S Immo AG — Interim / Quarterly Report 2011

Aug 30, 2011

Closeness is our strength.

		01.01. – 30.06.	01.01. –30.06.
		2011	2010
Revenues	EUR m	102.3	79.4
whereof rental income and revenue
from hotel operations	EUR m	81.3	65.3
EBITDA	EUR m	49.5	36.8
EBIT	EUR m	51.3	30.1
EBT	EUR m	12.5	6.6
Net income for the period	EUR m	10.1	5.0
Total assets	EUR m	2,172.8	2,128.4
Shareholders' equity	EUR m	530.4	518.1
Liabilities	EUR m	1,642.4	1,610.4
Equity ratio (including participation certificate capital)	in %	36	36
Investments	EUR m	17.9	82.4
Operating cash flow	EUR m	51.3	28.21)
Cash flow from investing activities	EUR m	-5.8	-35.0
Cash flow from financing activities	EUR m	-118.3	-61.3
Cash and cash equivalents as at 30 June	EUR m	58.3	142.7
NOI margin	in %	49	49
Loan to value ratio	in %	60	57
FFO	EUR m	21.6	16.41)
Earnings per share	EUR	0.11	0.09
NAV per share	EUR	8.54	8.23
Share price discount from NAV	in %	46	41
Cash flow from operations per share	EUR	0.75	0.41
Property portfolio (fair value)	EUR m	2,005.9	1,853.7
whereof properties under construction	EUR m	56.8	103.3

1) Adjusted

Residential building Mommsenstrasse, Berlin, Germany

Contents

LETTER FROM THE MANAGEMENT	2
INVESTOR RELATIONS	6
INTERIM MANAGEMENT REPORT	9
Market Overview Business Performance and Results Opportunities and Risks Outlook for 2011	9 13 17 18
CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS AT 30 JUNE 2011	19
Declaration pursuant to section 87 (1) (3) Austrian Stoc k Exchange Act (Börsegeset z)	39
FINANCIAL CALENDAR	40
CONTACT / PUBLICATION DETAILS	41

Dear Shareholders,

After a successful start to 2011, S IMMO continued its positive performance in the second quarter. Compared to the same period last year, we doubled our net income for the period, increased our cash flow by 80% and also improved other key indicators significantly. We have success stories to report in asset management, in recognition in form of international awards, and in excellent outcomes in our building refurbishment programme in Germany.

Uncertainties in the capital markets

However, these encouraging developments and the solid value of the Group's assets were not reflected in the performance of our Share: In recent weeks, capital markets have been plagued by turbulence, high levels of volatility and growing uncertainties. Despite international efforts to reassure the financial markets, stock exchange indexes worldwide have been in free fall since the beginning of August. Fears of a recession in the USA, the spreading European debt crisis and the downgrading of the US credit rating continue to unsettle the markets. The European Central Bank attempted to calm the capital markets by buying Italian and Spanish government bonds. However, this did not prevent developments around the world from impacting European financial markets unfavourably, and the Vienna Stock Exchange plunged sharply. At times, the ATX was down more than 30% from the level at which it began the year. The Austrian property index, the IATX, was even more severely affected in recent weeks, and has dropped below the level of 15 years ago, when it was first launched. At the same time, trading volumes increased sharply.

At the end of the first half year, the S IMMO Share closed at EUR 4.632 and was not spared the effects of subsequent developments. The traded volume doubled, reflecting the market's extreme volatility. Even if the poor performance of the S IMMO Share is clearly the result of the upheavals in international capital markets, Management is anything but satisfied with the Share's current discount to net asset value. What we shall continue to stress – in local and international roadshows, conferences, and investor meetings – is the obvious potential for appreciation that the S IMMO Share now has, and the strength of the Group's asset backing.

Achieving Share inclusion into the relevant industry indexes and simplifying our capital structure also features highly on our agenda. We have therefore started another repurchase programme for S IMMO INVEST participating certificates. Since the beginning of the year, we have been able to repurchase approximately 8.5% of the participating certificates. In our meetings with investors and analysts, it has been confirmed that this is an important step in the right direction.

This year's Annual General Meeting voted to change the Company's name to S IMMO AG, which was the last step in the process of giving the Group a new, uniform and more powerful international market presence.

Excellent half-year operating results

We are more than satisfied with the Group's halfyear operating results. Both the rental income of EUR 61.7m and the income from hotel operations of EUR 19.6m were significantly higher than in the same period last year. Gross profit was up by approximately 30% to EUR 54.5m. The gains on property disposals amounted to EUR 3.9m, and were a major factor in increasing EBITDA to EUR 49.5m. This is a substantial improvement compared with the same period last year – nearly 35%. The net profit for the first half of 2011 came to EUR 10.1m, twice as much as for the first half of 2010.

Other key figures we use in monitoring the Group's progress convey the same, very positive message: Funds from operations (FFO) were up more than 31% to EUR 21.6m, while operating cash flow increased by 82% to a very satisfactory EUR 51.3m. This is proof that the efforts we invested in the openings of our development projects and the acquisitions in the Viertel Zwei development in Vienna have borne fruit. In the first half of 2011, the EPRA NAV, the net asset value of our Share, increased once again and currently stands at EUR 8.54 per share.

Internalising our asset management and stepping up letting activities for our existing properties have brought us permanent benefits. Our success in acquiring such famous names as H&M and Diesel as tenants for our shopping centres Sun Plaza and Serdika Center has meant that we have been able to hold the occupancy rates at 98% and 96%, respectively, despite the depressing economic climate.

At the same time, we continue to invest in making our shopping centres popular attractions by utilising targeted marketing activities such as making the forecourts more inviting and providing additional incentives for shoppers and visitors. The outstanding quality of the projects was confirmed in recent months by the receipt of international awards such as the Europaproperty SEE Real Estate Award in the category of SEE Overall Project of the Year for Sun Plaza.

What does the second half of 2011 hold in store for us and our investors?

Our operating performance is on target and we currently expect the second half of this year to be equally successful. With our widely diversified, topquality portfolio we are extremely well placed to meet the challenges of the coming months. We shall continue our building refurbishment programme in Germany, where we have succeeded in increasing the occupancy rate from 86% to 90% and upping the rental income by 3.3% in the last twelve months. We will also take advantage of the potential for growth, in the SEE countries in particular, as soon as these countries have fully recovered from the economic crisis. The economic forecasts for these countries over the next few years are very optimistic.

We continue to work on planning permissions for our future development projects in our investment markets – all located in European Union capitals. Planning permission for our office project Grivitei in Bucharest has been obtained, and we are now focusing on the concept and design as well as on preparing the application for the construction permit. As soon as the relevant permits are received and local market conditions permit, construction on the various projects will begin. For our Quartier Belvedere Central project at the new Vienna Central Station, which we are developing together with Erste Group Immorent and PORR Solutions, we are expecting planning permission towards the beginning of 2012 and the construction permit later in the same year.

And – last but not least – we are proud to announce that our Annual Report has again won international awards. However, as much as we value the praise of impartial experts, it is the quantity and quality of feedback from you – our shareholders – that helps us make our communications even more transparent and service-oriented. We would like to take this opportunity to thank you for your regular feedback in e-mails, telephone calls as well as on what we send you and for the trust you place in us. We and our employees are always delighted to answer any questions you may have via the shareholder hotline, through the services provided on our website or in person at one of our many events.

The Management Board

Holger Schmidtmayr Ernst Vejdovszky Friedrich Wachernig

Our Share

International stock markets under heavy pressure In the first half of 2011, stock markets around the world were hit by the effects of severe natural disasters, such as the earthquake and tsunami in Japan and the country's nuclear catastrophe, and by the financial crisis in Greece. Greece's threatened insolvency and its impact on the EURO and the

Share price development

indexed (01.01.2011 to 30.06.2011)

S IMMO Share ATX 110

European Economic Area kept the markets unsettled. The serious danger that a fully integrated European country could become insolvent sent shock waves through the capital markets. In Austria, the debate about the securities capital gains tax was also responsible for the poor showing of the Austrian stock market – among the worst performances internationally, after Greece, Slovenia and Finland.

