Fair Value REIT-AG

Interim / Quarterly Report • Nov 7, 2014

Interim Report 1st to 3rd Quarter 2014

Key fi gures Fair Value Group
Revenues and earnings		1/1 – 9/30/2014	1/1 – 9/30/2013 1)
Rental revenues	in € thousand	17,961	22,137
Net rental result	in € thousand	13,810	16,968
Operating result (EBIT)	in € thousand	11,772	14,781
Result from equity-accounted investments	in € thousand	–	2,087
Consolidated net income	in € thousand	3,445	5,293
Earnings per share	in €	0.37	0.57
Adjusted consolidated net income ( EPRA-Earnings )/FFO	in € thousand	3,653	3,968
EPRA-Earnings/FFO per share	in €	0.39	0.43
Assets and capital		9/30/2014	12/31/2013
Non-current assets	in € thousand	289,394	292,510
Current assets	in € thousand	31,746	33,771
Non-current assets available for sale	in € thousand	–	19,585
Total assets	in € thousand	321,140	345,866
Equity/Net asset value ( NAV )	in € thousand	81,786	80,673
Equity ratio	in %	25.5	23.3
Immovable assets 2)	in € thousand	289,298	311,974
Equity within the meaning of Section 15 of the REIT act	in € thousand	148,128	146,315
Equity ratio within the meaning of Section 15 of the REIT act (minimum 45 %)	in %	51.2	46.9
Real estate investments		9/30/2014	12/31/2013
Number of properties	amount	44	49
Market value of properties 3)	in € million	288.8	311.4
Contractual rent p.a.	in € million	23.6	26.5
Potential rent p.a.	in € million	26.1	28.4
Occupancy	in %	90.1	93.3
Remaining term of rental agreements	years	4.9	5.0
Contractual rental yield before costs	in %	8.2	8.5

1) Year adjusted as part of the fi rst-time adoption of IFRS 10.

2) Including post-capitalisations and a purchase price advance payment (see Note 4).

3) Based on the market valuation dated December 31, 2013.

Further key fi gures
		9/30/2014	12/31/2013 2)
Number of shares in circulation	in pieces	9,325,572	9,325,572
Net asset value ( NAV ) per share	in €	8.77	8.65
EPRA-NAV per share	in €	8.87	8.86
Number of employees ( including Management Board )		3	3

Letter to Shareholders

Dear Shareholders, Business Partners, Ladies and Gentlemen,

Despite weaker economic development coupled with a decline in companies' willingness to invest, Fair Value REIT-AG has recorded positive business development in the fi rst nine months of the current fi nancial year 2014. We have succeeded in once again increasing the occupancy rate of our portfolio as of September 30, 2014, as well as aft er the balance sheet date, compared to the end of the fi rst half of 2014.

Among other reasons, this rise in occupancy back to 90.1 % as of September 30, 2014 is partially attributable to the full rental of the logistics property in Cologne's Köhlstraße. As of June 30, 2014, the occupancy rate of our portfolio was at 89.3 % aft er the insolvency-related termination of the Praktiker rental agreement in Celle, following a mark of 93.3 % at the end of 2013. The weighted remaining terms of the contracted lease agreements within the Group remained almost unchanged at 4.9 years as of September 30, 2014, compared to 5.0 years on December 31, 2013.

Aft er the reporting date, we were able to conclude a re-letting agreement in Celle with a franchisee of "hagebaumarkt" eff ective from December 1, 2014. This agreement is valid for over 10 years plus options and therefore stabilises this property in the long term. This will result in the occupancy rate of our portfolio once again rising to almost 93 %.

Net rental income came in at € 13.8 million in the fi rst nine months of 2014, slightly up on the proportionate forecast for the full year 2014. The fall compared to the previous year level of € 17.0 million was expected on the back of our strategic portfolio reduction since the start of 2013. Around 90 % of the fall in income was off set by interest rate and repayment-related reductions in net interest expenses.

In the fi rst nine months of 2014, we achieved an adjusted operating business result (EPRA earnings or FFO) of € 3.7 million or € 0.39 per share, aft er € 4.0 million or € 0.43 per share in the previous year.

Unadjusted IFRS consolidated net income from January to September 2014 came in at € 3.4 million or € 0.37 per share, aft er € 5.3 million or € 0.57 per share in the previous year.

The development of Group equity is also pleasing, with this fi gure being recorded at € 81.8 million as of September 30, 2014 or € 8.77 per share in circulation. This is slightly up on the fi gure posted on December 31, 2013 of € 80.7 million or € 8.65 per share. The REIT equity ratio increased substantially from 46.9 % to 51.2% of immovable assets.

We view the development in the fi rst nine months of 2014 as confi rmation of our forecast. However, we are anticipating an increase in maintenance and rental costs in the fourth quarter 2014 as well as slightly lower than expected rental income due to property sales. We are, however, reinforcing our dividend target for the fi nancial year 2014 of € 0.25 per share. We are therefore continuing to pursue a sustainable dividend policy, altough we will likely only just reach our forecast for the full year 2014 of adjusted consolidated net income (FFO) of € 5.1 million or € 0.55 per share.

Munich, November 4, 2014 The Management Board

Frank Schaich

The Share

Development of the stock market and the Fair Value REIT-AG share

Continued economic concerns coupled with the confl icts in the Ukraine and Middle East impacted sentiment on the markets. Aft er the DAX topped the 10,000 point mark for the fi rst time in June 2014, the leading German share index once again endured turbulence during the third quarter. The DAX closed the third quarter 2014 on 9,474.30 points, falling around 0.8 percent since the end of 2013.

The Fair Value share price also came under pressure from July to September 2014 and recorded its lowest mark in the third quarter at € 4.88 on September 8, 2014. In the rest of September, the share price recovered somewhat and reached € 5.05 on September 30, 2014, on a par with the level at the end of 2013. As a result, the price was 6.5 percent down on the closing price at the end of the previous quarter. The Fair Value share recorded its lowest price since the start of the year on February 6, 2014 at € 4.80. The high for the year so far was recorded on January 17, 2014 at € 5.89.

Up until the end of September 2014, the Fair Value REIT-AG share posted market capitalisation of around € 47.50 million. On average across the fi rst nine months of 2014, 15,835 Fair Value shares were traded per day of trading on all German stock markets. This is more than four times the previous year fi gure of 3,736 shares per day of trading.

Key data Fair Value REIT-AG's share

at September 30, 2014

Sector	Immobilien (REIT)
WKN ( German Securities Code )/ISIN	A0MW97/DE000A0MW975
Stock symbol	FVI
Share capital	€ 18,813,764.00
Number of shares ( non-par value shares )	9,406,882 pcs.
Proportion per share in the share capital	€ 2.00
Initial listing	November 16, 2007
High/low 1st – 3rd quarter 2014 ( XETRA )	€ 5.89/€ 4.80
Market capitalization at September 30, 2014 ( XETRA )	€ 47.50 million
Market segment	Prime Standard
Stock exchanges Prime Standard	Frankfurt, XETRA
Stock exchanges OTC	Stuttgart, Berlin-Bremen, Duesseldorf, Munich
Designated sponsor	Close Brothers Seydler Bank
Indices	RX REIT All Shares-Index, RX REIT-Index

Detailed information about the company and its share can be downloaded from the company's website at www.fvreit.de. Details about business trends are published in the context of business reports, ad hoc announcements and press releases.

Financial calendar

Fair Value REIT-AG
November 26, 2014	Presentation, German Equity Forum (Frankfurt/Main, Germany)
March 26, 2015	Annual Report 2014, Annual Press Conference (Frankfurt/Main, Germany)
May 7, 2015	Interim Report 1st Quarter 2015
May 19, 2015	Annual General Meeting (Munich, Germany)
August 6, 2015	Semi Annual Report 2015
November 5, 2015	Interim Report 1st – 3rd Quarter 2015

Group Interim Management Report at September 30, 2014

Group Interim Management Report

Basic Group Information

Group Structure and Business Model

Fair Value REIT-AG (hereinaft er also referred to as Fair Value) is headquartered in Munich, Germany, and does not have any branch offi ces. As a listed property investor, the company fulfi ls the provisions of the REIT Act and is exempt from corporation and trade tax.

Business model

The Fair Value Group focuses on the acquisition and management of commercial properties in Germany. The investment focus is on retail and offi ce properties in secondary and regional locations. Fair Value invests directly in real estate as well as indirectly in real estate partnerships via participations, and actively manages its portfolio.

The non-strategic operating functions such as commercial and technical property management, as well as accounting are outsourced to external service providers, which receive partly fi xed and partly performance-related variable remuneration. The Group's fi xed costs are kept to the required minimum level thanks to the streamlined organisational structure.

