Guernsey. 19 March 2010 - Eurocastle Investment Limited (Euronext Amsterdam: ECT) today announced its financial results for the year ended 31 December 2009. For more information regarding Eurocastle, its 2009 Annual Report and to be added to our email distribution list, please visit www.eurocastleinv.com.
Highlights
Financial
· Fully diluted NAV per share of €0.92 as at 31 December 2009 comprising of (€0.32) for the debt investment business and €1.24 for the commercial property portfolio (31 December 2008: €13.35 comprising (€0.27) for the debt investment business and €13.62 for the commercial property portfolio).
· Real estate NAV of €439 million and NAV per fully diluted share of €1.12 adjusted for the full impact of the Mars Portfolio refinancing, reflecting a NOI yield on valuation of 6.4%.

Net loss after tax was €605.9 million for the year ended 31 December 2009, compared with a loss of €454.1 million for the year ended 31 December 2008. The losses primarily relate to non-cash valuation adjustments to our portfolio.

Business Review
Sold 23 properties during the year, for total sales proceeds of €138 million compared to a carrying value of €140 million, realising cash of €8.1 million after repayment of asset level financings. Since the year end, the Group has sold two properties for €1 million generating €0.4 million of cash after repayment of asset level financings and has entered into binding agreements to sell a further nine properties for estimated total proceeds of €179 million.

During the year the Group has signed 345 commercial leases for approximately 143,000 square metres (sqm). This comprised 233 new leases for approximately 68,000 sqm, and 112 lease renewals for approximately 75,000 sqm. The renewal rate for 2009 was 82.4%.

Total lettable space was 2.1 million square metres at 31 December 2009 with occupancy of 86.2% as compared to occupancy of 85.9% at 31 December 2008 on a like for like basis.
Financing and Liquidity
· As at 31 December 2009, the Company had a corporate cash balance of €9.7 million.

During 2009, the Group raised approximately €100 million in Perpetual Subordinated Convertible Securities in three separate issuances. The proceeds of issuances, together with cash from operating activities and asset sales, were used to repay a substantial portion of the Group's corporate loan facility to €12.75 million as at 31 December 2009, as well as being used to reduce the Group's €30 million finance guarantee obligation.

· The Group repurchased €140.4 million of senior liabilities in CDO V with restricted cash within the CDO at an average price of 58.9%, realising a net book gain of €56.6 million.

Key Financial Information
Income Statement Data
( in €'000, except per share data)
Year ended
31 December 2009 Year ended 31 December 2008
Interest income 68,362 155,382
Rental income 251,607 281,118
(Decrease) in fair value of investment properties (420,313) (499,151)
Impairment losses (232,075) (16,794)
Interest expense (221,150) (285,596)
Property operating expenses (43,354) (34,449)
Other operating expenses (40,022) (47,641)
Net (loss) before taxation (612,103) (467,916)
Net (loss) after taxation (605,916) (454,073)
Funds from operations ("FFO") (195,894) 57,087
Normalised funds from operations 38,610 65,046
Loss per weighted average basic share and diluted share (9.98) (7.20)
FFO per weighted average basic share (3.23) 0.91
FFO per weighted average diluted share (0.94) 0.91
Normalised FFO per weighted average basic share 0.64 1.03
Normalised FFO per weighted average diluted share 0.18 1.03
Normalised FFO per fully diluted share 0.10 1.03

Weighted average number of ordinary shares, outstanding, basic
60,733,761 63,072,337
Dilutive effect of ordinary share options and convertible securities*
148,643,836 -
Weighted average number of ordinary shares outstanding, diluted
209,377,597 63,072,337
Ordinary shares outstanding 60,735,646 60,731,646
Fully diluted ordinary shares outstanding* 393,235,646 60,731,646

* For the year ended 31 December 2009, fully diluted ordinary shares represent the impact of converting €99,750,000 of convertible securities at €0.30 per share. The weighted average dilutive effect for year ended 31 December 2009 comprises a time weighting of the impact of fully converting the securities against the relative periods from the date of each convertible securities issue.


Balance Sheet Data
(in €'000, except per share data) 31 December 2009 31 December 2008
Cash and cash equivalents 122,545 119,869
Investment property (including properties held for sale) 3,678,298 4,230,111
Debt investments 1,496,840 1,733,942
Other assets 103,398 164,387
Total assets 5,401,081 6,248,309
Interest bearing debt financing (4,895,334) (5,300,880)
Other liabilities (142,383) (136,377)
Total liabilities (5,037,717) (5,437,257)

Net assets 363,364 811,052
Net assets per fully diluted share** 0.92 13.35

** The debt investment securities portfolio is predominantly financed to maturity with long-term collateralised debt obligations ("CDOs") that are not callable as a result of changes in value and are non-recourse to the Group. While the assets in the CDOs are consolidated in the financial statements for IFRS purposes, the Group's exposure to losses is limited to its initial investment in each CDO. The 31 December 2009 IFRS net asset value reflects approximately €173 million, or €0.44 per fully diluted share, of unrealised losses in assets within the Group's CDOs that exceeds its investment in the CDOs and, therefore, could not be realised in cash terms by the Group.

Conference Call
Management will conduct a conference call today, 19 March 2010, to review the Group's financial results for the year and quarter ended 31 December 2009. The conference call is scheduled for 2:00 P.M. London time (10:00 A.M. New York time). All interested parties are welcome to participate on the live call. You can access the conference call by dialling +1-877-717-3044 (from within the U.S.) or +1-706-679-1521 (from outside of the U.S.) ten minutes prior to the scheduled start

of the call; please reference "Eurocastle Year End Earnings Call."

A webcast of the conference call will be available to the public on a listen-only basis at www.eurocastleinv.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast. A replay of the webcast will be available for three months following the call.

For those who are not available to listen to the live call, a replay will be available until 11:59 P.M. New York time on Friday, 26 March 2010 by dialling +1-800-642-1687 (from within the U.S.) or +1-706-645-9291 (from outside of the U.S.); please reference access code "61585331."

The Annual Report for 2009 of Eurocastle is available on www.eurocastleinv.com