S IMMO Share performance

	(ISIN AT0000652250)
One year	-4.93%
Three years, p.a.	-12.48%

S IMMO INVEST participating certificate performance

ISIN	AT0000795737	AT0000630694
One year	10.50%	2.10%
Three years, p.a.	4.40%	3.80%

As at 30 June 2011, the situation varied from country to country: Germany's leading index, the DAX, put on 462.05 points, or 6.7%, since the beginning

in EUR	S IMMO Share price AT0000652250	S IMMO INVEST price AT0000795737	S IMMO INVEST price AT0000630694	ATX	IATX
31.12.2010	5.280	70.310	72.000	2,904.47	188.26
31.03.2011	5.046	72.670	72.680	2,882.18	196.18
30.06.2011	4.632	75.000	74.000	2,766.73	186.44

of 2011, and closed the half year at 7,376.24, only 9.5% short of its all-time high of 8,151.57 points in the spring of 2007.

The performance of the USA's main index, the Dow Jones Industrial Index (DJII), was also satisfactory. Over the last half year, it gained 836.83 points, or 7.2%, to close at 12,414.34 points on 30 June 2011. This was only 12.6% short of its record high of 14,198.10 points in October 2007.

The ATX, Austria's leading index, showed a completely different picture. Stock exchanges of secondary importance – Vienna ranks as one of these – generally see investors withdrawing their money in times of crisis. In combination with the securities capital gains tax, the introduction of which was confirmed but then postponed, the outflows and the lack of buyers in the marketplace had drastic effects on the ATX. Over the last six months, it was down 4.7% and ended the half year at 2,766.73 points. But its dismal state is even clearer when compared with its all-time high of 5,010.93 points in July 2007. By 30 June 2011 it has lost more than 44.8% compared with the level it reached then.

IATX and S IMMO Share in decline

Austria's property share index, the IATX, tells a similar story. Running counter to international trends, it lost nearly 1.0% in the first six months of 2011 and closed at 186.44 points.

Over the same period, the S IMMO Share fell by 3.1% to end the period at EUR 4.632. S IMMO's Management is far from being satisfied with this state of affairs, and is doing its utmost to highlight in Austria and abroad the significant upside potential represented by the gap between the share's current market price and its net asset value (NAV).

New repurchase programme for S IMMO INVEST started

With the Supervisory Board's approval, the Management Board has launched a further repurchase programme for S IMMO INVEST participating certificates. The Company is authorised to repurchase up to 15% of the certificates in issue, i.e., a maximum of 477,129 certificates. The repurchase programme began on 20 June 2011 and will end at the latest on 20 June 2012. This programme is another step towards permanently simplifying the Group's capital structure.

Share indicators		01-06/2011	01-06/2010
Closing price as at 30 June	EUR	4.632	4.872
Average daily turnover	shares	60,000	44,000
Earnings per share (EPS)	EUR	0.11	0.09
NAV per share	EUR	8.54	8.23
Operating cash flow per share	EUR	0.75	0.41
Price/operating cash flow	EUR	3.08	5.88
Share price discount to NAV as at 30 June	in %	46	41

International presence at investor conferences

During the first six months of this year, Management and Investor Relations staff have noted the return of a more positive attitude to property shares both in Austria and elsewhere.

Accompanied by the research house CA Cheuvreux and its initial analysis of S IMMO, the Company presented itself at meetings with customers and held group presentations in Paris and New York. In Switzerland with Credit Suisse, the focus was on private banking meetings. The general emphasis in private banking on a long-term approach to investment supports our arguments that investing at the present market price offers great potential for substantial, permanent gains.

Together with Erste Group, there were investor events in London, where the performance of Austrian property shares is being followed with great interest. S IMMO was also represented again at this year's investment conference organised by Raiffeisen Centro Bank in Zürs. In addition to a presentation of the Group, there were numerous one-on-ones with interested investors, largely representing Swiss businesses and institutions.

Annual General Meeting and change of name

S IMMO AG's Annual General Meeting was held on 31 May 2011 in the Vienna Marriott Hotel, a property belonging to the Group. Nearly 200 shareholders took part. The motions discharging the Management and Supervisory Boards from liability for the financial year 2010 were approved by the shareholders unanimously.

The AGM also approved a change in the Company's articles of incorporation, marking the final step in the process of giving the Group a new, uniform, internationally more recognisable presence. The Company's new name – S IMMO AG – was entered in the commercial register as at 01 July 2011.

Research house	Target Price / Fair Value	Recommendation	Last update
CA Cheuvreux	EUR 5.50	Underperform	10.05.11
Edge Capital	EUR 6.70	Outperform	15.04.11
Erste Group	EUR 6.30	Buy	21.04.11
HSBC Global Research	EUR 7.00	Overweight	01.03.11
KBC Securities	EUR 5.23	Hold	21.06.11
SRC Research	EUR 7.50	Buy	25.01.11

Interim Management Report

Market Overview

The broad economic picture across Europe has worried analysts and economists in recent months, as the sovereign debt crisis seems to be spiralling out of control. Greece, it is now widely acknowledged, may default in the coming year, and the worrying economic picture has shifted west to Italy and the Iberian Peninsula. However, the CEE region has not been touched by the Eurozone financial crisis.

The prospects for the EURO have shifted, with some questioning the long-term viability of the single currency and whether the Eurozone debt crisis will inevitably drag the currency down to an unsustainable value.

Overall across the Eurozone, property investment activity slowed to EUR 25bn in Q2, reflecting the growing uncertainty surrounding the financial situation. Total investment turnover in Europe was 12% below the Q1 total (EUR 28.4bn) and 3% lower year-on-year, at EUR 25.7bn. The momentum that has built up in the past year in the CEE market continued in Q2, with EUR 2.6bn turnover, though over 50% was attributable to the Russian market.

Austria

Vienna's office market has remained largely stable over Q2. Prime office rents stayed flat on the previous quarter, at EUR 23.50/m²/month. This is an increase of 5.6% year-on-year. Prime office yields in Vienna stood at 5.25%. They remained unchanged compared with the previous quarter, but saw a 30 bps drop year-on-year.

In the first half of 2011, office take-up in the Austrian capital remained stable at 85,000 m². There is an expectation amongst Austrian realtors that there will be a slight upward trend in the second half of 2011 due to the postponement of some large new lettings, although overall take-up is still predicted to fall by about 5% to 210,000 m². There will also be a lot of new construction and refurbishment projects that will enter the market in 2011 and 2012 in Vienna's first district. At the end of Q2 2011, Vienna's office supply stood at around 10,300,000 m².

Sources: CBRE, European Property Investment, July 2011; CBRE, EMEA Rents and Yields, 30 June 2011; CBRE MarketView, German Investment Quarterly, Q2 2011; Die Presse.com, Property prices are rising faster than rents, June 2011; Jones Lang LaSalle; Property Investor Europe, July 2011; The Wall Street Journal, 21 June 2011; TRI Hospitality Group (www.hotstats.com; 26 July 2011); Vienna Tourist Board statistics and press releases (www.wien.info; 26 July 2011)

The retail market in Vienna offered a mixed display: Prime rents rose slightly to EUR 226.00/m²/month, an increase of 0.4% on the previous quarter and of 1.8% year-on-year. Meanwhile, prime yields fell to 4.50%, a drop of 10 bps on the previous year, despite remaining flat on the previous quarter.

In terms of residential real estate in Vienna, a new apartment costs more than EUR 3,000.00/m² on average, an increase on a year ago. In a prime downtown location, apartments can cost nearly three times as much, at EUR 8,600.00/m². In Vienna, residential rental rates have risen by 2.8% over the past year.

