THE GUARANTEED RIGHTS OFFERED TO SHAREHOLDERS NEPI is looking to raise 40 million Euros

• The money will be used to finance the potential acquisitions of NEPI which are currently under negotiation

• Ovidiu Dumitrescu, Tradeville: "It will be interesting to see how much of the total amount will be subscribed by other investors besides Fortress as well as in what proportion the management of the company will participate in the offering"

South African investment fund New Europe Property Investments (NEPI) intends to perform an underwritten rights offering which targets all the shareholders of the company, who are looking to raise approximately 40 million Euros. NEPI states in a press release that the amounts raised from the rights offering will be used to finance the potential acquisitions which are being negotiated. In case the acquisitions don"t go through, the funds raised through the rights offering will be used to repay the current loans.

Fortress Income 2 Proprietary Limited, a branch owned by Fortress Income Fund Limited, has made the commitment to ensure the underwriting of the rights offering up to a total amount of 428.571.420 Rand (ZAR), representing the equivalent of 14,285,714 shares of the rights offering, at a subscription price of 30.00 Rand for each of the share of the rights offering listed on the Johannesburg Stock Exchange in exchange for an underwriting fee of 2,142,857 Rand (ZAR), an amount equal to 0.5% of its underwriting commitment.

Martin Slabbert, the CEO of NEPI, said: "The fact that we were capable to obtain an underwriting agreement for our rights issue at a higher price than our NAV per share proves the confidence in the fact that NEPI will continue to obtain excellent results in the execution of its economic strategy to offer an economic growth superior to that of the dividend market to shareholders in difficult economic circumstances. The funds raised will be used for acquisitions and additional investments in Romania".

In the offering, the shareholders of NEPI will be offered, 16.14242 new NEPI shares for each 100 shares owned on November 11th, 2011, in the case of shareholders registered in the South African or British registries, and to shareholders registered on November 4th 2011 , in the case of shareholders registered in Romania.

The subscription price for the shares in the rights offering is 2.80 Euros per share for shareholders registered with the British shareholder registry and for those registered in Romania, and 30,00 Rand (ZAR) per share for shareholders registered in South Africa, a price calculated using an EUR/ZAR exchange rate of 1 Euro/10.70 ZAR.

The allocation letters (which are being issued to shareholders of South Africa) are negotiable and can be traded on the Johannesburg Stock Exchange (Johannesburg Stock Exchange) with the ISIN IMOOB6YBF838. The preference rights (which are issued to shareholders registered in Romania) are negotiable and tradable on the BSE by shareholders registered in Romania using the ISIN IMOOB510GN84.

The allocation letters issued by the shareholders of South Africa and the preference rights issued by the shareholders in Romania aren"t fungible and as such can"t be transferred between the JSE and the BSE.

On the Bucharest Stock Exchange (BSE), the preference rights will be traded between November 7th - November 18th, and the reference date for establishing the ownership of the rights is November 23rd. Investors may subscribe on the BSE between November 23rd and November 28th. The preference rights, which are issued to the Romanian shareholders are negotiable. The shareholders will have the right to request the remaining shares left unsubscribed by the other shareholders, and they will be fairly distributed taking into account the number of shares and the number of rights owned prior to the allocation.

Ovidiu Dumitrescu, CFA, Financial Analyst at Tradeville, said: "The global macroeconomic environment is not too propitious for the real estate sector. If we add to that the fact that the Romanian real estate market, which is the focus of NEPI, is still feeling the effects of the burst in the bubble, and we have not seen any signs of a recovery, then the short and medium term prospects aren"t very good. Considering the fact that the recommended holding period for investments in REITs (ed. note: Real Estate Investment Trusts) is about five years, and that the price for existing shareholders seems to be attractive (approximately 2.8 EUR/share) compared to the current market price (approximately 3.2 EUR/share), we could say that there are some attractive elements as well.

Still, it needs to be considered that this price is below our current target as well (of about 1.51 EUR/share), calculated using the multiples method on a group of similar companies in Europe. Given the fact that the shares of NEPI are available on three markets, (London, Johannesburg and Bucharest), the odds aren"t as bad as suggested by the current environment. If we add to that the commitment of Fortress Income 2 Property Ltd. to subscribe, I think it would be surprising if the offering wasn"t successful. What would be more interesting to see is how much of the total amount would be subscribed by other investors besides Fortress and also the proportion in which the management of the company will participate in the offering".

New Europe Property Investments plc is a holding which manages a group of companies especially created to invest in the office, retail and industrial property market, mainly in Romania, where the Group is active since its launch in 2007.

The South-African investment group"s portfolio in Romania includes 27 properties and is focused on acquiring properties with reliable multinational tenants generating Euro based income.

The most recent investments of the group are Floreasca Business Park (December 2010), the remaining part of the Auchan Shopping Center in Piteşti (May 2011), an extension of Promenada Mall Brăila (April 2011), the completion of a refurbishment of an office building in Brasov (June 2011) and the acquisition of retail development land in Ploieşti and Braşov (1st quarter of 2011).

Among the most recent achievements of the Group, as reported in the 2010 Annual Report following the year end, is acquiring a land adjacent to Carrefour property in Ploieşti and has reached an agreement with the retailer to redevelop the combined properties into a 50,000 sqm regional shopping centre.

The Group is currently listed on the main board of the Johannesburg Stock Exchange (South Africa) and the AIM market of the London Stock Exchange and as mentioned above, starting with June 2011, it was also listed on the Bucharest Stock Exchange.