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PREFF PAN-EUROPEAN REAL ESTATE FUND OF FUNDS PUBLIC LIMITED COMPANY (A closed-ended investment company with variable capital incorporated with limited liability in Ireland under registration number 399330) CONDENSED INTERIM UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED 30 SEPTEMBER 2013

PREFF PAN-EUROPEAN REAL ESTATE FUND OF FUNDS PUBLIC LIMITED COMPANY

(Interim unaudited report for the six month period ended 30 September 2013)

Contents Page General Information 1 Responsibility Statement 3 Investment Manager’s Report 4 Portfolio of Investments 14 Portfolio Changes 17 Profit and Loss Account 18 Balance Sheet 19 Statement of Changes in Net Assets Attributable to Participating Shareholders 20 Cash Flow Statement 21 Notes to the Condensed Financial Statements 22 Directory 32



1

Capitalised terms used herein shall have the same meaning as capitalised terms used in the Prospectus of the Company dated 01 April 2005, unless otherwise defined herein. General information The following information is derived from and should be read in conjunction with the full text and definitions section of the Prospectus. The Prospectus was amended on 22 December 2006. PREFF Pan-European Real Estate Fund of Funds Public Limited Company (the “Company”) is a closed-ended investment company with variable capital organised under the laws of Ireland and has been authorised by the Central Bank of Ireland (the “Central Bank”) pursuant to Part XIII of the Companies Act, 1990. The Company may have more than one Share Class allocated to it. The Shares of each Class allocated to a fund will rank pari passu with each other in all respects except as to all or any of the following:

currency of denomination of the Class; dividend policy; the level of fees and expenses to be charged; and the minimum subscription and minimum holding applicable.

The functional currency of the Company is Euro (“EUR”). The participating Share Capital of the Company shall at all times equal its Net Asset Value (“NAV”). At 30 September 2013, the Company had three Share Classes in issue, Class A, Class C and Class D. The Company’s Shares are listed on the Irish Stock Exchange. Investment objective The investment objective of the Company is to obtain income driven, low volatility exposure to the European property sector, with a targeted return of 8% per annum, net of all fees and expenses. The Company expects to achieve its investment objective by obtaining diversified exposure to Pan-European Real Estate, either through investment in property related assets or investment funds. Prices During the Initial Offer Period, the subscription price was EUR100 per Share. The Offer Price of a Share shall be the appropriate Subscription Price on a Valuation Day. The Subscription Price is the NAV per Share as at the relevant Valuation Day. The Redemption Price per Share is the NAV per Share as of a relevant Valuation Day. Minimum subscription The minimum initial subscription amount/commitment must not be less than EUR250,000 in respect of Class A Shares, EUR5 million in respect of Class C Shares and EUR250,000 in respect of Class D Shares. Dealing The Valuation Day for the Company shall be the last Business Day in each calendar month or such other Business Day or Days as the Manager may determine from time to time and notify in advance to participating Shareholders provided that there is at least one Valuation Day in each month. A Business Day is defined as a day (other than Saturday or Sunday or a public holiday in Ireland), when retail banks are generally open for business in Dublin and Lisbon.



2

General information (continued) Subscriptions and redemptions Applications must be received by the Administrator before 5.00 pm (Irish time), 30 Business Days before the Subsequent Opening Date or such later period as the Directors may, at their discretion, accept, provided that such applications are received prior to the Valuation Point for that Subsequent Opening Date. As the Company is structured as a closed-ended company, participating Shareholders are not entitled to request redemption of their Shares. Dividend policy In accordance with the Prospectus the Directors can declare a semi-annual dividend (the “dividend”) to the participating Shareholders on the last Business Day of March and September in each year, (a “Dividend Declaration Date”) based on the net investment income of the Company on an income receivable basis. The dividend will be paid within 30 Business Days of the Dividend Declaration Date (the “Dividend Payment Date“), subject to foreign exchange regulations applicable in the country where the payment has been requested to be made or other delays. The Company did not declare any dividends during the current period or comparative periods shown in these financial statements.



3

Statement of Directors’ responsibilities in accordance with the Transparency Directive 2004/109/EC Each of the Directors, whose names and functions are listed on page 32 in the ‘Directory’ section of this report confirm that, to the best of each person’s knowledge and belief: These condensed financial statements have been prepared in accordance with the Financial Reporting Panel Statement: Half Yearly reports and with the Companies Acts, 1963 to 2012, the listing rules of the Irish Stock Exchange and the reporting requirements of the EU Transparency Directive. The condensed interim financial statements should be read in conjunction with the annual audited financial statements for the year ended 31 March 2013 which have been prepared in accordance with accounting standards generally accepted in Ireland. Accounting standards generally accepted in Ireland are those published by the Institute of Chartered Accountants in Ireland and issued by the Financial Reporting Panel. The condensed financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company. The Investment Manager’s report includes a fair review of the important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements, together with a description of the principal risks and uncertainties for the remaining six months of the financial year. The related party transactions are as disclosed in Note 16 of these financial statements. These condensed financial statements include all major related party transactions during the period. In addition, we confirm that there have been no significant changes in the related parties as disclosed in the annual audited financial statements prepared to 31 March 2013 that could have a material effect on the performance of the current period. These condensed interim financial statements have not been independently audited or reviewed by an external audit firm. Date: 25 November 2013



4

Investment Manager’s Report for the six month period ended 30 September 2013 Executive summary The Pan-European Real Estate Fund of Funds mandate, which commenced in May 2005, is invested in UK and Continental European property funds. The strategy is seeking to deliver a total return 8% per annum over the medium to long term.

Mandate Size € 150.6m Total Drawn Client Commitments €127.1m Total Fund Commitments € 142.5m Value of Portfolio € 82.1m No. of Investments 19 Undrawn Fund Commitments €2.9 m Leverage (Debt/GAV) 53.2%

Fund Performance for the six months to 30 September 2013 During the six months to September 2013, the fund achieved a total return of -3.2%. The return since inception is -2.9% (annualised). The performance is calculated using the time weighted method based on the monthly dealing NAV rather than using the opening and closing net asset values per the financial statements.

Fund % Performance Objective

%

Six months to Sep 13 -3.2% 4.0%

Year (12m) -11.5% 8.0%

Since inception (annualised) -2.9% 8.0%

Source: CBRE Global Multi Manager, Sep 2013

Improved confidence indicators, a decrease in macro-economic downside risk and more lenient financing conditions are all starting to have a favourable impact on the appetite for investments in European property markets. The most recent data is showing a strong recovery in transaction volumes. All sectors showed yield compression during the quarter. In addition, signals are emerging that European rental markets could be nearing the long awaited trough. We are also seeing a normalisation of elevated risk premiums in neglected segments of Europe’s property markets which is forecast to boost returns for early movers. During the quarter, we continued to explore opportunities to exit underperforming funds where attractive pricing exists. We have initiated negotiations with a potential buyer to sell PREFF’s holding in the Rockspring Pan European Fund on the secondary market and are currently assessing the rationale of a sale in the Henderson UK Shopping Centre given recent interest expressed. The portfolio produced a return of -0.2% over the quarter and -11.5% over the last 12 months. The relatively weak performance of the portfolio was primarily due to the portfolio’s exposure to funds with secondary assets or fund’s with exposure to southern European economies which have experienced further valuation falls during the quarter. The Corestate German Residential Fund and the Pradera European Retail Fund II remained a drag on performance.