Germany

Following on from the previous quarter, Germany is continuing to strengthen its status as one of the most important and potentially profitable investment markets worldwide. The total commercial property investment volume was up 28% compared to a year ago, with a transaction volume of EUR 5.6bn between April and July 2011.

The five main investment centres of Berlin, Düsseldorf, Frankfurt, Hamburg and Munich showed no change on the last quarter in terms of prime rents seen in office property. However, both Berlin and Frankfurt registered a fractional drop in prime yields of 10 bps on the last quarter, falling to 5.10% and 5.00%, respectively.

The retail market in Germany differed greatly when compared with the minor movements seen in the office market. Three of the five major investment centres in Germany experienced positive growth in prime rents, with Hamburg in particular posting a 13.6% increase on the previous quarter to EUR 250.00/m²/month. This made Hamburg one of the top risers in terms of prime rents in Europe. Prime yields in Hamburg remained static on the last quarter at 4.40% and saw only a 10 bps drop yearon-year.

Elsewhere, Düsseldorf and Frankfurt also posted good growth in prime rents, increasing by 4.5% and 7.1%, respectively, on Q1 2011 and by 4.5% and 11.1% year-on-year.

The two cities to remain static on the previous quarter in terms of prime rents were Berlin and Munich, with Berlin also posting a 15 bps drop in prime yields on the previous year. Munich fell by 10 bps on the previous year. Prime rents stood at EUR 250.00/m²/month in Berlin and EUR 310.00/m²/month in Munich.

In terms of residential property, institutional and retail investors are moving back into the market. Housing prices have soared in some of the biggest cities. Berlin's prime residential property prices are up 17.0% since October 2010 and Frankfurt's have climbed 15.0%.

Central and Eastern Europe (CEE)

Prime rents for office space in Budapest, Hungary, remained unchanged compared with Q1 and yearon-year, at EUR 20.00/m²/month. Prime yields stood at 7.50% for a successive quarter and fell by 50 bps year-on-year.

Prime rents for retail property in Budapest followed the trend set by office space, posting no growth on the last quarter or year-on-year, and stood at EUR 90.00/m²/month. Prime yields remained unchanged compared with the last quarter, at 7.00%, but fell 25 bps year-on-year.

At the end of Q2 2011, Budapest's new office lettings totalled 86,193 m². Total office stock reached 3,100,000 m².

As seen in Budapest, prime office rents in Bratislava, Slovakia, remained unchanged at EUR 17.00/m²/month, with no drop compared to the last quarter or year-on-year. Prime yields also remained stationary compared with last quarter, at 7.25%, but were down by 25 bps year-on-year.

The Slovakian retail market in Bratislava was one of the few markets to not post a percentage drop across the board in terms of prime rents and prime yields when compared to the previous quarter and year-on-year. The office market in Bratislava remained as it was in Q1 in terms of prime rents, staying at EUR 17.00/m²/month. Prime yields remained reasonably healthy at 7.25%, down by 25 bps year-on-year (no drop compared with the last quarter).

The prime office rental market in Prague, Czech Republic, also showed no drop both compared to the last quarter and year-on-year, remaining at EUR 21.00/m²/month. Prime yields for offices stayed at 6.50%, as in the previous quarter, but dropped by 35 bps year-on-year.

Prime retail rents remained steady both on the last quarter and year-on-year, holding at EUR 170.00/m²/month. In terms of prime yields, Prague remained unchanged compared with the last quarter, but fell by 25 bps year-on-year to 6.50%.

Investment volumes in Central and Eastern Europe amounted to EUR 4.4bn by the end of May 2011, representing an increase of 180% compared to the same period last year. Investor activity has focused largely on Poland, the Czech Republic and Russia. However, activity in other markets, particularly Budapest and Bucharest, is expected to increase due to the still considerable yield premiums witnessed there.

SouthEastern Europe (SEE)

In Bulgaria, no significant retail projects have been completed so far this year, in contrast to last year's record supply of new shopping centres. However, if all new-build is carried out successfully, it would bring a 42% rise to nearly 800,000 m².

Prime rents for retail space in Sofia held at EUR 40.00/m²/month year-on-year, without dropping on the previous quarter either. Prime yields remained at 8.00%, staying stationary both on the last quarter and year-on-year.

Prime office rents in Sofia fell by 3.5% year-onyear but remained stationary on the last quarter, at EUR 14.00/m²/month. Prime yields for office space in Sofia amounted to 9.35%, a 15 bps drop on last quarter and a 65 bps drop year-on-year.

In terms of prime office rents in Bucharest, Romania, rates remained the same as in the previous quarter, at EUR 19.50/m²/month. Prime yields fell by 25 bps on the last quarter, or by a substantial 10 bps year-on-year, to 8.50%.

Prime retail rents in Bucharest did not change compared with last quarter or year-on-year, at EUR 70.00/m²/month. Prime yields also stood at 10.25%. As in 2010, Bucharest represents a magnet for retailers and developers and, as a result, activity continues to be concentrated here.

In Zagreb, Croatia, prime office rents stood at EUR 15.90/m²/month, a 0.6% decline on the last quarter, but a drop of 3.6% year-on-year. Yields remained at 8.30% and showed no drop either on the last quarter or year-on-year.

The retail market in Zagreb remains strong, with prime rents rising slightly to EUR 77.50/m²/month, an increase of 3.3% on the last quarter. Compared with last year, they remained unchanged. In terms of prime yields, there was a slight drop of 10 bps on the last quarter to 7.50%.

		Prime rents EUR/m²/month	Take-up 2011 (m²)	Vacancy (%)		Prime yields (%)
	Office	Retail	Office	Office	Office	Retail
Vienna	23.50a	226.00a	60,000b	5.8b	5.25a	4.50a
Berlin	22.00a	250.00a	277,300c	9.4c	5.10a	4.75a
Hamburg	22.50a	250.00a	214,600d	8.6d	4.90a	4.40a
Prague	21.00a	170.00a	88,000e	11.9e	6.50a	6.50a
Bratislava	17.00a	54.00a	Not available	Not available	7.25a	8.50a
Budapest	20.00a	90.00a	86,200f	20.6f	7.50a	7.00a
Bucharest	19.50a	70.00a	65,000g	Not available	8.50a	10.25a
Sofia	14.00a	40.00a	Not available	Not available	9.35a	8.00a
Zagreb	15.90a	77.50a	Not available	Not available	8.30a	7.50a

Sources:

a CBRE MarketView, EMEA Rents and Yields, Q2 2011 ^d CBRE MarketView, Office Market Hamburg, Q2 2011

e CBRE MarketView, Prague Offices, Q2 2011 DTZ Research, Budapest Offices, Q2 2011

CBRE MarketView, Office Market Berlin, Q2 2011

^b CBRE MarketView, Vienna Offices, Q2 2011

g DTZ Research, Europe, Q2 2011

f

Hotels

In Vienna, the positive development of overnight stays and turnover seen in the hotel industry at the beginning of the year continued. During the first half of 2011, overnight stays increased by 5.3% compared to the prior year. Turnover in the hotel industry grew by 12.1% year-on-year from January to May. These increases can primarily be attributed to foreign guests.

A further encouraging development is the fact that, despite the increase in the overall capacity of Viennese hotels by 1,800 beds compared to the prior year, the occupancy rate increased slightly and, along with higher average room rates, resulted in a 4.5% rise in turnover year-on-year.

Due to the Ice Hockey World Championship held in May 2011, Bratislava saw a marked increase in occupancy and room rates, especially in the fourstar hotel segment. Room rates grew by 26% yearon-year in May.

However, the positive results in May could not erase the persistently weak occupancy rates and low room rates seen during the rest of the first half of 2011. The Slovakian capital is still suffering from a surplus of rooms that remains yet to be absorbed.

The Budapest hotel market benefited from a significant increase in demand due to the Hungarian EU presidency during the first half of the year. In Prague – for the first time in quite a while – hotels posted gains in both occupancy and room rates. In May 2011, Prague's RevPAR, the average revenue per available room, increased by 10% year-on-year.