Taking into account the trade limitations of the REIT Act, the strategy also encompasses the targeted sales of individual portfolio properties. Here, smaller properties and non-strategic real estate form the focus. The successive liquidation of subsidiaries is intended to lead to savings of participation-related administration expenses, as well as to further reduce the complexity of the business model.

Change to accounting following the fi rst-time adoption of IFRS 10 The consolidated interim fi nancial statements encompass the fi nancial statements of Fair Value REIT-AG and its subsidiaries. This forms the basis for the two business areas or segments of "Direct investments" and "Subsidiaries".

Due to the fi rst-time adoption of IFRS 10 as of December 31, 2013, the former associated companies BBV 02, BBV 10, BBV 14, IC 12 and IC 15 were fully consolidated (see Note 2b). The change to the accounting of the aff ected participations applies retroactively pursuant to IAS 8. As a result, the interim previous year fi gures have also been adjusted.

Portfolio

As of September 30, 2014, the directly and indirectly-held portfolio consisted of 44 properties (December 31, 2013: 49 properties) with market values, which represent the fair values pursuant to IAS 40, totalling around € 289 million (December 31, 2013: € 312 million).

The occupancy rate of the portfolio fell from 93.3 % as of December 31, 2013 to 90.1 %, largely due to the insolvency-related cancellation of a rental agreement as of January 31, 2014 for the DIY store space in Celle rented by Praktiker AG. The weighted remaining terms of the lease agreements as of September 30, 2014 totalled 4.9 years (December 31, 2013: 5.0 years).

The following table provides an overview of the real estate assets attributable to the Group as of September 30, 2014. The market values of the properties are based on property-by-property evaluations by the external experts CBRE GmbH as of December 31, 2013.

Real estate assets of Fair Value Group as of September 30, 2014
	Total plot size [m2 ]	Lettable space [m2 ]	Annualized contractrual rent [T€]	Market value 12/31/20131) [T€]	Occupancy level 2) [%]	Ø-remaining term of rental agree ments 2) [years]	Contractual rental yield before costs [%]	Participating interest [%]
Segment direct investments	40,038	33,165	2,651	37,102	98.2	9.1	7.1	100
Segment subsidiaries	327,682	233,604	20,906	251,658	89.2	4.4	8.3	46
Total Portfolio	367,720	266,769	23,557	288,760	90.1	4.9	8.2	53

Explanations

1) According to market valuation by CBRE GmbH, Frankfurt/Main as of December 31, 2013, without the purchase price advance payment for a plot area in Chemnitz in the amount of € 500 thousand (see Note 4) 2) Income-weighted

Business Report

Macroeconomic and sector-specifi c conditions

Macroeconomic situation Aft er a strong fi rst half of the year 2014, the German economy lost momentum in the third quarter 2014. The gross domestic product will likely only rise by 1.3 % in the current fi nancial year according to Economic Forecast Project Group Autumn 2014, published by Deutsche Institut für Wirtschaft sforschung (DIW Berlin) and not by 1.8 %, as was previously anticipated. Economic development has primarily been slowed by the weaker world economy and cautious investment sentiment. The economic slowdown is already making its fi rst impacts on the employment market. The rate of employment increase has slowed on the back of this.1) At the end of September 2014, 2.80 million people were registered as unemployed. That is 41,000 less than on the same date in the previous year. The unemployment rate totalled 6.5 %.2) Meanwhile, the infl ation rate weakened further. At the end of September 2014, consumer prices were 0.8% up on the same month in the previous year.3) In January, infl ation was still at 1.3 %. For the full year 2014, the DIW is anticipating a 1.0 % rise in consumer prices, and growth of 1.4 % for 2015.

Real Estate Market in Germany The rental Market Offi ce space The caution among companies, which was already tangible in spring 2014, in relation to the rental of offi ce space in the seven largest offi ce markets in Germany once again increased in the third quarter 2014.4) Leasing turnover in the fi rst nine months of the current fi nancial year totalled around 2.1 million m2 and was therefore 7 % down on the previous year period. As part of this, the regional diff erences were pronounced: while both of the largest cities Berlin and Hamburg recorded an increase in turnover of 11 % respectively, Cologne and Düsseldorf posted falls of 28 % and 25 % respectively. The decrease in Frankfurt was 17 %, while Munich and Stuttgart recorded relatively stable development with declines of 6 % and 2 % respectively. Year-on-year, vacancies at top locations fell by 6 % to 7.0 million m2 in the fi rst nine months of the current fi nancial year 2014. This represents a vacancy rate of 7.9 % across all cities.5)

Retail Space The pleasing development on the retail space market in the fi rst half of 2014 continued in the third quarter. Space turnover was roughly 10% up on the previous year at around 420,000 m2 . Unchanged from the previous quarter, the textile sector made up the highest proportion of this fi gure with 37%. This was followed by the food and gastronomy sector with 20%, which continues to penetrate inner city areas. The third strongest industry remains the health and beauty sector with 11%. At 7% and 5% respectively, the sport/outdoor sector and the home-living product sector recorded relatively constant fi gures.6)

The Investment Market Seemingly unperturbed by economic development over the last few months, the German investment market has the momentum to record its strongest year since 2007. With a transaction volume from commercially used properties of around € 26 billion, the fi rst nine months of the current fi nancial year saw turnover rise by a third compared to the previous year period. Almost half of the transaction volume focused on locations outside of the seven "real estate strongholds". Investors primarily looked to offi ce buildings, which made up 46 % of investment, followed by properties used for retail with a share of 25 %.7)

3) Destatis: Verbraucherpreise September 2014

4) Berlin, Düsseldorf, Frankfurt/Main, Hamburg, Cologne, Munich, Stuttgart.

7) JLL: Investment market overview Q3 2014.

¹⁾ Economic Forecast Project Group Autumn 2014 – DIW Weekly Report 42. 2) Federal Employment Agency: Der Arbeitsmarkt im September 2014

⁽The employment market in September 2014).

⁽Consumer prices September 2014).

⁵⁾ JLL: Offi ce market overview Q3 2014.

⁶⁾ JLL: Retail market overview Q3 2014.

Overall statement on the development of business by the management

On the back of the portfolio adjustment carried out since the start of 2013, net rental income was recorded at € 13.8 million, some 19 % down on the € 17.0 million reported in the previous year. This was compensated for by adjusted net interest expenses, which fell by more than 40 % to € 3.9 million (previous year: € 6.8 million).

In the fi rst nine months of 2014, the Fair Value Group's operating business result adjusted for extraordinary eff ects (EPRA earnings or FFO) therefore came in at € 3.7 million or € 0.37 per share, around 8 % down on the adjusted previous year fi gure of € 4.0 million or € 0.43 per share.

Adjusted consolidated net income in the fi rst nine months of the current fi nancial year was slightly down by around € 0.2 million or 4 % on the proportionate forecast of € 3.9 million. This was due to lower income on the back of the vacancy and sale of further properties (Weyhe-Leeste, Sparrieshoop) as well as slightly higher than anticipated net interest expenses.

Adjusted consolidated income
(EPRA-Earnings or FFO)		1/1 – 9/30/2014			1/1 – 9/30/2013 1)
			Adjustment for extraordinary factors				Adjustment for extraordinary factors
in € thousand	According to consoli dated income statement	Purchase- sales-, valuation results	Valuati on costs interest rate swaps/ interest rate caps	Adjusted consolida ted income statement	According to consoli dated income statement	Purchase- sales-, valuation results	Valuation costs interest rate swaps/ interest rate caps	Adjusted consolida ted income statement
Net rental income	13,810	–	–	13,810	16,968	–	–	16,968
General administrative expenses	(2,105)	–	–	(2,105)	(2,588)	–	–	(2,588)
Total other operating income and expenses	371	–	–	371	263	–	–	263
Earnings from sale of investment properties	(304)	304	–	–	327	(327)	–	–
Valuation profi t/loss	–	–	–	–	(189)	189	–	–
Operating result (EBIT)	11,772	304	–	12,076	14,781	(138)	–	14,643
Income from participations	–	–	–	–	2,087	–	(1,045)	1,042
Result from benefi cial acquisition of participations	–	–	–	–	166	(166)	–	–
Net interest expense	(3,941)	–	(13)	(3,954)	(6,686)	–	(143)	(6,829)
Ertragsteuern	–	–	–	–	(22)	–	–	(22)
Income before minority interests	7,831	304	(13)	8,122	10,326	(304)	(1,188)	8,834
Minority interests	(4,386)	(116)	33	(4,303)	(5,033)	30	137	(4,866)
Consolidated net income	3,445	188	20	3,653	5,293	(274)	(1,051)	3,968
Consolidated net income per share	0.37	–	–	0.39	0.57	–	–	0.43

