0
Other interest-bearing liabilities 2,814,180 – 3,182,602 – 779,079 – 1,339,086 – 1,064,437
Other liabilities 339,471 – 339,471 – 147,074 – 180,387 – 12,010
Primary financial liabilities 3,603,485 – 4,061,957 – 949,596 – 2,035,914 – 1,076,447
Interest rate derivatives in connection with cash flow
hedges 119,129 – 120,656 – 30,984 – 82,510 – 7,162
Interest rate derivatives not connected with hedges 66,180 – 69,053 – 16,507 – 43,657 – 8,889
Forward foreign exchange transactions not connected
with hedges 1,201 – 1,201 – 964 – 237 0
Derivative financial liabilities 186,510 – 190,910 – 48,455 – 126,404 – 16,051
3,789,995 – 4,252,867 – 998,051 – 2,162,318 – 1,092,498
31.12.2010 Book value Contractually Cash flow Cash flow Cash flow
€ 1,000 2010 agreed 2011 2012-2015 2016 ff
cash flows
Convertible bond 131,331 – 157,275 – 5,569 – 151,706 0
Other bonds 349,738 – 448,250 – 19,438 – 218,562 – 210,250
Other interest-bearing liabilities 1,645,286 – 1,983,310 – 269,469 – 640,209 – 1,073,632
Other liabilities 206,996 – 206,996 – 114,511 – 76,567 – 15,918
Liabilities relating to disposal groups 5,854 – 5,854 – 5,854 0 0
Primary financial liabilities 2,339,205 – 2,801,685 – 414,841 – 1,087,044 – 1,299,800
Interest rate derivatives in connection with cash flow
hedges 93,761 – 98,510 – 31,533 – 60,320 – 6,657
Interest rate derivatives not connected with hedges 45,356 – 49,456 – 13,888 – 29,029 – 6,539
Forward foreign exchange transactions not connected
with hedges 103 – 103 – 74 – 29 0
Derivative financial liabilities 139,220 – 148,069 – 45,495 – 89,378 – 13,196
2,478,425 – 2,949,754 – 460,336 – 1,176,422 – 1,312,996

Cash flows for interest rate derivatives are based on assumptions for the underlying forward rates.

The cash flows from derivatives in cash flow hedge relationships are expected to have an effect on profit and loss in the period of their occurrence.

Capital management

The objective of CA Immo Group's capital management is, firstly, to make the necessary resources for the continuation of the company available at all times, and secondly, to optimise the costs for the capital required for this.

The key parameters for determining the capital structure of the CA Immo Group are, on the one hand, the general relationship of shareholders' equity to liabilities, and on the other, the split within liabilities between that using properties as collateral, which are taken out by special-purpose vehicles, and unsecured liabilities, which are taken out by the group parent company. Equity based on the IFRS accounts is used for management. With regard to the first parameter, the CA Immo Group strives to maintain an equity ratio of some 35% to 40%. As at 30.6.2011, the equity ratio was below this target corridor. This can be attributed to the first-time consolidation of the Europolis Group in 2011. Consequently, the CA Immo Group intends to take active steps to improve the equity ratio, particularly through the sale of properties and the repayment of liabilities associated with this.

With regard to the second parameter, the CA Immo Group is focusing on secured property loans for financing with liabilities, which are usually taken out by special-purpose vehicles that hold the object in question. Generally speaking, secured financing offers more favourable conditions compared to unsecured financing, as these are structurally subordinated to the secured financing. Unsecured financing is only really available in the form of corporate bonds issued on the capital markets. There are no external ratings or explicit requirements, which have been stipulated by a third party, in respect of key parameters for managing the group's capital.

Net debt and the gearing ratio are other key figures for presenting the capital structure of the CA Immo Group:

€ 1,000 31.12.2011 31.12.2010
Interest-bearing liabilities
Long-term interest-bearing liabilities 2,486,925 1,888,306
Short-term interest-bearing liabilities 777,089 238,049
Interest-bearing assets
Securities 0 – 3,854
Cash and cash equivalents – 353,778 – 354,764
Cash and cash equivalents with drawing restrictions – 56,065 – 43,572
Net debt 2,854,171 1,724,166
Shareholders' equity 1,809,455 1,659,939
Gearing ratio (Net debt/equity) 157.7% 103.9%

Cash and cash equivalents with drawing restrictions have been taken into account for net debt, as they are used to secure the repayments on financial liabilities.

39. Other liabilities and contingent liabilities

Guarantees and other commitments

As at 31.12.2011 the CA Immo Deutschland Group has guarantees and other commitments amounting to € 23,801 K (31.12.2010: € 24,870 K) derived from urban development contracts and purchase agreements, which have been concluded to absorb the costs of contaminated sites and war damage totalling € 1,485 K (31.12.2010: € 3,374 K). Furthermore, there are have been made no rental guarantees (31.12.2010: € 64 K). In addition comfort letters had been signed for two proportionally consolidated companies in Germany amounting to € 61,749 K (31.12.2010: € 2,000 K). No guarantees were given (31.12.2010: € 800 K).

As at 31.12.2011 no guarantees and other commitments towards financing banks (31.12.2010: € 1,905 K) have been made for Eastern and South East Europe.

Contingent liabilities

The joint venture partner from "Project Maslov" has filed an arbitration action for € 48,097 K plus interest (announced as at 31.12.2010). The CA Immo Group considers the chances of this action succeeding as minimal. The expected payment in this respect has been recognised in the statement of financial position in a reasonable amount.

Furthermore, Caine B.V. made a guarantee in relation to take over liabilities for "Airport City Petersburg" in the amount of € 4,200K (31.12.2010: € 0 K).

Other financial obligations

Furthermore, other financial obligations relate to building site liabilities for work carried out in the course of developing real estate in Austria of € 5,186 K (31.12.2010: € 10,818 K) Germany of € 78,172 K (31.12.2010: € 146,570 K), and in Eastern and South East Europe of € 16,630 K (31.12.2010: € 23,450 K). For at equity consolidated companies there are proportionate other financial obligations arising from building site liabilities for work carried out to develop real estate in Eastern and South East Europe amounting to € 0 K (31.12.2010: € 3,735 K).

As at 31.12.2011 the total obligations of the CA Immo Group in respect of equity calls for proportionally consolidated companies amounted to € 179 K (31.12.2010: € 179 K).

40. Leases

CA Immo Group as lessor

All lease contracts concluded by the CA Immo Group, where the company is acting as lessor, are recorded as operating leases in accordance with IFRS. As a rule, these encompass the following essential contractual elements:

linkage to EUR or USD

guaranteed value by linkage to international indices

medium- to long-term maturities and/or termination waivers

Future minimum rental income from existing short-term lease contracts or contracts with termination waivers as at the day the consolidated financial statements were drawn up are as below:

€ 1,000 2011 2010
In the following year 231,731 152,657
Thereafter 4 years 664,981 520,416
More than 5 years 1,346,554 1,214,852
Total 2,243,266 1,887,924

All remaining tenancies may be terminated at short notice.

The minimum rental income includes net rentals to be collected until the contractually agreed expiration of the contract or the earliest possible termination option by the lessee (tenant).

CA Immo Group as lessee

All rental obligations undertaken by the CA Immo Group are classified as operating leases.

The lease contracts concluded by the CA Immo Deutschland Group acting as lessee primarily relate to rented properties in Cologne (until 2016), Munich (until 2017), Berlin (until 2018) and Frankfurt (until 2021).

The remaining operating lease agreements of the CA Immo Group relate to office furniture, equipment and other assets. No purchase options have been agreed. Leasing payments of € 3,024 K were recorded in the income statement as expenses during the business year (2010: € 2,732 K).

The following minimum lease payments will become due in the subsequent periods:

€ 1,000 2011 2010
In the following year 2,324 1,840
Thereafter 4 years 7,162 4,602
More than 5 years 5,818 4,021
Total 15,304 10,463

41. Business relationships with related companies and parties

The following companies and parties are deemed to be related parties to the CA Immo Group:

  • joint ventures, in which the CA Immo Group holds an interest
  • associated companies, in which the CA Immo Group holds an interest
  • the executive bodies of CA Immobilien Anlagen Aktiengesellschaft
  • UniCredit Bank Austria AG, Vienna, and the UniCredit Group affiliated to it

Business relationships with joint ventures

€ 1,000 31.12.2011 31.12.2010
Loans 9,758 11,142
Receivables 5,110 38,636
Trade creditors 2,279 1,671
€ 1,000 2011 2010
Other income 551 1,006
Other expenses – 5 – 59
Interest income 1,434 1,981
Interest expenses – 7 – 6

Outstanding loans to joint ventures and the majority of the receivables to joint ventures as at the balance sheet date serve to finance property companies. The interest rates are in line with those prevailing in the market. No guarantees or other forms of security exist in connection with these loans. The cumulative value adjustment of loans to joint ventures is € 0K (31.12.2010: € 18,581K). Receivables from joint ventures comprise granted short-term loans in the amount of € 1,437 K (31.12.2010: € 22,849 K). All receivables and liabilites have interest rates in line with those prevailing in the market. The remaining receivables and liabilites are predominantly the result of services performed in Germany. No guarantees or other forms of security exist in connection with these receivables and liabilites.

There were no other value adjustments recognised in profit or loss.

€ 1,000 31.12.2011 31.12.2010
Loans 20,480 14,551
€ 1,000 2011 2010
Income from associated enterprise 1,640 2,751
Expenditures from associated enterprises – 3,336 – 3,080
Result from associated companies – 1,696 – 328
Interest income from associated companies 2,872 2,087
Impairment of financial investments – 5,288 – 5,277

Business relationships with associated companies

Outstanding loans to associated companies as at the balance sheet date serve to finance project development companies. All loans have interest rates in line with those prevailing in the market. No guarantees or other forms of security exist in connection with these loans. The cumulative value adjustment of loans to associated companies is € 1,925 K (2010: € 5,271K); value adjustment expenses in the amount of € 1,925 K (2010: € 343K) have been recognised in the business year 2010.

There were no other value adjustments recognised in profit or loss.

The executive bodies of CA Immobilien Anlagen Aktiengesellschaft, Vienna

Management Board Bruno Ettenauer Wolfhard Fromwald Bernhard H. Hansen

The Management Board of CA Immobilien Anlagen Aktiengesellschaft is also the board of directors for CA Immo Deutschland GmbH, Frankfurt. Despite working for both companies, Bruno Ettenauer and Wolfhard Fromwald, members of the Management Board, only receive remuneration in respect of their contracts of employment with CA Immobilien Anlagen Aktiengesellschaft. The remuneration of Bernhard H. Hansen is settled in its entirety by CA Immo Deutschland GmbH, Frankfurt; no charge is made to CA Immobilien Anlagen Aktiengesellschaft. No loans or advances were paid.

Total costs for the Management Board consist of the following:

€ 1,000 2011 2010
Payments due at short notice (incl. staff incidentals) 1,051 962
Premium (provision, payment in following year) 834 852
Endowments to provisions for severance payments 50 110
Contributions to pensions funds 62 62
Pensions costs 27 27
Variable compensation (LTI) provision 425 172
Total costs 2,449 2,185

Supervisory Board

Wolfgang Ruttenstorfer, Chairman Helmut Bernkopf, Deputy Chairman Waldemar Jud Barbara A. Knoflach Reinhard Madlencnik Franz Zwickl Detlef Bierbaum (until 12.5.2011) Regina Prehofer (until 12.5.2011)

In 2011 (for the 2010 business year), CA Immo Anlagen Aktiengesellschaft paid a total of € 165 K (2010 for the 2009 business year: € 71 K) in Supervisory Board compensation. No other fees (particularly for consultancy or brokerage activities) were paid to Supervisory Board members. No loans or advances were paid.

Helmut Bernkopf is head of the Private Banking division of the UniCredit Group (UniCredit SpA, Milan). Franz Zwickl is a supervisory Board member at the same organisation. Meanwhile, Reinhard Madlencnik heads the Real Estate division at UniCredit Bank Austria AG, Vienna.

UniCredit Bank Austria AG/UniCredit Group

UniCredit Bank Austria AG is the principal bank of the CA Immo Group and the largest single shareholder in the company with a stake of about 18% (as at: 31.12.2011). CA Immo Group processes most of its payment transactions and arranges much of its credit financing and financial investment through the bank. UniCredit Bank Austria AG also holds four registered shares, which entitle the bank to nominate one Supervisory Board member for each share.

The list of the relationships with UniCredit Bank Austria AG/UniCredit Group relates to the following positions:

€ 1,000 31.12.2011 31.12.2010
Share of financial liabilities recognised in consolidated
statement of financial position 17.9% 25.3%
Outstanding receivables 146,252 159,723
Outstanding liabilities – 582,867 – 538,021
Market value of interest rate swaps – 128,053 – 95,395
Market value of interest rate caps 0 12

As regards the increase in outstanding liabilities, an amount of € 101,246 K can be attributed to the acquisition of the Europolis Group on 1.1.2011.

Consolidated income statement:

€ 1,000 2011 2010
Financing costs – 48,948 – 48,596
Result from interest derivative transactions – 8,951 – 2,362
Result from financial investments 1,898 4,723
Expenses of monetary transactions – 296 – 235

Other comprehensive income (equity):

€ 1,000 2011 2010
Valuation result (hedging) – 99,557 – 77,279

Consolidated statement of cash flows:

€ 1,000 2011 2010
Raising of new bank loans 195,274 35,310
Repayment of bank loans – 122,759 – 40,710
Realisation interest rate derivative transactions 109 0
Interest paid – 49,197 – 48,590
Interest received from financial investments 1,590 4,726

Mortgages, share pledges and similar guarantees are used as collateral for bank liabilities. There were no impairments recognised in profit or loss for bank receivables. The terms and conditions governing the business relationship with UniCredit Bank Austria AG/UniCredit Group are in line with those prevailing in the market.

42. Key figures per share

Earnings per share

A convertible bond was issued in November 2009. This bond generally has an effect on the earnings per share. In this case, the diluted earnings per share are equal to the undiluted earnings per share since no dilution effect arises due to the ordinary shares.

2011 2010
Weighted number of shares in circulation pcs. 87,856,060 87,333,896
Consolidated net income € 1,000 62,629 45,415
Earnings per share (undiluted equals diluted) 0.71 0.52

Cash flow per share

2011 2010
Weighted number of shares in circulation pcs. 87,856,060 87,333,896
Operating cash flow € 1,000 191,861 121,422
Operating cash flow per share (undiluted equals diluted) 2.18 1.39
Cash flow from operating activities € 1,000 198,626 172,033
Cash flow from operating activities per share (undiluted

43. Payroll

In the 2011 business year, the CA Immo Group engaged an average of 368 employees (2010: 268) and 27 workers (2010: 27), thereof on average 172 (2010: 182) were engaged as employees in Germany and 149 (2010: 31) were engaged as employees and 26 (2010: 28) as workers at subsidiaries in Eastern and South East Europe. Additionally there were on average one employee (2010: 12) and no workers (2010: 17) in proportionally consolidated companies employed.

44. Costs for the auditor

€ 1,000 2011 2010
Auditing costs 501 256
Other review services 263 107
Other consultancy services 0 132
763 495

The costs for the auditor don't contain non-deductible input tax in the amount of € 55K (2010: € 4K).

45. Events after the close of the business year

Middle of January 2012 the investment property under development "Tower 185" in Frankfurt has been finalised and will be shown totally as investment property in the consolidated statement of financial positions of the 1st quarter 2012.

In February 2012, further shares in Megapark o.o.d., Sofia, were acquired, increasing the Group's interest from 35.0% to 43.5%. In addition, the prepayments made on an investment property in Prague were assigned.

These consolidated financial statements have been prepared by the Management Board on the date below. The individual and consolidated financial statements for CA Immobilien Anlagen Aktiengesellschaft will be presented to the Supervisory Board on 14.3.2012 for their approval.

Vienna, 6 March 2012

Bruno Ettenauer (Chairman)

The Managing Board

Wolfhard Fromwald (Management Board Member)

Bernhard H. Hansen (Management Board Member)

ANNEX I TO THE CONSOLIDATED FINANCIAL STATEMENTS

SCOPE OF CONSOLIDATION

The following companies are included in the consolidated financial statements in addition to CA Immobilien Anlagen Aktiengesellschaft:

Company Registered Nominal Currency Interest in % Consoli Foundation /
office capital dation
method 1)
First time
consolidation
in 2011 2)
CA Immo d.o.o. Belgrade 390,500 EUR 100 FC
TM Immo d.o.o. Belgrade 13,750,000 EUR 100 FC
BA Business Center a.s. Bratislava 7,503,200 EUR 100 FC
CA Holding Szolgáltató Kft Budapest 13,000,000 HUF 100 FC
Canada Square Kft. Budapest 12,500,000 HUF 100 FC
Kapas Center Kft. Budapest 772,560,000 HUF 100 FC
Kilb Kft. Budapest 30,000,000 HUF 100 FC
R 70 Invest Budapest Kft. Budapest 5,250,000 HUF 100 FC
Skogs Buda Business Center II. Kft. Budapest 327,000,000 HUF 100 FC
Váci 76 Kft. Budapest 3,100,000 HUF 100 FC
CA Immobilien S.R.L. Bucharest 947,100 RON 100 FC
Opera Center One S.R.L. Bucharest 27,326,150 RON 100 FC
Opera Center Two S.R.L. Bucharest 7,310,400 RON 100 FC
S.C. BBP Leasing S.R.L. Bucharest 14,637,711 RON 100 FC
Blitz F07-neunhundert-sechzig-acht GmbH Frankfurt 25,000 EUR 100 FC
Blitz F07-neunhundert-sechzig-neun GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Acht GmbH & Co. KG Frankfurt 24,635 EUR 100 FC
CA Immo AG Frankfurt 50,000 EUR 100 FC
CA Immo Deutschland GmbH Frankfurt 5,000,000 EUR 100 FC
CA Immo Drei GmbH & Co. KG Frankfurt 23,937 EUR 100 FC
CA Immo Eins GmbH & Co. KG Frankfurt 22,927 EUR 100 FC
CA Immo Elf GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Fünf GmbH & Co. KG Frankfurt 24,684 EUR 100 FC
CA Immo Fünfzehn GmbH & Co. KG Frankfurt 25,000 EUR 100 FC G
CA Immo GB Eins GmbH & Co. KG Frankfurt 25,000 EUR 95 FC
CA Immo GB GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Neun GmbH & Co. KG Frankfurt 23,514 EUR 100 FC
CA Immo Null Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Sechs GmbH & Co. KG Frankfurt 23,581 EUR 100 FC
CA Immo Sechzehn GmbH & Co. KG Frankfurt 25,000 EUR 100 FC G
CA Immo Sieben GmbH & Co. KG Frankfurt 23,529 EUR 100 FC
CA Immo Vier GmbH & Co. KG Frankfurt 24,793 EUR 100 FC
CA Immo Zehn GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Zwei GmbH & Co. KG Frankfurt 21,795 EUR 100 FC
CEREP Allermöhe GmbH Frankfurt 25,000 EUR 100 FC
CM Komplementär F07-888 GmbH & Co. KG Frankfurt 25,000 EUR 95 FC
DRG Deutsche Realitäten GmbH Frankfurt 500,000 EUR 493) PC G
CA Immo Holding B.V. Hoofddorp 51,200,000 EUR 100 FC
CA Immobilien Anlagen d.o.o. Ljubljana 50,075 EUR 100 FC
CA IMMO NEW EUROPE PROPERTY FUND S.C.A. SICAR Luxembourg 153,569,000 EUR 70 FC
1) FC full consolidation, PC proportional consolidation, EQ at equity consolidation