Business Performance and Results

Property portfolio

S IMMO Group is invested in Austria, Germany and six other countries in Central and Southeastern Europe. As at 30 June 2011, it owned a total of 244 properties mainly in European Union capitals and large German cities. The market value of the Group's property portfolio was EUR 2,005.9m, with a total let floor space of approximately 1,400,000 m².

The portfolio is diversified by region and by property use type: At balance sheet date, around 60% of the total portfolio was in Western Europe and roughly 40% in Central and Southeastern Europe. A detailed breakdown by region shows that 31.5% of the properties were in Austria, 28.3% in Germany, 21.1% in SEE and 19.1% in CEE.

By property use type, the breakdown was as follows: 35.7% was office, 26.5% retail, 23.9% residential and 13.9% hotel property. The occupancy rate is at a very satisfying 91.2%, and the overall rental yield is 6.6%.

Rental yields by region

in %	30 June 2011
Germany	6.4
Austria	5.8
SEE	7.8
CEE	7.3
Total	6.6

In the first half of 2011, four apartments in the mixed residential and office building Neutor 1010 in Vienna and also a residential building in Vienna were successfully disposed of. Additionally, one retail and two residential properties in Berlin were sold. With EUR 18.4m, revenues from sales exceeded the assets' estimated values by EUR 3.9m.

In Germany, and in Berlin in particular, the building refurbishment programme continues. Measures include investments in the fabric of properties (e.g., facades or stairways) as well as direct investments in individual apartments. This programme contributes to enhancing the Group's profitability – we were able to increase the occupancy rate for the German portfolio from 86% to 90% and the rental income by 3.3%. The renovations also considerably increased the buildings' market value.

In our two shopping centres – Sun Plaza in Bucharest and Serdika Center in Sofia – the occupancy rates were 98% and 96%, respectively, which is very satisfactory considering the sluggishness of the countries' economies. We are glad to have been able to acquire the Swedish fashion chain H&M as a major tenant and attraction for Sun Plaza. H&M will be opening its 1,600 m² store on two floors in November. The outstanding quality of both shopping centres was officially recognised at the Europaproperty SEE Real Estate Awards Gala in Bucharest. Sun Plaza was a clear winner in the "Large Shopping Center" category, and also won the "SEE Overall Project of the Year" award. Serdika Center in Sofia won the award for the best shopping centre of the year 2010 in the category "Medium Shopping Center".

PERFORMANCE

Improvement in gross profit

Rental income of EUR 61.7m for the first half of 2011 was most satisfactory (first half of 2010: EUR 48.2m). The three buildings in Vienna's Viertel Zwei, which were acquired in December 2010, made a full contribution to earnings for the first time. The increase in rental income is also attributable to income from development projects that were completed during the past financial year.

The continuing positive trend in the hotel industry in Vienna and Budapest is also reflected in the performance of S IMMO's hotels. Income from hotel operations for the first half of the year climbed from EUR 17.0m in 2010 to EUR 19.6m. Despite a slight increase in operating expenses, profits from hotel operations in the first half of 2011 were up by around 25% to EUR 4.2m.

Rental income for the first half of 2011 by region was made up as follows: Germany contributed 29.3% and Austria 25.3%, while 23.6% came from SEE and 21.8% from CEE.

According to property use type the breakdown was as follows: The highest proportion was retail with 35.0%, followed by offices with 34.2%. Residential properties made up 23.2% and hotels contributed 7.6%. Results from the Vienna Marriott Hotel and the Budapest Marriott Hotel, both leased to hotel operators, are recognised as revenues from hotel operations.

Overall, in the first half of 2011 S IMMO Group improved its gross profit by 30.5% to EUR 54.5m (first half of 2010: EUR 41.8m).

Growth in earnings

S IMMO successfully disposed of a total of four properties in Vienna and Berlin in the first half of 2011. Additionally, four apartments in the mixed residential and office building Neutor 1010 in Vienna were sold. The gains on property disposals amounted to EUR 3.9m and were a major factor in pushing EBITDA up from EUR 36.8m to EUR 49.5m. This was a substantial increase of 34.7% compared with the same period last year.

For the six months to 30 June 2011, the net financing result amounted to EUR -32.0m, including a noncash foreign exchange loss of EUR 3.4m. This loss was driven by a drop in the EURO against functional currencies in Central and Southeastern Europe (Romanian leu, Hungarian forint, Czech crown and Croatian kuna).

Overall, net income for the first half of 2011 has doubled compared with the same period last year, and amounted to EUR 10.1m.

* not including Vienna Marriott Hotel and Budapest Marriott Hotel

Funds from operations (FFO)

Compared with the first half of 2010, S IMMO's FFO improved significantly – by 31.6% – to EUR 21.6m. In calculating FFO, the results for the period are adjusted for non-cash items, which include depreciation and amortisation, gains and losses on interest rate derivatives, exchange rate differences, and all effects of servicing the participating certificates. The prior figure was adjusted accordingly.

Net operating income (NOI)

S IMMO's excellent business performance was also reflected in the NOI, which increased from EUR 38.7m to EUR 50.2m.

NOI 01-06/ 2011 01-06/ 2010 Change NOI (EUR m) 50.2 38.7 29.6% NOI margin in % 49.1 48.8 0.3 pp

Cash flow

The operating cash flow for the first half of 2011 was EUR 51.3m, an impressive 81.9% increase compared with the same period last year. Cash flow from investing activities totalled EUR -5.8m (first half of 2010: EUR -35.0m), and from financing activities EUR -118.3m (first half of 2010: EUR -61.3m).

Consolidated balance sheet

S IMMO Group's total assets as at 30 June 2011 were down slightly compared with six months earlier, from EUR 2,256.2m to EUR 2,172.8m. Cash and cash equivalents amounted to EUR 58.3m (31 December 2010: EUR 129.7m).

During the first repurchase programme for S IMMO INVEST participating certificates, which ended on 08 April 2011, 51,399 participating certificates worth EUR 3.7m were repurchased. With the Supervisory Board's approval, S IMMO's Management Board started another repurchase programme for S IMMO INVEST participating certificates on 20 June 2011.

This year's distribution of profits of EUR 4.36 per participating certificate took place on 28 April 2011. As a result, the participating capital as at 30 June 2011 was EUR 247.2m (31 December 2010: EUR 257.8m).

Net asset value (NAV)

The EPRA NAV, the inner value of the share calculated in accordance with the guidelines of the European Public Real Estate Association, was up again in the first half of 2011 and at the end of the period stood at EUR 8.54 per share (31 December 2010: EUR 8.34 per share).

Opportunities and Risks

The overall assessment of S IMMO AG's potential opportunities and risks is described in detail in the Annual Report 2010 (on page 68 et seqq.).

S IMMO Group reduces real estate risks – particularly in relation to current market developments – through the very balanced diversification of its portfolio both by region and by property use type. The Austrian and German real estate markets are still developing very well. Germany is currently among the world's most important and profitable real estate markets. The total transaction volume in Germany amounted to EUR 11.1bn in the first half of 2011, which represents an increase of 28% compared to the same period of the prior year.

The properties in Central Europe are exhibiting a persistently stable trend with regard to rental income and property values, with the Czech Republic and Slovakia standing out as particularly strong markets. In contrast, the development of the market in Southeastern Europe is lagging behind expectations. The Bulgarian and Romanian economies are taking longer to recover than Western Europe and CEE. The low purchasing power in the affected countries may continue to have an impact on the earnings situation of the shopping centres in Sofia and Bucharest. However, the economic forecasts for the CEE and SEE region as a whole are very promising for the years ahead. The European Bank for Reconstruction and Development (EBRD) revised its 2011 economic forecast for the countries it supports from 4.6% to 4.8% at the end of July. For 2012, the bank still estimates an average increase in economic output of 4.4%. In Romania, GDP growth is expected to come in at 1.9% in 2011 and 3.8% in 2012. The scenario for Bulgaria is similar: Economic output is expected to increase by 2.3% this year and 3.7% in 2012. However, these positive prospects could be dampened by new potential risks in the Eurozone.