Income, fi nancial and net asset position

Income position

				Change
in € thousand	1/1 – 9/30/2014	1/1 – 9/30/2013 1)	in € thousand	in %
Rental income	17,961	22,137	(4,176)	(19)
Income from operating and incidental costs	4,001	4,817	(816)	(17)
Operating and incidental costs,
leasehold payments	(6,258)	(7,408)	(1,150)	(16)
Maintenance and rental costs	(1,894)	(2,578)	(684)	(27)
Net rental income	13,810	16,968	(3,158)	(19)
General adminstrative expenses	(2,105)	(2,588)	(483)	(19)
Other income and expenses,
sale and valuation result	67	401	(334)	(83)
Operating result (EBIT)	11,772	14,781	(3,009)	(20)
Income from participations	–	2,087	(2,087)	(100)
Net interest expense	(3,941)	(6,686)	(2,745)	(41)
Minority interest in the result	(4,386)	(5,033)	(647)	(13)
Consolidated net income	3,445	5,293	(1,848)	(35)

1) Previous year period adjusted as part of the fi rst-time adoption of IFRS 10

Rental income in the fi rst nine months of the current fi nancial year 2014 totalled around € 18.0 million, some € 4.2 million or 19 % down on the corresponding period in the previous year. Using the contracted rents for the year at the start of the respective reporting period as a basis, the fall in rental income was around two thirds attributable to property sales completed in the meantime and around one third to the temporary rise in vacancies.

The rise in vacancies resulted in a slight fall in the apportioned amount of operating and incidental costs. In the fi rst nine months of the current fi nancial year, rental and maintenance costs came in at € 1.9 million, around 27 % down on the previous year fi gure of € 2.6 million. This can however be attributed to deferrals during the year.

Net rental income was recorded at € 13.8 million, around € 3.2 million or 19 % down on the € 17.0 million reported in the previous year.

Aft er savings in general administration expenses of € 0.5 million and a € 0.3 million fall in the balance of other income, expenses as well as the sale and valuation results, the operating result came in at € 11.8 million, around € 3.0 million or 20 % down on the adjusted previous year fi gure of € 14.8 million.

Due to the disposal of the only equity-accounted associated company as of December 31, 2013, no income from participations had to be taken into account in the fi rst nine months of 2014 (previous year: € 2.1 million).

The Group's net interest expenses were reduced by € 2.7 million or 41 % from € 6.7 million to € 3.9 million on the back of repayment and interest rate-related savings.

Aft er deducting earnings shares of minority shareholders of € 4.4 million (previous year: € 5.0 million), the Fair Value Group concluded the fi rst nine months of the current fi nancial year 2014 with consolidated net income of € 3.4 million, or € 0.37 per share (previous year: € 5.3 million or € 0.57 per share).

Financial position

Cash Flow from operating activities The cash infl ow from operating activities came in at € 6.4 million in the period under review, some € 0.9 million up on the previous year level of € 5.5 million.

Cash and cash equivalents
in € thousand	1/1 – 9/30/2014	1/1 – 9/30/2013 1)
Cash fl ow from operating activities	6,426	5,528
Cash fl ow from investment activities	21,872	4,933
Cash fl ow from fi nancing activities	(28,748)	(10,795)
Change of cash and cash equivalents	(1,450)	(334)
Cash and cash equivalents – start of period	17,361	14,182
Cash and cash equivalents – end of period	15,911	13,848

1) Previous year period adjusted as part of the fi rst-time adoption of IFRS 10

Cash Flow from investment activities Investment activities resulted in a cash infl ow totalling € 21.9 million (previous year: € 4.9 million). This mainly resulted from the disposal of the carrying amounts of fi ve sold properties. These relate to the properties in Henstedt-Ulzburg and Sparrieshoop (directly held), the partially-owned property in Erlangen (BBV 02), the property in Weyhe-Leeste (BBV 03) and the hotel in Hannover (BBV 06). This was partially off set by an interest-bearing and collateralised purchase price advance payment totalling around € 0.5 million in return for a limited exclusive purchase right on an inner city land plot in Chemnitz (directly held).

Cash Flow from fi nancing activities Cash outfl ow from fi nancing activities totalled € 28.7 million (previous year: € 10.8 million). The largest item was the repayment of fi nancial liabilities totalling € 24.2 million (previous year: € 10.1 million). This item consisted € 19.0 million or 67 % sales-related one-off repayments, while a total of € 5.2 million or 33 % of this item were scheduled repayments. The second largest item was the dividend pay-out for 2013 totalling € 2.3 million (previous year: € 0.9 million). Moreover, this fi gure also contains pay-outs to minority shareholders totalling € 2.2 million; these relate 98 % to pay-outs to minority shareholders at subsidiary IC 03 and BBV 03, and 2 % to purchase price payments for the acquisition of minority shareholdings in several subsidiaries in the so-called secondary market. This item also includes € 0.9 million for the € 5.0 million reduction in an interest hedging transaction.

Liquidity In the fi rst nine months of the current fi nancial year 2014, cash and cash equivalents in the Group fell by € 1.5 million to € 15.9 million (previous year period: fall of € 0.3 million to € 13.8 million). The fall is largely attributable to the dividend pay-out.

Net asset position

Assets Total assets as of September 30, 2014 amounted to around € 321.1 million and were down by 7 % compared with December 31, 2013 (€ 345.9 million). The fall resulted from property sales and the repayments of fi nancial liabilities.

Non-current assets totalling around € 289.3 million accounted for 90 % of total assets (December 31, 2013: € 292.5 million or 85 %). Current assets totalled € 31.7 million or 10 % of total assets (December 31, 2013: € 33.8 million). Of this amount, cash and cash equivalents made up € 15.9 million or 50 %. Receivables and other assets accounted for another € 15.8 million (also 50 %). In this category, the largest item was the receivable for the pay-out of a settlement credit for the participation cancelled at the former associated company BBV 9 as of December 31, 2013, totalling € 11.6 million.

Equity and liabilities As of September 30, 2014, 25 % or € 81.8 million of assets were fi nanced by equity attributable to the shareholders of Fair Value REIT-AG, and 75 % or € 239.5 million by debt.

It should be noted that minority interests in subsidiaries in the amount of € 66.3 million are reported as liabilities in accordance with IFRS. For calculating the minimum equity ratio for purposes laid out by the REIT Act, interests in subsidiaries included in the consolidated fi nancial statements not owned by the parent company and classifi ed as debt are handled as equity. The corresponding Group equity totalled € 148.1 million or 46 % of total assets (December 31, 2013: € 146.3 million or 42 %).

In relation to immovable assets as of September 30, 2014 totalling € 289.3 million, the REIT equity ratio came in at 51.2 % (December 31, 2013: 46.9 %).

Financial liabilities The fi nancial liabilities of the Group totalled € 166.9 million or 52 % of total assets (December 31, 2013: € 191.2 million or 55 %). Of these, € 46.6 million or 28 % (December 31, 2013: € 64.6 million or 34 %) were current. The decrease in fi nancial liabilities by € 24.3 million or 15 % compared to December 31, 2013 was largely attributable to unscheduled repayments in connection with the sale of properties.

Financial liabilities Fair Value REIT-AG and subsidiaries as of 9/30/2014

Fund	Bank	Value date 9/30/2014	Condition	Bankmargin	Duration	LTV	DSCR
FVAG	Capital Bank GRAWE Group, Graz	(7,000)	variable	5.00 %	6/30/2015	–	–
FVAG	WIB Westdeutsche ImmobilienBank AG	(9,700)	2.55%	–	6/30/2019	70 %	120 %
FVAG	WIB Westdeutsche ImmobilienBank AG	(12,215)	variable	1.27 %	6/30/2019	70 %	120 %
IC 07	HSH Nordbank AG	(1,103)	variable	3.50 %	12/31/2014	–	–
IC 13	HSH Nordbank AG	(10,770)	variable	3.20 %	12/31/2014	–	–
IC 13	HSH Nordbank AG	(2,067)	3.10%	–	12/31/2014	–	–
IC 13	Corealcredit Bank AG	(2,812)	variable	2.50 %	2/28/2015	–	–
BBV 06	Unicredit Bank AG	(8,152)	variable	2.20 %	12/31/2014	–	–
IC 12	WIB Westdeutsche ImmobilienBank AG	(1,998)	5.20 %	–	8/31/2016	50 %	120 %
IC 15	HSH Nordbank AG	(6,494)	variable	3.10 %	2/27/2015	–	–
IC 15	Sparkasse Südholstein	(7,773)	2.71 %	–	1/30/2018	–	–
IC 15	pbb Deutsche Pfandbriefbank	(2,925)	4.55 %	–	12/31/2014	–	–
BBV 02	Bayerische Beamten Lebensvers. a.G.	(139)	5.80 %	–	12/31/2014	–	–
BBV 02	Bayerische Beamten Lebensvers. a.G.	(942)	6.15 %	–	9/30/2016	–	–
BBV 10	Bayerische Beamten Lebensvers. a.G.	(22,705)	4.50 %	–	12/31/2014	–	–
BBV 10	Unicredit Bank AG	(25,951)	variable	1.99 %	12/31/2014	–	–
BBV 10	Unicredit Bank AG	(10,051)	variable	2.10 %	12/31/2014	–	–
BBV 14	DG Hypothekenbank AG	(34,150)	variable	1.25 %	3/31/2016	63 %	110 %
Total	Separate fi nancial statements	(166,947)
Total	Reversal of market valuation diff erence and accrued loan processing fees	4

Total Consolidated fi nancial statement (166,943) On the back of a partially terminated interest hedging transaction, the proportion of fi nancial liabilities

hedged using interest rate swaps fell to € 5.0 million or 3 % of the Group's fi nancial liabilities (December 31, 2013: € 10.0 million or 5.2 %).