2) F foundation, A acquisition

3) common control

Company Registered Nominal Currency Interest Consoli Foundation /
office capital in % dation First time
method 1) consolidation
in 2011 2)
CA Immo S.á.r.l. Luxembourg 33,000 EUR 100 FC
OOO Saimir (in Liquidation) Moscow 10,000 RUB 100 FC
2P s.r.o. Pilsen 240,000 CZK 100 FC
Europort Airport Center a.s. Prague 14,100,000 CZK 100 FC
FCL Property a.s. Prague 2,000,000 CZK 100 FC
Megapark o.o.d. Sofia 5,000 BGN 353) PC
Office Center Mladost 2 EOOD Sofia 5,000 BGN 100 FC
Office Center Mladost EOOD Sofia 5,000 BGN 100 FC
Doratus Sp.z.o.o. Warsaw 2,000,000 PLN 100 FC
PBP IT-Services Sp.z.o.o. Warsaw 50,000 PLN 50 PC
Warsaw Financial Center Sp.z.o.o. Warsaw 218,032,000 PLN 50 PC
Betriebsobjekte Verwertung Gesellschaft m.b.H. & Co.
Leasing OG Vienna 4,135,427 EUR 100 FC
BIL-S Superädifikatsverwaltungs GmbH Vienna 70,000 EUR 100 FC
CA Immo BIP Liegenschaftsverwaltung GmbH Vienna 3,738,127 EUR 100 FC
CA Immo CEE Beteiligungs GmbH Vienna 35,000 EUR 100 FC
CA Immo Galleria Liegenschaftsverwaltung GmbH Vienna 35,000 EUR 100 FC
CA Immo Germany Holding GmbH Vienna 35,000 EUR 100 FC
CA Immo International Beteiligungsverwaltungs GmbH Vienna 35,000 EUR 100 FC
CA Immo International Holding GmbH Vienna 35,000 EUR 100 FC
CA Immo Investment Management GmbH Vienna 100,000 EUR 100 FC
CA Immo LP GmbH Vienna 146,000 EUR 100 FC
CA Immo ProjektentwicklungsgmbH Vienna 72,500 EUR 100 FC
CA Immo Rennweg 16 GmbH Vienna 35,000 EUR 100 FC
CA Immobilien Anlagen Beteiligungs GmbH & Co
Finanzierungs OG Vienna 2,537,600 EUR 100 FC
CA Immo-RI-Residential Property Holding GmbH Vienna 35,000 EUR 100 FC
CAII Projektbeteiligungs GmbH Vienna 35,000 EUR 100 FC
CAII Projektmanagement GmbH Vienna 35,000 EUR 100 FC
CEE Hotel Development GmbH Vienna 70,000 EUR 50 PC
CEE Hotel Management und Beteiligungs GmbH Vienna 35,000 EUR 50 PC
EUROPOLIS AG Vienna 5,000,000 EUR 100 FC A
I.N.A. Handels GmbH Vienna 37,000 EUR 100 FC
omniCon Baumanagement GmbH Vienna 100,000 EUR 100 FC
Parkring 10 Immobilien GmbH Vienna 35,000 EUR 100 FC
SQUARE S Holding GmbH Vienna 35,000 EUR 100 FC
UBM Realitätenentwicklung AG Vienna 5,450,463 EUR 25 EQ

1) FC full consolidation, PC proportional consolidation, EQ at equity consolidation

2) F foundation, A acquisition

3) common control

As at 31.12.2011, CA Immobilien Anlagen Aktiengesellschaft held 100% of shares in EUROPOLIS AG, Vienna. The following subsidiaries, shares in joint ventures and associated companies of EUROPOLIS AG, Vienna, are therefore also included in the consolidated financial statements:

Company Registered
office
Nominal
capital
Currency Interest
in %
Consoli
dation
method 1)
Foundation
/ First time
consolidati
on in 2011 2)
Phönix Logistics d.o.o. Belgrade 241,605,375 RSD 100 FC A
Europolis D61 Logistics s.r.o. Bratislava 1,325,000 EUR 100 FC A
Europolis Harbour City s.r.o. Bratislava 23,629,211 EUR 65 FC A
CA Immo Real Estate Management Hungary K.f.t. Budapest 3,100,000 HUF 100 FC A
Casa Property Kft. Budapest 51,310,000 HUF 100 FC
COM PARK Ingatlanberuházási Kft Budapest 3,000,000 HUF 65 FC A
EUROPOLIS ABP Ingatlanberuházási Kft Budapest 21,410,000 HUF 51 FC A
EUROPOLIS City Gate Ingatlanberuházási Kft Budapest 13,000,000 HUF 65 FC A
Europolis Infopark Ingatlanüzemeltető Kft Budapest 5,240,000 HUF 51 FC A
EUROPOLIS IPW Ingatlanberuházási Kft Budapest 50,200,000 HUF 65 FC A
EUROPOLIS M1 Ingatlanberuházási Kft Budapest 55,020,000 HUF 51 FC A
Europolis Park Airport Kft. Budapest 19,900,000 HUF 100 FC A
Europolis Tárnok Ingatlanberuházási Kft Budapest 5,400,000 HUF 65 FC A
Terminál Közép-Európai Ingatlan-fejlesztő Kft Budapest 3,400,000 HUF 75 FC A
CA Immo Real Estate Management Romania S.R.L. Bucharest 985,000 RON 100 FC A
EUROPOLIS BV DEVELOPMENT S.R.L. Bucharest 43,853,900 RON 65 FC A
EUROPOLIS ORHIDEEA B.C. S.R.L. Bucharest 91,389,960 RON 65 FC A
EUROPOLIS PARK BUCHAREST ALPHA S.R.L. Bucharest 54,064,790 RON 65 FC A
EUROPOLIS PARK BUCHAREST BETA S.R.L. Bucharest 6,481,000 RON 65 FC A
EUROPOLIS PARK BUCHAREST DELTA S.R.L. Bucharest 1,000 RON 65 FC A
EUROPOLIS PARK BUCHAREST GAMMA S.R.L. Bucharest 8,601,000 RON 65 FC A
EUROPOLIS PARK BUCHAREST INFRASTRUCTURA S.R.L. Bucharest 8,640,036 RON 65 FC A
EUROPOLIS SEMA PARK S.R.L. Bucharest 107,680,000 RON 65 FC A
EUROPOLIS SP S.R.L. Bucharest 169,840 RON 65 FC A
INTERMED CONSULTING & MANAGEMENT S.R.L. Bucharest 330 RON 65 FC A
VICTORIA INTERNATIONAL PROPERTY S.R.L. Bucharest 216 RON 65 FC A
Private Enterprise "Margolia Ukraine" Kiev 1,000 UAH 65 FC A
TzoV "Europolis Logistics Park I" Kiev 2,232,296 UAH 100 FC A
TzoV "Europolis Logistics Park II" Kiev 122,456,333 UAH 100 FC A
TzoV "Europolis Logistics Park III" Kiev 40,000 UAH 100 FC A
TzoV "Europolis Property Holding" Kiev 193,984,834 UAH 65 FC A
TzoV "Europolis Real Estate AM" Kiev 4,247,565 UAH 100 FC A
TzoV "Logistyk-Tsentr "A" Kiev 13,512,117 UAH 65 FC A
TzoV"Corma Development II" Kiev 1,000,000 UAH 65 FC A
TzoV"Corma Development" Kiev 928,688 UAH 65 FC A
BEDELLAN PROPERTIES LIMITED Limassol 11,491 EUR 65 FC A
EPC KAPPA LIMITED Limassol 11,185 EUR 100 FC A
EPC LAMBDA LIMITED Limassol 457,083 EUR 75 FC A
EPC LEDUM LIMITED Limassol 11,799 EUR 100 FC A
EPC OMIKRON LIMITED Limassol 55,575 EUR 65 FC A

1) VK Vollkonsolidierung; QK Quotenkonsolidierung; EQ At equity-Konsolidierung

2) F foundation, A acquisition

Company Registered Nominal Currency Interest Consolidat Foundation
office capital in % ion / First time
method 1) consolidati
on in 2011 2)
EPC PI LIMITED Limassol 1,910 EUR 65 FC A
EPC PLATINUM LIMITED Limassol 2,335 EUR 100 FC A
EPC RHO LIMITED Limassol 1,790 EUR 65 FC A
EPC THREE LIMITED Limassol 2,491,220 EUR 65 FC A
EPC TWO LIMITED Limassol 969,057 EUR 65 FC A
EUROPOLIS REAL ESTATE ASSET MANAGEMENT LIMITED Limassol 2,490 EUR 100 FC A
MOCASANRA HOLDINGS LIMITED Limassol 2,300 EUR 100 FC A
OPRAH ENTERPRISES LIMITED Limassol 2,700 EUR 100 FC A
Europolis Real Estate Asset Management LLC Moscow 26,350,886 RUB 100 FC A
CORMA HOLDINGS LIMITED Nicosia 6 EUR 65 FC A
HARILDO LIMITED Nicosia 1,400 EUR 100 FC A
VESESTO LIMITED Nicosia 1,400 EUR 100 FC A
4P - Immo. Praha s.r.o. Prague 200,000 CZK 75 FC A
CA Immo Real Estate Management Czech Republic s.r.o. Prague 1,000,000 CZK 100 FC A
EUROPOLIS 6 Holding s.r.o. Prague 200,000 CZK 100 FC A
EUROPOLIS Technopark s.r.o. Prague 200,000 CZK 51 FC A
RCP Alfa, s.r.o. Prague 1,000,000 CZK 51 FC A
RCP Amazon, s.r.o. Prague 1,000,000 CZK 65 FC A
RCP Beta, s.r.o. Prague 73,804,000 CZK 65 FC A
RCP Delta, s.r.o. Prague 1,000,000 CZK 65 FC A
RCP Epsilon, s.r.o. (in Liquidation) Prague 200,000 CZK 65 FC A
RCP Gama, s.r.o. Prague 96,931,000 CZK 65 FC A
RCP ISC, s.r.o. Prague 1,000,000 CZK 65 FC A
RCP Residence, s.r.o. Prague 5,000,000 CZK 100 FC A
TK Czech Development IX s.r.o. Prague 100,000 CZK 100 FC A
ALLIANCE MANAGEMENT COMPANY Sp.z o.o. Warsaw 971,925 PLN 65 FC A
CA Immo Real Estate Management Poland Sp. z o.o. Warsaw 500,000 PLN 100 FC A
CENTER PARK Sp.z o.o. Warsaw 70,000 PLN 65 FC A
EUROPOLIS BITWY WARSZAWSKIEJ Sp.z o.o. Warsaw 50,000 PLN 51 FC A
EUROPOLIS LIPOWY OFFICE PARK Sp.z o.o. Warsaw 70,000 PLN 100 FC A
EUROPOLIS PARK BŁONIE Sp.z o.o. Warsaw 1,091,400 PLN 65 FC A
EUROPOLIS SASKI CRESCENT Sp.z o.o. Warsaw 50,000 PLN 51 FC A
EUROPOLIS SASKI POINT Sp.z o.o. Warsaw 50,000 PLN 51 FC A
EUROPOLIS SIENNA CENTER Sp.z o.o. Warsaw 4,580,000 PLN 51 FC A
Mahler Property Services Sp.z.o.o. Warsaw 50,000 PLN 100 FC A
POLAND CENTRAL UNIT 1 Sp.z o.o. Warsaw 11,800,000 PLN 75 FC A
SOFTWARE PARK KRAKÓW Sp.z o.o. Warsaw 50,000 PLN 50 PC A
WARSAW TOWERS Sp.z o.o. Warsaw 50,000 PLN 51 FC A
EUROPOLIS CE Alpha Holding GmbH Vienna 36,336 EUR 65 FC A
EUROPOLIS CE Amber Holding GmbH Vienna 35,000 EUR 100 FC A

1) FC full consolidation, PC proportional consolidation, EQ at equity consolidation

2) F foundation, A acquisition

Company Registere Nominal Currency Interest in Consoli Foundation
d office capital % dation / First time
method 1) consolidation
in 2011 2)
EUROPOLIS CE Gamma Holding GmbH Vienna 35,000 EUR 65 FC A
EUROPOLIS CE Istros Holding GmbH Vienna 35,000 EUR 100 FC A
EUROPOLIS CE Kappa Holding GmbH Vienna 35,000 EUR 100 FC A
EUROPOLIS CE Lambda Holding GmbH Vienna 35,000 EUR 75 FC A
EUROPOLIS CE Ledum Holding GmbH Vienna 35,000 EUR 100 FC A
EUROPOLIS CE My Holding GmbH Vienna 35,000 EUR 75 FC A
EUROPOLIS CE Omikron Holding GmbH Vienna 35,000 EUR 65 FC A
EUROPOLIS CE Pi Holding GmbH Vienna 35,000 EUR 65 FC A
EUROPOLIS CE Rho Holding GmbH Vienna 35,000 EUR 65 FC A
EUROPOLIS CE Sigma Holding GmbH Vienna 35,000 EUR 65 FC A
EUROPOLIS CE Tau Holding GmbH Vienna 35,000 EUR 65 FC A
EUROPOLIS CE Tilia Holding GmbH Vienna 35,000 EUR 65 FC A
EUROPOLIS Duat Holding GmbH & Co OG Vienna 2,906,913 EUR 100 FC A
Europolis Pheme Holding GmbH Vienna 36,336 EUR 100 FC A
Europolis Real Estate Asset Management GmbH Vienna 35,000 EUR 100 FC A
EUROPOLIS Sarisu Holding GmbH Vienna 35,000 EUR 100 FC A
Europolis Zagrebtower d.o.o. Zagreb 15,347,000 HRK 65 FC A

1) FC full consolidation, PC proportional consolidation, EQ at equity consolidation

2) F foundation, A acquisition

As at 31.12.2011, CA Immobilien Anlagen Aktiengesellschaft held 70% of shares in CA IMMO NEW EUROPE PROP-ERTY FUND S.C.A. SICAR, Luxembourg. The following subsidiaries, shares in joint ventures and associated companies of CA IMMO NEW EUROPE PROPERTY FUND S.C.A. SICAR, Luxembourg, are therefore also included in the consolidated financial statements:

Company Registered office Nominal
capital
Currency Interest
in %
Consoli
dation
method 1)
Foundation
/ First time
consolidati
on in 2011 2)
CA Immo Sava City d.o.o. Belgrade 33,620,000 EUR 100 FC
TC Investments Arad S.R.L. Bucharest 4,018,560 RON 95.9 FC
Pannonia Shopping Center Kft. Györ 380,000,000 HUF 100 FC
CAINE B.V. Hoofddorp 18,151 EUR 100 FC
Pulkovo B.V. Hoofddorp 25,000 EUR 100 FC
CAINE S.à.r.l. Luxembourg 12,500 EUR 100 FC
K&K Investments S.R.L. Sibiu 21,609,000 RON 90 FC
OAO Avielen AG St. Petersburg 370,000,000 RUB 25 EQ
Amsterdam Office Sp.z.o.o. Warsaw 2,700,000 PLN 50 PC F
Poleczki Business Park Sp.z.o.o. Warsaw 7,936,000 PLN 50 PC
Vienna Office Sp.z.o.o. Warsaw 3,300,000 PLN 50 PC F
1) FC full consolidation, PC proportional consolidation, EQ at equity consolidation

2) F foundation, A acquisition

As at 31.12.2011 the CA Immo Group held 99.7% of shares in CA Immo Deutschland GmbH, Frankfurt am Main (or simply Frankfurt). The following subsidiaries, shares in joint ventures, and associated companies of CA Immo Deutschland GmbH, Frankfurt, are therefore also included in the consolidated financial statements:

Company Registered
office
Nominal
capital
Currency Interest
in %
Consoli
dation
method 1)
Foundation
/ First time
consolidati
on in 2011 2)
Flottwellpromenade Projektentwicklungs GmbH & Co. KG Berlin 100,000 EUR 50 PC F
Flottwellpromenade Verwaltungs GmbH Berlin 25,000 EUR 50 PC A
CA Immo 13 GmbH Frankfurt 25,000 EUR 100 FC F
CA Immo 14 GmbH Frankfurt 25,000 EUR 100 FC F
CA Immo Berlin Europaplatz 01 GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Berlin Europaplatz 01 Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Berlin Hallesches Ufer GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Berlin Lehrter Stadtquartier 3 GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Berlin Lehrter Stadtquartier 4 GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Berlin Lehrter Stadtquartier 5 GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Berlin Lehrter Stadtquartier 6 GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Berlin Lehrter Stadtquartier 7 GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Berlin Lehrter Stadtquartier 8 GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Berlin Lehrter Stadtquartier 9 GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Berlin Lehrter Stadtquartier Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Berlin Lietzenburger Straße Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Berlin Lietzenburger Straße GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Berlin MBVD Projekt GmbH & Co. KG Frankfurt 5,000 EUR 100 FC F
CA Immo Berlin MBVD Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC A
CA Immo Berlin Schöneberger Ufer Beteiligungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Berlin Schöneberger Ufer GmbH & Co. KG Frankfurt 25,000 EUR 100 FC
CA Immo Berlin Schöneberger Ufer Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Berlin Stadthafenquartier Europacity GmbH & Co. KG Frankfurt 5,000 EUR 50 PC F
CA Immo Berlin Stadthafenquartier Europacity Verwaltungs
GmbH Frankfurt 25,000 EUR 50 PC A
CA Immo Düsseldorf BelsenPark MK 2.1 Projekt GmbH & Co. KG Frankfurt 5,000 EUR 100 FC F
CA Immo Düsseldorf BelsenPark MK 3 Projekt GmbH & Co. KG Frankfurt 5,000 EUR 100 FC F
CA Immo Düsseldorf BelsenPark Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC F
CA Immo Frankfurt Bauphase I GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Frankfurt Bauphase I Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Frankfurt Nord 1 Beteiligungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Frankfurt Nord 1 Projekt GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Frankfurt Nord 1 Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Frankfurt Nord 4 GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Frankfurt Nord 4 Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Frankfurt Tower 185 Beteiligungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Frankfurt Tower 185 Projekt GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Frankfurt Tower 185 Verwaltungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Frankfurt Tower– 2-Besitz GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo Frankfurt Tower– 2-Betriebsgesellschaft mbH Frankfurt 25,000 EUR 100 FC
CA Immo Frankfurt Tower– 2-Geschäftsführungs GmbH Frankfurt 25,000 EUR 100 FC

1) FC full consolidation, PC proportional consolidation, EQ at equity consolidation

2) F foundation, A acquisition

CONSOLIDATED FINANCIAL STATEMENTS

Company Registered Nominal Currency Interest Consoli Foundation
office capital in % dation / First time
method 1) consolidatio
n in 2011 2)
CA Immo Frankfurt Tower– 2-Verwaltungsgesellschaft mbH Frankfurt 25,000 EUR 100 FC
CA Immo Köln K 1 GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Köln K 2 GmbH Frankfurt 25,000 EUR 100 FC
CA Immo Köln K 3 GmbH Frankfurt 25,000 EUR 100 FC
CA Immo München Ambigon Nymphenburg GmbH & Co. KG Frankfurt 5,000 EUR 100 FC
CA Immo München Ambigon Nymphenburg Verwaltungs
GmbH Frankfurt 25,000 EUR 100 FC
CA Immo München MI 1 - Arnulfpark
Grundstücksverwertungs GmbH Frankfurt 25,000 EUR 100 FC
CA Immo München MK 6 - Arnulfpark FC
Grundstücksverwertungs GmbH Frankfurt 25,000 EUR 100
omniCon Gesellschaft für innovatives Bauen mbH Frankfurt 100,000 EUR 100 FC
omniPro Gesellschaft für Projektmanagement mbH Frankfurt 25,000 EUR 100 FC
VIADOR GmbH Frankfurt 100,000 EUR 70 FC
CA Immo München Eggartensiedlung GmbH & Co. KG Grünwald 5,000 EUR 100 FC F
CA Immo München Eggartensiedlung Verwaltungs GmbH Grünwald 25,000 EUR 100 FC F
CA Immo München Moosach Projekt GmbH & Co. KG Grünwald 5,000 EUR 100 FC F
CA Immo München Moosach Verwaltungs GmbH Grünwald 25,000 EUR 100 FC F
CA Immo Projektentwicklung Bayern GmbH & Co. KG Grünwald 255,646 EUR 100 FC
CA Immo Projektentwicklung Bayern Verwaltungs GmbH Grünwald 25,000 EUR 100 FC
CA Immo Stuttgart Heilbronner Straße GmbH & Co. KG Grünwald 5,000 EUR 100 FC F
CONCEPT BAU - PREMIER CA Immo Isargärten GmbH & Co.
KG Grünwald 15,000 EUR 33.33) PC
CONCEPT BAU - PREMIER CA Isargärten Verwaltungs GmbH Grünwald 25,000 EUR 33.33) PC
Isargärten Bauträger GmbH & Co. KG Grünwald 15,000 EUR 33.33) PC
Isargärten Bauträger Verwaltungs GmbH Grünwald 25,000 EUR 33.33) PC
Isargärten Thalkirchen Verwaltungs GmbH Grünwald 30,000 EUR 33.3 EQ
SKYGARDEN Arnulfpark GmbH & Co. KG Grünwald 100,000 EUR 100 FC A
SKYGARDEN Arnulfpark Verwaltungs GmbH Grünwald 25,000 EUR 50 PC
Congress Centrum Skyline Plaza Beteiligung GmbH Hamburg 25,000 EUR 50 PC F
Congress Centrum Skyline Plaza Verwaltung GmbH Hamburg 25,000 EUR 50 PC
CongressCentrum Skyline Plaza GmbH & Co. KG Hamburg 25,000 EUR 50 PC
REC Frankfurt Objekt GmbH & Co. KG Hamburg 100,000 EUR 50 PC
REC Frankfurt Objektverwaltungsgesellschaft mbH Hamburg 25,000 EUR 50 PC
Mainzer Hafen GmbH Mainz 25,000 EUR 50 PC
Zollhafen Mainz GmbH & Co. KG Mainz 1,200,000 EUR 50.13) PC
Kontorhaus Arnulfpark GmbH & Co. KG Oberhaching 100,000 EUR 50 PC
Kontorhaus Arnulfpark Verwaltungs GmbH Oberhaching 25,000 EUR 50 PC
Skyline Plaza Generalübernehmer GmbH & Co. KG Oststeinbek 25,000 EUR 50 PC F
Skyline Plaza Generalübernehmer Verwaltung GmbH Oststeinbek 25,000 EUR 50 PC F
Boulevard Süd 4 GmbH & Co. KG Ulm 200,000 EUR 50 PC
Boulevard Süd 4 Verwaltungs-GmbH Ulm 25,000 EUR 50 PC
1) FC full consolidation, PC proportional consolidation, EQ at equity consolidation

2) F foundation, A acquisition

3) common control

DECLARATION OF THE MANAGEMENT BOARD DUE TO SECTION 82 (4) OF THE AUSTRIAN STOCK EXCHANGE ACT

The management board confirms to the best of their knowledge that the consolidated financial statements of CA Immobilien Anlagen Aktiengesellschaft, which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the CA Immo Group and that the group management report gives a true and fair view of the development and performance of the business and position of the CA Immo Group, together with a description of the principal risks and uncertainties the CA Immo Group faces.