The critical country risk for Greece and Italy at the moment has no direct effect on S IMMO's property portfolio because the Group does not own any properties or have any other investments in these countries.

At this time, we do not see any major depreciation risks for the overall portfolio. There have been only minor changes compared to the available appraisals (most of which stem from February/March 2011).

Interest rate risk is hedged through a number of measures. S IMMO AG's credit portfolio is made up of 92% variable rate loans and 8% fixed rate loans. The variable rate loans are hedged using the interest rate hedging instruments caps, collars and swaps. Despite this fact, the ECB's key interest rate hikes in April and July 2011 had an impact on S IMMO AG's financing costs. However, due to the adjustments the Group made (hedging), the effects of these actions were mitigated. Based on the general predictions of experts, additional key interest rate hikes of 25 to 50 bps are expected in the second half of the year. This could result in a 15 to 20 bps increase in S IMMO's financing costs.

Outlook

S IMMO's operations went well in the first half of 2011. At the present time, the results for the second half of the year are expected to develop positively as well. Our focus remains on capital cities in our investment markets, which are members of the European Union. We will also continue the successful refurbishment programme in Berlin. Thanks to the modernisation measures, we have increased rental income substantially and reduced the vacancy rate. The Group will continue to closely monitor the ongoing upswing on the German real estate market and will take advantage of profitable sales opportunities.

Economic developments in Romania and Bulgaria are still subdued. Despite the very challenging conditions at the moment, the letting situation in both shopping centres is very satisfying, at 98% occupancy in Bucharest and 96% in Sofia. In November, the Swedish fashion chain H&M will open its 1,600 m² shop, which is spread out over two floors. This will further improve the occupancy rate. The Italian fashion label Diesel will open its new shop in Serdika Center soon.

Along with the new tenants, additional activities and marketing measures will be performed in the shopping centres in the second half of the year. For example, the terrace at Sun Plaza has been redesigned. The popular summer hangout called Sun Sensations will attract many visitors to the shopping centre all the way into late summer. An antique car exhibit was also very popular among visitors at Serdika Center.

The two office buildings belonging to the shopping centres are also enjoying additional letting success. For example, 3,600 m² of space in the Serdika Office building was prelet in the first half of the year. Negotiations with well-known international tenants regarding an additional 8,000 m² will continue in the second half of 2011. The construction on lettable space is continuing according to schedule. The situation at Sun Office is also encouraging: A rental agreement for 2,100 m² of space is about to be concluded with an international food company, and an additional 3,000 m² are currently under negotiation.

We see a great deal of upside potential in our Southeastern European markets and we will continue leveraging this potential as soon as the region has recovered from the economic crisis. The fact that we were one of the first companies to enter these markets, that we were present during difficult times and that we continued our projects and successfully brought them to a close even during the financial crisis will certainly benefit us here.

With regard to development projects, the focus in the second half of 2011 will remain on preparing undeveloped properties for construction. Various zoning proceedings are currently under way, including for the new urban district of Quartier Belvedere, where one of the largest innercity development projects in Europe is being built at the new Vienna Central Station. This one-of-a-kind office, residential and business district will encompass a total area of over 550,000 m². S IMMO is developing a prominent sub-project – Quartier Belvedere Central, with a gross floor space of roughly 136,000 m² – in cooperation with Erste Group Immorent and PORR Solutions. Together with our partners, we will realise a mix of use types including offices, hotels and retail space in several phases on the site. The zoning is expected to be finalised at the beginning of 2012 and the first building permit issued during the next year.

Shopping centre Sun Plaza, Bucharest, Romania

Consolidated Interim Financial Statements

CONSOLIDATED STATEMENT OF FINANCIAL POSITION	20
CONSOLIDATED INCOME STATEMENT From 01.01. to 30.06.2011	22
CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME From 01.01. to 30.06.2011	23
CONSOLIDATED INCOME STATEMENT From 01.04. to 30.06.2011	24
CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME From 01.04. to 30.06.2011	25
CONSOLIDATED CASH FLOW STATEMENT	26
CHANGES IN CONSOLIDATED EQUITY	27
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS	28

Consolidated Statement of Financial Position as at 30 June 2011

Assets EUR '000	Notes	30.06.2011	31.12.2010
Non-current assets
Properties held as financial investments
Investment properties	3.1.1.	1,796,124	1,810,322
Development projects and undeveloped land	3.1.1.	56,821	55,989
		1,852,945	1,866,311
Owner-operated properties	3.1.2.	136,926	140,755
Other plant and equipment		8,601	9,069
Intangible assets		192	179
Goodwill		100	100
Interests in associated companies		5	5
Group interests	3.1.3.	3,155	3,117
Deferred tax assets		26,623	28,455
		2,028,547	2,047,991

Current assets

Properties held for sale	3.1.4.	16,030	6,000
Inventories	3.1.5.	7,710	12,029
Trade receivables		9,170	10,324
Other accounts receivable		43,095	42,287
Other assets		9,991	7,811
Cash and cash equivalents	3.1.6.	58,270	129,721
		144,266	208,172

2,172,813 2,256,163

Equity and liabilities EUR '000	Notes	30.06.2011	31.12.2010
Shareholders' equity
Share capital		247,509	247,509
Capital reserves		73,578	73,578
Other reserves		176,535	160,185
		497,622	481,272
Non-controlling interests	3.1.7.	32,784	31,426
		530,406	512,698

Non-current liabilities

Subordinated participating certificate capital	3.1.8.	247,205	257,820
Financial liabilities	3.1.9.	1,127,612	1,228,786
Provisions		8,568	8,770
Other liabilities		11,411	10,955
Deferred tax liabilities		58,423	55,981
		1,453,219	1,562,312

Current liabilities

Financial liabilities	3.1.9.	127,908	124,123
Trade payables		8,032	16,479
Other liabilities		53,248	40,551
		189,188	181,153

|--|

Consolidated Income Statement

for the six months ended 30 June 2011

EUR '000	Notes	01 - 06 / 2011	01 - 06 / 2010
Revenues
Rental income	3.2.1.	61,739	48,228
Revenues from service charges		21,012	14,082
Revenues from hotel operations		19,577	17,046
		102,328	79,356
Other operating income		4,314	3,056
Expenses directly attributable to properties	3.2.2.	-36,705	-26,906
Hotel operating expenses	3.2.2.	-15,401	-13,707
Revenues less direct expenses		54,536	41,798
Income from property disposals		18,364	57,670
Carrying values of property disposals		-14,415	-55,060
Gains on property disposals	3.2.3.	3,949	2,610
Management expenses		-8,944	-7,623
Earnings before interest, tax, depreciation and amortisation (EBITDA )		49,541	36,785
Depreciation and amortisation		-4,830	-4,970
Gains / losses on property valuation		6,600	-1,730
Operating result (EBIT )		51,311	30,084
Financing costs	3.2.4.	-32,038	-18,526
Participating certificates result	3.1.8.	-6,773	-5,001
Net income before tax (EBT )		12,500	6,558
Taxes on income	3.2.5.	-2,385	-1,542
Net income for the period		10,115	5,016
of which attributable to shareholders in parent company		7,319	6,215
of which attributable to non-controlling interests		2,796	-1,199

Earnings per share

Undiluted = diluted 0.11 0.09

Consolidated Statement of Total Comprehensive Income

for the six months ended 30 June 2011

EUR '000	01 - 06 / 2011	01 - 06 / 2010
Net income for the period	10,115	5,016
Change in value of cash flow hedges	9,732	-18,258
Income tax related to other comprehensive income	-2,631	4,432
Foreign exchange rate differences	2,097	-2,210
Total income for the period	19,313	-11,020
of which attributable to shareholders in parent company	16,350	-9,821
of which attributable to non-controlling interests	2,963	-1,199