Interest rate hedges 9/30/2014

		Amount T€	Cap/Swap	Interest	Duration
FV AG	WIB Westdeutsche ImmobilienBank AG	(5,000)	Swap	4,94 %	6/30/2018
BBV 06	Unicredit Bank AG	(21,000)	Cap	3,50 %	12/31/2014
BBV 14	DZ Bank AG	(34,863)	Cap	4,25 %	12/31/2016
Total		(65.863)

Total fi xed interest loans fell to € 47.3 million or 28.3 % of the Group's fi nancial liabilities (previous year: € 55.5 million or 29.1 %).

As the interest rate caps do not currently have any eff ect due to the agreed upper limit of the 3-month EURIBOR interest rate of 3.5 % p.a. and 4.25 % p.a., as of the balance sheet date € 119.7 million or around 71.7 % of fi nancial liabilities are subject to variable interest rates (December 31, 2014: € 125.7 million or 65.7 %).

Assuming a constant 3-month EURIBOR interest rate of 0.1 % p.a., the weighted interest rate of fi nancial liabilities of the Group came in at 2.8 % p.a. as of September 30, 2014. This is on a par with the weighted interest rate as of December 31, 2013.

Equity / Net asset value (NAV) The net asset value (NAV), amounted to € 81.8 million as of September 30, 2014, compared with € 80.7 million on December 31, 2013.

Based on 9,325,572 shares in circulation as of the balance sheet date, the NAV per share was € 8.77, compared to € 8.65 on December 31, 2013.

Balance sheet NAV
in € thousand	9/30/2014	12/31/2013
Market value of properties ( including properties held for sale )	289,298	311,974
Miscellaneous assets minus miscellaneous liabilities	29,338	29,224
Minority interests	(66,342)	(65,642)
Financial liabilities	(166,943)	(191,181)
Other liabilities	(3,565)	(3,702)
Net Asset Value	81,786	80,673
Net Asset Value per share	8.77	8.65

The "Best Practices Recommendations" of the European Public Real Estate Association (EPRA) are accepted recommendations which complement the IFRS reporting of real estate companies by providing guidance on property- and company related key performance indicators including a transparent net asset value calculation. The EPRA-NAV indicator shown below was calculated on the basis of these recommendations; it eliminates the market values of derivative fi nancial instruments and therefore represents the real-estate-related net asset value. As deferred taxes are not relevant to Fair Value REIT-AG as a result of its REIT status, the EPRA-NAV fi gures shown below also correspond to the NNAV indicator used by some experts.

EPRA-NAV
in € thousand	9/30/2014	12/31/2013
NAV pursuant to consolidated balance sheet	81,786	80,673
Market value of derivative fi nancial instruments	1,066	2,089
Thereof due to minority interests	(92)	(161)
EPRA-NAV	82,760	82,601
EPRA-NAV per share	8.87	8.86

Supplementary Report

Subsidiary BBV 10 At the end of October 2014 the DIY store in Celle rented to Praktiker up to the end of January 2014 (total rental space incl. ancillary and outdoor areas of around 10,200 sqm.) has been leased to a franchisee for operating a DIY and garden store under the "hagebaumarkt" brand for a period of 10 years and 1 month until December 31, 2024 plus a 2 x 5-year option.

A turnover rent of 6 % of annual turnover of the DIY store was agreed with a minimum rent of € 396 thousand p.a.; if turnover is € 8 million p.a. or over, a rent of 6.5 % of total turnover applies. Incidental costs are due from December 1, 2014, and the hand-over of the rental space will likely take place at the end of January 2015 following wide-ranging renovation and maintenance work by the owner as well as parallel work by the tenant on the lighting system; rent is due from four months aft er the hand-over.

The renovation and maintenance work totals € 0.5 million. In addition to that rental-related costs for additional building measures, for a construction cost subsidy for the lighting system and for fees result in total expenses of roughly € 0.6 million. As the other main tenant at the property, Hammer speciality stores, announced the advance extension of its rental agreement on the back of the new contract with "hagebaumarkt", this property will now once again be stabilised in the long term.

Risk Report

The Fair Value Group's business activities expose it to a wide range of risks. In addition to general economic risks, these are essentially occupancy risks, rental default risks, interest rate risks and liquidity risks. The risk management activities and the general risks faced by the company are described on pages 40 to 46 of the Fair Value REIT-AG Annual Report 2013.

The Management Board does not expect any risks to materialise in the coming twelve months that could pose a threat to the continued existence of Fair Value REIT-AG.

Opportunities and forecast

As of the balance sheet date, the occupancy rate of the portfolio was below the long-term average at around 90 %. However, taking into account the re-letting of the DIY store space in Celle eff ective as of December 1, 2014, the occupancy rate would once again be close to 93 %.

The Management Board views the progress in the fi rst nine months of the current fi nancial year as confi rmation of the anticipated development. In the fourth quarter 2014 however rising maintenance and rental costs are to be expected. The Management Board reiterates its forecast for a dividend of € 0.25 per share for the fi nancial year 2014 although consolidated net income (EPRA Earnings or FFO) for the full year 2014 will likely just reach the anticipated number of € 5.1 million or € 0.55 per share.

Munich, November 3, 2014

Fair Value REIT-AG

Frank Schaich , CEO

Consolidated Interim Financial Statements

Balance Sheet

Consolidated balance sheet
in € thousand Note no.	9/30/2014	12/31/2013
Assets
Non-current assets
Intangible assets	79 3	106
Property, plant and equipment	3	97
Investment property	289,298 4	292,297
Other receivables and assets	14	10
Total non-current assets	289,394	292,510
Current assets
Trade receivables	2,136	2,491
Income tax receivables	28	27
Other receivables and assets	13,671 5	13,892
Cash and cash equivalents	15,911	17,361
Total current assets	31,746	33,771
Non-current assets available for sale	– 6	19,585
Total assets	321,140	345,866
Equity and liabilities
Equity
Subscribed capital	18,814	47,034
Share premium	74,387	46,167
Loss carryforward	(11,017)	(12,130)
Treasury shares	(398)	(398)
Total equity	81,786 7	80,673
Non-current liabilities
Minority interests	66,342	65,642
Financial liabilities	120,581 8	126,583
Derivative fi nancial instruments	1,066	2,089
Total non-current liabilities	187,989	194,314
Current liabilities
Provisions	439	429
Financial liabilities	46,362 8	64,598
Trade payables	999	2,150
Other liabilities	3,565	3,702
Total current liabilities	51,365	70,879
Total equity and liabilities	321,140	345,866

Income Statement

Consolidated income statement
in € thousand	Note no.	1/1 – 9/30/ 2014	1/1 – 9/30/ 2013 1)
Rental income		17,961	22,137
Income from operating and incidental costs		4,001	4,817
Leasehold payments		–	(4)
Operating and incidental costs		(6,258)	(7,404)
Maintenance and rental costs		(1,894)	(2,578)
Net rental result		13,810	16,968
General administrative expenses	9	(2,105)	(2,588)
Other operating income		397	273
Other operating expenses		(26)	(10)
Total other operating income and expenses		371	263
Net income from the sale of investment properties		22,626	5,182
Expenses in connection with the sale of investment properties		(22,930)	(4,855)
Result from sale of investment properties	6	(304)	327
Valuation losses		–	(189)
Valuation result		–	(189)
Operating result		11,772	14,781
Result from equity-accounted investments		–	2,087
Other income from participations		–	166
Interest income		54	64
Interest expenses	10	(3,995)	(6,750)
Result before tax		7,831	10,348
Income tax		–	(22)
Income before minority interests		7,831	10,326
Minority interest in the result		(4,386)	(5,033)
Net income		3,445	5,293
Earnings per share in € ( basic/diluted )		0.37	0.57