Vienna, 6 March 2012

Bruno Ettenauer (Chairman)

The Management Board

Wolfhard Fromwald (Member of the Management Board)

Bernhard H. Hansen (Member of the Management Board)

AUDITOR'S REPORT

Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of

CA Immobilien Anlagen Aktiengesellschaft, Vienna,

for the year from 1 January 2011 to 31 December 2011. These consolidated financial statements comprise the consolidated statement of financial position as of 31 December 2011, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of cash flows and the consolidated statement of changes in equity for the year ended 31 December 2011 and a summary of significant accounting policies and other explanatory notes.

Management's Responsibility for the Consolidated Financial Statements and for the Accounting System

The Company's management is responsible for the group accounting system and for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's Responsibility and Description of Type and Scope of the Statutory Audit

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and with International Standards on Auditing, issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Those standards require that we comply with professional guidelines and that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the consolidated financial statements comply with legal requirements and give a true and fair view of the financial position of the Group as of 31 December 2011 and of its financial performance and its cash flows for the year from 1 January to 31 December 2011 in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU.

Report on the Management Report for the Group

Pursuant to statutory provisions, the management report for the Group is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the other disclosures are not misleading with respect to the Company's position. The auditor's report also has to contain a statement as to whether the management report for the Group is consistent with the consolidated financial statements and whether the disclosures pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate.

In our opinion, the management report for the Group is consistent with the consolidated financial statements. The disclosures pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate.

Vienna, 6 March 2012

KPMG Wirtschaftsprüfungs- und Steuerberatungs GmbH

Mag. Walter Reiffenstuhl Wirtschaftsprüfer

ppa Mag. Christoph Erik Balzar Wirtschaftsprüfer

(Austrian Chartered Accountants)

This report is a translation of the original report in German, which is solely valid.

Publication of the consolidated financial statements together with our auditor's opinion may only be made if the consolidated financial statements and the management report are identical with the audited version. The Auditor's Report only refers to the complete German version of the consolidated financial statements and the management report. Section 281 paragraph 2 UGB (Austrian Commercial Code) applies.

FINANCIAL STATEMENTS AND MANAGEMENT REPORT

CONTENT

FINANCIAL STATEMENTS AND MANAGEMENT REPORT

Annex

  • I Annual Financial Statements as at 31.12.2011
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AUDITOR'S REPORT 1

DECLARATION OF THE MANAGEMENT BOARD DUE TO SECTION 82 (4) OF THE AUSTRIAN STOCK EXCHANGE ACT (BÖRSEGESETZ) FEHLER! TEXTMARKE NICHT DEFINIERT.

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BALANCE SHEET AS AT 31.12.2011

Assets

31.12.2011 31.12.2010
€ 1,000
A. Fixed assets
I. Intangible fixed assets
1. EDP software 41,336.14 71
2. Goodwill 0.00 214
41,336.14 285
II. Tangible fixed assets
1. Property and buildings 248,555,451.61 263,896
of which land value: € 51,058,279.43; 31.12.2010: € 52,092 K
2. Other assets, office furniture and equipment 1,342,896.21 1,189
3. Prepayments made and construction in progress 12,281,422.15 617
262,179,769.97 265,702
III. Financial assets
1. Investments in affiliated companies 1,741,906,941.08 1,753,501
2. Loans to affiliated companies 217,874,578.91 194,630
3. Prepayments made on investments in affiliated companies 1,900,000.00 200
4. Investments in associated companies 57,533.69 125
5. Other loans 14,343,679.35 4,147
1,976,082,733.03 1,952,603
2,238,303,839.14 2,218,590
B. Current assets
I. Receivables
1. Trade debtors 455,288.03 330
2. Receivables from affiliated companies 66,323,956.48 28,630
3. Other receivables 5,270,368.59 3,074
72,049,613.10 32,034
II. Other securities 33,055,300.00 3,854
III. Cash on hand, credit balances with banks 44,934,505.56 43,554
150,039,418.66 79,442
C. Deferred expenses 1,067,285.40 1,418
2,389,410,543.20 2,299,450

Liabilities and shareholders' equity

31.12.2011 31.12.2010
€ 1,000
A. Shareholders' equity
I.
Share capital
638,713,556.20 638,714
II. Tied capital reserves 820,184,324.63 820,184
III. Net profit 98,747,939.27 0
of which profit carried forward: € 0.00; 31.12.2010: € 5,897 K
1,557,645,820.10 1,458,898
B. Untaxed reserves
Other untaxed reserves
Special item for investment grants 278.88 79
C. Provisions
1. Provision for severance payment 696,706.00 612
2. Tax provisions 216,150.00 378
3. Other provisions 62,915,513.80 74,655
63,828,369.80 75,645
D. Liabilities
1. Bonds 485,000,000.00 485,000
of which convertible: € 135,000,000.00; 31.12.2010: € 135,000 K
2. Liabilities to banks 136,880,870.52 144,499
3. Trade creditors 607,023.03 297
4. Payables to affiliated companies 137,308,285.94 125,369
6. Other liabilities 6,993,783.80 8,454
of which from taxes: € 420,572.02; 31.12.2010: € 263 K
of which in connection with social security: € 99,199.56; 31.12.2010: € 88 K
766,789,963.29 763,619
E. Deferred income 1,146,111.13 1,209
2,389,410,543.20 2,299,450
Contingent liabilities 353,317,651.00 259,596

INCOME STATEMENT FOR FISCAL 2011

2011 2010
€ 1,000 € 1,000
1. Gross Revenues 20,998,339.50 23,933
2. Other operating income
a) Income from the sale of fixed assets except of financial assets 8,132,070.43 104
b) Income from the reduction of provisions 244,986.40 286
c) Other income 4,644,220.80 13,021,277.63 4,729 5,119
3. Staff expense
a) Wages – 13,560.65 – 14
b) Salaries – 6,975,583.51 – 6,270
c) Expenses for severance payments and payments into staff welfare funds – 175,283.75 – 222
d) Expenses in connection with pensions – 160,498.36 – 153
e) Payments relating to statutory social security contributions as well as as
payments dependent on remuneration and compulsory contributions – 1,160,985.40 – 1,166
f) Other social expenses – 91,064.07 – 8,576,975.74 – 29 – 7,854
4. Depreciation on intangible fixed assets and tangible fixed assets – 7,846,332.00 – 18,223
of which unscheduled depreciation in accordance with § 204 para. 2 Commercial
Code: € 0.00; 2010: € 10.052 K
5. Other operating expenses
a) Taxes – 344,391.93 – 588
b) Other expenses – 14,918,591.33 – 15,262,983.26 – 19,748 – 20,336
6. Subtotal from S 1 to 5 (operating result) 2,333,326.13 – 17,361
7. Income from investments 163,526,306.21 1,970
of which from affiliated companies: € 163,526,306.21; 2010: € 1,970 K
8. Income from loans from financial assets 10,476,573.08 10,458
of which from affiliated companies: € 9,333,129.33; 2010: € 8,107 K
9. Other interest and similar income 33,611,309.50 9,194
of which from affiliated companies: € 4,201,735.07; 2010: € 7,999 K
10. Income from the disposal and appreciation of financial assets and short-term
securities 18,033,969.51 37,065
11. Expenses for financial assets, thereof – 60,789,006.70 – 55,634
a) Depreciation: € 58,267,065.15; 2010: € 54,769 K
b) Expenses from affiliated companies: € 56,540,804.70; 2010: € 52,410 K
12. Interest and similar expenses – 74,003,900.79 – 56,297
of which relating to affiliated companies: € 19,021,199.05; 2010: € 4,061 K
13. Subtotal from S 7 to 12 (financial result) 90,855,250.81 – 53,244
14. Result from usual business activity 93,188,576.94 – 70,605
15. Extraordinary income 0.00 5,465
16. Extraordinary expenses 0.00 – 5,813
17. Extraordinary result 0.00 – 348
18. Taxes on income 5,481,013.90 5,731
19. Annual income/loss 98,669,590.84 – 65,222
20. Dissolution of untaxed reserves
Special item for investment grants 78,348.43 2
21. Dissolution of tied capital reserves 0.00 53,046
22. Dissolution of free reserves 0.00 6,277
23. Profit carried forward from the previous year 0.00 5,897
24. Net profit 98,747,939.27 0

NOTES ON THE FINANCIAL STATEMENTS FOR FISCAL 2011

ACCOUNTING AND VALUATION PRINCIPLES AND GENERAL INFORMATION

The financial statements have been drawn up pursuant to the provisions of the Austrian Commercial Code (UGB).

I. Fixed assets

Intangible and tangible fixed assets

The intangible and tangible assets are stated at acquisition or production cost reduced by scheduled depreciation, where depreciable, and unscheduled depreciation, where required.

The scheduled depreciation is carried out on a linear basis, with the depreciation period corresponding to the useful life expectancy. Additions in the first half of the fiscal year are subject to full annual depreciation, additions in the second half are subject to half of annual depreciation.

Unscheduled depreciation is only carried out where it is anticipated that permanent value impairments have occurred. In fiscal 2011 no unscheduled depreciation on tangible assets are made (2010: € 10,052 K).

In fiscal 2011 the accounting option not to carry out potential appreciation on tangible assets in accordance with section 208, para. 2 of the Austrian Commercial Code (UGB) was not exercised for the first time, and appreciation on tangible assets in the amount of € 2,511K (2010: € 0 K) were made while appreciation in the amount of € 64 K (2010: € 3,905K) was not carried out.

Financial assets

Investments in affiliated companies including prepayments and the investment in associated companies are stated at acquisition costs reduced by unscheduled depreciation.

The loans to affiliated companies and other loans are stated at acquisition costs reduced by repayments made and unscheduled depreciation.

Unscheduled depreciation is only carried out where it is anticipated that permanent value impairments have occurred. In fiscal 2011 unscheduled depreciation in the amount of € 58,267K (2010: € 54,769K) and appreciation in the amount of € 15,919K (2010: € 34,011K) were made on financial assets.

The income from investments is recognised on the basis of shareholder resolutions.

II. Current assets

Receivables are valued at nominal value. Identifiable defaults risks are considered by carrying out individual value adjustments.

Securities are stated including accrued interest attributable to the securities, though not higher than at market value.

III. Other untaxed reserves

The construction cost subsidies received from the public sector are shown as Special item for investment grants and are reversed on a pro rata basis in accordance with the effective life of the projects they are used to part-finance.

IV. Provisions and liabilities

Provisions for severance payments amount to 103.41% (31.12.2010: 103.52%) of the imputed statutory severance payment obligations existing on the balance sheet date. The calculation is made using the PUC method, which is recognised in international accounting, based on an interest rate of 4.75% (31.12.2010: 4.5%) and future salary increases of 2% for employees plus an inflation payment of 2% and not taking into account a fluctuation discount. The interest rate was increased by 0.25% compared to the previous year, otherwise the same parameters were applied for calculation of the provisions as in the previous year.

The Tax and Other provisions are made on a prudent basis in accordance with the anticipated requirement. They take into account all identifiable risks and as yet unquantified liabilities.

Derivative financial instruments are recognised at the fair value. Where this is possible, the derivative financial instruments (interest rate swaps) held are designated as hedging instruments. In 2011 the AFRAC Comment Letter "Accounting for Derivatives and Hedging Instruments under Company Law" was applied for the first time. According to this Comment Letter, the derivatives designated as hedging instruments are deemed to form part of a hedging relationship from 2011 on and will not be recognised in the balance sheet as provisions for anticipated losses if the fair value is negative. Therefore, the provisions recognised as at 31 December 2010 to the value of € 24,935K were reversed. Additionally, the receivables from affiliated companies from back-to-back derivative financial instruments to the value of € 15,191K that were stated in the balance sheet in the previous year were adjusted or reversed. The reversal of the provisions for anticipated losses is shown under Other interest and similar income. The adjustment of receivables to the value of € 15,191K is recognised under Interest and similar expenses towards affiliated companies. The prospective effectiveness of the hedging relationship is determined on the basis of the "critical term match", while the retrospective effectiveness is ascertained on the basis of the "hypothetical derivative method". Where no hedging relationship can be established, provisions for anticipated losses are continued to be set up in case of negative market values of the derivative financial instruments.

Liabilities are stated on a prudent basis at their repayment amount.

V. Note on currency conversion

Foreign exchange receivables are valued at the purchase price or at the lower bid rate as at the balance sheet date. Foreign exchange liabilities are valued at the purchase price or at the higher offer rate as at the balance sheet date.

EXPLANATORY NOTES ON THE BALANCE SHEET AND INCOME STATEMENT

VI. Explanatory notes on the balance sheet

a) Fixed assets

The breakdown and development of the fixed assets can be seen from the assets analyses in appendix 1.

Intangible assets

The Goodwill is the result of the merger with CA Immo Beteiligungen und Leasing GmbH which took place in fiscal 2002 and is amortised over a period of ten years in accordance with the effective economic life. Since it was fully depreciated at 31.12.2011, the goodwill was recognised as a disposal in the assets analyses.

Tangible assets

The additions to Property and buildings and to Prepayments made and construction in progress relate for the most part to current investments, in particular amalgamation and division of leased premises and preconstruction works for the Erdberger Lände. The disposals relate to the sale of five items of real estate. As at the balance sheet date the tangible assets include 23 properties (31.12.2010: 28 properties).

Financial assets

The notes on affiliated companies can be found in appendix 2.

The book value of the Investments in affiliated companies is € 1,741,907K (31.12.2010: € 1,753,501K). The current additions are mainly the result of diverse shareholder contributions in the amount of € 18,630 K to companies in Eastern Europe and the acquisition of the remaining 50% of a management company in Poland. The disposals are the result of the sale of two management companies in Eastern Europe to other companies of the Group. Depreciation of investments in affiliated companies to the value of € 53,017K and appreciation to the value of € 14,219K were carried out in 2011.

The Loans to affiliated companies are made up as follows:

€ 1,000 31.12.2011 31.12.2010
CA Immobilien Anlagen Beteiligungs GmbH & Co Finanzierungs OG, Vienna 86,767 117,416
CA Immo Holding B.V., Hoofddorp 29,190 0
Kapas Center Kft, Budapest 13,480 0
R70 Invest Budapest Kft, Budapest 12,704 18,004
BA Business Center a.s., Bratislava 11,000 11,000
CA Immo Galleria Liegenschaftsverwaltung GmbH, Vienna 7,900 0
S.C. BBP Leasing S.R.L., Bucharest 7,590 7,590
other under € 7,500K 49,244 40,620
217,875 194,630

Loans to affiliated companies to the value of € 134,044K (31.12.2010: € 194,630K) have a remaining term of up to one year.

The prepayment made on investments in affiliated companies was added with a value of € 1,700K (2010: € 0K).

In the fiscal year, unscheduled depreciation to the value of € 15 K (2010: € 7K) were made on Investments in associated companies.

The Other loans mainly relate to long-term loans to affiliated companies and joint venture partners.

b) Current assets

Trade debtors to the value of € 455K (31.12.2010: € 330K) include outstanding rent and operating cost payments.

Receivables from affiliated companies are made up as follows:

€ 1,000 31.12.2011 31.12.2010
Receivables from dividend payments 49,815 0
Receivables from interest 7,192 5,340
Receivables from tax compensation 5,399 6,210
Trade debtors (current transfer to affiliated companies) 1,068 1,889
Receivables from charging of derivative financial instruments 0 15,191
Other receivables 2,850 0
66,324 28,630

In the Other receivables in the amount of € 5,270K (31.12.2010: € 3,074K) the main items are receivables from the sale of a property, short-term cash advances and receivables from the passing-on of costs. In 2011 the cost of value adjustment is € 190K (2010: € 6K).

As in the previous year, all receivables have a remaining term of up to one year.

The Other securities include own 2006-2016 bonds redeemed from the market with a book value of € 13,658K and a nominal value of € 14,008K as well as convertible bonds with a book value of € 19,397 K and a nominal value of € 20,500K (31.12.2010: 433 shares in ABS Dynamic Cash € 3,854K). The convertible bond is registered for trading on the unlisted securities market of the Vienna Stock Exchange. However, the trading volumes on the stock exchange are very low and transactions are made only sporadically. Due to the low trading volume, the prices that can be observed on the stock exchange do not reflect the market price of this paper so that the own convertible bond held by the company was valued on the basis of internal valuation models.

c) Deferred expenses

Deferred expenses in the amount of € 1,067K (31.12.2010: € 1,418K) essentially comprise deferred discounts to the value of € 1,059K (31.12.2010: € 1,341K) for the issuance of a bond in the amount of € 200,000K in 2006 and a bond issued in fiscal 2009 to the value of € 150,000K.

d) Shareholders' equity

The stated Share capital is the nominal capital in the amount of € 638,713,556.20 (31.12.2010: € 638,713,556.20), which is fully paid up. It is broken down into 87,856,056 (31.12.2010: 87,856,056) bearer shares and 4 nonpar registered shares. The registered shares are held by UniCredit Bank Austria AG, Vienna, and entitle it to nominate one Supervisory Board member for each share. This right has not been exercised. All Supervisory Board members have been elected by the Ordinary General Meeting.

In the 21st Ordinary Shareholders' Meeting of 13.5.2008 the Management Board was authorised with the approval of the Supervisory Board and up to 12.5.2013 to issue convertible bonds to a total nominal value of up to € 317,185K on a one-off basis or repeatedly, also under exclusion of the subscription rights of the shareholders, and to grant the bearers of convertible bonds conversion rights on up to 43,629,300 bearer shares of CA Immobilien Anlagen Aktiengesellschaft. In November 2009, on the basis of this authorisation, a five-year convertible bond worth € 135,000K was issued. The coupon of the convertible bond (payable semi-annually) was fixed at 4,125% and the conversion price at € 11,5802 (this corresponds to a premium of 27.5% over the reference price on the date of issuance). Thus, a maximum of 11,657,829 bearer shares can be issued if the conversion right is exercised. According to the terms and conditions of issuance of the convertible bond, the creditors are entitled to convert their bonds into shares of CA Immobilien Anlagen Aktiengesellschaft at the conversion price at any time (i.e. also before the end of the term of the bond in 2014). As at the balance sheet date of 31.12.2011 the stock exchange price of the CA Immo share was € 8.29 and thus below the conversion price. No bonds were submitted for conversion by the balance sheet date or the date when the balance sheet was drawn up.

As at 31.12.2011 there is authorised but unissued capital in the amount of € 312,841,476.80 which can only be made use of up until 8.8.2012 and unconditional capital in the amount of € 317,185,011.00.

The 2011 net retained earnings include appreciation on the fixed assets to the value of € 18,431K. The net retained earnings are subject to a limitation on profit distribution in this amount in accordance with section 235 no. 1 of the Austrian Commercial Code (UGB).

e) Untaxed reserves

The Special item for investment grants relates to a construction cost subsidy of the Provincial Government of Vienna for the property at Zimmermannplatz 1, Vienna 9. The subsidy is written back in operating income in accordance with the remaining useful life of the investments thus financed.

f) Provisions

Under the Provision for severance payment there is a provision of € 697K (31.12.2010: € 612K) for the severance payment claims of employees of the company.

The Tax provisions in the amount of € 216K (31.12.2010: € 378K) relate for the most part to provisions for German corporation tax.

The Other provisions are made up as follows:

€ 1,000 31.12.2011 31.12.2010
Derivative transactions 37,812 54,012
Provision for contributions to group companies 17,114 15,452
Construction services 2,503 82
Premiums 2,370 1,743
Real property tax and land transfer tax 1,367 1,217
Staff (vacation and overtime) 591 332
Legal, auditing and consultancy fees 412 663
Publications and expert opinions 220 251
Other 527 903
62,916 74,655

In fiscal 2010 the Management Board was, for the first time, offered the option to participate in an LTI (long term incentive) programme with a term of three years. Participation requires personal investment limited to 50% of the annual basic salary. Such investment was evaluated at the closing rate as at 31.12.2009, with the number of associated shares thereby determined. Performance will be measured according to the following indicators: NAV growth, ISCR (interest service coverage ratio) and TSR (total shareholder return). First-level managerial staff was also entitled to take part in the LTI programme. For these staff members, the personal investment is limited to 35% of the basic salary. The LTI programme was continued in fiscal 2011, and the Management Board and the first-level managerial staff were again given the opportunity to take part. As with the 2010 LTI programme, NAV growth, ISCR and TSR were used as performance indicators; however, their weighting was modified and the target values were increased.