5

Investment Manager’s Report for the six month period ended 30 September 2013 (continued) Economic Background The outlook for Europe is still a small contraction in 2013 and a weak recovery thereafter. Projections have been revised slightly upward though, which is a promising sign. An on-going flow of positive news has helped lift confidence to levels not seen in several years. However despite the change in sentiment some indicators remain weak. Retail sales and industrial production have continued to decline albeit are expected to improve, unemployment remains at a record-high and credit growth is also negative. Given this economic backdrop, it is more than likely that the ECB will keep rates at present levels for an extended period of time. All of this points to a continued cautious stance on the strength of the economic recovery. Occupier Markets Quarter-on-quarter prime rental growth for the aggregate EU-15 property markets was virtually zero during Q2. The aggregate stability hides only very limited variation at the individual city level. One of the most notable changes with respect to European office rents is that for the first time in 20 quarters, Madrid and Barcelona (combined) did not show a negative change in prime rents. We see this as a signal that European rental markets, including the non-prime segment of the market, could be nearing the long awaited trough. Despite some early signs of increased confidence in Europe we maintain our forecast of modest changes in prime rents for the period 2013-2017. Capital Markets European investment activity is continuing to recover. The most recent data available for Q2 shows transaction volumes at EUR 34.2 billion, up 18% over the previous quarter and 22% year-on-year. Indicative figures for Q3 show that the growth trend is gaining further momentum. Encouragingly, growth was reported in a broad group of countries but also in an expanding number of cities. In the UK for example a clear rise in interest in second tier cities is reported. Strong demand from institutional investors for high quality assets combined with a lack of supply of such properties led to the further sharpening of prime yields. All sectors showed yield compression during Q2 with the strongest decrease seen in the sought-after industrial sector. The gap between prime and (good) secondary yields has been rising since the onset of the crisis. However, with investors starting to move up the risk curve we foresee the reversal of this trend. Summary Improved confidence indicators, a decrease in macro-economic downside risk and more lenient financing conditions are all starting to have a favourable impact on the appetite for investments in European property markets. While economic conditions remain subdued the prospect of bottoming out economies clearly creates a positive sentiment. A normalisation of elevated risk premiums in neglected segments of Europe’s property markets is forecast to boost returns for early movers.



6

Investment Manager’s Report for the six month period ended 30 September 2013 (continued) Portfolio Holdings as at 30 September 2013

1Calculated as (Fund NAV)/(Portfolio NAV )

Fund Name Committed (€’000)

NAV (€’000)

Undrawn (€’000)

% of Portfolio¹

Gearing (LTV)

Comment

Aviva Central European Property Fund

9,000 5,383 5.8% 45.8%Value add, diversified fund with a strong office bias investing across Central and Eastern Europe.

AXA APIV 7,300 6,169 87 6.6% 26.2%Specialist, pan European fund offering exposure to alternative assets including healthcare centers, hotels and government properties.

Corestate German Residential Fund

10,000 6,458 6.9% 61.0%Specialist fund invested in German residential units with a strategy of reducing vacancy and selling units in blocks.

Corestate German Residential Fund Private Notes

97 30 0.1% 61.0%Specialist fund invested in German residential units with a strategy of reducing vacancy and selling units in blocks.

Curzon Capital Partners II 5,000 2,041 1,741 2.2% 67.3%Pan European fund invested in diversified assets throughout France, Germany and Netherlands.

MRM 5,000 2,043 2.2% 52.8%Value add, diversified, listed real estate company investing throughout France.

Grosvenor UK Shopping Centre Fund

6,942 74 0.1% 0.0%Specialist, value add, closed-end, UK shopping centre fund. Good quality assets in secondary locations.

Henderson Outlet Mall Fund 7,000 11,147 11.9% 29.3%

Specialist, lowly geared pan European fund invested in dominant outlet malls managed by specialist mall operator and developer MacArthurGlen.

Henderson UK Shopping Centre Feeder Fund

6,402 4,449 4.8% 10.7%

Specialist, core, closed-end fund invested in prime dominant shopping centres such as the Bull Ring, Birmingham and Buchannan Galleries, Glasgow; with an above average occupancy and low risk tenant base.

CBRE European Industrial Fund

6,079 4,024 4.3% 41.9%Core, semi open-end fund investing in logistics properties in Western Europe.

IRUS European Retail Fund 10,000 9,753 10.4% 49.3%Specialist, pan European fund invested in dominant outlet malls managed by specialist mall operator and developer Neinver.

V+ Nordic Aktiv Property Fund 15,000 1,094 1.2% 92.2%Value add fund investing in a diversified portfolio of secondary mixed use assets in the Nordics.

Olinda 3,825 857 0.9% 49.4%Value add listed real estate company invested in retail assets throughout Italy.

Pradera European Retail Fund II

10,000 3,010 3.2% 78.0%Specialist southern European retail fund focused on hypermarket anchored shopping centres in Spain and Italy.

Prologis European Properties II

8,362 7,200 7.7% 42.4%Specialist, pan European open-end fund offering exposure to logistics properties with a strong income yield.

Rockspring German Retail Box Fund

9,000 6,144 6.6% 55.9%Specialist core fund focused on German retail assets including neighbourhood centres and regional shopping centres.

Rockspring Pan European LP 6,757 2,812 3.0% 42.3%Diversified, pan European fund with a retail bias investing in a mix of prime and secondary assets.

TSEV VI 10,000 3,419 1,063 3.7% 62.0%Value add pan European fund focusing principally on the repositioning, redevelopment and development of high-quality office properties.

UNITE Student Accommodation Fund

7,842 5,963 6.4% 44.0%

Specialist, value add, semi open-end fund investing in student accommodation properties throughout the UK, well diversified with a focus towards Russell Group universities, market leading management team.

TOTAL INVESTED 142,482 82,070 2,891 87.9%

Cash 10,405 11.1%

Other Assets 931 1.0%

PORTFOLIO TOTAL 142, 482 93,406 2,891 100% 53.2%



7

Investment Manager’s Report for the six month period ended 30 September 2013 (continued) Portfolio Composition and Investment Activity Geographic Exposure by Gross Asset Value Property Sector Exposure by Gross Asset Value

United Kingdom 11.1%

France 8.1%

Germany 34.9%

Iberia 8.6%

Italy 13.0%

Benelux 5.3%

Nordics 7.7%

CEE 8.4%

Other 2.9%

Targeted Geographic Allocation Targeted Sector Allocation

The portfolio is now at a mature stage. Geographically, the portfolio is under weight to the UK, France and Nordics, but over weight to Germany and Italy. Ideally we would reverse these positions however given the mature stage of the portfolio we don’t expect significant changes to the portfolio’s geographic exposure in the near future. In terms of property type allocations, the portfolio is outside the strategic range for office with a strong underweight position. We are comfortable with this given the relatively poor fundamentals in that sector as evidenced by the weak occupier market and subdued employment growth. Investment Activity During the last 6 months, the Tishman Speyer European Ventures VI completed the disposal of two Parisian assets 2.8% and 10.6% above latest valuation respectively. Following these sales, PREFF received a €0.9m return of capital. Regarding the Aviva Central European Property Fund, the manger submitted a proposal to extend the fund life term by a three year period from 10 January 2015. We have informed the manager of our disagreement with the proposal and are currently awaiting a formal response. We will provide an update in the next quarterly report.