Statement of Comprehensive Income

Consolidated statement of comprehensive income
in € thousand	1/1 – 9/30/ 2014	1/1 – 9/30/ 2013 1)
Net income	3,445	5,293
Other results
Change in cash fl ow hedges	–	(2,794)
Thereof due to minority interests	–	801
Total other results	–	(1,993)
Comprehensive income	3,445	3,300

1) Previous year period adjusted as part of the fi rst-time adoption of IFRS 10

Statement of Changes in Equity

Consolidated statement of changes in equity

in € thousand	Shares in circulation [in pcs.]	Subscribed capital	Share premium	Own shares	Reserve for changes in value	Retained earnings	Total
Balance at January 1, 2013	9,325,572	47,034	46,167	(398)	(6,411)	(5,971)	80,421
Dividend	–	–	–	–	–	(932)	(932)
Total net income 1)	–	–	–	–	1,993	5,293	7,286
Balance at September 30, 2013	9,325,572	47,034	46,167	(398)	(4,418)	(1,610)	86,775
Balance at January 1, 2014	9,325,572	47,034	46,167	(398)	–	(12,130)	80,673
Capital decrease	–	(28,220)	–	–	–	–	(28,220)
Adjustment in the capital
reserve	–	–	28,220	–	–	–	28,220
Dividend	–	–	–	–	–	(2,332)	(2,332)
Total net income	–	–	–	–	–	3,445	3,445

Cash Flow Statement

Consolidated cash fl ow statement
in € thousand	1/1 – 9/30/ 2014	1/1 – 9/30/ 2013 1)
Net income	3,445	5,293
Adjustments to consolidated earnings for reconciliation to cash fl ow from operating activities
Income tax expenses/( income )	(1)	27
Interest expenses	3,995	6,750
Interest income	(54)	(64)
Amortization of intangible assets and depreciation of property, plant and equipment	29	28
(Profi ts)/losses from the disposal of investment properties	304	(327)
Income from equity-accounted investments	–	(2,087)
Withdrawals from equity-accounted investments	–	511
Income from benefi cial acquisition of participations	–	(166)
Loss/( profi t ) of minority shareholders in subsidiaries	4,386	5,033
Disbursement to minority shareholders in subsidiaries	(1,427)	(1,577)
Result from the valuation of derivative fi nancial instruments	(104)	(263)
Interest paid	(4,612)	(7,704)
Interest received	54	64
Change in assets, equity and liabilities
( Increase )/decrease in trade receivables	339	309
( Increase )/decrease in other receivables	717	(214)
( Decrease )/increase in provisions	10	(3)
( Decrease )/increase in trade payables	(1,151)	29
( Decrease )/increase in other liabilities	480	(117)
Noncash relevant additions and disposals	16	6
Cash fl ow from operating activities	6,426	5,528
Payments for purchase of interests in associated companies	–	303
Investments in investment property	–	(409)
Investments in investment property/properties under construction	(450)	–
Disposal of investment properties/properties under construction	22,322	5,044
Investments in intangible assets and depreciation of property, plant and equipment	–	(5)
Cash fl ow from investment activities	21,872	4,933
Distribution of dividends	(2,332)	(932)
Receipts from fi nancial liabilities	–	700
Repayment of fi nancial liabilities	(24,238)	(10,121)
Decline swap	(919)	–
Payments to minority interests	(2,259)	(442)
Cash fl ow from fi nancing liabilities	(29,748)	(10,795)
Cash eff ective change of liquid funds	(1,450)	(334)
Cash and cash equivalent ( start of period )	17,361	14,182
Cash and cash equivalent ( end of period )	15,911	13,848

Notes

(1) General Information about the Company

Fair Value REIT-AG is a stock company ("Aktiengesellschaft ") founded and headquartered in Germany. The company does not have any branch offi ces. Following its registration as an "Aktiengesellschaft " on July 12, 2007, Fair Value REIT-AG ("the company") has been listed on the stock exchange since November 16, 2007. It became a REIT on December 6, 2007. The shares of Fair Value REIT-AG are publicly traded. The registered headquarters of the company are located at Leopoldstr. 244 in 80807 Munich, Germany.

As a real estate investment fi rm, the company focuses on the acquisition and management of commercial properties in Germany. Investment activities focus in particular on offi ce and retail properties in regional centres. Fair Value REIT-AG invests directly in real estate as well as indirectly in real estate partnerships via the acquisition of participations. Information on the Group structure is presented in Note 2a.

As a result of its participations in a total of 10 (previous year: 11) closed-end real estate funds and six additional companies, the Company must prepare consolidated fi nancial statements.

(2) Key Accounting, Valuation and Consolidation Methods as well as Presentation of Amendments from Previous Years

(2a) Key Accounting, Valuation and Consolidation

Basis of preparation of the fi nancial statements The consolidated interim fi nancial statements were prepered by Fair Value REIT-AG in accordance with the International Financial Reporting Standards ("IFRs") of the International Accounting Standards Board (IASB) while taking into account the interpretations of the IAS 34 "Zwischenberichterstattung".

The consolidated interim fi nancial statements are generally prepared by applying the cost principle. The exceptions to this are investment properties as well as derivative fi nancial instruments, which were measured at fair value.

The consolidated interim fi nancial statements have been prepared in euros. Unless otherwise stated, all amounts are provided in thousands of euros (€ thousand).

Comparative Figures The fi gures used for comparison in the balance sheet and the statement of change in the equity capital are from the reporting date December 31, 2013. The comparative fi gured used for the profi t and loss account, the statement of income and accumulated earnings and the cash fl ow statement in general relate to the period from January 1 to September 30, 2013.

Principles and scope of consolidation All subsidiaries are included in the consolidated interim fi nancial report. The scope of consolidation has not changed since December 31, 2013.

The scope of consolidation as of September 30, 2014 constitutes the following:

Voting rights/fi xed capital interest in %	Share per 9/30/2014	Share per 12/31/2013
GP Value Management GmbH, Munich ("GPVM")	100.00	100.00
BBV 3 Geschäft sführungs-GmbH & Co. KG, Munich ("FV03")	100.00	100.00
BBV 6 Geschäft sführungs-GmbH & Co. KG, Munich ("FV06")	100.00	100.00
BBV 9 Geschäft sführungs-GmbH & Co. KG, Munich ("FV09")	100.00	100.00
BBV 10 Geschäft sführungs-GmbH & Co. KG, Munich ("FV10")	100.00	100.00
BBV 14 Geschäft sführungs-GmbH & Co. KG, Munich ("FV14")	100.00	100.00
IC Fonds & Co. Büropark Teltow KG, Munich ("IC 07")	77.85	77.74
IC Fonds & Co. Forum Neuss KG, Munich ("IC 03")	71.58	71.58
BBV Immobilien-Fonds Nr. 6 GmbH & Co. KG, Munich ("BBV 06")	59.74	59.72
BBV Immobilien-Fonds Nr. 3 GmbH & Co. KG, Munich ("BBV 03")	54.10	54.10
IC Fonds & Co. Gewerbeportfolio Deutschland 13. KG, Munich ("IC 13")	51.07	50.54
IC Fonds & Co. SchmidtBank-Passage KG, Munich ("IC 12")	50.11	48.86
BBV Immobilien-Fonds Nr. 14 GmbH & Co. KG, Munich ("BBV 14")	45.56	45.22
BBV Immobilien-Fonds Erlangen GbR, Munich ("BBV 02")	41.53	41.53
BBV Immobilien-Fonds Nr. 10 GmbH & Co. KG, Munich ("BBV 10")	40.85	40.77
IC Fonds & Co. Gewerbeobjekte Deutschland 15. KG, Munich ("IC 15")	39.63	39.49

The slight changes in individual participation levels are based on other shareholders exiting, on the additional acquisition of participations in the so-called secondary market and on roundings.

Accounting and Valuation Methods The same accounting and valuation methods are used for the quarterly report as for the consolidated fi nancial statement on December 31, 2013. The fi rst-time adoption of IFRS 13 – Measuring Fair Value – had impacts on mandatory explanatory notes on specifi c assets and liabilities as well as on a disclosure of fair value hierarchies. For the period under review there were no material impacts on the measurement of fair value.

Measuring fair value The Group measures fi nancial instruments and real estate at fair value at every reporting date.

The fair value is the price which would be paid in an orderly business transaction between market participants on the valuation date for the sale of an asset or the transfer of a liability. When measuring fair value, the assumption is made that the business transaction which takes place during the sale of an asset or the transfer of a liability, either takes place on the:

• Main market for the asset or liability or
• The most advantageous market for the asset or liability, if no main market is available.

The Group needs to have access to the main market or the most advantageous market.