With such cash-settled share-based payment, the accrued debt is recognised as a provision in the amount of the fair value. Until this debt has been settled, the fair value will be newly determined on each reporting date and on the date of settlement. All changes will be recognised in the operating income in each fiscal year.

g) Liabilities

31.12.2011 Maturity Maturity Maturity Total
€ 1,000 up to 1 year 1-5 years more than 5 years
Bonds 0 485,000 0 485,000
Liabilities to banks 35,510 52,581 48,790 136,881
Trade creditors 430 177 0 607
Payables to affiliated companies 126,293 6,040 4,975 137,308
Other liabilities 6,994 0 0 6,994
Total 169,227 543,798 53,765 766,790
31.12.2010 Maturity Maturity Maturity Total
€ 1,000 up to 1 year 1-5 years more than 5 years
Bonds 0 285,000 200,000 485,000
Liabilities to banks 33,699 51,900 58,900 144,499
Trade creditors 228 69 0 297
Payables to affiliated companies 112,627 6,040 6,702 125,369
Other liabilities 8,454 0 0 8,454
Total 155,008 343,009 265,602 763,619

The Bonds item comprises the following liabilities:

Nominal value Nominal interest
rate
€ 1,000
Bond 2006-2016 200,000 5,125%
Bond 2009-2014 150,000 6,125%
Convertible bond 2009-2014 135,000 4,125%
485,000

The maturity of the convertible bond was assigned on the basis of the end of its term.

The Liabilities to banks item mainly comprises investment loans with a filed claim to entry in the land register to the value of € 136,881K (31.12.2010: € 144,499K).

The Trade creditors item for the most part comprises liabilities for construction services and liability guarantees as well as general administrative costs.

The liabilities shown under the Payables to affiliated companies item mainly relate to group-internal cash advances.

The Other liabilities are essentially made up of accrued interest for bonds and convertible bonds (€ 5,503 K) which only become cash-effective in the spring or autumn of 2012, open purchase prices for investments in affiliated companies (€ 684K) and Tax Office netting from the advance VAT return for November and December 2011.

h) Deferred income

€ 1,000 31.12.2011 31.12.2010
Comprised rent prepayments received for various properties 846 891
Investment grant from the municipality of Vienna 300 318
1,146 1,209

i) Contingent liabilities

Maximum Used as at Used as at
amount as at reporting reporting
date date
31.12.2011 31.12.2011 31.12.2010
Tsd. € 1,000 € 1,000
Liability for a loan granted to CA Immo Frankfurt Tower 185 Projekt GmbH & Co
KG, Frankfurt 25,000 25,000 19,065
Guarantee for loans granted to CA Immo BIP Liegenschaftsverwaltung GmbH, BIL-S
Superädifikatsverwaltungs GmbH, CA Immo Galleria Liegenschaftsverwaltung
GmbH, Betriebsobjekte Verwertung Gesellschaft mbH & Co. Leasing OG and
CA Immo Deutschland GmbH 192,479 97,792 122,460
Guarantee for CA Immo CEE Beteiligungs GmbH, Vienna, for the acquisition of
Europolis AG granted to the sellers 136,884 136,884 0
Irrevocable guarantee for a loan granted to Vaci 76 Kft., Budapest 45,600 35,445 36,000
Guarantee for loans granted to CA Immo Frankfurt Tower 185 Projekt GmbH & Co
KG, Frankfurt 34,000 33,333 19,065
Irrevocable guarantee for a loan granted to S.C. BBP Leasing S.R.L., Bucharest 33,150 16,156 18,310
Irrevocable guarantee for a loan granted to Kilb Kft, Budapest 21,000 13,579 14,345
Irrevocable guarantee for a loan granted to CA Immo Rennweg 16 GmbH, Vienna 10,900 6,800 8,900
Irrevocable guarantee for a loan granted to Doratus Sp.z.o.o., Warsaw 8,500 7,157 7,549
Irrevocable guarantee for a loan granted to Canada Square Kft., Budapest 8,200 6,172 6,319
Irrevocable guarantee for a loan granted to CA Immo Galleria
Liegenschaftsverwaltung GmbH, Vienna 0 0 4,016
Irrevocable guarantee for a loan granted to Starohorska Development s.r.o.,
Bratislava 0 0 1,905
Irrevocable guarantee for a loan granted to Kapas Kft., Budapest 0 0 888
Irrevocable guarantee for a loan granted to Officecenter Mladost EOOD, Sofia 0 0 444
Irrevocable guarantee for a loan granted to Opera Center Two S.R.L., Bucharest 0 USD 0 330
378,318 259,596

CA Immobilien Anlagen Aktiengesellschaft and CA Immo CEE Beteiligungs GmbH, Vienna, acquired the shares in Europolis AG, Vienna, on 1.1.2011. CA Immobilien Anlagen Aktiengesellschaft is liable towards the seller for the purchase price of € 136 m, which was still outstanding on 31.12.2011. The outstanding purchase price is deferred until 31.12.2015.

Furthermore, the stakes of CA Immobilien Anlagen Aktiengesellschaft in the following companies are pledged in favour of the lenders financing the subsidiaries:

Betriebsobjekte Verwertung Gesellschaft m.b.H. & Co. Leasing OG, Vienna CA Immo-RI-Resi.Prop.Holding GmbH, vienna CA Immo BIP Liegenschaftsverwaltung GmbH, Vienna CA Immo International Holding GmbH, Vienna Canada Square Kft., Budapest Kilb Kft., Budapest Vaci 76Kft., Budapest BBP Leasing S.R.L. , Bucharest 2P s.r.o., Pilsen FCL Property a.s., Prague Office Center Mladost II EOOD, Sofia

Furthermore, the following letters of comfort were issued for subsidiaries to financial institutions financing them:

BIL S Superädifikationsverwaltungs GmbH, Vienna Betriebsobjekte Verwertung Gesellschaft m.b.H. & Co. Leasing OHG, Vienna CA Immobilien Anlagen d.o.o., Laibach 2P s.r.o., Pilsen FCL Property a.s., Prague

The partner from a Russian project has filed an arbitration action in the amount of € 48,097K plus interest (announced as at 31.12.2012). However, the chance of success is assumed to be low. Appropriate provisions were set up in the balance sheet for the expected payment outflow.

j) Liabilities from utilisation of tangible assets

The lease-related liability from utilisation of tangible assets not reported in the balance sheet is € 746 K for the subsequent fiscal year and € 3,723K for the subsequent five fiscal years.

Of this € 738K is attributable to affiliated companies for the subsequent fiscal year and € 3,692K for the subsequent five fiscal years.

€ 1,000 Market value Book value Not considered thereof
fixed interest interest Derivatives Derivatives Derivatives charged
rate as at derivatives to
affiliated
companies
Start End Nominal value 31.12.2011 reference rate 31.12.2011 31.12.2011 31.12.2011 31.12.2011
12/2007 12/2012 58,438 4.25% 3M-EURIBOR – 1,865 – 1,865 0 0
12/2007 12/2017 116,875 4.41% 3M-EURIBOR – 17,383 – 5,828 – 11,555 – 469
12/2007 12/2017 65,000 4.82% 3M-EURIBOR – 11,648 – 11,648 0 0
12/2007 12/2022 58,438 4.55% 3M-EURIBOR – 12,076 – 5 – 12,071 – 10,774
01/2008 12/2017 42,525 4.41% 3M-EURIBOR – 6,288 – 6,288 0 0
01/2008 12/2022 59,063 4.55% 3M-EURIBOR – 12,178 – 12,178 0 0
12/2008 12/2017 75,200 4.41% 3M-EURIBOR – 11,167 0 – 11,167 – 11,167
475,539 – 72,605 – 37,812 – 34,793 – 22,410

k) Details of derivative financial instruments

€ 1,000
Start
End Nominal value fixed interest
rate as at
31.12.2010
interest
reference rate
Market value
Derivatives
31.12.2010
Derivatives
31.12.2010
Book value Not considered
Derivatives
31.12.2010
thereof
charged
derivatives to
affiliated
companies
31.12.2010
09/2004 12/2011 14,741 2.99% 3M-EURIBOR – 289 – 289 0 0
09/2004 12/2011 14,741 3.87% 3M-EURIBOR – 408 – 408 0 0
06/2005 12/2011 7,371 2.90% 3M-EURIBOR – 132 – 132 0 0
12/2007 12/2012 59,688 4.25% 3M-EURIBOR – 3,369 – 3,369 0 0
12/2007 12/2017 119,375 4.41% 3M-EURIBOR – 12,867 – 12,867 0 – 347
12/2007 12/2017 65,000 4.82% 3M-EURIBOR – 9,044 – 9,044 0 0
12/2007 12/2022 59,688 4.55% 3M-EURIBOR – 7,383 – 7,383 0 – 6,587
12/2008 12/2017 76,800 4.41% 3M-EURIBOR – 8,257 – 8,257 0 – 8,257
01/2008 12/2017 43,200 4.41% 3M-EURIBOR – 4,629 – 4,629 0 0
01/2008 12/2022 60,000 4.55% 3M-EURIBOR – 7,332 – 7,332 0 0
10/2009 12/2015 43,200 2.73% 3M-EURIBOR 951 0 951 0
10/2009 12/2020 60,000 3.29% 3M-EURIBOR 1,224 0 1,224 0
12/2010 12/2013 65,000 1.53% 3M-EURIBOR – 302 – 302 0 0
688,804 – 51,837 – 54,012 2,175 – 15,191

The fair value corresponds to the amount that CA Immobilien Anlagen Aktiengesellschaft would receive or pay upon liquidation of the business on the balance sheet date. These values were determined by the financial institution with which the transactions were concluded. The cited figures are present values. Future income streams from variable payments and discount rates are determined on the basis of generally recognised financial models. Interbank mid-rates are used for valuation. Specific bid/offer spreads and other liquidation costs are not included in the valuation.

The negative market values of those derivatives that were not recognised in the balance sheet amount to € 34,793K (1.1.2011: € 24,935K). Furthermore, receivables from affiliated companies to the value of € 22,410K (1.1.2011: € 15,191K) were not recognised due to a hedging relationship.

l) Hedging relationship

The fair value of the interest rate swaps designated as hedging instruments amounts to € – 34,982K on the balance sheet date (1.1.2011: € – 25,061K); € 189K of this amount (1.1.2011: € 126K) were recognised as a provision for being an ineffective part. The fair value of the receivables from affiliated companies designated as underlying transactions amounts to € 22,410K (1.1.2011: € 15,191K).

The hedging periods differ depending on the interest swap and relate to the periods from 12/2007 to 12/2022.

The losses from derivatives not recognised in the balance sheet that form a hedging relationship with future payment flows amount to € 34,793K in the closed fiscal year (1.1.2011: € 24,935K). The profits from receivables from affiliated companies not recognised in the balance sheet that form a hedging relationship with future payment flows amount to € 22,410K in the closed fiscal year (1.1.2011: € 15,191 K).

VII. Explanatory notes on the income statement

Gross revenues

The gross revenues relate in full to real estate located in the domestic market and are made up as follows:

€ 1,000 2011 2010
Rental income for real estate 16,404 19,323
Operating costs passed on to tenants 4,594 4,610
20,998 23,933

Other operating income

The other income item of the other operating income of € 4,644K (2010: € 4,729K) results from management fees paid to subsidiaries in the amount of € 4,131 K (2010: € 2,972K, cost allocations and insurance revenues.

Staff expense

This item includes wages, salaries, statutory social welfare contributions and expenses for severance payments and pensions totalling € 8,577K (2010: € 7,854K) for the 60 staff (2010: 60) employed by the company on average.

The Expenses for severance payments as well as payments dependent on remuneration and compulsory contributions are made up as follows:

€ 1,000 2011 2010
Allocation to provision for severance payments to directors and executive
employees 81 118
Allocation to provision for severance payments to other employees 4 5
Pension fund contributions for directors and executive employees 44 54
Pension fund contributions for other employees 46 46
175 223

The Expenses in connection with pensions are made up as follows:

€ 1,000 2011 2010
Pension fund contributions for directors and executive employees 123 123
Pension fund contributions for other employees 37 30
160 153

Depreciation

€ 1,000 2011 2010
Depreciation of intangible fixed assets 244 249
Scheduled depreciation of buildings 7,134 7,474
Unscheduled depreciation of real estate 0 10,052
Depreciation of other assets, office furniture and equipment 468 437
Low-value assets 0 11
7,846 18,223

Other operating expenses

Where they do not come under taxes on income the taxes in the amount of € 344K (2010: € 588K) mainly comprise the non-deductible input VAT of the current year and real estate charges passed on to tenants in the amount of € 330K (2010: € 331K).

The Other expenses item of the other operating expenses is made up as follows:

€ 1,000 2011 2010
Other expenses directly related to properties
Operating costs passed on to tenants 4,247 4,262
Own operating costs (vacancy costs) 1,815 1,393
Maintenance costs 1,659 2,500
Administration and agency fees 227 436
Other 194 129
Subtotal 8,142 8,720
General administrative costs
Legal and consulting fees 2,307 2,650
Advertising and representation expenses 862 904
Office rent including operating costs 820 732
Claims and reserves for bad debts of other receivables 348 4,372
Current expenses of bonds and convertible bond 297 281
Other fees and bank charges 128 147
Administrative and management costs 35 522
Other 1,980 1,420
Subtotal 6,777 11,028
Total other operating expenses 14,919 19,748

Income from interest

This item comprises dividends paid from affiliated companies from Austria in the amount of € 102,340K (2010: € 120K) and from Eastern Europe or intermediate holding companies for investments in Eastern Europe in the amount of € 61,187K (2010: € 1,850K).

Income from loans from financial investments

This item comprises interest income from loans to affiliated companies, from loans to associated companies and from other loans.

Other interest and similar income

The interest income originates from fixed term deposits, investments in securities and cash at bank as well as from loans and swap interest transfers to affiliated companies. In relation to the change in the accounting method used for derivative financial instruments qualified as parts of hedging relationships, provisions for anticipated losses to the total value of € 24,935K (2010: € 0K) were reversed on 1.1.2011.

Income from the sale of and addition to financial assets and short-term securities

Due to reversals of impairment losses appreciation of investment in affiliated companies to the value of € 14,219K (2010: € 34,011K) and in the previous year appreciation of short-term securities from current assets to the value of € 1,304K were carried out. In addition income from the sale of short-term securities from current assets to the value of € 815K (2010: € 1,722K) was generated.

Expenses for financial assets

€ 1,000 2011 2010
Depreciation of financial assets 58,267 54,769
Provision for contributions to group companies 2,522 824
Loss from disposal of investments in affiliated companies 0 41
60,789 55,634
of which due to dividends 21,695 603

Interest and similar expense

€ 1,000 2011 2010
Interest costs for bonds 25,006 25,006
Expenses for derivative transactions 26,090 24,115
Interest for loans taken up and bank liabilities for the financing of real estate assets 3,879 3,100
Interest costs in respect of affiliated companies 19,021 4,061
Other 8 15
74,004 56,297

In relation to the change in the accounting method used for derivative financial instruments qualified as parts of hedging relationships, swap receivables from affiliated companies to the total value of € 15,191K (2010: € 0 K) were adjusted as at 1.1.2011.

Taxes on income

This item essentially comprises the income from tax compensation of group members in the amount of € 5,409K (2010: € 5,734K).

As at 31.12.2011 CA Immobilien Anlagen Aktiengesellschaft has losses carried forward in the amount of € 283,810K (31.12.2010: € 254,260K) for which, pursuant to the provisions of the Austrian Commercial Code (UGB), no deferred taxes were shown in the financial statements. Furthermore, no deferred tax assets were recognised for depreciation on financial assets in the amount of € 30,569K (31.12.2010: € 32,208K) that have not yet been claimed for tax purposes.

OTHER INFORMATION

VIII. Affiliated companies

CA Immobilien Anlagen Aktiengesellschaft, Vienna, is the ultimate parent company of CA Immobilien Anlagen AG Group. The Group Consolidated Financial Statements are drawn up pursuant to International Financial Reporting Standards (IFRS) and the supplementary provisions of section 245a of the Austrian Commercial Code (UGB) and filed at the Vienna Commercial Court.

IX. Fiscal corporate group

In fiscal 2005 a group and tax compensation agreement was concluded for the formation of a corporate group within the meaning of section 9 of the Austrian Corporation Tax Act (KStG) effective from fiscal 2005, and this was expanded in the subsequent years to include additional group members. The group is headed by CA Immobilien Anlagen Aktiengesellschaft, Vienna.

To the extent negative income allocated to a group member has not yet been passed to account when the group is dissolved or the group member leaves the group, CA Immobilien Anlagen Aktiengesellschaft will be obliged as the head of the group to make a compensation payment to the amount of the cash value of the (fictitious) future tax relief which the group member would probably have obtained from the utilisation of the allocated negative income not yet passed to account if it had not joined the group. The amount of such compensation payment will be determined by obtaining an expert opinion from a jointly appointed auditor or auditing company at the time when the group member leaves the group or the group is dissolved.

In 2011 the following companies are group members:

  • BIL-S Superädifikatsverwaltungs GmbH, Vienna
  • CA Immo Beratungs- und Beteiligungs GmbH, Vienna
  • CA Immo BIP Liegenschaftsverwaltung GmbH, Vienna
  • CA Immo CEE Beteiligungs GmbH, Vienna
  • CA Immo Galleria Liegenschaftsverwaltung GmbH, Vienna
  • CA Immo Germany Holding GmbH, Vienna
  • CA Immo International Beteiligungsverwaltungs GmbH, Vienna
  • CA Immo International Holding GmbH, Vienna
  • CA Immo Investment Management GmbH, Vienna
  • CA Immo LP GmbH, Vienna
  • CA Immo ProjektentwicklungsgmbH, Vienna
  • CA Immo Rennweg 16 GmbH, Vienna
  • CA Immo RI Residential Property Holding GmbH, Vienna
  • Europolis AG, Vienna
  • Europolis CE Alpha Holding GmbH, Vienna
  • Europolis CE Amber Holding GmbH, Vienna
  • Europolis CE Gamma Holding GmbH, Vienna
  • Europolis CE Istros Holding GmbH, Vienna
  • Europolis CE Kappa Holding GmbH, Vienna
  • Europolis CE Lambda Holding GmbH, Vienna
  • Europolis CE Ledum Holding GmbH, Vienna
  • Europolis CE My Holding GmbH, Vienna
  • Europolis CE Omikron Holding GmbH, Vienna
  • Europolis CE Pi Holding GmbH, Vienna
  • Europolis CE Rho Holding GmbH, Vienna
  • Europolis CE Sigma Holding GmbH, Vienna
  • Europolis CE Tau Holding GmbH, Vienna
  • Europolis CE Tilia Holding GmbH, Vienna
  • Europolis Pheme Holding GmbH, Vienna
  • Europolis Real Estate Asset Management GmbH, Vienna
  • Europolis Sarisu Holding GmbH, Vienna
  • omniCon Baumanagement GmbH, Vienna
  • Parkring 10 Immobilien GmbH, Vienna
  • SQUARE S Holding GmbH, Vienna

X. Executive bodies and employees

Supervisory Board

Dr. Wolfgang Ruttenstorfer, Chairman Mag. Helmut Bernkopf, Deputy Chairman O.Univ.-Prof.DDr.Waldemar Jud Barbara A. Knoflach Mag. Reinhard Madlencnik Mag. Franz Zwickl Detlef Bierbaum (until 10.5.2011) Mag. DDr. Regina Prehofer (until 10.5.2011)

As at 31.12.2011 all members of the Supervisory Board had been elected by the General Meeting.

Management Board

Dr. Bruno Ettenauer Mag. Wolfhard Fromwald Bernhard H. Hansen

In fiscal 2011 remuneration to the total value of € 1,186 K (2010: € 667K) was paid to the members of the Management Board. In 2011 the remuneration of the Management Board included variable salary components to the value of € 584K (2010: € 0K) for the previous year. Furthermore, provisions for variable remuneration/bonuses incl. incidental salary costs in the amount of € 622K (2010: € 609K) and for an LTI (long term incentive) programme in the amount of € 281 K (2010: € 105K) were recognised as expenses in the fiscal year, which will only become cash-effective in the following years. No loans or advances were paid to Management Board members.

Subject to the adoption of a resolution by the Annual General Meeting the total remuneration of the Supervisory Board members for fiscal 2011 (payments will be made in 2012) was € 115 K (2010: € 113K) for CA Immobilien Anlagen Aktiengesellschaft. No additional fees were paid to Supervisory Board members.

The average number of staff employed by the company during the fiscal year was 60 (2010: 60).

XI. Auditor's remuneration

There is no indication of the auditor's remuneration for the fiscal year pursuant to section 237, no. 14 of the Austrian Commercial Code (UGB), as this information is contained in the Group Consolidated Financial Statements of CA Immobilien Anlagen Aktiengesellschaft. Proposal for the appropriation of net earnings

It is proposed to use part of the net retained earnings of € 98,747,939.27 to pay a dividend of € 0.38 per share, i.e. a total of € 33,385,302.80, to the shareholders. The rest of the net retained earnings in the amount of € 65,362,636.47 is intended to be carried forward to new account.