0%

5%

10%

15%

20%

25%

30%

35%

40%

Uni

ted

Kin

gdom

Fra

nce

Ger

man

y

Iber

ia

Italy

Ben

elux

Nor

dics

CE

E

Oth

er

Current Portfolio GMM Target

Office 14.4%

Retail 41.2%

Industrial 14.1%

Resi/ Other 30.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Offi

ce

Ret

ail

Indu

stria

l

Res

i/ O

ther

Current Portfolio GMM Target



8

Investment Manager’s Report for the six month period ended 30 September 2013 (continued) Investment Activity (continued) MRM: Due to the highly leveraged financing structure of the company and the lack of liquidity for more secondary properties, MRM has been unable to comply with its future debt obligation. In order to avoid a “fire sale” of the portfolio, SCOR, an insurance company, entered into an investment agreement with MRM to recapitalise the company and become a major shareholder. The recapitalization was subject to the existing €54m bond loan being converted into equity at a conversion rate equal to 0.3x and completed in May resulting in SCOR acquiring a 59.9% stake in the company. As part of the recapitalization scheme, the company significantly reduced its indebtedness ratio and all loan maturities have been extended beyond November 2017. Also during the period, we voted against the restructuring proposal put forward by the manager of the Rockspring Pan European Fund as we deemed the proposal was not in the best interest of investors. We continue to explore various routes with the manger to satisfy our redemption requests and have initiated discussions with an investor regarding a secondary trade. As part of its new valuation policy, the fund will be using IFRS and INREV principles next quarter. As a result of this, we expect the value of the fund to be marked down by approximately 17%. Future Plans During the period, we were asked to explore the effect and timing of an accelerated liquidation of the portfolio with the objective of returning capital back to investors. A detailed analysis has been carried out where the key variable is the pace of the liquidation. Based on this analysis our recommendation is to proceed with an orderly liquidation of the fund over the fund life span so as to preserve the fund equity while benefitting from good performance delivered by open-ended funds. In addition, we continue to explore opportunities to exit underperforming funds where attractive pricing exists. Dealing NAV Update

Sep 2013 Mar 2013 Sep 2012

Class A (EUR) €73.54 €76.04 €83.27

Class B (EUR) €75.49 €77.95 €85.22

Class C (EUR) €69.31 €71.94 €79.07

Against the performance objective of 4.0%, PREFF returned -3.2% for the six month period ended 30 September 2013, an underperformance of 7.2%.

Annual Fund Performance The Henderson Outlet Mall Fund continues to perform well returning 11.8% over the last 12 months. The fund is invested in eight directly owned and three indirectly owned luxury discount outlet mall centres across Europe. The fund performance was primarily driven by income as well as increases in the value of the portfolio as a result of continued turnover growth in the centres. The Corestate German Residential Fund Private Notes returned 11.4% over the last 12 months. The Fund repaid 69% of the Preferred Loan Note at quarter end. The loan note was due to be repaid fully in September but proceeds from property sales were not timely received by the fund, due to the long notarisation period following asset disposals in Germany. The interest rate for the unpaid part rises to approx. 18% and we expect this amount to be repaid before year end.



9

Investment Manager’s Report for the six month period ended 30 September 2013 (continued) Annual Fund Performance (continued)

The Unite UK Student Accommodation Fund returned 10.1% over the last 12 months. The fund is invested in student accommodation properties across the UK. These properties have continued to experience strong demand, with 99% of bed spaces let for the 2013/14 academic year, and have seen an overall rental increase of c. 2.0% compared to the previous year. The strong performance of the fund during the last quarter was attributable to further increases in portfolio value combined with a good income return and a positive movement in swap values. The fund completed a £405m refinancing which reduces the average cost of interest cost from 4.9% to 3.9% p.a. The fund commenced an equity raise in June in order to de-gear the portfolio and provide funds for acquisitions. The units are to be issued at a price reflecting a 3.3% premium to NAV. There is interest in the issue but no new equity has been raised as yet. The IRUS European Retail Property Fund returned 6.4% over the last 12 months. The return was primarily attributable to operating profit slightly offset by a negative revaluation at the end of 2012. The fund is invested in 11 outlet schemes, 1 retail park and 1 stand-alone retail box and is predominantly exposed to southern Europe (67%) and Germany (17%) and Poland (16%). The fund is fully invested and despite the uncertain economic conditions, the key operating performance metrics in the portfolio are positive with current occupancy in the portfolio at 97.2%, a 4.4% sales increase in Jan-Jun 2013 compared to Jan-Jun 2012 and a 4.8% increase in visitor numbers in that same period. The manager has been active rebranding assets in Madrid and Sevilla and has extended an asset in Italy scheduled to open in October with all but one unit pre-leased. The Prologis European Property Fund achieved also a good positive return of 3.2% over the last 12 months. The fund is a pan- European fund investing in industrial assets in good locations. The positive return over the last 12 months was mainly driven by operating result reflected in a distribution yield of 7.4%. The strong operating result is driven by a high net income yield of 7.3% on a portfolio level and cost reduction, mainly due to a decrease in the cost of debt. The acquisitions made by the fund following the capital raise also contributed to the positive result and improved the quality of the portfolio. On a like for like basis the portfolio value decreased as value correction in the first six months had a strong negative impact. The currency effect over the last 12 months was also negative as the fund has significant exposure to the Sterling. The Henderson UK Shopping Centre Fund returned 2.9% over the last 12 months. The return over the last year was driven by valuation increases as market sentiment for prime shopping centres improved, particularly in the first quarter of 2013. There is debt at the feeder fund level, with gearing of c. 35.0%. The high cost of debt at 9.3% continues to be a drag on the net performance of the feeder fund with a low gross distribution yield of 2.5% over the last year. Henderson UK Shopping Centre Fund owns four prime dominant shopping centres across the UK. The portfolio is near full occupancy at 98% and has a relatively long weighted average unexpired lease term of c.11 years. This year, the fund made further progress with regard to the Buchannan Galleries extension with a pre-let commitment from Marks and Spencer as an anchor tenant. The fund manager is in negotiations to refinance the current debt held against the St. James’ Edinburgh asset of £70.0m and has made further progress in preparing to seek a JV development partner for this asset in 2014. The AXA APIV Fund delivered a 1.5% return over the last 12 months. The fund is invested in alternative property types across Europe including healthcare, automotives, leisure and hotels. The overall portfolio benefits from long indexed leases and strong income security. The fund performance was primarily driven by net operating income distributed to investors whilst the value of the portfolio was impacted by worsening operator covenants within the German healthcare portfolio. The Curzon capital Partners Fund returned -4.9% over the last 12 months. The negative return was primarily attributable to a mark-down in the value of the portfolio as a result of market conditions worsening regarding both leasing and capital market in the Netherlands and France. During the quarter, the manager of the fund put forward a proposal to extend the fund maturity by two years from April 2014 to April 2016. We are currently assessing the proposal before taking a position in that respect.