(2b) Changes of Accounting Methods

As of December 31, 2013, the Group adopted the standard IFRS 10 Consolidated Financial Statements for the fi rst time, which resulted in an expansion of the scope of consolidation and therefore required an adjustment to the comparative fi gures from the previous year. Due to the fi rst-time adoption of IFRS 10, the former equity-accounted companies BBV 02, BBV 10, BBV 14, IC 12 and IC 15 became subsidiaries which are fully consolidated as part of their inclusion into the Group. For more detailed explanations of this, please refer to the annual report 2013, notes 2a (p. 59 f.).

in € thousand 1/1 – 9/30/2013 1) Adjustment 1/1 – 9/30/2013 Rental income 22,137 14,398 7,739 Income from operating and incidental costs 4,817 3,155 1,662 Leasehold payments (4) – (4) Operating and incidental costs (7,404) (4,959) (2,445) Maintenance and rental costs (2,578) (877) (1,701) Net rental result 16,968 11,717 5,251 General administrative expenses (2,588) (868) (1,720) Other operating income 273 138 135 Other operating expenses (10) (9) (1) Total other operating income and expenses 263 129 134 Net income from the sale of investment properties 5,182 2,900 2,282 Expenses in connection with the sale of investment properties (4,855) (2,735) (2,120) Result from sale of investment properties 327 165 162 Valuation gains – – – Valuation losses (189) (186) (3) Valuation result (189) (186) (3) Operating result 10,957 3,824 14,781 Income from equity-accounted investments (2,905) 4,992 2,087 Other income from participations 166 3 163 Interest income 64 59 5 income expenses (6,750) (3,963) (2,787) Result before tax 10,348 4,151 6,197 Income tax (22) – (22) Result before minority interest 10,326 4,151 6,175 Minority interest in the result (5,033) (4,156) (877) Financial result 5,293 (5) 5,298 Earnings per share in € (basic/diluted) 0.57 0.57

Eff ect on the income statement (increase/decrease) in earnings

in € thousand	1/1 – 9/30/2013 1)	Adjustment	1/1 – 9/30/2013
Net income	5,293	(5)	5,298
Adjustments to consolidated earnings for reconcolidation to cash fl ow from operating activities
Income tax expenses/(income)	27	7	20
Interest expenses	6,750	3,963	2,787
Interest income	(64)	(59)	(5)
Amortization of intangible assets and depreciation of property, plant and equipment	28	2	26
(Profi ts)/losses from the disposal of investment properties	(327)	(165)	(162)
Income from equity-accounted investments	(2,087)	2,905	(4,992)
Withdrawels from equity-accounted investments	511	(1,238)	1,749
Income from benefi cial acquisition of participations	(166)	(3)	(163)
Loss/(profi t) for minority interests	5,033	4,156	877
Disbursements to minority interests	(1,577)	(1,577)	–
Result from the valuation of derivative fi nancial instruments	(263)	(273)	10
Interest paid	(7,704)	(4,459)	(3,245)
Interest received	64	59	5
Changes in assets, equity and liabilities
(Increase)/Decrease in trade receivables	309	(162)	471
(Increase)/Decrease in other receivables	(214)	(405)	191
(Decrease)/Increase in provisions	(3)	–	(3)
(Decrease)/Increase in trade payables	29	(9)	38
(Decrease)/Increase in other liabilities	(117)	2	(119)
noncash relevant additions and disposals	6	6	–
Cash fl ow from operating activities	5,528	2,745	2,783
Receipt of cash and cash equivalents of aquired subsidiaries minus payments for purchase of equity-accounted participations	303	325	(22)
Investments in investment property	(409)	–	(409)
Disposal of investment properties/properties under construction	5,044	2,855	2,189
Investments in intangible assets and depreciation of property, plant and equipment	(5)	(5)	–
Cash fl ow from investment activities	4,933	3,175	1,758
Distribution of dividends	(932)	–	(932)
Receipts from fi nancial liabilities	700	–	700
Repayment of fi nancial liabilties	(10,121)	(6,294)	(3,827)
Disbursements of minority intersts	(442)	(345)	(97)
Cash fl ow from fi nancing activities	(10,795)	(6,639)	(4,156)
Cash eff ective change of liquid funds	(334)	(719)	385
Cash and cash equivalents – start of period	14,182	8,321	5,861

Cash and cash equivalents – end of period 13,848 7,602 6,246

Eff ect on the statement of cash fl ows (increase/decrease) in cash fl ow

(3) Intangible Assets

The intangible assets include a contractual right that was valued individually within the framework of a company acquisition and will be amortized over a useful life of fi ve years. Amortization totalling € 27 thousand to € 79 thousand were carried out in the quarter under review.

(4) Investment Property

Development of investment property
in € thousand	Direct investments	Subsidiaries	Total
Acquisiton costs
Balance at January 1, 2014	42,338	342,034	384,372
Additions (purchase price advance payment plot area Chemnitz)	450	–	450
Additions (subsequent acquisition costs)	88	–	88
Disposals – sale	(204)	(3,900)	(4,104)
Reclassifi cation (purchase price advance payment plot area
Chemnitz)	–	(500)	(500)
Balance at September 30, 2014	42,672	337,634	380,306
Changes in value
Balance at January 1, 2014	(5,059)	(87,016)	(92,075)
Disposals – sale	27	1,040	1,067
Balance at September 30, 2014	(5,032)	(85,976)	(91,008)
Fair values
Balance at January 1, 2014	37,279	255,018	292,297
Balance at September 30, 2014	37,640	251,658	289,298

The fair values used for the investment properties are those determined on December 31, 2013 by CBRE GmbH, Frankfurt.

As of September 30, 2014, a total of 44 properties were held by the group. A total of 38 of these were freehold properties, while fi ve properties were in co-ownership and one was a leasehold property. Compared to December 31, 2013, the number of properties in the portfolio decreased by two. These were the properties in Sparrieshoop (directly held) and in Weyhe (BBV 03) with fair values of € 177 thousand and € 2,860 thousand respectively.

In addition to retrospective acquisition costs, the additions in the reporting period also relate to an interest-bearing and collateralised purchase price advance payment by Fair Value totalling € 450 thousand for a possible property acquisition in Chemnitz. In return, Fair Value has the exclusive right up to December 31, 2014 to examine and carry out the transaction with an investment volume of € 1,100 thousand plus

incidental acquisition costs. Previously, the subsidiary IC 12 abstained from acquiring the same property for tax reasons. In return, the purchase price advance payment paid to IC Grundbesitz GmbH & Co. Bankgebäude Chemnitz KG, Unterschleißheim on December 27, 2011 by IC 12 totalling € 500 thousand was reclassifi ed from investment properties to other receivables and assets.

(5) Other Receivables and Assets

Other Receivables and Assets comprise the following:

in € thousand	9/30/2014	12/31/ 2013
Settlement credit BBV 09	11,628	11,628
Purchase price receivable property Kaltenkirchen (Fair Value)	–	1,960
Purchase price receivable commercial property Erlangen (BBV 02)	1,355	–
Advance payment of property in Chemnitz (IC 12)	500	–
Tax receivables (income tax + vat)	52	83
Accrual insurances	48	–
Other accrual	33	53
Other	23	46
Accrued interest	17	24
Vendor with a debit balance	15	98
	13,671	13,892

The pay-out of the proportion of the sale price held in the notary account for the commercial property in Erlangen (BBV 02) is linked to the entry of the new owner into the land register. This entry is probably to be completed during the next fi nancial year. The purchase price advance payment paid to IC Grundbesitz GmbH & Co. Bankgebäude Chemnitz KG, Unterschleißheim totalling € 500 thousand is due to be repaid to IC 12 by December 30, 2014 at the latest. The due amount is subject to 5 % interest p.a.

(6) Non-current Assets available for sales

in € thousand	9/30/2014	12/31/2013
Hotel property Hannover, Hinueberstr. 6 (BBV 06)	–	17,000
Offi ce building Henstedt-Ulzburg, Hamburger Str. 83 (Fair Value)	–	1,100
Retail property Erlangen, Henkestr. 5 (BBV 02)	–	1,485
	–	19,585

The receivables relating to the payment of the purchase prices for the property in Henstedt-Ulzburg and the hotel property in Hannover were settled in February of this year. In the quarter under view, the sales resulted in sales losses totalling € 304 thousand on the back of incidental costs of sale.

(7) Equity

The Annual General Meeting on May 27, 2014 agreed on the creation of authorised capital. Moreover, the Management Board was authorised to issue convertible and/or warrant bonds or participation rights with or without conversion rights or subscription rights. The creation of conditional capital was also adopted, as was a capital decrease in the amount of € 18,814 thousand, as part of which the freed up portion of the shareholders' assets tied to the previous amount of the share capital in the amount of € 28,220 thousand being released and transferred to the capital reserve. The capital decrease was entered into the commercial register on July 8, 2014.