Vienna, 6 March 2012

Bruno Ettenauer (Chairman)

The Management Board

Wolfhard Fromwald Bernhard H. Hansen

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Inv
s in
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estm
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196
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506
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0
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533
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5.
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590

INFORMATION ABOUT GROUP COMPANIES

Direct investments1)

Co
mp
any
iste
red
Re
g
off
ice
mi
nal
ita
l
No
ca
p
Sh
of
ita
l
are
cap
in
%
fit/
los
s fo
r fi
l
Pro
sca
201
1
Sh
hol
der
s' e
are
qu
of 3
2.2
011
1.1
as
ity
fit/
los
s fo
r fi
Pro
sca
201
0
l
Sh
hol
der
s' e
are
qu
of 3
2.2
010
1.1
as
d.
CA
Im
mo
o.o
Bel
d
gra
390
,50
0
EU
R
100 – 3
,13
5
TR
SD
229 TR
SD
– 2
,38
5
TR
SD
3,3
64
TR
SD
CA
Ho
ldi
Szo
lg
álta
tó K
ft
ng
Bu
dap
est
13
,00
0,0
00
HU
F
100 17,
023
TH
UF
854
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3
TH
UF
12
2,3
00
TH
UF
2,9
79,
449
HU
T
F
ada
ft.
Can
Sq
e K
uar
dap
Bu
est
12,
500
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0
HU
F
100 – 3
77,
999
TH
UF
– 3
34,
281
TH
UF
30,
188
TH
UF
161
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3
TH
UF
Kf
Cas
a P
erty
t.
rop
dap
Bu
est
51,
310
,00
0
HU
F
100 – 1
7,0
48
TH
UF
63
,76
7
TH
UF
72
,74
4
TH
UF
18
6,5
15
TH
UF
Kil
b K
ft.
Bu
dap
est
30,
000
,00
0
HU
F
100 – 6
51,
934
TH
UF
– 1
8,5
06
TH
UF
341
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7
TH
UF
761
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4
TH
UF
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ft.
R 7
0 In
t B
st K
ves
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dap
Bu
est
5,2
50,
000
HU
F
100 – 4
71,
204
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UF
55
2,1
26
TH
UF
21
0,6
93
TH
UF
1,2
87,
580
T
HU
F
Sko
da
ft.
Bu
Bu
sin
Ce
r II
. K
nte
gs
ess
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Bu
est
327
,00
0,0
00
HU
F
100 – 2
49,
949
TH
UF
417
,26
1
TH
UF
– 7
2,2
94
TH
UF
667
,21
0
TH
UF
ft.
Vác
i 76
K
dap
Bu
est
3,1
00,
000
HU
F
100 – 1
,43
1,6
50
TH
UF
3,0
28,
085
TH
UF
– 7
99,
302
TH
UF
4,4
59,
735
T
HU
F
CA
bil
ien
S.R
Im
.L.
mo
kar
Bu
est
947
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0
RO
N
100 – 2
7
ON
TR
415 ON
TR
133 ON
TR
443 RO
T
N
CA
Im
AG
mo
nkf
Fra
urt
50
,00
0
EU
R
100 2,0
52
TE
UR
29
7,0
22
TE
UR
– 9
,11
2
TE
UR
294
,96
9
TE
UR
sch
eal
bH
DR
G D
e R
ität
Gm
eut
en
nkf
Fra
urt
500
,00
0
EU
R
)
492
– 7
2
TE
UR
428 TE
UR
abl
ish
ed
est
201
1
CA
Im
Ho
ldi
B.V
mo
ng
Ho
ofd
dor
p
51
,20
0,0
00
EU
R
100 4,2
35
TE
UR
59
,04
6
TE
UR
– 1
3,8
82
TE
UR
104
,62
6
TE
UR
bil
lag
d.o
CA
Im
ien
An
mo
en
.o.
blj
Lju
ana
50,
075
EU
R
100 – 2
,25
1
TE
UR
– 1
0,6
50
TE
UR
– 4
,52
9
TE
UR
– 1
1,1
33
TE
UR
CA
IM
MO
NE
W
EU
RO
PE
PR
OP
ER
TY
FU
ND
S.
C.A
. SI
CA
R
bou
Lux
em
rg
153
,56
9,0
00
EU
R
70 1,0
44
TE
UR
67
,76
7
TE
UR
– 2
8,4
35
TE
UR
52
,82
4
TE
UR
CA
Im
S.
á.r.
l.
mo
Lux
bou
em
rg
33,
000
EU
R
100 – 1
4
TE
UR
– 1
4
TE
UR
– 5 TE
UR
0 TE
UR
2P
s.r.
o.
Pil
sen
24
0,0
00
CZ
K
100 – 6
0,9
34
TC
ZK
30
,56
5
TC
ZK
– 8
6,6
23
TC
ZK
85
,09
7
TC
ZK
Eu
Ai
rt C
ort
ent
rop
rpo
er a
.s.
Pra
gue
14,
100
,00
0
CZ
K
100 – 1
07,
693
TC
ZK
– 3
1,7
93
TC
ZK
– 1
20,
830
TC
ZK
47,
902
TC
ZK
FC
L P
erty
rop
a.s
Pra
gue
2,0
00,
000
CZ
K
100 8,8
87
TC
ZK
19
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9
TC
ZK
– 2
00
TC
ZK
7,6
83
TC
ZK
Off
ice
Ce
lad
OO
nte
r M
ost
2 E
D
Sof
ia
5,0
00
BG
N
100 117 GN
TB
937 GN
TB
916 GN
TB
678 BG
T
N
Off
lad
ice
Ce
r M
EO
OD
nte
ost
Sof
ia
5,0
00
BG
N
100 – 3
01
TB
GN
6,1
93
TB
GN
586 TB
GN
6,5
74
TB
GN
hle
Ma
r P
Se
rvi
Sp
erty
rop
ces
.z.o
.o.
Wa
rsa
w
50,
000
PL
N
100 – 1
29
TP
LN
– 7
8
TP
LN
126 TP
LN
635 TP
LN
PB
P I
T-S
ice
s S
erv
p.z
.o.o
Wa
rsa
w
50
,00
0
PL
N
50 – 9 TP
LN
10 TP
LN
– 3
0
TP
LN
20 TP
LN
rieb
sob
kte
sel
lsc
haf
.b.H
Bet
je
Ve
Ge
Co
. Le
asi
OG
ert
t m
. &
rw
un
g
ng
Vie
nn
a
4,1
35,
427
EU
R
100 1,2
35
TE
UR
5,3
70
TE
UR
– 3
18
TE
UR
4,3
47
TE
UR
ilig
bH
CA
Im
CE
E B
Gm
ete
mo
un
gs
Vie
nn
a
35
,00
0
EU
R
100 15,
130
TE
UR
15
1,1
65
TE
UR
3,0
72
TE
UR
13
9,1
07
TE
UR
CA
Im
In
ion
al B
ilig
altu
Gm
bH
ter
nat
ete
mo
un
gsv
erw
ngs
Vie
nn
a
35,
000
EU
R
100 767 TE
UR
20,
439
TE
UR
625 TE
UR
20,
333
TE
UR
CA
ion
al H
old
ing
Gm
bH
Im
In
ter
nat
mo
Vie
nn
a
35
,00
0
EU
R
100 70,
539
TE
UR
1,3
32,
718
TE
UR
25
,10
4
TE
UR
1,3
40,
574
TE
UR
bH
CA
Im
In
M
Gm
tm
ent
ent
mo
ves
ana
gem
Vie
nn
a
100
,00
0
EU
R
100 279 TE
UR
388 TE
UR
407 TE
UR
660 TE
UR
kte
ick
lun
mb
CA
Im
Pr
oje
H
ntw
mo
gsg
Vie
nn
a
72
,50
0
EU
R
100 – 1
,34
6
TE
UR
443 TE
UR
– 1
,88
7
TE
UR
– 1
,01
1
TE
UR
CA
Gm
bH
Im
Re
16
mo
nn
we
g
Vie
nn
a
35,
000
EU
R
100 487 TE
UR
1,8
16
TE
UR
– 2
,29
9
TE
UR
1,3
29
TE
UR
bil
lag
eili
bH
CA
Im
ien
An
Bet
Gm
Co
Fin
ier
OG
&
mo
en
gun
gs
anz
un
gs
Vie
nn
a
2,5
37,
600
EU
R
100 – 9
5
TE
UR
2,2
01
TE
UR
– 3
2
TE
UR
2,2
95
TE
UR
ekt
bH
CA
II P
roj
Gm
ent
ma
nag
em
Vie
nn
a
35,
000
EU
R
100 – 1
,57
9
TE
UR
209 TE
UR
– 8
,29
7
TE
UR
1,7
88
TE
UR
CE
E H
l D
lop
Gm
bH
ote
nt
eve
me
Vie
nn
a
70
,00
0
EU
R
50 – 3 TE
UR
68 TE
UR
– 1 TE
UR
94 TE
UR
l M
d B
ilig
bH
CE
E H
Gm
ote
ent
ete
ana
gem
un
un
gs
Vie
nn
a
35,
000
EU
R
50 – 3 TE
UR
32 TE
UR
– 1
0
TE
UR
46 TE
UR
bH
niC
Bau
Gm
ent
om
on
ma
nag
em
Vie
nn
a
100
,00
0
EU
R
100 – 2 TE
UR
88 TE
UR
– 1
6
TE
UR
91 TE
UR

1) information on participations abroad (excl. Germany) is based exclusively on IFRS financial statements, whereas information on participations in Austria and Germany is according to local accounting standards

2) common control

CA IMMOBILIEN ANLAGEN AKTIENGESELLSCHAFT, WIEN ATTACHMENT 2/2

Indirect investments1)

Com
pan
y
Re
iste
red
g
mi
nal
No
ita
l
ca
p
Sh
of
ita
l
are
cap
fit/
los
s fo
r fi
l
Pro
sca
Sh
hol
der
s' e
are
qu
ity
fit/
los
s fo
r fi
l
Pro
sca
Sh
hol
der
ity
s' e
are
qu
off
ice
%
in
201
1
of 3
1.1
as
2.2
011
201
0
of 3
1.1
as
2.2
010
d.o
CA
Im
Sa
Cit
mo
va
y
.o.
Bel
d
gra
33,
620
,00
0
EU
R
100 – 2
42,
374
TR
SD
– 1
21,
441
TR
SD
– 8
92,
387
TR
SD
– 8
69,
267
TR
SD
Ph
öni
x L
isti
d.o
og
cs
.o.
Bel
d
gra
24
1,6
05,
375
RS
D
100 – 3
,85
5
TR
SD
23
6,3
84
TR
SD
uir
ed
acq
201
1
d.
TM
Im
mo
o.o
Bel
d
gra
13,
750
,00
0
EU
R
100 110
,19
2
SD
TR
672
,94
0
SD
TR
– 2
93,
911
SD
TR
– 3
05,
764
SD
TR
Flo
ellp
de
kte
ick
lun
bH
Pro
je
Gm
Co
. K
G
ttw
ntw
&
rom
ena
gs
lin
Ber
100
,00
0
EU
R
50 – 4
4
TE
UR
356 TE
UR
abl
ish
ed
est
201
1
Flo
ellp
de
ltu
bH
Ver
Gm
ttw
rom
ena
wa
ngs
lin
Ber
25,
000
EU
R
50 0 TE
UR
25 TE
UR
ed
uir
acq
201
1
BA
Bu
sin
Ce
nte
ess
r a
.s.
Bra
tisl
ava
7,5
03,
200
EU
R
100 – 2
9
TE
UR
4,3
82
TE
UR
– 2
,62
9
TE
UR
– 5
,41
5
TE
UR
oli
Eu
s D
Log
isti
61
rop
cs
s.r.
o.
tisl
Bra
ava
1,3
25,
000
EU
R
100 – 3
2
TE
UR
4,7
44
TE
UR
ed
uir
acq
201
1
oli
arb
Eu
s H
Ci
ty s
rop
our
.r.o
tisl
Bra
ava
23
,62
9,2
11
EU
R
65 – 3
7
TE
UR
8,3
86
TE
UR
ed
uir
acq
201
1
al E
K.f
CA
Im
Re
te M
Hu
sta
ent
.t.
mo
ana
gem
nga
ry
dap
Bu
est
3,1
00,
000
HU
F
100 – 2
1,6
44
TH
UF
– 1
0,8
31
TH
UF
ed
uir
acq
201
1
CO
tlan
ber
uh
ázá
si K
ft
M
PA
RK
In
ga
dap
Bu
est
3,0
00,
000
HU
F
65 – 9
47,
997
TH
UF
484
,68
6
TH
UF
uir
ed
acq
201
1
tlan
ber
uh
ft
EU
RO
PO
LIS
AB
P I
ázá
si K
nga
dap
Bu
est
21,
410
,00
0
HU
F
51 – 7
1,0
98
TH
UF
8,2
68,
506
TH
UF
ed
uir
acq
201
1
tlan
ber
uh
ft
EU
RO
PO
LIS
Ci
Gat
e In
ázá
si K
ty
ga
dap
Bu
est
13
,00
0,0
00
HU
F
65 21,
530
TH
UF
3,7
58,
468
TH
UF
ed
uir
acq
201
1
oli
fop
ark
tlan
ltet
ő K
ft
Eu
s In
In
üze
rop
ga
me
dap
Bu
est
5,2
40,
000
HU
F
51 7,8
03
– 7
TH
UF
3,8
52,
187
TH
UF
uir
ed
acq
201
1
atla
nbe
ruh
ázá
ft
EU
RO
PO
LIS
IP
W
Ing
si K
dap
Bu
est
50
,20
0,0
00
HU
F
65 4,9
55
TH
UF
1,0
05,
884
TH
UF
ed
uir
acq
201
1
tlan
ber
uh
ft
EU
RO
PO
LIS
M
1 In
ázá
si K
ga
dap
Bu
est
55,
020
,00
0
HU
F
51 – 3
45,
592
TH
UF
4,0
10,
367
TH
UF
ed
uir
acq
201
1
Eu
oli
s P
ark
Ai
rt K
ft.
rop
rpo
Bu
dap
est
19
,90
0,0
00
HU
F
100 – 5
0,7
36
TH
UF
42
6,8
05
TH
UF
uir
ed
acq
201
1
oli
árn
ok
atla
nbe
ruh
ázá
si K
ft
Eu
s T
Ing
rop
dap
Bu
est
00,
000
5,4
HU
F
65 – 3
04,
010
TH
UF
407
,79
0
TH
UF
uir
ed
acq
201
1
ft.
Ka
Ce
r K
nte
pas
dap
Bu
est
77
2,5
60,
000
HU
F
100 – 4
84,
041
TH
UF
824
,73
2
TH
UF
144
,25
7
TH
UF
1,6
01,
862
TH
UF
nál
tlan
-fej
les
Kf
Ter
mi

zép
-Eu
róp
ai I
ztő
t
nga
dap
Bu
est
3,4
00,
000
HU
F
75 – 4
84,
052
TH
UF
65,
595
TH
UF
ed
uir
acq
201
1
CA
Im
Re
al E
te M
Ro
nia
S.R
.L.
sta
ent
mo
ana
gem
ma
Bu
kar
est
98
5,0
00
RO
N
10
0
147 TR
ON
2,7
72
TR
ON
uir
ed
acq
201
1
EU
RO
PO
LIS
BV
DE
VE
LO
PM
EN
T S
.R.L
kar
Bu
est
43,
853
,90
0
RO
N
65 – 1
,60
5
TR
ON
35,
864
TR
ON
ed
uir
acq
201
1
EU
RO
PO
LIS
OR
HID
EE
A B
.C.
S.R
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kar
Bu
est
91
,38
9,9
60
RO
N
65 – 1
0,4
52
TR
ON
36
,06
6
TR
ON
ed
uir
acq
201
1
EU
RO
PO
LIS
PA
RK
BU
CH
AR
ES
T A
LPH
A S
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Bu
kar
est
54,
064
,79
0
RO
N
65 – 1
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CA IMMOBILIEN ANLAGEN AKTIENGESELLSCHAFT, VIENNA ATTACHMENT 2/5

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1) information on participations abroad (excl. Germany) is based exclusively on IFRS financial statements, whereas information on participations in Austria and Germany is according to local accounting standards

2) common control

Com
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Re
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No
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1

1) information on participations abroad (excl. Germany) is based exclusively on IFRS financial statements, whereas information on participations in Austria and Germany is according to local accounting standards

2) common control

CA IMMOBILIEN ANLAGEN AKTIENGESELLSCHAFT, VIENNA ANNEX 2/8

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201
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201
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201
1

1) information on participations abroad (excl. Germany) is based exclusively on IFRS financial statements, whereas information on participations in Austria and Germany is according to local accounting

standards

Com
pan
y
Re
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red
g
off
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No
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Pro
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201
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201
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201
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1) information on participations abroad (excl. Germany) is based exclusively on IFRS financial statements, whereas information on participations in Austria and Germany is according to local accounting

standards

2) based on IFRS

MANAGEMENT REPORT

MANAGEMENT REPORT OF CA IMMOBILIEN ANLAGEN AKTIENGESELLSCHAFT FOR THE PERIOD 1 JANUARY TO 31 DECEMBER 2011

CA Immobilien Anlagen Aktiengesellschaft ("CA Immo") is the parent company of the CA Immo Group. Its head office is at Mechelgasse 1, 1030 Vienna. The CA Immo Group is an internationally active property group. It has subsidiaries in Bulgaria, Germany, Estonia, Croatia, Luxembourg, the Netherlands, Austria, Poland, Romania, Russia, Serbia, Slovakia, Slowenia, the Czech Republic, Ukraine, Hungary and Cyprus. As of 31 December 2011, the CA Immo Group owned real estate and properties in all of the aforementioned countries except Estonia, Luxembourg, the Netherlands and Cyprus. The company's main activity involves administering and financing the domestic and foreign subsidiaries. It also owns 23 properties in Austria (as of 31 December 2011).

ECONOMIC ENVIRONMENT

THE CYCLICAL TREND

Economic growth is the main factor that drives demand for office space in the real estate sector; similarly, liquidity and interest rates are the key criteria in operational business developments. The continuing debt crisis is therefore impacting on general economic stability and feeding insecurity on markets and amongst investors.

With average GDP growth of 1.6% (compared to 1.7% in 2010), the dynamism witnessed on most EU markets early in the year had tailed off dramatically by the end of 2011. The economies of Europe are continuing to drift apart. Against this background of tension, economic data shows that the core markets of CA Immo performed above the EU average in 2011. Compared to most eurozone nations, economic output on the majority of CA Immo 's core markets is more stable, with higher growth rates and far lower levels of debt. Poland and Germany were at the forefront of economic expansion with impressive GDP growth of 4% and 3% respectively, whilst the Hungarian economy (1.4% GDP growth) was adversely affected by the uncertain political climate.

THE MONEY MARKET AND INTEREST RATE ENVIRONMENT 1

The average inflation rate for 2011 in the eurozone was 2.7%, well above the two percent target level specified by the European Central Bank (ECB). Once again, prices were driven by energy and other commodities. The ECB responded to the rising inflation in the first six months by raising the base rate from 1.0% to 1.5%. During the fourth quarter, the bank then cut back the base rate by 50 base points to its original level of 1.0%.

Money market rates were significantly more volatile, especially in the final quarter of 2011, with major differences between the secured and unsecured markets. At the end of the year, the average monthly interest rate for term deposits in interbank transactions (3 month Euribor), which is used as the basis for variable financing, stood at 1.35%; since then it has fallen closer to 1.0%. Despite the low interest level, total financing costs are the same or higher than in previous years owing to higher bank margins. The main cause of this is restraint in interbank transactions and a greater capital requirement on the part of banks.

CURRENCIES 2

The exchange rate for the euro remained volatile as the sovereign debt crisis in peripheral European nations unfolded. The value of the euro has been falling sharply against the currencies of the 20 main trading partners since the end of August. By the end of the year, the exchange rate against the US dollar had fallen by 1.9% on the previous year's value to US\$ 1.3920 on average. However, given that CA Immo 's lease contracts are all concluded in euros, this did not impact directly on rental revenue.

OUTLOOK

In 2012, economic development in Europe will be governed by the sovereign debt crisis on the continent, a weakening macro-economic environment and diminishing consumer confidence as a result. The economic stability of Europe will depend heavily on the savings and

1 Sources: Eurostat 2012, European Central Bank, Monthly Bulletin January 2012 2

Sources: European Central Bank, Monthly Bulletin January 2012, www.finanzen.net; closing rate on 30.12.2011

reform measures enacted by the debt-ridden member states of Greece, Italy, Spain and Portugal.

As the year progresses, the slowdown in the global economy will mean companies investing less and export ratios falling in most countries – a scenario that could seriously affect the commercial property market as demand for office premises is suppressed. Only core properties let for the long term are likely to benefit from the increasing reluctance of investors to take risks.

Stability in the banking sector will spur economic activity

The lowering of the credit quality threshold for certain asset-backed securities (ABS) confirmed by the ECB in December entails credit default risk; moreover, this will not solve the problem of declining interbank transactions owing to mistrust between banks. Radical reforms on the money and capital markets are thus inevitable.

The tightening of financing conditions in particular is sure hinder economic dynamism, at least temporarily. By the middle of the year, European banks will have to comply with the requirements of the European Banking Authority and raise their core capital stock by a minimum of 9%. The stance taken by individual banks – and the effect this will have on bank lending to the real economy – remain unclear. Guaranteeing the medium-term resilience of banks within the eurozone on the one hand whilst sustaining economic development through lending to the real economy on the other will constitute a balancing act.