10

Investment Manager’s Report for the six month period ended 30 September 2013 (continued) Annual Fund Performance (continued) The Rockspring Pan European Fund returned -13.6% over the last 12 months. The negative return of the fund is wholly attributable to significant declines in the value of the portfolio caused by a persistent weak economic environment and partly offset by a net operating profit. The fund remains under liquidity pressure given its geographic exposure to peripheral European economies and its large redemption queue. For tactical reasons, we filed a redemption in the fund in January 2012. Since then, the fund has deferred all its redemptions requests and put forward recently a restructuring proposal to solve its liquidity issue. The proposal was rejected by 19% of the voting investor base and as a result the manager is currently exploring a secondary market sale to reach the required approval level. The Corestate German Residential Fund returned -13.9% over the last 12 months. The negative return was mainly due to write-down of the goodwill that was paid when the Youniq business was acquired. The fund is in the process of repaying the preferred loan note which will be completed by the end of the year. However, development costs overrun within the Youniq business have created liquidity issues since valuations were adjusted and as a result banks required more guarantees and reduced the level of development financing. Corestate management company is providing a temporary mezzanine loan to resolve the liquidity issues at 11% coupon. The loan will be repaid from selling two assets once the business plan has been completed. The Pradera European Retail Fund II returned -36.8% over the last 12 months. The negative return was primarily driven by a mark-down in the value of the portfolio amplified by the high leverage of the fund (78%). Due to its’ high leverage (78.0%). The valuer increased yields in Italy by approximately 25 basis points, while keeping the yields in Spain unchanged. At the end of the last quarter the fund received a binding term sheet from Hypothenkenbank Frankfurt for the restructuring of the Italian and Spanish loans which included fixed amortization payments, a full cash sweep and a 3.0% margin. The fund is also making progress on the expired Aareal loan but final terms have not been presented. Both loans are expected to be refinanced in Q4. CBRE GMM negotiated a lowering of the management fee, effective 1 July 2013. The management fee is now 15% of net property income, which is an approximate 20% reduction. The MRM company returned -56% over the last 12 months. Due to the highly leveraged financing structure of the company and the lack of liquidity for more secondary properties, MRM has been unable to comply with its future debt obligation. In order to avoid a “fire sale” of the portfolio, SCOR, an insurance company, entered into an investment agreement with MRM to recapitalise the company and become a major shareholder. The recapitalization was subject to the existing €54m bond loan being converted into equity at a conversion rate equal to 0.3x and completed in May resulting in SCOR acquiring a 59.9% stake in the company. As part of the recapitalization scheme, the company significantly reduced its indebtedness ratio and all loan maturities have been extended beyond November 2017. The Grosvenor Shopping Centre Fund sold its three shopping centre assets (Burton, Grimsby and Inverness) to F&C REIT during the year for a price that was below their carrying value in the fund’s accounts. The carrying value had also fallen prior to sale as valuers had marked down the values of secondary UK shopping centres. As a result the fund recorded a return of -59.6% over the last year. The fund distributed 95% of the net sale proceeds to investors. The remaining proceeds are being withheld as a contingency to cover any further costs of collapsing the fund structure over the next 12 to 24 months and will be paid upon final close. The V+ Nordic Fund returned -85.9% over the last 12 months. The fund has a single loan facility for €443 million with a syndicate of banks (led by HBOS) that expires in December 2013. As at Q3 2012 the LTV ratio of the facility was 71.7% versus the 70.0% bank covenant. In anticipation of the refinancing discussion, Valad had been progressing a sales plan during 2012 to deleverage the fund. Unfortunately, to date, only half of the assets earmarked for sale have been sold, which has not provided sufficient proceeds to reduce the leverage ratio as required. Therefore, in anticipation of a bank-driven liquidation, the portfolio has now been revalued to reflect a distressed sales price. Jones Lang LaSalle has performed the valuation resulting in 25% average value decrease as at 31st December 2012. Given the high leverage within the fund, this resulted in an 85% write down in the NAV. The objective going forward is to get the portfolio refinanced under terms that allow for an orderly liquidation of the portfolio and provide the required working capital to operate it.



11

Investment Manager’s Report for the six month period ended 30 September 2013 (continued) Annual Fund Performance (continued)

Compliance with Investment Restrictions

Due to the exposure to Germany the largest single country exposure of the portfolio exceeded the 30% limit. Breaches arising from underlying funds returning capital as part of their wind-down phase or changes in the value of assets driven by market changes are not considered as active breach of the IMA. As a result of the merger with ING REIM, the portfolio is now invested in one in-house fund, the CBRE European Industrial Fund. It is not deemed the Fund is in breach of the investment restriction as the investment in the CBRE European Industrial Fund was made before the merger.

Restriction Limit Actual

Any underlying funds with a longer initial duration than that of the Fund 0.0% 0.0%

Largest exposure to single holding 20.0% 12.6%

Largest exposure to a single country 30.0% 34.9%

Largest exposure to a single sector 50% 41.2%

Largest exposure to a single manager 20.0% 12.6% Invest in funds managed by the investment manager or investment adviser without waiving the initial charge

0.0% 0.0%

Invest in countries that are not member states of the European economic area 15.0% 0.0%

Take legal or management control of the issuer of any of its underlying investments 0.0% 0.0%

11.8%

11.4%

10.1%

6.4%

3.2%

2.9%

1.5%

-0.4%

-1.5%

-1.7%

-3.1%

-4.5%

-4.9%

-13.6%

-13.9%

-36.8%

-56.0%

-59.6%

-85.9%

-100% -80% -60% -40% -20% 0% 20%

Henderson Outlet Mall Fund

Corestate German Residential Fund Private Notes

Unite UK Student Accomodation Fund

IRUS European Retail Property Fund

Prologis European Property Fund

Henderson UK Shopping Centre Fund

AXA APIV Fund

TSEV VI

Rockspring German Retail Box Fund

CBRE European Industrial Fund

Aviva Central European Property

Olinda

Curzon Capital Partners II

Rockspring Pan European Fund LP

Corestate German Residential Fund

Pradera European Retail Fund II

MRM

Grosvenor UK Shopping Centre Fund

V+ Nordic Fund



12

Investment Manager’s Report for the six month period ended 30 September 2013 (continued) Corporate Actions CBRE European Industrial Fund: Approval of decisions made in annual general meeting. CBRE European Industrial Fund: Consented approval for a unit transfer to implement the co-investment program which was agreed during the merger process between ING and CBRE. Corestate German Residential Fund: Granted power of attorney to approve resolutions during annual general meeting. MRM: Approval to the conversion of the bonds into new shares of the company and the increase in share capital to the benefit of SCOR SE. Rockspring Pan European Fund: Voted against the resolution to support the restructure of the limited partnership. Risks and Uncertainties Risks over the next six months Market risk may affect PREFF’s performance over the next six months including potential price volatility and relative illiquidity of real estate in some markets. Other general risk factors to consider include the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and differences in government supervision and regulation; economic and political risks, including potential exchange-control regulations, potential restrictions on repatriation of capital, and possibilities of less predictable means of dispute resolution can also be a risk when investing on a European basis. In certain jurisdictions, foreign ownership of real estate related assets is restricted, and the underlying funds have invested in joint venture arrangements which carry risk in execution and liquidity. Fluctuations in currencies is also a potential source of additional volatility in PREFF’s performance, as it may impact the value of PREFF’s underlying funds denominated in foreign currency. Adverse economic or other conditions in the markets in which the underlying funds operate may lower their occupancy levels and limit their ability to increase or maintain rents/prices. If the underlying properties fail to generate revenues sufficient to meet the underlying fund’s operating and other expenses, the operating results and distributions could be adversely impacted. The following factors, among others, may negatively affect the results of PREFF’s investments: The impact of local or regional real estate market conditions upon occupancy;

Periods of economic slowdown or recession may occur and could result in general decline in rents or an increase in tenant defaults;

Increased operating costs, including need for capital improvements, insurance premiums, real estate taxes and utilities;

Changes in supply of, or demand for, similar or competing properties in an area;

The impact of environmental protection laws;

Earthquake and other natural disasters, terrorist acts, civil disturbances or acts of war which may result in uninsured or underinsured losses; and changes in tax, real estate and zoning laws; and

Unfavorable economic conditions and in particular rising interest rates could increase funding costs. Funds may have limited access to capital markets or lenders may decide not to extend credit to the Fund. These events could represent a source of volatility for the Fund. In addition changes in interest rates and yield curves will result in mark to market movements which represent another source of volatility.



13

Investment Manager’s Report for the six month period ended 30 September 2013 (continued) Important events after the period end As part of our strategy to exit underperforming funds while maximising value, we contemplate a secondary market sale of the Rockspring Pan European Properties LP underlying fund and have initiated discussions with an investor. In addition, the Curzon Capital Partners II Fund put forward a proposal to extend the maturity date of the fund which we are currently reviewing with other investors. Existence of any branches There are no branches in existence Likely Future Developments We plan to proceed with an orderly liquidation of the fund over the fund life span so as to preserve the fund equity while benefitting from good performance delivered by open-ended funds. In addition, we continue to explore opportunities to exit underperforming funds where attractive pricing exists. Information Concerning Acquisition of own Shares No subscriptions or redemptions occurred during the six month period ended 30 September 2013 as PREFF is a closed-ended fund. Use of Financial Instruments Currency hedging is undertaken on a portfolio level using forward currency contracts. The hedging is designed to minimise the currency risk of holding non-EUR denominated investments in the portfolio. Hedging is undertaken by the Investment Manager, Atrium Investimentos. Interest rate Swaps are used by the underlying funds in order to reduce the volatility and uncertainty of the floating interest rate.