Consolidated Income Statement

for the three months ended 30 June 2011

EUR '000	Notes	04 - 06 / 2011	04 - 06 / 2010
Revenues
Rental income	3.2.1.	31,448	26,347
Revenues from service charges		11,473	7,507
Revenues from hotel operations		11,156	9,926
		54,077	43,781
Other operating income		700	1,934
Expenses directly attributable to properties	3.2.2.	-19,766	-16,281
Hotel operating expenses	3.2.2.	-8,207	-7,326
Revenues less direct expenses		26,804	22,108
Income from property disposals		14,068	1,006
Carrying values of property disposals		-10,696	-760
Gains on property disposals	3.2.3.	3,372	246
Management expenses		-4,688	-3,698
Earnings before interest, tax, depreciation and amortisation (EBITDA )		25,488	18,655
Depreciation and amortisation		-2,389	-2,612
Gains / losses on property valuation		1,600	-1,730
Operating result (EBIT )		24,699	14,313
Financing costs	3.2.4.	-14,404	-9,604
Participating certificates result	3.1.8.	-3,323	-2,251
Net income before tax (EBT )		6,972	2,459
Taxes on income	3.2.5.	-2,273	-3,461
Net income/loss for the period		4,699	-1,002
of which attributable to shareholders in parent company		4,559	233
of which attributable to non-controlling interests		140	-1,235

Earnings per share

Undiluted = diluted 0.07 0.00

Consolidated Statement of Total Comprehensive Income

for the three months ended 30 June 2011

EUR '000	04 - 06 / 2011	04 - 06 / 2010
Net income / loss for the period	4,699	-1,002
Change in value of cash flow hedges	-4,789	-10,758
Income tax related to other comprehensive income	824	2,628
Foreign exchange rate differences	-1,519	-418
Total income for the period	-785	-9,550
of which attributable to shareholders in parent company	-900	-8,315
of which attributable to non-controlling interests	115	-1,235

Consolidated Cash Flow Statement

for the six months ended 30 June 2011

EUR '000	01 - 06 / 2011	01 - 06 / 20101)
Operating cash flow	51,267	28,190
Changes in net current assets	1,345	671
Cash flow from operating activities	52,612	28,861
Cash flow from investing activities	-5,778	-35,006
Cash flow from financing activities	-118,285	-61,279
Total	-71,451	-67,424
Cash and cash equivalents at 01 January	129,721	210,151
Cash and cash equivalents at 30 June	58,270	142,727
Net change in cash and cash equivalents	-71,451	-67,424

1) Adjusted

Changes in Consolidated Equity

EUR '000	Share capital	Capital reserves	Foreign currency translation reserve	Hedge accounting reserve	Other reserves	Sub-total S IMMO share holders	Non controlling interests	Total
At 01 January 2011	247,509	73,578	-13,398	-38,335	211,918	481,272	31,426	512,698
Net income / loss for the period	0	0	0	0	7,319	7,319	2,796	10,115
Other comprehensive income	0	0	2,097	6,934	0	9,031	167	9,198
Decrease	0	0	0	0	0	0	-1,605	-1,605
At 30 June 2011	247,509	73,578	-11,301	-31,401	219,237	497,622	32,784	530,406
At 01 January 2010	247,509	147,110	-13,491	-38,668	136,543	479,003	44,832	523,835
Net income / loss for the period	0	0	0	0	6,215	6,215	-1,199	5,016
Other comprehensive income	0	0	-2,210	-13,826	0	-16,036	0	-16,036
Acquisitions	0	0	0	0	0	0	5,273	5,273

Notes to the Consolidated Interim Financial Statements

(condensed)

1. The Group

S IMMO Group (S IMMO AG and its subsidiaries) is an international real estate group. The ultimate parent company of the Group, S IMMO AG, has its registered office and headquarters at Friedrichstrasse 10, 1010 Vienna, Austria. The Company has been listed on the Vienna Stock Exchange since 1992, since 2007 in the Prime Segment. It has subsidiaries in Austria, Germany, the Czech Republic, Slovakia, Hungary, Croatia, Romania, Bulgaria, Denmark, Cyprus and Ukraine (in liquidation). At 30 June 2011 S IMMO Group owned properties in all the above countries except Denmark, Cyprus and Ukraine. The Company's principal business is the acquisition, letting and sale of properties in different regions and market segments in order to achieve a balanced investment portfolio. Another business activity is the development and construction of properties in cooperation with project development partners.

2. Accounting and valuation policies

2.1. Accounting policies

The consolidated interim financial statements for the six months ended 30 June 2011 have been prepared in accordance with IAS 34 and do not contain all the information requiring to be disclosed in a full set of IFRS consolidated financial statements. The interim financial statements should therefore be read in conjunction with the last IFRS consolidated financial statements – those for the year ended 31 December 2010.

There has been a change in the method of calculating the cash flow as compared with that used for the financial statements as at 31 December 2010. In the consolidated interim financial statements for the six months ended 30 June 2011, the cash flow from the sale of inventories has been included in the operating cash flow and is not shown under changes in working capital. The comparative figures for the first six months of 2010 have been adjusted accordingly. In preparing the consolidated interim financial statements for the six months ended 30 June 2011, all other accounting and valuation policies applied in the consolidated financial statements for the year ended 31 December 2010 have remained substantially unchanged.

The financial statements for the six months ended 30 June 2011 have neither been audited nor reviewed by independent auditors.

The accounting policies of all consolidated companies are based on the uniform accounting regulations of S IMMO Group. The financial year for all companies is the year ending on 31 December. There has been no change in the companies included in consolidation as compared with the consolidated financial statements for the year ended 31 December 2010.

The consolidated financial statements are presented rounded to the nearest 1,000 euro (EUR '000). The totals of rounded amounts and the percentages may be affected by rounding differences caused by the usage of computer software.

2.2. Reporting currency and currency translation

The Group reporting currency is the EURO. The functional currencies of Group companies are determined by the business environment in which they operate. In the case of S IMMO Group companies, the functional currencies are the respective national currencies. Functional currencies are translated into the reporting currency in accordance with IAS 21, as follows:

• (a) Assets and liabilities at closing rates
• (b) Income and expenses at the average rate for the period
• (c) All resulting exchange differences are recognised in the foreign currency translation reserve under equity.

3. Notes to the consolidated interim financial statements

3.1. Statement of financial position

3.1.1. Properties held as financial investments

EUR '000	Investment properties	Development projects and undeveloped land
At 01 January 2010	1,253,432	445,784
Additions (incl. initial consolidations)	200,167	9,007
Disposals	-21,733	-191
Changes in fair value	-7,153	-7,000
Reclassifications	385,610	-391,610
At 31 December 2010	1,810,322	55,989
whereof pledged as security	1,767,758	0
Additions	4,788	832
Disposals	-4,556	0
Changes in fair value	1,600	0
Reclassifications	-16,030	0
At 30 June 2011	1,796,124	56,821
whereof pledged as security	1,763,123	0

Made up of:

Investment properties

Development projects and undeveloped land

EUR '000	30.06.2011	31.12.2010	EUR '000	30.06.2011	31.12.2010
Austria	579,377	579,914	Austria	0	0
Germany	551,134	565,857	Germany	0	0
Central Europe	310,702	308,640	Central Europe	6,197	6,175
Southeastern Europe	354,911	355,911	Southeastern Europe	50,624	49,814
	1,796,124	1,810,322		56,821	55,989

3.1.2. Owner-operated properties

For S IMMO Group, owner-occupied properties are principally hotels operated for the Group by international hotel chains under management agreements. Both expenses and income of hotel operations are subject to seasonal fluctuations.