The limits of financing with outside capital

Since the availability of loan capital will also be limited in the real estate sector over the years ahead, the financing of development projects and other transactions will be a major challenge. In the medium term, identifying alternative forms of finance and financing partners (such as capital market financing in the form of bonds) will be critical. The extent to which insurance companies and pension funds play a greater role will surely also depend on the future patterns of savings by private households and financial asset acquisition by institutional investors.

REAL ESTATE MARKETS

The core markets of CA Immo held their ground in 2011, producing not only above average economic data but also stable or improving performance indicators on the property investment and rental markets. With steady growth and large, liquid real estate markets, Germany proved a particularly safe haven in 2011, developing more strongly than many other major international markets. Generally speaking, performance on the company's main markets in Eastern Europe was also stable to above average in 2011, although investment and lettings activity slowed somewhat in the second half of the year.

Once again, security and core were central factors in the purchase decisions of investors. As a result, the gap has widened between high quality real estate in capital cities and older properties in B-class locations that fall short of modern technical standards. This trend is expected to continue in 2012.

AUSTRIA 3

The investment market

Around € 1.7 bn was invested in Austrian real estate in 2011, an increase of 7.0% on the transaction volume for 2010. Investors were strongly attracted to high quality office properties (27%) and hotels (24%). In year-on-year comparison, peak yields fell by five base points to stand at 5.20% at the turn of the year. Yields are expected to stagnate in 2012.

The office property market

During 2011, 260,000 sqm of office space was let in Vienna, around 5.4% down on the previous year and the lowest figure since the crisis began in 2008. Market activity in Vienna will continue to be characterised by smallscale new lettings in 2012. Although demand stagnated in 2011, the production of (office) premises rose by 14%. Another 178,000 sqm of office space is expected to be produced in 2012 as various projects are completed (not including general restorations). Moreover, owing to the fact that older properties are required to undergo full redevelopment prior to re-utilisation in order to attain certain rent levels, more and more fully restored properties are coming onto the market – a trend that is sure to intensify. During 2012, CA Immo will also market a resto

3 Sources: CBRE, Vienna Office MarketView Q4 2011; EHL Market Research 2012

ration project comprising some 18,800 sqm of reconditioned office premises at the Lände 3 site. As a result, both competition for tenants and vacancy (especially in previously occupied properties not conforming to the latest standards) will increase this year.

Peak rent levels were hovering around € 23.75/sqm at the end of 2011. Rental rates are expected to rise marginally this year in prime locations; stagnation is likely in other locations owing to excess supply.

GERMANY 4

The investment market

Economic stability, a polycentric structure and large, liquid real estate markets are making Germany a magnet for investors. Some € 23.5 bn was invested in real estate purchases in 2011, up nearly 20% on the previous year's figure. Peak yield values were stable throughout the year in most locations. With real estate in Germany retaining its popularity despite the financial market crisis, the transaction volume for 2012 is likely to be similarly high. Demand also remained strong for high quality properties with good letting levels (core segment), especially in the usage categories of retail properties (46% of the total investment volume) and office premises (30%). At present, we expect this demand to be maintained in 2012, leading to further increases in value in this segment.

With a transaction volume of € 2.96 bn (up 58%), Frankfurt once again led the German investment market in terms of sales; it was followed by Munich (€ 2.88 bn), which experienced a boom as the investment volume exceeded the previous year's value by 70%. The transaction volume in Berlin fell 26% to € 2.34 bn; the reason for this was not a lack of demand from investors, however, but a shortage of suitable supply.

The office property market

As regards the office rental market in Germany, office space totalling 1.75 million square metres was let on the core CA Immo markets of Munich, Berlin and Frankfurt in 2011 (compared to 1.52 million square metres in 2010). Strong demand for high quality premises coupled with falling construction levels will reduce vacancy further in the quality segment during 2012. At the same time, va-

cancy in class B real estate that does not conform to the latest standards will continue to rise.

EASTERN EUROPE 5

The investment market

In 2011, investment activity in Eastern Europe was characterised by a search for secure asset classes (especially in capital cities). Taking account of the acquisition of the Europolis portfolio by CA Immo, the total office transaction volume exceeded € 4 bn (up 60% on the prior year). The markets of Russia (42%), Poland (29%) and the Czech Republic (14%) generated the highest shares of the total volume. By contrast, very little investment activity was reported in the smaller nations of South Eastern Europe in particular owing to worsening economic conditions and the lack of financing.

A strong phase of recovery was followed by a slump in the investment volume in the fourth quarter of 2011; this was mainly due to the limited availably of core properties, for which demand was high, and constraints on financing – issues likely to remain prominent in 2012. With little construction activity on most markets, investors are falling back on investment properties. Moreover, only a few banks are prepared to provide finance in Eastern Europe. Poland and the Czech Republic have emerged as the only relatively liquid markets (unlike Hungary, the Balkan states and the Ukraine, where investment activity is likely to remain at very low levels for some time to come).

Peak yields did not vary greatly in 2011, although there was a slight trend towards compression in the second half of the year. For class A office properties in Poland and the Czech Republic, peak yields were 6.25% and 6.75% respectively. Given the limited supply of high quality prime real estate on these markets, a further fall in yields is expected for this product class.

The office market in Eastern Europe 6

6

Like the investment market, the office rental market also slowed down in the second six months. Compared to the first half of 2011, market absorption in Warsaw, Bucharest and Prague fell by 20-40%. Despite this, overall lettings performance in Warsaw reached a record level. Minimal

4 Sources: BNP Paribas Real Estate 2012; CBRE EMEA Rents and Yields Q4 2011; CBRE MarketView, Office Market Frankfurt/Munich Q4 2011

5 Sources: CBRE Market View, CEE Offices February 2012; CBRE EMEA Rents and Yields Q4 2011

Sources: CBRE Market View, CEE Offices February 2012; CBRE EMEA Rents and Yields Q4 2011

levels of building activity have reduced vacancy and the influx of new tenants has been generally low. There is a clear focus on extending and expanding existing lease contracts on portfolio buildings. For countries with strong links to Western Europe in particular, the development of the demand situation will depend largely on the economic trend in this region. However, the stable performance of the German economy gives rise to hopes of a further boost to the Czech and Slovakian markets especially.

With the exception of Warsaw, vacancy rates on most markets remain above 10% (although the trend is downward). Owing to the limited availability of financing, high levels of pre-letting on new development projects are required, and this should continue to suppress vacancy. Some cities in the SEE region in particular (including Sofia and Belgrade) are still struggling with high (22%) rates of vacancy, and this is turn is forcing down rental rates. By contrast, rent levels are stable or rising modestly on core CA Immo markets such as Warsaw.

Logistics 7

The logistics segment – a sector that traditionally has shorter lease agreement terms, higher volumes of floor space and direct links to the business environment – generally responds more quickly to international trends than the office sector. Despite the volatile climate, development for the logistics area in Eastern Europe was largely stable in the first six months of the year. Poland, the Czech Republic and Russia achieved the strongest growth on the European logistics market in terms of both transaction volumes and lettings performance.

General conditions in the second half of 2011 mirrored those for the office markets: limited supply and minimal construction in the core segment coupled with an increasingly uncertain economic outlook suppressed activity on the investment as well as the lettings markets.

Thanks to the country's strong domestic market and stable economic growth, demand expanded steadily in the logistics segment in Poland. Floor space turnover in the commercial sector increased by over 30% during 2011, driven mainly by the logistics area. The logistics vacancy rate fell marginally to around 9-15% (depending on location), with rent levels stabilising in the range of € 2.8/sqm to € 5.0/sqm. Peak yields were also stable at 7.75%. Rents and yields are not expected to change significantly in 2012.

PROPERTY ASSETS

The CA Immo Group divides its core activity into two business areas: letting investment properties and developing real estate. In both of these business areas, CA Immo specialises in commercial real estate with a clear focus on office properties in Central Europe. The objective is to build up a focused portfolio of high quality and sustainable investment properties within the core markets of Germany, Austria, the Czech Republic, Poland, Hungary, Romania and Slovakia. The company generates additional revenue through the utilisation of developed real estate reserves.

As a result of the integration of Europolis, the property assets of the CA Immo Group in the consolidated statement of financial position for 2011 rose from approximately € 3.6 bn (as at 31 December 2010) to € 5.2 bn as at 31 December 2011. Of this figure, investment properties8 account for € 4.2 bn (82 % of the total portfolio) and property assets under development represent € 0.9 bn (18% of the portfolio as a whole). The proportion of the Eastern and South Eastern European segment expanded from around 20% to over 41% of the company's overall property assets, bringing it onto a par with the German segment.

As at 31 December 2011 CA Immobilien Anlagen AG itself holds 23 properties in Austria with a recognised value of € 260,837 K (including property and buildings, prepayments made and construction in progress) compared to 28 properties with a recognized value € 264,513 K (31 December 2010).

During 2011 CA Immo sold five investment properties with a value of € 11,530 K. Market placement was particularly profitable for small to medium-sized apartment houses in Vienna and the regional capitals. Total income of € 5,608 K was generated from sales in 2011.

As at 31 December 2011, the company was realising one development project in Vienna: early in 2010, CA Immo launched a large-scale inner city development and restoration project known as Lände 3 on the Erdberger Lände

7 Sources: Jones Lang LaSalle, European Industrial Bulletin, September 2011; CBRE Big Box Poland Industrial Market View, Q4 2011

8 including properties used for own purposes and intended for trading or sale

site in the capital. The site, which currently offers some 80,000 sqm of rentable area, comprises a number of sections. Following a phase of restoration, the tenant Post AG started to occupy 31,000 sqm of office space in August 2011; by December, all of the organisation's officebased operations in Vienna had been amalgamated on the site. Sim & More GmbH also signed up as a tenant and operator of a self-service restaurant with usable space of 2,500 sqm.

Meanwhile, full-scale revitalisation work on the Silbermöwe office property began in March: by the autumn of 2012, modern and sustainable office space with rental effective area of approximately 18,800 sqm will be created within the nine-storey building, which is just under 40 metres high. An application will be made for DGNB sustainability certification for the building.

BUSINESS DEVELOPMENTS AT CA IMMOBILIEN ANLAGEN AG

Earnings

Owing to real estate sales transacted in business year 2010, rental income fell from € 19,323K to € 16,404 K. The gross revenues shown in the annual financial statements of CA Immobilien Anlagen AG in 2011 declined by –12 % (from € 23,933 K to € 20,998 K) as this was generated solely from the letting of real estate in Austria.

Other operating income of € 4,644 K (compared to € 4,729 K in 2010) includes management fees to subsidiaries of € 4,131 K (€ 2,972 K in 2010) as well as cost allocations and insurance proceeds.

With the average staffing level unchanged, salary adjustments led to an increase of 9 % in personnel spending to € 8,577 K (€ 7,854 K in 2010).

Depreciation on intangible assets, fixed assets and tangible assets fell by – 57 % to € 7,846 K (€ 18,223 K in 2010) owing to unplanned depreciation in the previous year. Other operating expenditure also declined by – 25 %, from € 20,336 in 2010 to € 15,263 K in 2011; this was mainly due to cost savings of – 39 % within general administrative expenses (from € 11,028 K as at 31 December 2010 to € 6,777 K on 31 December 2011). The developments outlined above brought about an operating result of € 2,333 K as at 31 December 2011 (€ – 17,361 K in 2010).

Profit distributions of subsidiaries of € 61,187 K (€ 1,850 K in 2010) in Eastern Europe and € 102,340 K (€ 120 K in 2010) in Austria led to an increase from € 1,970 K (in 2010) in the item 'Income from shareholdings' to € 163,526 K (in 2011). This was counteracted by expenses from financial investments and securities held as current assets of € 60.789 K (€ 55.634 K in 2010) which resulted mainly from the dividend-related depreciation of shares in affiliated companies.

Income from loans was largely unchanged at € 10,477 K (€ 10,458 K in 2010). Interest income rose from € 9,194 K in 2010 to € 33,611 K in 2011; this was the result of fixed deposits, investments in securities and bank balances as well as cash advances and swap transfers to affiliated companies.

Income from the sale of and addition to financial assets and investments held as current assets stood at € 18,034 K, down – 51 % on the figure for 2010 (€ 37,065 K). This income derived mainly from reversals of depreciation within CA Immo AG of Frankfurt, Rennweg 16 GmbH of Vienna, CA Immo International Holding GmbH of Vienna and FCL Property a.s. of Prague as well as the sale of holdings in Eastern Europe. Appreciation of current investments of € 1,304 K were also carried out in the previous year. Revenue of € 815 K (€ 1,722 K in 2010) was generated from the sale of an ABS fund in 2011.

The change in the accounting method in 2011 from derivative financial instruments qualified as accounting units led to a reversal of provisions for contingent losses of € 9,744 K. Moreover, receivables from affiliated companies and provisions for contingent losses of € 15,191 K in each case were written off or reversed. The reversal of the provisions for contingent losses of € 24,935 K is stated under other interest and similar income; the depreciation of receivables in the amount of € 15,191 K as interest and similar expenses from affiliated companies led to a rise in interest and similar expenses from € 56,297 K in 2010 to € 74,004 K. Interest on loans obtained to finance property assets included in this item also increased marginally.

Overall, the factors above brought a significant rise in the financial result, from € – 53,244 K in 2010 to € 90,855 K in 2011. Profit on ordinary activities stood at € 93,189 K (against € – 70,605 K in 2010).

Taking account of tax revenue (essentially from group tax) of € 5,481 K (€ 5,731 K in 2010), there was an annual

surplus of € 98,670 K as at 31 December 2011 (compared to € – 65,222 K on 31.12.2010); taking the reversal of untaxed reserves into consideration produces net retained earnings of € 98,748 K (€ 0 K in 2010).

Cash flow from operating activities (operating cash flow plus changes to net current assets) for business year 2011 stood at € 68,174 K (€ 38,641 K in 2010); cash flow from investment activities was € –59,176 K (€ –270,794 K in 2010). Cash flow from financing activities amounted to € –7,618 K (€ –8,045 K in 2010).

Balance sheet: assets

Compared to the previous year, the total assets of CA Immobilien Anlagen AG increased from € 2,299,450 K in 2010 to € 2,389,411 K in 2011. On the assets side, fixed assets rose from € 2,218,590 K (on 31.12.2010) to € 2,238,304 K as at 31 December 2011. The proportion of fixed assets in the total assets was around 94 % as at 31 December 2011 (against 96 % in 2010). On the balance sheet date, the company's property assets comprised 23 properties in Austria with a market value of € 260,837 K (31.12.2010: 28 properties with a market value of € 264,513 K). Owing mainly to the scheduled depreciation of goodwill, intangible assets fell from € 285 K on the last day of 2010 to € 41 K as at 31 December 2011; they now contain only EDP software. Tangible fixed assets fell from € 265,702 K on 31 December 2010 to € 262,180 K. This change was mainly due to the fall in the book value of land and buildings following real estate sales. Additions of € 11,664 K in the item 'Down payments made and construction in progress' mainly relate to current investment, especially on the Lände 3 project.

Financial assets increased from € 1,952,603 K to € 1,976,083 K as at 31 December 2011. Additions derived from the increased stake acquired by CA Immobilien Anlagen AG in the CA Immo New Europe Property Fund in the fourth quarter, and from a capital increase performed for the fund. CA Immobilien Anlagen AG now holds a 70% stake in the fund.

Loans to affiliated companies include a loan of € 86,767 K to CA Immobilien Anlagen Beteiligungs GmbH & Co Finanzierungs OG (€ 117,416 K on 31.12.2010) to refinance various subsidiaries in Austria and Germany for property investment, and various loans to affiliated companies in Eastern Europe to a total amount of € 120,608 K (€ 77,215 K on 31.12.2010). Other loans (€ 14,344 K on 31.12.2011) mainly include loans related to the 'Airport City St. Petersburg' project which

is held by the CA Immo New Europe project development fund.

Current assets expanded by € 70,597 K, from € 79,442 K as at 31 December 2010 to € 150,039 K on 31 December 2011. Additions included amounts due from the distribution of profits at CA Immo Holding B.V., Hoofddorp (NL) of € 49,815 K (€ 0 K in the previous year) and other receivables amounting to € 5,270 K at the end of 2011 (€ 3,074 K on 31.12.2010).

Between September 2011 and the end of the reporting year, convertible bonds with a nominal value of € 20,500 K were repurchased from the market at an average rate of 94.6 %; bonds from 2006 with a nominal value of € 14,008 K were bought back at a rate of 97.5 %.

The company has three outstanding bonds at present, registered for trading on the unlisted securities market of the Vienna Stock Exchange. The bonds provide unsecured financing at CA Immobilien Anlagen AG; they are on equal footing to one another and to all other unsecured financing of CA Immobilien Anlagen AG. The conditions of the bonds do not provide for any relevant financial covenants. Key features of convertible bonds are:

The conversion price of the convertible bond is € 11.58; the planned payment of a dividend will result in adjustment of the conversion price and thus the maximum number of bearer shares issued where the right of conversion is exercised. The conversion price will thereby be restricted to the level of the dividend yield at the time of the dividend payment. Early repayment of the convertible bonds by CA Immo is possible as from the end of the final quarter of 2012 provided the price of the CA Immo share (in certain periods) amounts to at least 130 % of the applicable conversion price at that time.

Balance sheet: liabilities

On the liabilities side, shareholders' equity rose by 7 % (from € 1,458,898 K as at 31 December 2010 to € 1,557,646 K as at 31 December 2011) owing to net retained earnings of € 98,748 K (€ 0 K on 31.12.2010). The equity ratio was around 65 % on the key date (compared to 63 % on 31.12.2010). Fixed assets were 70 % covered by equity (66 % on 31.12.2010). Compared to the previous year, provisions fell by – 16 % (from € 75,645 K as at 31 December 2010 to € 63,828 K); in particular, this reflects obligations linked to derivative transactions of € 37,812 K (€ 54,012 K on 31.12.2010) and provision for

grants to subsidiaries of € 17,114 K (€ 15,452 K on 31.12.2010).

The increase in payables (from € 763,619 K at the end of 2010 to € 766,790 K at the end of 2011) was mainly due to additional payment obligations to affiliated companies.

INFORMATION PROVIDED UNTER ARTICLE 243 A OF THE AUSTRIAN COMMERCIAL CODE (UGB)

The following information must be declared according to Section 243a UGB:

The capital stock of CA Immo amounts to € 638,713,556.20. It is divided into four registered shares and 87,856,056 bearer shares traded on the prime market segment of the Vienna Stock Exchange (ISIN: AT0000641352). The four registered shares are held by UniCredit Bank Austria AG and each equate to one position on the Supervisory Board, although this right has not been exercised. All members of the Supervisory Board are elected at the General Meeting. As at 31 December 2011, the company held none of its own shares; this position has not changed from the previous year.

There are no limitations on voting rights. The transfer of registered shares is linked to the company's approval.

On 29 January 2011, UniCredit Bank Austria AG announced a voluntary public takeover bid in accordance with article 4ff of the Austrian Takeover Act to the shareholders of CA Immo bilien Anlagen AG (' CA Immo ') with a view to acquiring their shares CA Immo. The offer price was € 12.35 per CA Immo share. The takeover bid was open to acceptance until 16 February 2011. At the time of declaring the takeover bid, the bidder held 10,438,224 shares in CA Immo, equivalent to a stake of 11.88% in the capital stock of CA Immo. During the acceptance period, the bid was accepted in respect of 4,402,326 CA Immo shares, equivalent to a stake of approximately 5% in the total capital stock of CA Immo. With the transfer of the new shares, and taking into account shares held prior to the takeover bid as well as further acquistions of CA Immo shares via the Stock Exchange the stake of UniCredit Bank Austira AG in CA Immo increased up to 18%. Further information is provided on the companies' website www.caimmo.com.

With around 18% of the capital stock and the four registered shares, UniCredit Bank Austria AG is the company's largest shareholder. The company is not aware of any other shareholders with a stake of more than 5%. The remaining shares of CA Immo (approximately 82% of the capital stock) are in free float. Except for UniCredit Bank Austria AG, no other shareholders had particular controlling rights.

Employees who hold shares may exercise their voting rights directly at the General Meeting. According to the Articles of Association, the company's Management Board must comprise one, two or three people. The age limit for Management Board members is set at 65 and is laid down in the rules of procedure for the Management Board. The tenure of a company officer on the Management Board ends after the Ordinary General Meeting, which falls after his or her 65th birthday. The Supervisory Board must comprise at least three, and a maximum of twelve, members. Owners of the four registered shares are each entitled to send one member to the Supervisory Board. The members of the Supervisory Board who have been sent by the registered shareholders can be recalled and replaced at any time by the shareholders. The provisions of the Articles of Association do not apply to members sent to the Supervisory Board for the duration of their time in office. The remaining members of the Supervisory Board are elected at the General Meeting. The age limit for members of the Supervisory Board is set at 70 and is laid down in the rules of procedure for the Supervisory Board. Supervisory board members retire from their position on the Supervisory Board after the next Ordinary General Meeting held after their 70th birthday.