14

Portfolio of Investments as at 30 September 2013

Nominal Security Value

EUR % of NAV

Investments in Real Estate Funds (88.10%) (31/03/2013: 87.04%) (30/09/2012: 90.26%)

France (2.19%) (31/03/2013: 0.27%) (30/09/2012: 0.45%)

1,284,904 MRM (Dynamique Bureaux) 2,042,997 2.19

Germany (6.93%) (31/03/2013: 7.25%) (30/09/2012: 7.23%)

9,496,676 Corestate German Residential Fund 6,457,740 6.93

Italy (0.92%) (31/03/2013: 0.88%) (30/09/2012: 0.85%)

7,897 Olinda 856,825 0.92

Luxembourg (39.19%) (31/03/2013: 38.96%) (30/09/2012: 36.28%)

8,500,000 Aviva Central European Property Fund 5,382,865 5.78

596,674 Henderson Outlet Mall Fund Class A (2) 11,146,600 11.97

8,816 IRUS European Retail Fund 9,752,967 10.47

1,000,000 Pradera European Retail Fund II 3,010,000 3.23

1,276,591 Prologis European Properties Fund II 7,199,977 7.74

36,492,409 39.19

Netherlands (4.32%) (31/03/2013: 4.26%) (30/09/2012: 4.15%)

7,000 CBRE European Industrial Fund CV 4,024,300 4.32

United Kingdom (34.55%) (31/03/2013: 35.42%) (30/09/2012: 41.30%)

5,800,846 AXA Alternative Property Income Venture Fund Bond 6,168,929 6.63

799,641 Curzon Capital Partners II 2,041,000 2.19

35,911 Grosvenor Shopping Centre Fund 74,148 0.08

1,087 Henderson UK Shopping Centre Feeder Fund 4,449,388 4.78

942,022 Rockspring German Retail Box Fund 6,144,300 6.61

67 Rockspring Pan European LP 2,812,459 3.02

1 Tishman Speyer European Real Estate Venture VI 3,418,661 3.67

5,286,989 UNITE UK Student Accommodation Fund 5,962,890 6.40

150 V+ Nordic Aktiv Property Fund 1,093,500 1.17

32,165,275 34.55

Total Investments in Real Estate Funds 82,039,546 88.10



15

Portfolio of Investments as at 30 September 2013 (continued)

Nominal Security Value

EUR % of NAV

Private Notes (0.03%) (31/03/2013: 4.81%) (30/09/2012: 4.28%)

Germany(0.03%) (31/03/2013: 0.03%) (30/09/2012: Nil)

30,076 Corestate German Residential Fund Private Notes 30,076 0.03

Total Private Notes 30,076 0.03 Investments in Money Market Funds (11.17%) (31/03/2013: 7.00%) (30/09/2012: 4.86%)

Ireland (11.17%) (31/03/2013: 7.00%) (30/09/2012: 4.86%)

25,000 SSgA Cash Management GBP Fund 29,908 0.03

10,372,899 SSgA Cash Management EUR Fund 10,372,899 11.14

Total Investments in Money Market Funds 10,402,807 11.17

Total Investments excluding Financial Derivative Instruments (Cost: EUR150,345,435) (31/03/2013: EUR148,368,416) (30/09/2012: EUR148,030,909) 92,472,429 99.30

Financial Derivative Instruments ((0.32%)) (31/03/2013: (0.22%)) (30/09/2012: 0.11%)

Forward Foreign Currency Exchange Contracts* ((0.32%)) (31/03/2013: (0.22%)) (30/09/2012: 0.11%)

Currency Bought

Amount Bought

Currency Sold

Amount Sold

Effective Date

Maturity Date

Unrealised Loss EUR

% of NAV

EUR 10,249,855 GBP 8,820,000 23/08/2013 29/11/2013 (295,472) (0.32)

Unrealised loss on forward foreign currency exchange contracts (295,472) (0.32)

Total Financial Derivative Instruments (295,472) (0.32)

Total Investments including Financial Derivative Instruments 92,176,957 98.98

Debtors (31/03/2013: 0.53%) (30/09/2012: 0.67%) 1,015,767 1.09

Cash and bank balances (31/03/2013: 1.16%) (30/09/2012: 0.09%) 151,437 0.16

Creditors (31/03/2013: (0.32%)) (30/09/2012: (0.27%)) (218,462) (0.23)

Net Asset Value as at 30 September 2013 (Note 5) 93,125,699 100.00

* The counterparty for the forward foreign currency exchange contracts is State Street Global Markets



16

Portfolio of Investments as at 30 September 2013 (continued) 30/09/2013 31/03/2013 30/09/2012 (Unaudited) (Audited) (Unaudited) EUR EUR EUR Dealing Net Asset Value in EUR (Note 5) 93,405,987 96,497,206 105,560,820 Number of participating Shares in issue (Note 13) Units Units UnitsClass A 46,220 46,220 46,220Class C 1,071,025 1,071,025 1,071,025Class D 132,061 132,061 132,061 Net Asset Value per participating Share EUR EUR EURClass A 73.54 76.04 83.57Class C 75.49 77.95 85.22Class D 69.31 71.94 79.07 Country designation is based on the country of domicile of the underlying fund and not on the market into which it is invested.



17

Portfolio changes for the six month period ended 30 September 2013 Purchases Cost

EURMRM (Dynamique Bureaux) 4,500,000SSgA Cash Management EUR Fund 4,080,000SSgA Cash Management GBP Fund 110,670Total purchases for the period 8,690,670

Sales Proceeds

EURDynamique Financiere 4,500,000Tishman Speyer European Real Estate Venture VI 894,388AXA Alternative Property Income Venture Fund Bond 643,867SSgA Cash Management EUR Fund 296,000SSgA Cash Management GBP Fund 188,042Aviva Central European Property Fund 125,620Corestate German Residential Fund Private Notes 66,924Total sales for the period 6,714,841



18

Profit and Loss Account for the six month period ended 30 September 2013 6 month 6 month Period ended Year ended Period ended 30/09/2013 31/03/2013 30/09/2012 (Unaudited) (Audited) (Unaudited)

Note EUR EUR EUR Investment income 7 2,211,574 2,811,294 1,895,267 Net losses on investments designated at fair value through profit or loss 11 (3,987,403) (11,274,702) (729,825) Foreign exchange (losses)/gains 11 (151,254) 111,243 (584,556) Expenses (486,650) (1,039,423) (526,615) (Loss)/profit before tax (2,413,733) (9,391,588) 54,271 Taxation (28,643) (148,071) (60,965) Loss for the period/year (2,442,376) (9,539,659) (6,694) Net decrease in Net Assets attributable to participating Shareholders

(2,442,376) (9,539,659) (6,694)

There are no recognised gains or losses arising in the period other than the decrease in Net Assets attributable to participating Shareholders resulting from operations. In arriving at the results for the financial period, all amounts above relate to continuing operations. The accompanying notes are an integral part of these condensed financial statements.



19

Balance Sheet as at 30 September 2013 30/09/2013 31/03/2013 30/09/2012 (Unaudited) (Audited) (Unaudited)

Note EUR EUR EURAssets Non- Current Assets: Financial assets designated at fair value through profit or loss 92,472,429 94,484,003

104,472,737

Current Assets Unrealised gain on forward foreign currency exchange contracts

- -

111,381

Debtors and prepayments 8, 11 1,015,767 498,662 703,804Cash and bank balances 151,437 1,103,001 99,684Total Current Assets 93,639,633 96,085,666 105,387,606 Current Liabilities Unrealised loss on forward foreign currency exchange contracts

(295,472) (206,443)

-

Creditors (amounts falling due within one year) 11 (218,462) (311,148) (286,566)Total Current Liabilities (excluding Net Assets attributable to participating Shareholders)

(513,934) (517,591)

(286,566)

Net Assets attributable to participating Shareholders at the end of the period/year

93,125,699 95,568,075

105,101,040

The accompanying notes are an integral part of these condensed financial statements.