3.1.3. Group interests

EUR '000	Interest in %	30.06.2011	31.12.2010
BGM-IMMORENT Aktiengesellschaft & Co KG	22.8	2,286	2,286
ERSTE Immobilien Kapitalanlagegesellschaft m.b.H.	11.5	621	621
Other		248	210
		3,155	3,117

3.1.4. Properties held for sale

Properties are treated as held for sale if it is the intention of the Group's Management to dispose of them in the near future (e.g., if negotiations for sale are already well advanced). It is currently intended to dispose of five properties located in Germany.

3.1.5. Inventories

Inventories consist in the main of freehold apartments under construction in Austria and are measured at cost of acquisition and construction. The carrying values at 30 June 2011 amounted to EUR 7,710,000 (2010: EUR 12,029,000). External construction finance directly attributable to such inventories is capitalised as acquisition and construction cost.

3.1.6. Cash and cash equivalents

EUR '000	30.06.2011	31.12.2010
Bank balances	58,072	129,464
Cash in hand	198	257
	58,270	129,721

3.1.7. Non-controlling interests

The minority interests of EUR 32,784,000 (2010: EUR 31,426,000) consisted mainly of Hansa Immobilien EOOD/Einkaufscenter Sofia G.m.b.H. & Co KG (35% interest).

3.1.8. Participating certificates (subordinated)

The terms of the agreement for S IMMO INVEST participating certificates were changed retroactively with effect from 01 January 2007 and the S IMMO INVEST Participating Certificates Fund was dissolved (resolution of the meeting of the holders of the participating certificates of 11 June 2007 and resolution of the Annual General Meeting of 12 June 2007).

Under the amended agreement, the holders of the participating certificates receive an annual income entitlement (interest) calculated as follows:

(Participating certificate	Consolidated EBIT
capital + profit brought * forward)	Average property portfolio (not including investment properties
	under development)

To the extent that potential earnings attributable to the participating certificates under the terms of the Participating Certificates Agreement are not paid out, they are added to the profit carried forward into the next year.

For the six months ended 30 June 2011, the total share of earnings was EUR 6,400,000 (2010: EUR 9,452,000).

In the first quarter of 2011 a repurchase programme for the S IMMO INVEST participating certificates was launched. Within the first quarter of 2011, the company reacquired and cancelled 44,024 participating certificates. Overall, 51,399 participating certificates were bought by the end of the repurchase programme on 08 April 2011.

On 20 June 2011 a new repurchase programme was started under which, by the end of the second quarter, 26,313 participating certificates were reacquired.

The distribution paid out to the participating certificate holders amounted to EUR 4.36 per certificate and was, thus, kept at the same level as the prior year. The payment was made on 28 April 2011.

As at 30 June 2011 there were 3,180,860 participating certificates in issue. The total entitlements of participating certificate holders as of that date were EUR 77.72 per certificate (2010: EUR 79.95), made up as follows:

EUR '000	Participating certificates capital	Profit brought forward	Profit for the period	Share in undisclosed reserves on property portfolio	Total
Participating certificates capital – 01 January 2011	234,352			1,254	235,606
Profit brought forward 01 January 2011		12,762			12,762
Income entitlements of participating certificate holders from 2010			9,452		9,452
Distribution – 28 April 2011			-13,869		-13,869
Change in profit brought forward pursuant to Clause 5(6), Participating Certificates Agreement		-4,417	4,417		0
Repurchase and cancellation of 44,024 participating certificates	-3,199	-303		-17	-3,519
Income entitlements of participating certificate holders			6,400		6,400
Allocation of undisclosed reserves on property portfolio				373	373
Participating certificates capital as at 30 June 2011	231,153	8,042	6,400	1,610	247,205
Per participating certificate (EUR)	72.67	2.53	2.01	0.51	77.72

EUR '000	Participating certificates capital	Profit brought forward	Profit for the period	Share in undisclosed reserves on property portfolio	Total
Participating certificates capital – 01 January 2010	234,352			484	234,836
Profit brought forward 01 January 2010		36,788			36,788
Income entitlements of participating certificate holders from 2009			-9,966		-9,966
Distribution – 21 May 2010		-14,060			-14,060
Change in profit brought forward pursuant to Clause 5(6), Participating Certificates Agreement		-9,966	9,966		0
Income entitlements of participating certificate holders			9,452		9,452
Allocation of undisclosed reserves on property portfolio				770	770
Participating certificates capital as at 31 December 2010	234,352	12,762	9,452	1,254	257,820
Per participating certificate (EUR)	72.67	3.96	2.93	0.39	79.95

The participating certificates mature on 31 December 2029. With effect from 31 December 2017, both the holders and the Company may annually give notice of redemption of the participating certificates in whole or in part.

3.1.9. Financial liabilities

The short-term and long-term financial liabilities amounted to EUR 1,255,520,000 in total (2010: EUR 1,352,909,000), made up as follows:

EUR '000	30.06.2011	31.12.2010
Remaining term less than 1 year	127,908	124,123
Remaining term between 1 and 5 years	347,464	409,438
Remaining term over 5 years	780,148	819,348
	1,255,520	1,352,909

3.1.10. Derivatives

S IMMO Group uses caps, collars and swaps to hedge interest rate risks. EUR 4,250,000 (31.12.2010: EUR 5,204,000) of these derivatives is disclosed under other financial assets, and EUR 44,454,000 (31.12.2010: EUR 54,212,000) under non-current financial liabilities. The fair value measurement of derivatives is based on estimates made by banks. In the first half of 2011 income of EUR 9,732,000 was recognised under equity without affecting the income statement, and EUR 929,000 was recognised as financial expense in the consolidated income statement.

As at 30 June 2011

EUR '000	Nominal	Positive fair value	Negative fair value
Swaps	524,417	2,808	-33,580
Caps	467,246	1,442	0
Collars	200,000	0	-10,874
Total	1,191,663	4,250	-44,454

EUR '000	Nominal	Positive fair value	Negative fair value
Swaps	482,417	3,338	-39,782
Caps	365,746	1,866	0
Collars	200,000	0	-14,430
Total	1,048,163	5,204	-54,212

As at 31 December 2010

3.2. Consolidated income statement

3.2.1. Rental income

Rental income by property use type was as follows:

EUR '000	01-06/2011	01-06/2010
Office	21,073	15,014
Residential	14,319	13,707
Retail	21,630	17,109
Hotels	4,717	2,398
	61,739	48,228

3.2.2. Operating costs and expenses from properties and hotel operations

These costs and expenses are expenses in connection with non-current property assets, consisting in the main of operating costs, provisions for doubtful debts, maintenance expenses and commissions.

The expenses of hotel operations are largely made up of expenses for food, beverages, catering supplies, hotel rooms, licences and management fees, maintenance, operating costs, commissions, personnel expenses and advertising. Both expenses and income of hotel operations are subject to seasonal fluctuations.

The average number of employees was 541, including hotel staff (first half of 2010: 527). Personnel expenses in the hotels are disclosed under hotel operations.

3.2.3. Gains on property disposals

Gains on property disposals include the sale of four apartments in Neutorgasse in Vienna and of one residential building in Vienna as well as the disposal of two residential and one retail property in Berlin.

EUR '000	01-06/2011	01-06/2010
Disposal proceeds

Properties held as
financial investments	5,427	920
Properties held for sale	6,300	56,750
Inventories	6,637	0
	18,364	57,670

Carrying value of property disposals

Properties held as financial investments	-4,556	-760
Properties held for sale	-6,000	-54,300
Inventories	-3,859	0
	-14,415	-55,060

Gains on property disposals

Properties held as financial investments	871	160
Properties held for sale	300	2,450
Inventories	2,778	0
	3,949	2,610

3.2.4. Financing costs

Net financing costs were made up as follows:

EUR '000	01-06/2011	01-06/2010
Financing expense	-32,708	-20,103
Financing income	670	1,577
	-32,038	-18,526

In the first half of 2011 financing expense included a non-cash foreign exchange loss of EUR 3,414,000.