As at 31 December 2011, there was a total of € 312,841,476.80 non-exhausted authorised capital (article 169 AktG), which can be utilised until 8 August 2012 at the latest.

At the Ordinary General Meeting on 13 May 2008, the Management Board was authorised to issue convertible bonds, even by excluding shareholder subscription rights, for a maximum nominal amount of up to € 317,185K by 12 May 2013 with the approval of the Supervisory Board on single or multiple occasions, and to guarantee conversion rights on up to 43,629,300 bearer shares in the company for convertible bond holders. As a result of this authorisation, a five-year convertible bond was issued in November 2009 with a volume of € 135,000K. The halfyearly coupon payable on the convertible bond was set at 4.125% and the conversion price was set at € 11.5802 (this represents a premium of 27.5% above the reference

price). As such, a maximum of 11,657,829 no-par value shares will be paid out for any conversion rights which may be exercised. In this regard, the same General Meeting approved contingent capital (article 159 AktG) amounting to € 317,185K.

At the 23rd Ordinary General Meeting on 12 May 2010, the Management Board was authorised in accordance with art. 65 subsection 1 line 8 of the AktG to buy back and, where necessary, sequester or sell the maximum proportion of its own shares via alternative means than on the stock market, or even via public offering, as allowed by law (10% of share capital) for a period of 30 months after the decision was taken. As at 31 December 2011, this right had not been exercised.

There are no substantive agreements, which come into effect, change or cease with a change of control within the company as a result of a takeover offer.

In the case of a public takeover offer, there will be no compensation agreements with members of the Management or Supervisory Boards or employees.

With regards the accounting process, the main features of the internal monitoring and risk management system are: Minimum standards for internal monitoring systems are determined in an internal group directive. In order to monitor whether these standards were being observed, a

separate Internal Auditing unit under the control of the full Management Board was set up as part of a reorganisation process alongside the Risk Management department. The unit, which took up its assigned tasks in 2010, will oversee compliance with legal provisions, internal guidelines and rules of conduct on the basis of an auditing plan; it will also monitor the potential for risk in operational processes (upholding the dual verification principle in all organisational entities, continual reporting, and so on) while assessing the potential for efficiency improvements (regular auditing of individual group companies). Reports on the auditing plan and assessment results will be submitted to the Supervisory Board at least once every year. The internal monitoring system (IMS) has been expanded to assist in the early identification and monitoring of risks. An internal group directive also governs uniform regulations for the group for the production of annual financial statements and interim statements. The group has a comprehensive risk management system. The accounting process was analysed with regard to the important subprocesses. The efficiency of subprocess is audited on the basis of a rotating time plan and designed around best practices (e.g. derivatives, accounts receivable management). The risk management system is part of the auditor's regular program. The results of the audits are reported to the audit committee of the Supervisory Board.

Development of shareholders' equity is as depicted below.

€ 1,000 31.12.2010 Capital increase Dividend
payments
Annual result Release of
capital
31.12.2011
reserves
Share capital 638,714 0 0 0 0 638,714
Tied capital reserves 820,184 0 0 0 0 820,184
Retained Earnings 0 0 0 0 0 0
Net profit 0 0 0 98,748 0 98,748
Total equity 1,458,898 0 0 98,748 0 1,557,646

COMMITTED TO OBSERVING THE AUSTRIAN CORPORATE GOVERNANCE CODE

Compliance with the appropriate legal provisions in Austria is very important to the Management Board and Supervisory Board of CA Immo. Needless to say, our subsidiaries in Germany and Eastern Europe comply with local legislation. CA Immo is committed to observing the

Austrian Corporate Governance Code9 and thus to transparency and principles of good corporate management. In business year 2011, CA Immo implemented almost in full the regulations and recommendations of the Code as

9 The Austrian Corporate Governance Code may be viewed on the web site of the Austrian Working Group for Corporate Governance at www.corporate-governance.at.

amended in January 2010. Discrepancies were noted in respect of C Rules no. 2 (right of appointment to the Supervisory Board) and 45 (executive positions with competitor companies). Compliance with the Code is evaluated annually (most recently by KPMG Wirtschaftsprüfungs- und Steuerberatungs GmbH)10.

RISK MANAGEMENT

The persistently tough economic climate is posing significant risks to CA Immo and its business activities. The main risks to the Group derive from the market-linked danger of rising vacancy rates, tenant insolvency, the difficult environment for real estate transactions created by the restrictive lending policy of banks, associated increase in yields and the decline in property values. The risk categories outlined below were re-evaluated following a risk assessment carried out in 2011; the major risks facing the Group have not changed significantly from the previous year.

General

Systematic risk management is a key element of the CA Immo Group's internal controlling process with a direct bearing on strategic and operational decisionmaking within the company. Therefore, the objective of risk management is to identify at an early stage and continually monitor potentially hazardous developments as well as opportunities so that suitable measures can be implemented as necessary. To be able to evaluate the company's risk position at all times, CA Immo is constantly evaluating the level of risk by means of quarterly reporting that takes account of the current situation of the company and the market. In these reports, risks are documented in relation to specific properties and projects but also to (sub-)portfolio level. Other aspects of risk reporting involve simulations and depictions of scenarios as regards the value trend for the portfolio as well as exit strategies and liquidity planning. In addition, specific risk types are assessed at regular intervals, with external advisors consulted. CA Immo assesses risk according to substance, effect and the likelihood of occurrence. On that basis, risk management is implemented at every level of the company and is therefore binding on all organisational divisions. From a strategic viewpoint, risk management includes the compilation of compulsory guidelines on investment policy.

Operational risk management is concerned with countering property-specific and general business risks. The company circumvents unexpected risk by means of early warning indicators such as rent forecasts and vacancy analyses as well as the continual monitoring of lease agreement periods and the possibility of terminations. The Management Board is involved in all risk-relevant decisions and bears overall responsibility for such decisions. At all process levels, decisions are subject to the dual verification principle. Clear internal guidelines and strategies, business and investment plans and the continuous reporting systems have made it possible to monitor and control the economic risks associated with everyday business activity. Measures are applied to all Group subsidiaries. Investment plans are also subject to scrutiny by the Supervisory Board or its investment committee. The Controlling department supports the realisation of risk management by providing structured information and data; individual matters are also spot-checked by the Internal Auditing division.

THE INTERNAL MONITORING SYSTEM (IMS)

The accounting specific internal monitoring system (IMS) is a conglomeration of systematically structured measures designed to ensure compliance with guidelines and prevent errors; the guidelines include both specific company rules (Group manual, allocation of responsibilities, authority to sign, dual verification principle, regulations for release, etc.) as well as legal provisions. The objectives of the IMS are to preclude (preventive monitoring) and identify (detective monitoring) errors in accounting and financial reporting, thus enabling amendments or countermeasures to be introduced in good time. The operational divisions are involved to ensure a complete overview of the process of financial reporting. CA Immo defines preventive monitoring as those checks undertaken by responsible administrators as they carry out business processes prior to and/or within specific systems (e.g. accounting and consolidation software). Detective monitoring refers in particular to controls carried out by responsible heads of department or the head of finance and accounting on the basis of analyses derived from such systems. In accordance with the organisational structure of the CA Immo Group, responsibility for the implementation and supervision of the internal monitoring system lies with the appropriate local management teams, i.e. the managing directors of the various subsidiaries are required to perform self-checks in order to assess and document compliance with the monitoring measures

10 The results of the evaluation may be viewed on our web site (www.caimmoag.com).

making up the IMS, which has been standardised across the Group. Alongside the Risk Management division, CA Immo has set up an Internal Auditing unit under the control of the full Management Board with a view to consolidating the internal monitoring system. Both units now oversee compliance across the Group with legal provisions, internal guidelines and rules of conduct on the basis of annually compiled auditing plans, or in response to ad-hoc assessments performed as needs dictate. On an operational level, the units review the functioning of (business) processes as regards possible risk and costeffectiveness and assess the potential for efficiency improvements. The Internal Auditing unit also supervises the observance of checking procedures by local management teams and determines the dependability of operational information as well as the effectiveness of the internal monitoring system. Finally, the results of these assessments are reported to the responsible executive boards as well as the full CA Immo Management Board. The Supervisory Board is informed as to the auditing plan and the assessment results at least once a year. Furthermore, the proper functioning of the risk management system is evaluated annually by the Group auditor, with the findings presented to the Management Board and the Supervisory Board or its audit committee.

STRATEGIC RISKS

Capital market and financing risk

Refinancing on the financial market is one of the most important measures open to CA Immo. However, developments have shown that the erosion of trust in a functioning capital market can make the procurement of capital much more difficult. Due to the implementation of Basel III an increasing number of banks reconsider their mortgaging. Therefore, it is assumed that lending will be handled extremely restrictive in future. In addition, some banks currently make market stress test of scattered Eastern European countries or are preparing their exit from the region. Especially in Hungary and Romania refinancing could become more difficult in the upcoming months; however, in Poland and the Czech Republic willingness to finance is a little more stable. Above all, German banks have announced their plans to stop lending outside their home market temporarily, by implication, vice versa in the following years there will be sufficient liquidity in the German market. With the introduction of Solvency II it is assumed that insurance companies will occur increasingly in the financing business, which could provide a slight improvement on the financing sector. For this reason, it is essential that the company has the ability to plan and secure liquidity. As an alternative and supplement to established means of (equity) capital procurement, the company enters into equity partnerships (joint ventures) at project level. Given that the risk of (re)financing may remain a latent factor, detailed liquidity planning has been drawn up for the years ahead. This planning takes particular account of the financial consequences of strategic targets (such as the steady depletion of the project pipeline and real estate sales). The expiry profile of financial liabilities for the CA Immo Group is reasonably stable until business year 2014; loans maturing by that date are linked solely to financing at property or project level. The refinancing of the 6.125% CA Immo bond 09-14 (ISIN: AT0000A0EXE6) and the convertible bond are scheduled for 2014, provided conversion rights are not exerted.

Concentration (cluster) risk

A certain level of concentration (cluster) risk in the portfolio arises where a single investment exceeds a defined upper value in the total portfolio as regards location or investment volume. In such cases, the potential market risk is heightened significantly and the prospect of selling these properties can be diminished (especially where the market environment is constricted). On the other hand, exceptionally small properties raise the danger of excessive administration costs (in relation to rental revenue). For this reason, CA Immo seeks joint venture partners or an early (partial) exit for large-scale investment initiatives as this substantially lessens the burden of risk on the company. To bring about a suitable balance between expenditure and revenue, small properties (which are generally acquired through portfolio purchases) are regularly sold off and the composition of the portfolio is assessed on a quarterly basis. Concentration risk is also created where certain investments lead to overrepresentation of a particular region, country and specific usage type or tenant structure in the overall portfolio: this is because changes in the market can affect levels of demand which will impact negatively on the company's profitability. Concentration risk as regards tenants generally arises where individual tenants are over-represented in terms of rental revenue and rentable space and thus have a significant bearing on the earnings of the CA Immo Group. As a countermeasure, especially on the target markets of Eastern and South Eastern Europe, CA Immo applies regional investment limits according to the size of the overall portfolio and, in the case of individual properties, the size of the respective market. Aside from regional distribution, efforts are made to ensure diversification in

the tenant structure and usage types. In terms of tenants a concentration risk will only be accepted in case of longterm leases and an excellent credit rating.

If we define the limit value for concentration/cluster risk at 5% of the total portfolio, only one investment (Tower 185) falls into this category. Given the current equity commitment of € 190 m on this project, an (partial) exit is planned following completion. Construction financing until is valid until the end of 2012. Due to the difficult market environment negotiation about the prolongation are already initiated. Although the package of investment properties acquired from the state of Hesse in 2006 makes up some 15% of the overall portfolio, it comprises a total of 36 properties that the company could sell individually. In view of the long-term nature of existing lease contracts and the satisfactory creditworthiness of the tenant (the state of Hesse), this portfolio represents a calculated risk. Alongside Tower 185 and the Hesse portfolio, three more individual properties have an IFRS market value of over € 100 m. In terms of location, Prague (River City) and the logistics park in Bucharest have created concentration risk within the portfolio. As regards our land reserves and land development projects, risk arises from the high associated capital commitment; the prevailing market climate is also hampering development projects. For this reason, further property sales are in the pipeline for 2012, measures have been put in place to accelerate land development projects where possible and joint venture partners are being involved at an early stage with a view to cutting the capital commitment.

Country-specific risk and transfer risk

Country-specific and transfer risk incorporate the dangers of economic and political instability. Given the CA Immo Group's high level of investment activity abroad – and particularly in Eastern Europe – inflows of capital and liquidity to which the company is undoubtedly entitled can fail to materialise owing to a lack of foreign currency or transfer restrictions in other countries. There is no generally effective way to hedge against this kind of transfer risk. CA Immo counters country-specific risk by concentrating on a defined core region with local subsidiaries and on-site staff, and through appropriate regional allocation within that core market. The company ensures it is able to respond quickly to economic and political events through continual portfolio monitoring and specific portfolio management. CA Immo negates transfer risk by repatriating liquid assets from investment markets with a low credit standing.

PROPERTY-SPECIFIC RISKS

General

The real estate sector is closely intertwined with the macroeconomic developments on its markets. Any worsening of the debt and financial crisis in Europe poses the greatest risk to the real estate area as such a scenario has the potential to make financing conditions significantly harder for businesses. It seems ever more probable that the European economy will shrink even further during 2012; most indicators point to a slowdown in growth rates across the continent. This would have a particularly serious effect on the commercial property market, depressing the demand for office space whilst rendering access to finance more restrictive and costly. Only core properties let for the long term look like benefiting from the increasing reluctance of investors to take risks.

Market and liquidation risk

From a financing point of view, the risk to property investment markets remains considerable as more and more banks become ever more reluctant to finance large-scale investment in real estate. A deceleration in the transaction rate in 2012, which cannot therefore be ruled out, could impact negatively on CA Immo's sales targets for the year. There is also a danger that owing to rising yields, CA Immo will either be unable to sell properties, or only able to sell them at a discount. This could adversely affect the company's liquidity. To prevent such risks arising, CA Immo performs its own exhaustive market analyses prior to any investment decision and as a regular part of portfolio management; the company also maintains constant contact with leading experts in the sector. To minimise regional risks, the ideal resale times for the largest properties in the portfolio are considered as part of regular discussions concerning location quality, property quality, market changes and emerging trends. Through this approach, key early indicators of market risk are systematically applied to evaluations of investment and project plans, and thus to medium-term liquidity and corporate planning.

Letting risk, loss of rent risk

The opportunities and risks posed by trends on the rental markets are closely linked to economic development, one of the factors that drive demand for commercial real estate. Given the economic outlook for the eurozone and the CEE/SEE markets in the medium term, the high degree of uncertainty will persist throughout 2012. Rental markets will remain at risk of a downturn despite low levels of building activity.We expect rent prices to

pick up slowly in the months ahead; in some subsegments rent prices will decline, as potential tenants will be reserved in making their decision about investments or locations. Significant reduction in vacancy rates – particularly in Eastern Europe – is therefore not expected in 2012.

Within the CA Immo portfolio, vacancy increased particularly sharply in (South) Eastern Europe following the takeover of Europolis; the negative trend has been especially acute in the area of logistics. Although vacancy was reduced moderately in the office area, lettings activity in Hungary was persistently problematic. In Austria too, CA Immo still has high vacancy relative to total available rental space despite the handover of rental premises at the Lände 3 site to Österreichische Post AG. Reducing the vacancy level is likely to remain a challenge in 2012: on the office rental market in Vienna, office space (and rent prices) outside the prime segment are still coming under pressure owing to the rising production of new premises and the high availability of modern, energy-efficient office units. The lettings situation thus continues to be characterised by protracted decision-making on the part of potential tenants. By comparison, vacancy rates in the German asset portfolio are low; here, the only vacancy risk is linked to recently completed development projects Tower 185, Ambigon (both being in the stabilisation phase) and Skygarden. Nonetheless, office tenants continue to favour prime real estate in top locations, and are especially keen to secure first occupancy of new buildings. The fact that the supply of such properties remains limited is helping CA Immo to market its modern office premises in Germany.

Aside from greater vacancy risk, it is also possible that existing tenants will be unable to meet their rent payments given the economic circumstances (loss of rent risk). This risk is generally countered by demanding securities (bank guarantees). To keep vacancy and rent losses to an absolute minimum, CA Immo screens the creditworthiness and reputation of potential tenants. The budgeted and actual revenues generated by all properties are continually monitored, and structured quality checks are carried out. Properties with heightened risk potential are managed by a specially formed restructuring unit with a view to securing their sale at the earliest opportunity after restructuring. The only rental payments outstanding are in the Eastern Europe segment, particularly in relation to hotels, three logistics parks and a shopping centre. The value of all outstanding receivables has been adjusted,

taking account of the risk of lost rent to a sufficient degree in the valuation of properties. Reduced income following contract extensions remains a risk where rent levels have to be reduced or greater incentives are offered. Overall, however, the aforementioned problematic cases do not pose a noteworthy risk potential to the company.

Project development risks

The realisation of projects is associated with higher risk. Risks can arise from imponderables such as delays in the property use approval or planning permission processes, cost/deadline overruns, construction defects, low demand for rental premises and similar factors. Nonetheless, given the high value that can be created through development projects, this business area also offers the chance of generating additional revenue. For projects to be realised, it is essential that equity or additional loan capital (project financing) is available. Delays in credit lending can lead to delays in construction work, which has a negative knock-on effect on project valuation; where pre-letting has been secured, this can result in the imposition of contractual penalties. Loss of rental revenue can in turn have serious implications for the company's cash flow. Moreover, financing conditions can be tightened where construction costs increase. With all of this in mind, CA Immo takes various steps to control the risks associated with project development (cost monitoring, variance analyses, long-term liquidity planning and observance of minimum pre-letting quotas, and so on). In general, CA Immo is countering project development risk by choosing partners and service providers with care whilst maintaining stringent controlling, both internally and externally. Controlling involves regular cost monitoring, variance analyses and appropriate reporting. The start-up losses that typically arise in connection with project development also have a detrimental effect on earnings with the accrual of non-capitalisable costs. Over the project lifecycle, these losses are offset against revenue from lettings and sales; accordingly, projects are only launched after comprehensive and long-term liquidity planning. CA Immo invariably seeks to secure pre-letting (50–60% in Germany, for example) before actually commencing a project. In Eastern and South Eastern Europe in particular, however, this may not be achievable (or only possible to a limited degree) on account of the specific market situation. In this region, lease contracts tend to be signed as soon as there is a sufficient likelihood of project completion and projects are sometimes initiated even with low levels of pre-letting, but ever having a secured funding in place.

CA Immo also faces the risk of significant cost variation linked to price trends in the raw materials sector (steel, aluminium, copper, etc.). With this in mind, cost pools are formed for large-scale projects to pass on the risk of rising commodity prices or production costs to the contractor. All current projects are being implemented within their approved budgetary frameworks. Pressure on development earnings results primarily from the market-driven extension of the stabilisation phase (initial renting) and from the risk of rising yields due to restrictive lending.

Property valuation risk

Owing to changing framework conditions, property prices can fluctuate considerably. CA Immo subjects its properties to annual valuation by an outside party; value changes during the year are identified by internal specialists.

The rise in yields over recent years continues to be reflected in valuation reports owing to the discount and capitalisation rates assessed and directly influences consolidated net income through the changes in market value that must be recognised under IAS 40; shareholders' equity is also reduced. Developments in the second half of 2011 especially have shown that Eastern Europe, having been unable to evade the turbulence given the region's close economic ties with Western Europe (especially in the banking sector), is coming under renewed pressure. In core markets such as Poland and the Czech Republic, yields remained stable and sporadically even a decline in yields was observed. With banks significantly reducing their exposure in these markets, it is likely that the property investment market will bottom out partially in 2012, which could lead to a rise in yields. The demand for core properties in core markets, however, continues unabated. The diminishing prospect of rental growth also poses the danger that starting yields for commercial real estate will be adjusted upwards. Changes in value will continue to represent a significant risk in 2012 in view of the expected market trend. If yields fall by an average of 25 base points in the short term and rent levels remain the same, losses in the Eastern Europe portfolio alone could potentially amount to € 50-70 m (in the worst case scenario).

GENERAL BUSINESS RISKS

Legal risks

In addition to the usual legal disputes that arise in the sector (especially against tenants), CA Immo faces the risk of disputes with, for example, joint venture and project partners. There is also potential for disputes arising over past and future sales of real estate as well as annulment actions brought by shareholders in connection with resolutions of the Ordinary General Meeting or review of the exchange ratio applied in the 2010 merger of CA Immo International AG and CA Immo. Legal disputes are monitored and managed centrally by the legal department. At present, no lawsuits or arbitration proceedings that could threaten the company's survival are imminent or pending. Almost all pending actions relate to conventional operational business activity. Sufficient provisions are formed as necessary; as at 31 December 2011, these amounted to approximately € 7,726 K (CA Immo Group). In addition, the joint venture partner of the 'Maslov' project has filed an arbitration claim for € 48,097 K (including interest). CA Immo considers the chances of this action succeeding as minimal. For the expected cash outflow an adequate provision has been made.