20

Statement of Changes in Net Assets Attributable to Participating Shareholders for the six month period ended 30 September 2013 6 month 6 month Period ended Year ended Period ended 30/09/2013 31/03/2013 30/09/2012 (Unaudited) (Audited) (Unaudited) EUR EUR EUR Net Assets attributable to participating Shareholders at the beginning of the period/year 95,568,075 105,107,734 105,107,734 Net decrease in Net Assets attributable to participating Shareholders (2,442,376) (9,539,659) (6,694) Net Assets attributable to participating Shareholders at the end of the period/year 93,125,699 95,568,075 105,101,040 The accompanying notes are an integral part of these condensed financial statements.



21

Cash Flow Statement for the six month period ended 30 September 2013

6 month 6 month

Period ended Year ended Period ended

30/09/2013 31/03/2013 30/09/2012

(Unaudited) (Audited) (Unaudited)

Note EUR EUR EUR

Cash flow used in operating activities 4 (641,561) (633,937) (1,159,335)

Capital expenditure and financial investment

Purchases of financial assets (8,690,670) (3,717,236) (1,826,610)

Sales of financial assets 6,522,296 2,396,152 1,061,669

(2,168,374) (1,321,084) (764,941)

Taxation paid - (68,954) (34,860)

Returns on investment and servicing of finance

Bank interest income 4,757 1,700 -

Dividend income 1,853,614 2,895,295 1,828,839

1,858,371 2,896,995 1,828,839

Net (decrease)/increase in cash and bank balances during the period/year (951,564) 873,020 (130,297)

Cash and bank balances at beginning of the period/year 1,103,001 229,981 229,981

Cash and bank balances at end of the period/year 151,437 1,103,001 99,684

The accompanying notes are an integral part of these condensed financial statements.



Notes to the condensed financial statements for the six month period ended 30 September 2013

22

1. Accounting policies The accounting policies and calculation methods applied are consistent with the annual audited financial statements for the year ended 31 March 2013, as described in those financial statements. Basis of preparation These interim unaudited condensed financial statements have been prepared in accordance with the Financial Reporting Panel (“FRC”) Statement: Half Yearly Financial Reports. The interim unaudited condensed financial statements should be read in conjunction with the annual report and audited financial statements for the year ended 31 March 2013, which have been prepared in accordance with the accounting standards generally accepted in Ireland and with Irish Statute comprising the Companies Acts 1963 to 2012. Accounting standards generally accepted in Ireland are those published by the Institute of Chartered Accountants in Ireland and issued by the Financial Reporting Panel. Due to the nature of the Company’s business and the type of transactions the Company engages in, the Directors have adapted the Profit and Loss and Balance Sheet formats to suit the circumstances of the business in accordance with Section 4 of the Companies (Amendment) Act, 1986. The format and certain wording of the condensed financial statements have been adapted from that contained in the Companies (Amendment) Act, 1986 and FRS 3 “Reporting of the Financial Performance“ (“FRS 3”), so that in the opinion of the Directors they may appropriately reflect the nature of the Company’s business. In the opinion of the Directors, the condensed financial statements with the noted changes provide the information required by the Companies Acts 1963 to 2012 and FRS 3. 2. Significant agreements Administration fee The Administrator is entitled to a fee, payable out of the assets of the Company, at a rate of 0.1% per annum, up to and including the first EUR100 million of NAV of the Company and in respect of any excess thereafter, at a rate of 0.08% per annum of the NAV of the Company, accruing monthly and be payable monthly in arrears, subject to a minimum monthly fee of EUR7,000 in respect of the Company. The Administrator is also entitled to be reimbursed for all agreed transaction fees and out of pocket expenses properly incurred by it in the performance of its duties and responsibilities under the Administration Agreement. All such fees and expenses are borne by the Company. The administration fee for the six month period ended 30 September 2013 was EUR47,611 (year ended 31 March 2013: EUR103,979, period ended 30 September 2012: EUR52,645), of which EUR17,014 (31 March 2013: EUR17,654, 30 September 2012: EUR18,892) was payable at the period end. Custodian fee The Custodian is entitled to a fee of 0.03% per annum of the NAV of the Company, accruing monthly and is payable monthly in arrears out of the assets of the Company. The Custodian is also entitled to be reimbursed for all agreed transaction fees and out of pocket expenses properly incurred by it in the performance of its duties. The Custodian also charges third party transaction fees and sub-custodian fees at normal commercial rates. The Custodian fee for the six month period ended 30 September 2013 was EUR14,283 (year ended 31 March 2013: EUR31,508, period ended 30 September 2012: EUR15,981), of which EUR4,646 (31 March 2013: EUR4,861, 30 September 2012: EUR5,269) was payable at the period end.



Notes to the condensed financial statements for the six month period ended 30 September 2013 (continued)

23

2. Significant agreements (continued) Investment Manager fee The Company pays monthly to the Investment Manager a fee calculated for each Class of Shares as 1/12th of the percentages of the NAV as follows: Class A Class C Class D

Base fee rates (%) 0.75 0.50 0.75 The Investment Manager is also entitled to a fee of 0.25% of the amount of committed but unpaid capital for Shares in the Company. These fees accrue and are payable monthly in arrears out of the assets of the Company. The management fee for the six month period ended 30 September 2013 was EUR346,179 (year ended 31 March 2013: EUR 758,673, period ended 30 September 2012: EUR383,379), of which EUR108,653 (31 March 2013: EUR117,181, 30 September 2012: EUR122,273) was payable at the period end. Performance fee In addition to the management fees, the Investment Manager is also entitled to charge a performance fee equal to 15% of the excess Total Return per Share of the Company (as defined below) over the Hurdle Return per Share of the Company (as defined below) since the end of the previous fiscal year (the “Performance Period”), subject to recovery of any losses in previous Performance Periods. The Total Return per Share is the increase in the NAV per participating Share attributable to the performance in the period and not to draw downs of capital, together with any Dividends declared in the Performance Period attributable to Shares. The Hurdle Return per Share is the average capital employed (being the opening NAV per participating Share plus or minus the time weighted average amount of capital drawn down/redeemed during the Performance Period) multiplied by the year on year increase in the Consumer Price Index in the Eurozone plus 4% (Bloomberg Code: ECCPEMUY). For the purpose of calculating the current Performance Fee, while the relevant performance of the Total Return per Share over the previous Performance Period is less than the Hurdle Return per Share over that Performance Period, the amount of such under performance is deducted from the relevant performance in the current Performance Period and any subsequent Performance Periods. The Performance Fee is calculated at the end of each fiscal year and will be payable within 30 days of the end of each Performance Period. No Performance Fee was accrued during the period ended 30 September 2013, (year ended 31 March 2013: Nil, period ended 30 September 2012: Nil). Set up fee The Investment Manager is entitled at the end of the Initial Offer Period and on each Closing Date to a once-off set up fee equal to 1% of the total subscription amount/commitment during the Initial Offer Period, or for each Subsequent Closing Date (as appropriate). Such set up fees are typically written-off over a ten year period. However, for the purposes of these financial statements, these figures are written-off over the relevant financial period in which they are incurred to comply with Irish GAAP. A reconciliation is prepared in Note 5 which explains the difference between the dealing NAV and the NAV per the condensed financial statements.