(8) Financial Liabilities

The short-term and long-term fi nancial liabilities of € 166,943 thousand decreased by € 24,238 thousand compared to December 31, 2013. This was because of scheduled repayments of € 5,230 thousand and unscheduled repayments of € 19.008 thousand. Of this amount, € 16,982 thousand was attributable to property sales of the hotel property in Hannover (BBV 06) and € 2,026 thousand to the directly held properties in Kaltenkirchen, Henstedt-Ulzburg and Sparrieshoop.

(9) General Administrative Expenses

in € thousand	1/1 – 9/30/2014	1/1 – 9/30/2013 1)
Fund management	446	713
Personnel expenses	410	411
Trustee-fees	193	197
Stock market listing, general meeting and events	192	273
Non-deductible VAT	152	195
Audit expenses	152	158
Legal and consulting costs	128	201
Other	97	119
Accounting	97	100
Valuations	73	30
Remuneration (Supervisory and Advisory Boards, General Partner)	71	100
Offi ce costs	43	39
Depreciation	29	29
Travel and vehicle expenses	22	23
Total general administrative expenses	2,105	2,588

Of the general administrative expenses, € 1,123 thousand (53 %) are attributable to Fair Value (€ 982 thousand or 47 % in the previous year). To the subsidiaries € 1,222 thousand (47 %) are attributable (€ 1,366 thousand or 53 % in the previous year).

(10) Interest Expenses

in € thousand	1/1 – 9/30/2014	1/1 – 9/30/2013 1)
Valuation of derivative fi nancial instruments	104	263
Other interest expenses	(4,099)	(7,013)
Total interest expenses	(3,995)	(6,750)

1) Previous year period adjusted as part of the fi rst-time adoption of IFRS 10

Of the other interest expenses, € 3,799 thousand were spent on loans and swaps. The remaining € 300 thousand relate to processing fees as part of unscheduled repayments, the release of accruals for processing fees as well as the payment of a cap premium.

(11) Segment Revenues and Results

		1/1 – 9/30/2014		1/1 – 9/30/2013 1)
in € thousand	Segment revenues	Segment results	Segment revenues	Segment results
Direct investments	2,344	1,644	2,712	1,984
Subsidiaries	19,618	11,112	24,242	13,840
Total segment revenues and results	21,962	12,756	26,954	15,824
Central administrative expenses and other	–	(984)	–	(1,043)
Earnings from equity-accounted participations	–	–	–	2,087
Other income from participations	–	–	–	166
Net interest expenses	–	(3,941)	–	(6,686)
Income tax	–	–	–	(22)
Minority interest in the result	–	(4,386)	–	(5,033)
Net income	–	3,445	–	5,293

The following table shows the income statement of the segments, with the "subsidiaries" segment being broken down according to the individual fund companies.

Income statement by segments at September 30, 2014

	Direct investments
in € thousand	FV AG	IC 03	IC 07	IC 12	IC 13
Rental income	1,946	–	463	379	1,419
Income from operating and incidental costs	398	–	247	241	388
Segment revenue	2,344	–	710	620	1,807
Operating and incidental costs	(559)	(10)	(311)	(258)	(460)
Other real estate-related expenses	(18)	–	(174)	(146)	(181)
Administrative expenses related to segment	(117)	(4)	(46)	(53)	(95)
Other operating expenses and income ( balance )	29	–	31	8	2
Income from sale of investment properties	(35)	–	–	–	–
Segment result	(1,644)	(14)	210	171	1,073
General administrative costs	(1,006)	–	–	–	–
Income from participations	4,474	–	–	–	–
Net interest expenses	(885)	–	(28)	(59)	370
Minority interests in the result	–	–	–	–	–
Consolidated net income	4,227	(14)	182	112	703

						Subsidiaries
IC 15	BBV 02	BBV 03	BBV 06	BBV 10	BBV 14	Total	Recon ciliation	Group
2,176	2	362	1,676	5,559	3,979	16,015	–	17,961
204	–	54	283	1,260	926	3,603	–	4,001
2,380	2	416	1,959	6,819	4,905	19,618	–	21,962
(298)	(48)	(96)	(548)	(2,375)	(1,295)	(5,699)	–	(6,258)
(132)	–	(47)	(283)	(567)	(346)	(1,876)	–	(1,894)
(90)	(14)	(72)	(147)	(255)	(222)	(998)	–	(1,115)
(27)	44	–	35	91	152	336	6	371
–	(16)	(96)	(157)	–	–	(269)	–	(304)
1,833	(32)	105	859	3,713	3,194	11,112	6	12,762
–	–	–	–	–	–	–	16	(990)
–	–	–	–	–	–	–	(4,474)	–
(429)	(42)	–	(336)	(1,401)	(392)	(3,057)	1	(3,941)
–	–	–	–	–	–	–	(4,386)	(4,386)
1,404	(74)	105	523	2,312	2,802	8,055	(8,837)	3,445

Income statement by segments at September 30, 2013

	Direct investments
in € thousand	FV AG	IC 03	IC 07	IC 12	IC 13	IC 15
Rental income	2,252	441	421	343	1,369	2,180
Income from operating and incidental costs	460	155	146	176	393	204
Segment revenue	2,712	596	567	519	1,762	2,384
Leasehold payments	–	–	–	–	–	–
Operating and incidental costs	(673)	(173)	(297)	(294)	(460)	(382)
Other real estate-related expenses	(50)	(93)	(539)	(156)	(170)	(37)
Administrative expenses related to segment	(136)	(31)	(31)	(31)	(79)	(119)
Other operating expenses and income ( balance )	23	3	2	5	10	16
Profi t from purchase of investment properties	108	–	–	–	–	–
Valuation losses	–	–	(3)	–	–	(10)
Segment result	1,984	302	(301)	43	1,063	1,852
General administrative costs	(1,086)	–	–	–	–	–
Income from equity-accounted participations	511	–	–	–	–	–
Other income from participations	(120)	–	–	–	–	–
Net interest expenses	(1,615)	(43)	(56)	(57)	(360)	(444)
Aff ecting valuation of derivative fi nancial instruments	(110)	–	–	–	–	–
Minority interests in the result	–	–	–	–	–	–
Income tax	(22)	–	–	–	–	–
Consolidated net income 1)	(458)	259	(357)	(14)	703	1,408

Subsidiaries
	BBV 02	BBV 03	BBV 06	BBV 10	BBV 14	Total	Recon ciliation	Group
	163	440	2,816	6,897	4,815	19,885	–	22,137
	14	78	430	1,574	1,187	4,357	–	4,817
	177	518	3,246	8,471	6,002	24,242	–	26,954
	–	–	(4)	–	–	(4)	–	(4)
	(63)	(106)	(736)	(2,432)	(1,788)	(6,731)	–	(7,404)
	(3)	(394)	(455)	(205)	(476)	(2,528)	–	(2,578)
	(23)	(115)	(223)	(305)	(390)	(1,347)	–	(1,483)
	2	10	24	14	92	178	62	263
	–	–	54	165	–	219	–	327
	–	–	–	–	(176)	(189)	–	(189)
	90	(87)	1,906	5,708	3,264	13,840	62	15,886
	–	–	–	–	–	–	(19)	(1,105)
	–	–	–	–	–	–	1,576	2,087
	–	–	–	–	–	–	286	166
	(45)	1	(700)	(2,972)	(659)	(5,335)	1	(6,949)
	–	–	100	153	120	373	–	263
	–	–	–	–	–	–	(5,033)	(5,033)
	–	–	–	–	–	–	–	(22)
	45	(86)	1,306	2,889	2,725	8,878	(3,127)	5,293

The following table shows all the allocated and non-allocated assets and liabilities, with the "subsidiaries" segment being broken down according to the individual companies.