Environmental risk

The CA Immo Group can incur significant costs from its responsibility to prevent certain kinds of damage to the environment (from toxic substances and materials in built structures and contamination); there is also a risk that the legal changes may require previously acceptable materials and substances to be eliminated. It is not possible to predict changes to legal provisions, case law or administrative practice, or the consequences that such changes will have on the earning power of real estate; changes could adversely affect real estate values and thus the company's assets, financial and revenue positions. To minimise the risk, CA Immo incorporates these considerations into its wide-ranging assessments prior to every purchase. Appropriate guarantees are also required from sellers. The CA Immo Group makes use of environmentally sustainable materials and energy-saving technologies wherever possible. Environmental risks associated with investment properties are assessed by the CA Immo Sustainability Tool (CAST).

Taxation risk

National taxation systems are subject to ongoing amendment on the target markets of the CA Immo Group. The company monitors all relevant debates and decisions taken by national legislators. Despite this, tax rises linked to changing legal frameworks pose a constant risk to revenue. Sufficient financial provisions have been made for established risks.

FINANCIAL RISKS

Risks linked to liquidity, credit, interest rates and currencies make up the main financial risks.

Liquidity risk

Owing to a clear reluctance on the bank of banks to extend credit at present, short-term liquidity risks cannot be ruled out. Liquidity risk is potentially created where negative market trends prevent or lead to delays in planned sales activity. Other risks arise from unforeseen additional funding obligations in relation to project financing and breaches of covenant in the property financing area. CA Immo is highly skilled at planning and securing liquidity in order to counter these risks and ensure the Group can meet unexpected cash flow requirements as well as its financing commitments on projects and investments. To this end, various liquidity deployment measures have been identified; amongst other things, these provide for the early redemption of loans with very high margins. Loans are invariably agreed on a long-term basis in accordance with the investment horizon for real estate. Even with meticulous planning, however, liquidity risk cannot be eliminated, particularly where capital requests linked to joint venture partners and fund partners are not viable. Capital commitments are typical in the case of development projects; the Group company CA Immo Deutschland has a particularly high commitment in the case of the Tower 185 project. Financing has been secured for all projects under construction; additional financing is required for new project launches, however.

Given the refinancing scheduled for 2012/13, partner risks pose a particular threat; project-related and countryspecific risks will also persist, especially with regard to further developments in Hungary. Additional reserves are needed to cover any breaches of covenant. The refinancing risk and the risk of a breach of contract terms are monitored continuously. The worst case resulting from the potential hazard is included in the current liquidity planning.

Interest rate risk

Interest rate risk stems from market-related fluctuations in the interest rate. This risk affects both the level of financing costs and the fair value of interest hedging transactions concluded, which influences the company's earnings and equity. Moreover, where new loans are agreed or loans are extended in particular, there is a danger that credit margins will rise substantially. The base

rate was cut from 1.5% to 1.25% early in November 2011 and again to 1% at the start of December in a bid to combat the worsening recession. According to the latest interest rate forecasts, the base rate is likely to remain at its present level of 1% until the end of 2012. Swap rates (which have stayed highly volatile as the critical situation persists) are also unlikely to rise significantly.

CA Immo generally opts for a mix of long-term fixedrate and floating-rate loans; in some cases, the latter are secured by means of derivative financial instruments (interest rate caps/swaps), which without exception are used to hedge against the risk of interest rate changes arising from underlying transactions. With the incorporation of Europolis, the risk of rate changes is 60% hedged on all variable-rate loans of the CA Immo Group. Continuous monitoring of the interest rate risk is imperative. No risks constituting a serious and sustained threat to the company exist at the present time. Sufficient provisions have been formed for all risks identified.

Currency risk

Since CA Immo invests in various currency areas, the company is exposed to certain currency risks. CA Immo counters currency risk from the inflow of rental income and rents receivable in BGN, CZK, HUF, PLN, RON and RSD by pegging rents to a hard currency (EUR or USD). No significant currency risk exists at present. Since incoming payments are mainly received in local currency, however, free liquidity is converted into euros upon receipt. The pegging of rents to the EUR/USD affects the creditworthiness of tenants and thus produces an indirect currency risk that can result in payment bottlenecks and loss of rent. Loans are taken out in the currency underlying the relevant lease (this mainly applies to financing in CZK and USD). Currency risks are hedged in connection with construction projects if possible.

FINANCIAL INSTRUMENTS11

Given that the interest paid makes up the biggest expense item in the income statement for most real estate companies, interest rate rises can have a serious impact – especially since the income side (rent) is usually based on long-term agreements, which means increases in financing costs cannot be counterbalanced by higher revenue. For this reason, the CA Immo Group's financing policy

11 For full details on the derivative financial instruments of CA Immobilien Anlagen AG, see the notes section.

partly involves hedging a substantial proportion of finance against fluctuation over the long term. Interest swaps (and, to a lesser extent, interest rate caps) are used as interest hedging tools.

BRANCH OFFICES

The CA Immo Group has its head office in Austria and also has a presence in Germany via the subsidiary CA Immo Deutschland GmbH in Frankfurt, Berlin, Munich and Cologne, as well as in Eastern Europe via subsidiaries in Budapest, Belgrade, Bucarest, Prague, Warsaw and Moscow.

INVESTMENTS AND FUNDS

The listed company CA Immobilien Anlagen Aktiengesellschaft, based in Vienna, is the parent company of the CA Immo Group. The Group's activities are focused on Austria, Germany and Eastern Europe. The Group has 263 subsidiaries, of which

  • 42 are in Austria (including 8 joint ventures),
  • 103 are in Germany (including 20 joint ventures) and 118 other companies (including 24 joint ventures) were created in connection with investment in Eastern Europe.

All tasks are performed through a network of branch offices in Austria, Germany, Hungary, the Czech Republic, Romania, Poland and Serbia; there are also offices in Russia, Ukraine and Cyprus employing a total of 390 staff members. Every site functions as a profit centre. Construction management – which encompasses project monitoring, tendering, contract awarding, construction supervision and general planning – is carried out by omniCon, the subsidiary of CA Immo Deutschland acquired in July 2008. omniCon also performs these services for third parties. In addition, DRG was founded in 2011 as a joint venture with the estate agent and property management firm ÖRAG. DRG undertakes tenant management, service charge accounting, rental revenue enhancement, cost reduction, maintenance tasks and letting for CA Immo's office investment properties in Germany. Throughout the group, external service providers are brought in to carry out certain other activities. This enables the cost structure to be adapted flexibly to varying workloads. All activity in Germany is processed via CA Immo Deutschland; business in Eastern Europe is

bundled in CA Immo as well as in Europolis AG, which was acquired early in 2011. Since 2006, project development in Eastern Europe has been managed largely through the CA Immo New Europe (CAINE) special fund.

CA Immo Deutschland

CA Immo entered the German market in the autumn of 2006. Since 2008, CA Immo Deutschland GmbH (formerly Vivico Real Estate GmbH, a collecting society for railway properties owned by the German state) has provided the operational platform. CA Immo Deutschland has extensive expertise in developing inner city properties. Projects on these development sites are at various stages of preparation and will be rapidly progressed to construction readiness over the coming years. On completion, development projects are either sold, transferred to the company's asset portfolio or sold to property developers as construction-ready real estate. With branch offices in Frankfurt, Berlin and Munich, the organisation of CA Immo Deutschland meets the requirements of local presence. CA Immo Deutschland GmbH is fully consolidated in the consolidated financial statements of CA Immo. The company's property assets mainly comprise properties under construction and undeveloped plots alongside a portfolio of properties intended for trading or sale. As at key date 31 December 2011, the market value of this real estate portfolio was € 1,343 m (€ 1,157 m on 31.12.2010). Most of the investment properties in Germany, including the package of properties acquired from the state of Hesse in 2006, are maintained by Frankfurt-based CA Immo AG, in which CA Immobilien Anlagen Aktiengesellschaft of Vienna has direct and indirect holdings amounting to 100 %. CA Immo AG of Frankfurt is also fully consolidated in the consolidated financial statements. The market value of the property assets was € 1,019 m as at 31 December 2011 (against € 1,006 m in the previous year).

Europolis AG

Europolis AG, which was acquired from the Volksbank Group at the start of January, is also a wholly owned subsidiary of CA Immo. The Europolis Group, which has been in existence since 1990, focuses on class A office, logistical and retail buildings in Eastern Europe. The Europolis AG portfolio also includes a small number of development projects and undeveloped plots in Poland, Hungary and the Ukraine. The overall portfolio is divided into six smaller portfolios in which reputable partners such as the EBRD, AXA and Union Invest hold shares of between 25 % and 49 %. The portfolios are managed by Europolis Real Estate Asset Management GmbH of Vi

enna (EREAM), a wholly owned subsidiary of Europolis AG, alongside a group of regional companies in Prague, Budapest, Warsaw, Bucharest and Belgrade trading as "CA Immo Real Estate Management". As at 31 December 2011, the property assets of the Europolis Group had an approximate market value of € 1,408 m (€ 1,517 m in the previous year).

CA Immo New Europe property fund

The CA Immo New Europe property fund is a project development fund structured under Luxembourg law as a SICAR (societé d'investissement en capital à risque). The fund has drawn together CA Immo's development projects in Eastern Europe since early 2007. CA Immo raised its stake by a further 10 % in the fourth quarter and now holds 70 % of the shares in the fund. The remaining 30 % is held by three institutional investors. The planned lifespan of the fund, which is managed by a CA Immo subsidiary, is seven years in total (with the option to extend). The commitment period (in which new projects can be initiated) ended on 31 December 2009. In view of changed market conditions, investment activity fell far short of the levels originally intended; agreement was reached with the co-partners only to proceed with development projects that were already in progress. In future, new projects will be realised by CA Immo itself where the fund partner decides against individual involvement in the implementation. As at the balance sheet date, the fund portfolio had a book value of around € 142 m (compared to € 134 m in the previous year). Three projects are in progress at the present time; another three have been finalised since the fund was set up and will henceforth be held directly by the fund as investment properties.

Investment in UBM

CA Immo holds a stake of 25 % plus four shares (vetoing minority holding) in the listed Vienna-based real estate developer UBM Realitätenentwicklung AG through a subsidiary company.

The main shareholder in UBM is the PORR Group with a holding of approximately 41 %. With its track record of development expertise in the CEE region, UBM is an ideal partner to the CA Immo Group. Projects realised with UBM include the Poleczki Business Park in Warsaw and the Airport City St. Petersburg project.

PENDING LAWSUITS

The company is involved in several lawsuits arising from the ordinary course of business. Provisions were formed, depending on the likelihood of a claim being asserted.

FINANCIAL AND NON-FINANCIAL PERFORMANCE INDICATORS

In strategic terms, the business activity of CA Immo revolves around raising the value of the company over the long term. Central financial performance indicators (key figures) are an important tool as regards identifying the main factors that contribute to the long-term increase in corporate value and quantifying those factors for the purposes of value management.

The primary financial performance indicator in this context is the net income generated with the money shareholders have invested (return on equity, RoE). The aim is to produce a ratio higher than the imputed cost of equity (we assume a medium-term rate of around 7.0%) and thereby generate shareholder value. The return on equity for 2011 was around 3.8%, below the target value. Despite the significant increase compared to the previous year, the goal was not attained in particular because of the negative contribution from the valuation of interest rate hedges. Nevertheless, we remain confident that the measures defined under our strategy will enable us to return to an acceptable return on equity in the medium term.

Among the other quantitative factors used to measure and manage our shareholders' long-term yield are the change in NAV per share, the operating cash flow per share, return on capital employed (ROCE) and economic value added.

VALUE INDICATORS FOR CA IMMO GROUP

2011 2010 2009 2008 2007
NAV/share 19.20 18.70 17.90 18.90 22.00
Change in NAV/share % 2.7 4.5 –5.3 –14.1 6.8
Operating Cash Flow/share 2.18 1.38 1.40 1.32 1.07
RoE1) in % 3.8 2.8 –4.8 –13.4 3.3
ROCE2) in % % 5.5 4.8 0.1 Negative 5.2
EVA3) €m 44.0 Negative Negative Negative 2.7

1) Return on Equity = Consolidated Net Income after minorities / Ø Equity (excl. minority interest)

2) Return on Capital Employed (ROCE) = Net Operating Profit After Tax (NOPAT) / Capital Employed

3) EVA (Economic Value Added) registered brand of Stern Stewart & Co; EVA = Capital Employed * (ROCE – WACC); WACC 2011 = 4.51

The key factors for CA Immo AG include the equity ratio, net debt (bonds and liabilities to bank less cash and cash equivalents) and equity-to-fixed-assets ratio. The equity ratio reflects the portion of the company's financing that is covered by its equity. It is an important indicator when assessing a company's creditworthiness. The equity-to-fixed-assets ratio indicates the extent to which, measured in percent, equity covers the fixed assets of CA Immo AG.

VALUE INDICATORS FOR CA IMMOBILIEN ANLAGEN AG

2011 2010 2009 2008 2007
Equity ratio % 65 63 66 60 69
Net debt €m 544 586 406 368 440
Equity-to-fixed-assets ratio % 70 66 75 61 85

Since the financial indicators ultimately demonstrate the operational success of our property business, they are preceded by a series of performance indicators that cannot be immediately quantified in financial terms and which are key to measuring and managing our operational business:

Vacancy rate and average rent

Sound economic data feeds the demand for commercial premises and invigorates both building activity and the property market. Cyclical discrepancies between supply and demand are reflected in the utilisation rate and attainable rents. Viewed over time, the vacancy rate and average rent are key indicators of a portfolio's quality and its successful management; they are also indicative of the asset managers' ability to respond in a timely fashion to economic influences.

Location quality

The quality of a site is a major criterion in property marketing: the accessibility of a location, determined by infrastructure, plays a particularly crucial role. Changes in the quality of a location take place gradually and are eventually reflected not only in price, but also in the difficulty of attracting new tenants.

Local presence

Local knowledge and familiarity with markets are key to the effective cultivation of highly diverse regional markets. For this reason, CA Immo maintains branch offices in the company's main markets of Germany and Eastern Europe (the latter have been consolidated by the recent influx of Europolis staff members).

Expertise and synergy

The competitive edge of CA Immo stems from the local knowledge of its operating employees and the utilisation of synergies in the Group, especially in the fields of project development and property marketing.

STAFF

As at 31 December 2011, the CA Immo Group had a total of 39012 employees at its headquarters in Vienna and its sites in Frankfurt, Berlin, Munich, Budapest, Warsaw, Prague, Belgrade and Bucharest; the comparable figure for 31 December 2010 was 318. CA Immobilien Anlagen AG itselv employed 63 people compared to 58 people (as at 31 December 2011).

Integration of Europolis completed

The Europolis team has relocated to CA Immo headquarters in Vienna and local branch offices have been amalgamated in Eastern Europe. As a result of this, the staffing level has changed: a total of 6413 new employees joined the Group in 2011.

OUTLOOK 2012

The main event of 2011 was the integration of Europolis. Now the emphasis has switched to the careful implementation of our corporate strategy, stage by stage.

Our main expectations for 2012 are thus:

  • Increase in rental income (and thus gross revenue) of around 10%: additional rent from new lettings in particular will more than compensate for losses of rental income due to sales
  • Sales of around € 15 m from the portfolio of CA Immobilien Anlagen AG
  • Utilisation of released funds, primarily for the purposes of debt reduction; in particular, opportunistic repurchasing of outstanding bonds
  • Investment of approximately € 33 m, especially in the current Lände 3 development project (section A)

In general, conditions on the rental and transaction markets are not expected to change significantly compared with last year. Given the reduction in the credit volume proposed by the banks, however, the financing market is likely to pose challenges in 2012.

The main threats to our forecasts for 2012

Our predictions for 2012 are subject to certain assumptions on general conditions as well as parameters specific

to the real estate sector. The economic picture remains unpredictable, which means more uncertainty as to whether we will meet our targets for investment volumes, realisation timeframes and revenue.

We believe the main factors influencing our business plans will be:

  • Trends on international capital markets and the effects of these on economies in our active regions.
  • The accessibility (and cost) of financing with outside capital.
  • The extent of the impact of economic developments on demand for rental premises and rental prices across our various regions.
  • Developments on the real estate investment market, the associated price trend and the resultant effects on the value of our portfolio.
  • The speed at which planned development projects are realised (which will largely depend on the availability of necessary external loan capital and equity).
  • Political, fiscal, legal and economic risks; the transparency and development level on our real estate markets.
  • The development of interst level.

RESEARCH & DEVELOPMENT

To facilitate the ongoing redevelopment and modernisation of the real estate portfolio, staff qualification is an investment priority for CA Immo; the support of external experts is selectively enlisted as required.

SUPPLEMENTARY REPORT

The following activities are reported for the opening months of business year 2012:

In Vienna, Update Training GmbH has rented the investment property on Klosterneuburger Strasse 23-27, occupying usable space of around 1,050 sqm.

12 Of these, 7 % were part-time staff members

13 excl. take up of Europolis staff

Vienna, 6 March 2012

Bruno Ettenauer (Chairman)

The Management Board

Wolfhard Fromwald Bernhard H. Hansen

AUDITOR'S REPORT

Report on the Financial Statements

We have audited the accompanying financial statements, including the accounting system, of

CA Immobilien Anlagen Aktiengesellschaft, Vienna,

for the fiscal year from 1 January 2011 to 31 December 2011. These financial statements comprise the balance sheet as of 31 December 2011, the income statement for the fiscal year ended 31 December 2011, and the notes.

Management's Responsibility for the Financial Statements and for the Accounting System

The Company's management is responsible for the accounting system and for the preparation and fair presentation of these financial statements in accordance with Austrian Generally Accepted Accounting Principles. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors' Responsibility and Description of Type and Scope of the statutory audit

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and Austrian Standards on Auditing. Those standards require that we comply with professional guidelines and that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the financial statements comply with legal requirements and give a true and fair view of the financial position of the Company as of 31 December 2011 and of its financial performance for the year from 1 January 2011 to 31 December 2011 in accordance with Austrian Generally Accepted Accounting Principles.

Report on Other Legal Requirements (Management Report)

Pursuant to statutory provisions, the management report is to be audited as to whether it is consistent with the financial statements and as to whether the other disclosures are not misleading with respect to the Company's position. The auditor's report also has to contain a statement as to whether the management report is consistent with the financial statements and whether the disclosures pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate.

In our opinion, the management report is consistent with the financial statements. The disclosures pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate.

Vienna, 6 March 2012

KPMG Wirtschaftsprüfungs- und Steuerberatungs GmbH

Mag. Helmut Kerschbaumer ppa Mag. Christoph Erik Balzar

Wirtschaftsprüfer Wirtschaftsprüfer

(Austrian Chartered Accountants)

Publication of the financial statements together with our auditor's opinion may only be made if the financial statements and the management report are identical with the audited version attached to this report. Section 281 paragraph 2 UGB (Austrian Commercial Code) applies.

This report is a translation of the original report in German, which is solely valid.

DECLARATION OF THE MANAGING BOARD DUE TO SECTION 82 (4) OF THE AUSTRIAN STOCK EXCHANGE ACT (BÖRSENGESETZ)

The managing board confirms to the best of their knowledge that the financial statements of CA Immobilien Anlagen Aktiengesellschaft, which were prepared in accordance with the applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the CA Immobilien Anlagen Aktiengesellschaft and that the management report gives a true and fair view of the development and performance of the business and position of the company, together with a description of the principal risks and uncertainties the CA Immobilien Anlagen Aktiengesellschaft faces.

Vienna, 6 March 2012

The Management Board

Bruno Ettenauer (Chairman)

Wolfhard Fromwald Bernhard H. Hansen

CONTACT

CA Immobilien Anlagen AG Mechelgasse 1 1030 Vienna Phone +43 1 532 59 07-0 Fax +43 1 532 59 07-510 [email protected] www.caimmo.com

Investor Relations Free info hotline in Austria: 0800 01 01 50 Claudia Hainz Florian Nowotny Phone +43 1 532 59 07-0 Fax +43 1 532 59 07-595 [email protected]

Corporate Communications Susanne Steinböck Silke Gregoritsch Julia Müller Phone +43 1 532 59 07-0 Fax +43 1 532 59 07-595 [email protected]

DISCLAIMER

This Report contains statements and forecasts which refer to the future development of CA Immobilien Anlagen AG and their companies. The forecasts represent assessments and targets which the Company has formulated on the basis of any and all information available to the Company at present. Should the assumptions on which the forecasts have been based fail to occur, the targets not be met or the risks set out in the risk management report materialise, then the actual results may deviate from the results currently anticipated. This Report does not constitute an invitation to buy or sell the shares of CA Immobilien Anlagen AG.

IMPRINT

Published by: CA Immobilien Anlagen AG 1030 Vienna, Mechelgasse 1 Text: Susanne Steinböck, Florian Nowotny, Claudia Hainz, Julia Müller Graphic design and setting: Silke Gregoritsch, WIEN NORD Werbeagentur Photographs: CA Immo Production: 08/16

We ask for your understanding that gender-conscious notation in the texts of this Report largely had to be abandoned for the sake of undisturbed readability of complex economic matters.

This Report is printed on environmentally friendly and chlorine-free bleached paper.

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