24

2. Significant agreements (continued) Directors’ fee The Directors shall be entitled to such remuneration as shall be agreed by the Directors and disclosed in the Prospectus issued by the Company from time to time. Such remuneration shall be subject to a maximum fee for each Directors per annum of EUR15,000. Such remuneration shall be deemed to accrue from day to day. The Directors and any alternate Directors may also be paid all travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Directors, or any committee of the Directors or general meetings of the Company, or in connection with the business of the Company provided such expenses are unanimously approved by the Directors. During the period ended 30 September 2013, the Directors charged fees of EUR8,250 (for the year ended 31 March 2013: EUR16,500, period ended 30 September 2012: EUR8,250) of which EUR16,939 (31 March 2013: EUR8,689, 30 September 2012: EUR11,939) was payable at the period end. 3. Taxation Under current law and practice the Company qualifies as an investment undertaking as defined in Section 739B of the Taxes Consolidation Act, 1997, as amended. On that basis, it is not chargeable to Irish tax on its income and gains. However, Irish tax may arise on the happening of a “chargeable” event. A chargeable event includes any distribution payments to participating Shareholders or any encashment, redemption, cancellation or transfer of participating Shares. No Irish tax will arise on the Company in respect of chargeable events in respect of: (a) a participating Shareholder who is neither Irish resident nor ordinarily resident in Ireland for tax

purposes, at the time of the chargeable event, provided appropriate valid declarations in accordance with the provisions of the Taxes Consolidation Act, 1997, as amended, are held by the Company; and

(b) certain exempted Irish tax resident participating Shareholders who have provided the Company with the necessary signed statutory declarations.

Dividends, interest and capital gains (if any) received on investments made by the Company may be subject to taxes imposed by the country from which the investment income/gains are received and such taxes may not be recoverable by the Company or its participating Shareholders. The Company incurred withholding tax on dividend income of EUR28,643 (for the year ended 31 March 2013: EUR148,071, period ended 30 September 2012: EUR86,738)




25

4. Cash flow from operating activities 6 month 6 month Period ended Year ended Period ended 30/09/2013 31/03/2013 30/09/2012 EUR EUR EUR(Loss)/profit before tax (2,413,733) (9,391,588) 54,271Adjustments for:

Investment income (2,211,574) (2,811,294) (1,895,267)Net change in unrealised losses on financial assets 3,988,592 11,064,774 738,531(Decrease)/increase in creditors (92,686) 66,381 41,799Net change in unrealised gains /(losses) on forward foreign currency exchange contracts 89,029 227,862 (89,962)Realised (gains)/losses on sale of investments (1,189) 209,928 (8,707)

(641,561) (633,937) (1,159,335) Reconciliation of net cash flows to net debt 6 month

ended 30/09/2013

Year ended 31/03/2013

6 month ended

30/09/2012 EUR EUR EURNet Debt at start of the year 94,465,074 104,877,753 104,877,753

Increase in cash (951,564) 873,020 (130,297)Decrease/(Increase) in total debt (539,248) (11,285,699) 253,900Movement in Net Debt in the year (1,490,812) (10,412,679) 123,603

Net Debt at end of the year 92,974,262 94,465,074 105,001,356 5. Net Asset Value reconciliation The Company has incurred accumulated set up costs related to the subscriptions into the Company. Set up costs are written off over a ten year period in line with the Prospectus with EUR280,288 yet to be written off at 30 September 2013 (31 March 2013: EUR 370,034, 30 September 2012: EUR459,780). However, Irish accounting standards require such costs to be written off when incurred. This difference in accounting treatment has resulted in a different NAV being reported under Irish GAAP when compared to the dealing NAV. Please see the note below reconciling the two amounts. The dealing NAV of the Company includes estimated NAVs of the underlying funds and in some cases may include the prices of previous quarters. The NAV per the financial statements have been updated to reflect the NAVs as at 31 March 2013 as received from the administrators of the underlying funds and this has lead to a downward adjustment of EUR599,097. There have been no such estimations during the period ended 30 September 2013.

30/09/2013 31/03/2013 30/09/2012 EUR EUR EUR (Unaudited) (Audited) (Unaudited)

Dealing Net Asset Value 93,405,987 96,497,206 105,560,820Write off of unamortised set up fee (280,288) (370,034) (459,780)Net Asset Value movement - (559,097) -Net Asset Value per financial statements 93,125,699 95,568,075 105,101,040




26

6. Efficient portfolio management The Company may on behalf of each fund underlying employ (subject to the conditions and within the limits laid down by the Central Bank) techniques and instruments relating to transferable securities provided that such techniques and instruments are used for efficient portfolio management purposes or to provide protection against exchange risk. During the period, the Manager entered into transactions for the purpose of hedging the currency exposure of any investment which is denominated in a currency other than the base currency of the Company. The extent to which the Manager will hedge against such currency fluctuations shall not exceed 100% of the NAV of the relevant investment so that an investment will not be leveraged as a result of these transactions. At 30 September 2013, the Company had a net unrealised loss on forward foreign currency exchange contracts of EUR295,472 (31 March 2013: loss of EUR206,443, 30 September 2012: gain of EUR111,381). This amount is included in unrealised loss on forward foreign currency exchange contracts in the Balance Sheet. The net change in unrealised loss on forward foreign currency exchange contracts during the period is included in the Profit and Loss Account. 7. Investment income 30/09/2013 31/03/2013 30/09/2012 EUR EUR EUR (Unaudited) (Audited) (Unaudited) Interest income from cash and bank balances 4,757 1,700 -Dividend income from financial assets at fair value through profit or loss 2,206,817 2,809,594

1,895,267

2,211,574 2,811,294 1,895,267

8. Debtors 30/09/2013 31/03/2013 30/09/2012 EUR EUR EUR (Unaudited) (Audited) (Unaudited) Dividends receivable 823,223 498,662 703,804Receivable for investments sold 192,544 - - 1,015,767 498,662 703,804




27

9. Fair value hierarchy FRS 29 “Improving Disclosures about Financial Instruments” (“FRS 29”), requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels as defined under FRS 29: Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).

Level 3 Inputs for the asset or liability that are not based on observable market data

(unobservable inputs). There were no significant transfers between levels of the fair value hierarchy from the year ended 31 March 2013 to 30 September 2013. All of the investments with the exception of those invested in money market funds and forward foreign exchange contracts are classified as Level 3 investments. Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently. Level 3 investments are collective investment schemes and the Company predominately invested in closed-ended funds. As observable prices are not available for these securities, the Company has used valuation techniques to derive the fair value. The valuation techniques used are based on the NAV provided by the administrator of the underlying fund. NAVs provided may be based on differing assumptions and not consistent with generally accepted accounting principles adopted by the Company. 10. Purchases and sales of investments during the period 30/09/2013 31/03/2013 30/09/2012 EUR EUR EUR Total purchases 8,690,670 4,726,572 1,702,305 Total sales 6,714,841 2,396,152 1,061,669 11. Explanatory note on significant movements between reporting periods Profit and Loss Account Overall the results for the period have shown a loss for the period of EUR 2,442,376 compared with a loss of EUR 6,694 for the same period last year. The reduction in profits was primarily driven by an increase in net losses on investments designated at fair value through profit or loss during the period of EUR 3,987,403. This loss relates to an unrealised loss of EUR 3,988,592 for the period. Foreign exchange losses EUR 151,254; six month period ended 30/09/2012: EUR 584,556 The loss relates to a net loss position on open and settled forward foreign currency exchange contracts of EUR 45,951, a loss on settled spot foreign exchange contracts of EUR 81,525 and an unrealised loss on revaluation of non-Euro denominated cash of EUR 23,741.