3.2.5. Taxes on income

EUR '000	01-06/2011	01-06/2010
Current tax expenses	-962	-976
Deferred tax expenses	-1,423	-566
	-2,385	-1,542

4. Operating segments

Segment reporting for S IMMO Group is based on geographical regions. The four regions selected are as follows.

Austria: This operating segment includes all the Group's Austrian subsidiaries.

Germany: This operating segment includes the German subsidiaries and also the subsidiaries in Denmark, which are property ownership companies holding properties in Germany.

Central Europe: This operating segment comprises the subsidiaries in Slovakia, the Czech Republic and Hungary.

Southeastern Europe: This operating segment includes the subsidiaries in Bulgaria, Croatia and Romania. The subsidiary in Ukraine is also treated as part of this segment, as are the subsidiaries in Cyprus, which are related to the Group companies in Romania and Ukraine.

In preparing and presenting the segment information, the same accounting and valuation policies are applied as for the consolidated financial statements.

5. Other obligations and contingent liabilities

In S IMMO Group there were several open legal disputes at balance sheet date, however the amounts involved were not significant and even in total the amount was not material in comparison with the Group's total assets.

6. Related party disclosures

For S IMMO Group related parties are as follows:

• S IMMO Group's managing bodies
• Erste Group
• Vienna Insurance Group

	Austria
EUR '000	2011	2010
Rental income	15,640	10,361
Revenues from service charges	4,245	2,486
Revenues from hotel operations	11,473	10,263
Total revenues	31,358	23,110
Other operating income	3,440	1,682
Property operating expenses	-6,231	-5,297
Hotel operating expenses	-9,331	-8,429
Gross profit/loss	19,236	11,066
Gains/losses on property disposals	2,782	2,450
Management expenses	-4,847	-3,863
EBITDA	17,171	9,653
Depreciation and amortisation	-1,809	-1,600
Gains/losses on property valuation	0	2,300
EBIT	15,362	10,353
	30.06.2011	31.12.2010
Non-current assets	658,969	661,387
Non-current liabilities (incl. participating certificates in Austria)	709,350	776,680

S IMMO Group's managing bodies are as follows:

S IMMO AG Management Board

Holger Schmidtmayr, MRICS, Vienna Ernst Vejdovszky, Vienna Friedrich Wachernig, MBA, Vienna

S IMMO AG Supervisory Board

Martin Simhandl, Vienna (Chairman) Gerald Antonitsch, Vienna (first deputy chairman) Franz Kerber, Graz (second deputy chairman) Christian Hager, Krems Erwin Hammerbacher, Vienna Michael Matlin, MBA, New York Wilhelm Rasinger, Vienna Ralf Zeitlberger, Vienna

Germany		Central Europe		Southeastern Europe		Total
2011	2010	2011	2010	2011	2010	2011	2010
18,023	17,449	13,476	9,980	14,600	10,438	61,739	48,228
6,612	5,654	3,649	3,405	6,506	2,537	21,012	14,082
0	0	8,104	6,783	0	0	19,577	17,046
24,635	23,103	25,229	20,168	21,106	12,975	102,328	79,356
643	1,008	211	217	20	149	4,314	3,056
-15,274	-12,390	-4,457	-4,183	-10,743	-5,036	-36,705	-26,906
0	0	-6,070	-5,278	0	0	-15,401	-13,707
10,004	11,721	14,913	10,924	10,383	8,088	54,536	41,798
1,167	160	0	0	0	0	3,949	2,610
-2,675	-2,527	-543	-568	-879	-665	-8,944	-7,623
8,496	9,354	14,370	10,356	9,504	7,423	49,541	36,785
-80	-99	-2,510	-2,728	-431	-544	-4,830	-4,970
1,900	970	700	0	4,000	-5,000	6,600	-1,730
10,316	10,225	12,560	7,628	13,073	1,879	51,311	30,084
30.06.2011	31.12.2010	30.06.2011	31.12.2010	30.06.2011	31.12.2010	30.06.2011	31.12.2010
551,218	566,341	387,281	388,564	431,079	431,699	2,028,547	2,047,991
306,909	334,867	239,451	246,459	197,509	204,306	1,453,219	1,562,312

There were the following receivables and payables with Erste Bank Group and Vienna Insurance Group at balance sheet date:

EUR '000	30.06.2011	31.12.2010
Other receivables	808	1,903
Bank balances	29,164	40,479
Receivables	29,972	42,382
EUR '000	30.06.2011	31.12.2010
Non-current liabilities to banks	421,721	416,314
Non-current financial liabilities	62,771	83,607
Current bank and financial liabilities	55,215	86,901
Trade payables	670	1,103
Other liabilities	962	623
Payables	541,339	588,548

There were the following material expenses and income in connection with Erste Group and Vienna Insurance Group in the period under review:

EUR '000	01-06/2011	01-06/2010
Management fees – Erste Group Immorent AG	833	1,228
Bank loan interest, other interest, and charges	16,188	7,325
Other expenses	1,055	718
Expenses	18,076	9,271

EUR '000	01-06/2011	01-06/2010
Rent and service charges	545	159
Bank interest	87	50
Other interest income	68	68
Income	700	277

7. Significant events after balance sheet date

On 20 June 2011 a new repurchase programme for S IMMO INVEST participating certificates was started, which will expire on 20 June 2012 at the latest. As this report went to press 221,108 participating certificates had been repurchased under the programme.

Vienna, 29 August 2011

The Management Board:

Holger Schmidtmayr, MRICS m.p. Ernst Vejdovszky m.p. Friedrich Wachernig, MBA m.p.

Declaration

pursuant to section 87 (1) (3) Austrian Stock Exchange Act (Börsegesetz)

"Statement of all Legal Representatives

We confirm to the best of our knowledge that the condensed interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group as required by the applicable accounting standards and that the group management report gives a true and fair view of important events that have occurred during the first six months of the financial year and their impact on the condensed interim financial statements, of the principal risks and uncertainties for the remaining six months of the financial year and of the major related party transactions to be disclosed."

Vienna, 29 August 2011

The Management Board

Holger Schmidtmayr Ernst Vejdovszky Friedrich Wachernig

Financial Calendar 2011

30 August 2011	Results first half 2011
24 November 2011	Results first three quarters 2011

This Interim Report has been prepared and proofread with the greatest possible care, and the information in it has been checked. Nevertheless, the possibility of rounding errors, errors in transmission and typesetting or printing errors cannot be excluded. Apparent arithmetical errors may be the result of rounding errors caused by software. In the interests of simplicity and readability, the language of this Interim Report is as far as possible gender neutral. Therefore, the terms used refer to people of both genders. This Interim Report contains information and forecasts relating to the future development of S IMMO AG and its subsidiaries. These forecasts are estimates, based on the information available to us at the time the Interim Report was prepared. Should the assumptions on which the forecasts are based prove to be unfounded, or should events of the kind described in the risk report occur, then the actual outcomes may differ from those currently expected. This Interim Report neither contains nor implies a recommendation either to buy or to sell shares in S IMMO AG. Past events are not a reliable indicator of future developments. This Interim Report has been prepared in the German language, and only the German language version is authentic. The Interim Report in other languages is a translation of the German Report.

Contact

S IMMO AG

Friedrichstrasse 10 1010 Vienna E-mail: office@simmoag.at Phone: +43 (0)50 100-27521 Fax: +43 (0)50 100 9-27521

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E-mail: investor@simmoag.at Phone: +43 (0)50 100-27556 Fax: +43 (0)50 100 9-27556

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Publication Details

Concept and design

Berichtsmanufaktur GmbH, Hamburg

Photography

Christina Häusler, Vienna (Management Board) Detlef Overmann, Hamburg (Cover, pages 1, 19)

S IMMO AG, Friedrichstrasse 10, 1010 Vienna Phone: +43 (0)50 100-27556, Fax: +43 (0)50 100 9-27556 E-mail: investor@simmoag.at, www.simmoag.at/en