Segment assets and liabilities at September 30, 2014

	Direct
	investments
in € thousand	FV AG	IC 03	IC 07	IC 12	IC 13
Intangible assets and property, plant and equipment	3	–	–	–	–
Investment property	37,640	–	7,860	7,480	18,580
Trade receivables	327	49	310	115	69
Income tax receivables	19	–	–	–	–
Other receivables and assets	11,695	12	5	507	7
Cash and cash equivalents	1,386	259	203	370	760
Subtotal segment assets	51,070	320	8,378	8,472	19,416
Participation in subsidiaries	64,393	–	–	–	–
Total assets	115,463	320	8,378	8,472	19,416
Provisions	(279)	(16)	(9)	(11)	(14)
Trade payables	(50)	(103)	(25)	(52)	(70)
Other liabilities	(271)	(89)	(21)	(61)	(207)
Subtotal segment liabilities	(600)	(208)	(55)	(124)	(291)
Minority interests	–	–	–	–	–
Financial liabilities	(29,091)	–	(1,103)	(2,007)	(15,649)
Derivative fi nancial instruments	(898)	–	–	–	–
Total liabilities	(30,589)	(208)	(1,158)	(2,131)	(15,940)
Net assets at September 30, 2014	84,874	112	7,220	6,341	3,476

Overview of maturities of fi nancial liabilities at September 30, 2014
Long term	(27,539)	–	–	(1,931)	(14,919)
Short term	(1,552)	–	(1,103)	(76)	(730)
Financial liabilities	(29,091)	–	(1,103)	(2,007)	(15,649)

						Subsidiaries
IC 15	BBV 02	BBV 03	BBV 06	BBV 10	BBV 14	Total	Recon ciliation	Group
–	–	–	–	–	–	–	79	82
34,030	–	3,670	21,796	88,362	69,880	251,658	–	289,298
257	–	10	136	399	443	1,788	21	2,136
–	–	–	–	1	–	1	8	28
25	1,380	–	15	20	16	1,987	3	13,685
1,669	60	968	3,424	3,520	3,140	14,373	152	15,911
35,981	1,440	4,648	25,371	92,302	73,479	269,807	263	321,140
–	–	–	–	–	–	–	(64,393)	–
35,981	1,440	4,648	25,371	92,302	73,479	269,807	(64,130)	321,140
(16)	(7)	(8)	(23)	(12)	(34)	(150)	(10)	(439)
(24)	(19)	(3)	(129)	(340)	(184)	(949)	–	(999)
(290)	(55)	(35)	(890)	(1,426)	(189)	(3,263)	(31)	(3,565)
(330)	(81)	(46)	(1,042)	(1,778)	(407)	(4,362)	(41)	(5,003)
–	–	–	–	–	–	–	(66,342)	(66,342)
(17,175)	(1,105)	–	(8,152)	(58,707)	(34,150)	(138,048)	196	(166,943)
–	–	–	–	–	(168)	(168)	–	(1,066)
(17,505)	(1,186)	(46)	(9,194)	(60,485)	(34,725)	(142,578)	(66,187)	(239,354)
18,476	254	4,602	16,177	31,817	38,754	127,229	(130,317)	81,786

(17,175)	(1,105)	–	(8,152)	(58,707)	(34,150)	(138,048)	196	(166,943)
(9,626)	(78)	–	(8,152)	(24,291)	(950)	(45,006)	196	(46,362)
(7,549)	(1,027)	–	–	(34,416)	(33,200)	(93,042)	–	(120,581)

Segment assets and liabilities at December 31, 2013

	Direct investments
in € thousand	FV AG	IC 03	IC 07	IC 12	IC 13
Intangible assets and property, plant and equipment	97	–	–	–	–
Investment property	37,279	–	7,860	7,980	18,580
Non-current assets held for sale	1,100	–	–	–	–
Trade receivables	364	121	200	86	85
Income tax receivables	24	–	–	–	–
Other receivables and assets	13,685	22	–	7	1
Cash and cash equivalents	717	2,662	461	435	775
Subtotal segment assets	53,266	2,805	8,521	8,508	19,441
Participation in subsidiaries	64,128	–	–	–	–
Total assets	117,394	2,805	8,521	8,508	19,441
Provisions	(243)	(16)	(5)	(13)	(13)
Trade payables	(310)	(240)	(48)	(77)	(145)
Other liabilities	(288)	(61)	(114)	(113)	(214)
Subtotal segment liabilities	(841)	(317)	(167)	(203)	(372)
Minority interests	–	–	–	–	–
Financial liabilities	(31,601)	–	(1,316)	(2,061)	(16,296)
Derivative fi nancial instruments	(1,778)	–	–	–	–
Total liabilities	(34,220)	(317)	(1,483)	(2,264)	(16,668)
Net assets at December 31, 2013	83,174	2,488	7,038	6,244	2,773
Overview of maturities of fi nancial liabilities at December 31, 2013
Long term	(30,641)	–	–	(1,985)	(15,703)
Short term	(960)	–	(1,316)	(76)	(593)

Financial liabilities (31,601) – (1,316) (2,061) (16,296)

						Subsidiaries
IC 15	BBV 02	BBV 03	BBV 06	BBV 10	BBV 14	Total	Recon ciliation	Group
–	–	–	–	–	–	–	106	203
34,030	–	6,530	21,796	88,362	69,880	255,018	–	292,297
–	1,485	–	17,000	–	–	18,485	–	19,585
224	5	34	588	498	286	2,127	–	2,491
–	–	–	–	–	–	–	3	27
24	30	29	79	8	14	214	3	13,902
1,692	4	810	3,369	2,898	3,416	16,522	122	17,361
35,970	1,524	7,403	42,832	91,766	73,596	292,366	234	345,866
–	–	–	–	–	–	–	(64,128)	–
35,970	1,524	7,403	42,832	91,766	73,596	292,366	(63,894)	345,866
(15)	(5)	(12)	(22)	(34)	(41)	(176)	(10)	(429)
(122)	(67)	(14)	(392)	(520)	(215)	(1,840)	–	(2,150)
(332)	(12)	(28)	(863)	(1,310)	(340)	(3,387)	(27)	(3,702)
(469)	(84)	(54)	(1,277)	(1,864)	(596)	(5,403)	(37)	(6,281)
–	–	–	–	–	–	–	(65,642)	(65,642)
(17,883)	(1,112)	–	(25,415)	(60,397)	(35,100)	(159,580)	–	(191,181)
–	–	–	(60)	–	(251)	(311)	–	(2,089)
(18,352)	(1,196)	(54)	(26,752)	(62,261)	(35,947)	(165,294)	(65,679)	(265,193)
17,618	328	7,349	16,080	29,505	37,649	127,072	(129,573)	80,673
(7,704)	(1,045)	–	–	(35,605)	(33,900)	(95,942)	–	(126,583)
(10,179)	(67)	–	(25,415)	(24,792)	(1,200)	(63,638)	–	(64,598)
(17,883)	(1,112)	–	(25,415)	(60,397)	(35,100)	(159,580)	–	(191,181)

(12) Scope of relationships with related parties

in € thousand	1/1 – 9/30/2014	1/1 – 9/30/2013 1)
Receivables	16	230
Liabilities	(14)	(91)
Total	2	139

1) Previous year period adjusted as part of the fi rst-time adoption of IFRS 10

No Auditor's Review

This report was not audited within the meaning of Section 317 of the Handelsgesetzbuch (German GAAP) or subject to an audit review by an auditor and thus does not include an auditor's opinion.

Declaration Concerning the German Corporate Governance Code

The current declarations by Fair Value REIT-AG's Managing and Supervisory Boards according to Section 161 of the AktG on the German Corporate Governance Code have been made permanently accessible on the company's website.

Munich, November 3, 2014 Fair Value REIT-AG

Frank Schaich

Declaration by Legal Representative

To the best of my knowledge, I declare that, according to the principles of proper consolidated reporting applied, the unaudited consolidated interim fi nancial statement provide a true and fair view of the Group's net assets, fi nancial position and results of operations, that the group interim management report presents the Group's business including the results and the Group's position such as to provide a true and fair view and that the major opportunities and risks of the Group's anticipated development are described.

Munich, November 3, 2014 Fair Value REIT-AG

Frank Schaich

Imprint

Fair Value REIT-AG Leopoldstraße 244 80807 München Deutschland Tel . +49-89 -929 28 15 - 01 Fax +49-89 - 929 28 15 - 15 info @ fvreit . de www. fvreit . de

Registered offi ce : Munich Commercial register at Munich Local Court No. HRB 168 882

Date of publication: November 6, 2014

Management Board

Frank Schaich

Supervisory Board

Prof. Dr. Heinz Rehkugler, Chairman Dr. Oscar Kienzle , Vice Chairman Wolfgang Sauerborn

Disclaimer This interim report contains future-oriented statements, which are subject to risks and uncertainties. They are estimations of the management board of Fair Value REIT-AG and refl ect it's current views with regard to future events. Such expressions concerning forecasts can be recognised by terms such as "expect", "estimate", "intend", "can", "will" and similar expressions with reference to the enterprise. Factors, that can cause deviations or eff ects can be (without claim on completeness): the development of the property market, competition infl uences, alterations of prices, the situation on the fi nancial markets or developments related to general economic conditions. Should these or other risks and uncertainty factors take eff ect or should the assumptions underlying the forecasts prove to be incorrect, the results of Fair Value REIT-AG could vary from those, which are expressed or implied in these forecasts. The Company assumes no obligation to update such expressions or forecasts.