28

11. Explanatory note on significant movements reporting periods (continued) Profit and Loss Account (continued) Taxation Taxation for the period ended 30 September 2013 was EUR28,643, representing a 53% decrease period on period. Although investment income increased during the period ended 30 September 2013 by 17% compared to the period ended 30 September 2012, foreign dividend income decreased by 71% compared to 30 September 2012. The taxation liability as a proportion of decreased compared to the prior financial year as highlighted below: 30/09/2013 31/03/2013 30/09/2012 Foreign dividend income EUR142,865 EUR740,355 EUR496,017 Taxation charge for the year EUR28,643 EUR148,071 EUR60,965 Taxation as a % of foreign dividend income 20% 20% 12% Balance Sheet The main changes on the Balance Sheet were; Debtors Debtors increased by EUR517,105 compared to the year end. This increase relates to an increase in dividends receivable and receivable for investments sold at the period end compared to the year ended 31 March 2013. Cash and cash equivalents Cash and cash equivalents were reduced by EUR951,564 as compared to the year ended 31 March 2013. As highlighted in the cash flow statement, this movement was mainly due to cash outflow from operating activities of EUR641,561 and capital expenditure of EUR2,168,374, offset by returns on investments and servicing of finance of EUR1,858,371. 12. Soft commission arrangements No soft commission arrangements were entered into during the period ended 30 September 2013, year ended 31 March 2013 or period ended 30 September 2012. 13. Share capital Authorised Share Capital The authorised share capital of the Company is 500,000,000,000 shares of no par value. Shares issued during the Initial Offer Period have been issued on a fully-paid basis and Shares issued on Subsequent Opening Dates shall also be issued on a fully paid basis. Total commitments received and called during the year are as follows: Commitments received and called 30/09/2013 31/03/2013

30/09/2012

EUR EUR EUR

Total commitment received - EUR 149,494,412 149,494,412 149,494,412

Total commitment called - EUR 127,070,293 127,070,293 127,070,293




29

13. Share capital (continued) Subscriber Shares The Company has issued 2 Subscriber Shares of no par value. The Subscriber Shares do not form part of the NAV of the Company and thus are disclosed in the financial statements by way of this note only. Lower Mount Limited and Wilton Secretarial Limited (the “Company Secretary”), hold one Subscriber Share each in the Company at 30 September 2013. In the opinion of the Directors, this disclosure reflects the nature of the Company’s business as an investment vehicle. These shares have the following rights attached to them:

on a vote taken on show of hands, be entitled to one vote per holder and, on a poll, be entitled to one vote per share;

in the event of a winding up or dissolution of the Company, have the entitlements referred to under the “Distribution of Assets on a Liquidation” as per the Prospectus.

Participating Shares As the Company is structured as a closed-ended fund, participating Shareholders are not entitled to request redemption of their Shares. It is expected that the Company will redeem all outstanding Shares within 30 days of the expiration of the duration. The duration of the Company is 10 years. The Company will close in October 2016. In the event that the duration is extended, each Shareholder will have the right to redeem its Shares at the NAV per Share as of the last day of the duration or the second anniversary thereof, as appropriate. These shares have the following rights attached to them:

on a vote taken on show of hands, be entitled to one vote per holder and, on a poll, be entitled to one vote per share;

be entitled to such dividends as the Directors may from time to time declare; and in the event of a winding up or dissolution of the Company, have the entitlements referred to under

the “Distribution of Assets on a Liquidation” as per the Prospectus There were no Shares issued or redeemed during the six month periods ended 30 September 2013 and 30 September 2012 or for the year ended 31 March 2013. The numbers of Shares in issue are as follows:

Class A Class C Class DShares in issue 46,220 1,071,025 132,061

14. Financial risk management In pursuing its investment objective, the Company is exposed to a variety of financial risks, market risk (including market price risk, interest rate and currency risk), credit risk and liquidity risk, that could result in a reduction in the Company’s Net Assets. The Company invests primarily in specialist funds. The Company is therefore indirectly exposed to the risks inherent in the investee funds. These are primarily market price risk, currency risk, credit risk and liquidity risk.




30

15. Capital commitments Details of the Company’s capital commitments from participating Shareholders are as follows:

30/09/2013 31/03/2013 30/09/2012

tal capital commitment (EUR) 149,494,412 149,494,412 149,494,412

aw down (%) 85 85 85

ndrawn commitment (EUR) 22,424,119 22,424,119 22,424,119 Conversely, the Company has undrawn commitments to underlying funds of EUR2.9m (31 March 2013: EUR2.9m, 30 September 2012: EUR3.1m) 16. Related party transactions Financial Reporting Standard 8 “Related Party Transactions” (“FRS 8”) requires the disclosure of information relating to material transactions with parties who are deemed to be related to the reporting entity. Transactions with parties who have significant influence Atrium Investimentos acted as the Investment Manager during the year. The Investment Manager is regarded as a related party due to its significant influence in the financial and operating policies decisions of the Company. Fees charged by and payable to the Investment Manager are disclosed in Note 2. At the period end, Atrium Investimentos held 25,500 shares in Class A, 253,435 in Class C and 4,426 in Class D. Transactions with key management personnel Nuno Sampaio and Joao Fonseca, Directors of the Company, are employees of the Investment Manager, and as such have an indirect interest in the investment management fee. Each Director is entitled to such remuneration for services as the Directors may determine. Nuno Sampaio and Joao Fonseca, as employees of the Investment Manager, have each waived the fee for their services as Directors of the Company. 17. Significant events during the period In relation to MRM, a recapitalisation plan was agreed during the period. As part of the recapitalization plan, all bondholders agreed to convert their bond notes into equity while receiving an income distribution corresponding to the amount of accrued interest over the prior period. As a result of this, all bonds held by the Company were converted into equity and the Company now owns only shares in the MRM. There were no other significant events affecting the Company during the period. 18. Significant events after the Balance Sheet date As part of the Company’s strategy to exit underperforming funds while maximising value, it contemplates a secondary market sale of the Rockspring Pan European Properties LP underlying fund and has initiated discussions with an investor. In addition, the Curzon Capital Partners II Fund put forward a proposal to extend the maturity date of the fund which the Company is currently reviewing with other investors. Finally, the Henderson Outlet Mall Fund recently submitted a proposal to all investors regarding a renewal of the fund which the Company is currently assessing.




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19. Exchange rates The following exchange rates against the Euro were used to convert the investments and other assets and liabilities at 30 September 2013, 31 March 2013 and 30 September 2012. 1 EUR = 30/09/2013 31/03/2013 30/09/2012GBP 0.8358969 0.8456641 0.7966932 20. Prospectus There were no material changes to the prospectus during the period. 21. Employee Information The Company had no employees during the period (31 March 2013: none; 30 September 2012: none). 22. Business Segments The Company invests in the real estate sector with geographical split in the Portfolio of Investments. 23. Approval of the condensed financial statements The condensed financial statements were approved by the Directors on 25 November 2013.



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Directory Directors James Deeny (Irish) (independent) Thomas Finlay (Irish) (independent) Joao Fonseca (Portuguese) Pedro Santa-Clara (Portuguese) Nuno Sampaio (Portuguese) The Directors are all non-executive Directors of the Company.

Registered Office The Anchorage 17/19 Sir John Rogerson’s Quay Dublin 2 Ireland

Administrator, Registrar and Transfer Agent State Street Fund Services (Ireland) Limited 78 Sir John Rogerson's Quay Dublin 2 Ireland

Independent Auditors Deloitte & Touche Chartered Accountants & Statutory Audit Firm Deloitte & Touche House Earlsfort Terrace Dublin 2 Ireland

Investment Manager Atrium Investimentos Avenida da República, 35, 2° 1050-186 Lisbon Portugal

Legal Advisors Walkers Ireland The Anchorage 17/19 Sir John Rogerson's Quay Dublin 2 Ireland

Investment Advisor CBRE Global Collective Investors UK Limited Third Floor One New Change London, EC4M 9AF United Kingdom

Sponsoring Broker and Irish Paying Agent Walkers Listing & Support Services Limited The Anchorage 17/19 Sir John Rogerson's Quay Dublin 2 Ireland

Custodian State Street Custodial Services (Ireland) Limited 78 Sir John Rogerson's Quay Dublin 2 Ireland

Company Secretary Intertrust Corporate Services (Dublin) Limited 3rd Floor Europa House Harcourt Centre Harcourt Street Dublin 2 Ireland

preff pan-european real estate fund of funds public ... · preff pan-european real estate fund of...

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