PEPR maintains above average occupancy and improves its loan-to-value ratio
Luxembourg - 28 July 2011 - ProLogis European Properties (Euronext: PEPR), one of Europe's largest owners of modern distribution facilities, today reports results for the quarter and half year ended 30 June 2011.

Highlights
33 lease transactions completed covering 357,400m2, including 83,100m2 of new or expanded leases (HY 2011: 81 leases transactions, totalling 745,900m2)
Portfolio values remained broadly stable, the net portfolio value decreased 0.6% from 31 December 2010, excluding currency impacts (-1.25% including currency impacts)
93.2% portfolio occupancy (Q1 2011: 93.2%), in line with expectations
Loan-to-value ratio further improves to 51.1% from 52.6% at 31 March 2011
2011 full year earnings guidance maintained
Quarter to 30 June 2011
Half year to 30 June 2011

EPRA earnings €0.09 per ordinary unit (Q2 2010: €0.11 per ordinary unit) EPRA earnings €0.19 per ordinary unit (HY 2010: €0.21 per ordinary unit)
IFRS loss €0.04 per ordinary unit (Q2 2010 €0.07 loss per ordinary unit) IFRS earnings €0.02 per ordinary unit (HY 2010: €0.01 per ordinary unit)
EPRA net asset value €6.32 per ordinary unit (Q1 2011: €6.37 per ordinary unit) EPRA net asset value €6.32 per ordinary unit (YE 2010: €6.32 per ordinary unit)
IFRS net asset value €5.64 per ordinary unit (Q1 2011: €5.72 per ordinary unit) IFRS net asset value €5.64 per ordinary unit (YE 2010: €5.62 per ordinary unit)

Commenting on the results, Peter Cassells, chief executive officer of PEPR, said: "We are pleased to report financial results in line with guidance and sustained operating performance, with portfolio occupancy remaining stable and well above market average. In fact, occupancy has increased or remained stable in nine out of the 11 countries in which we operate. Furthermore, we continue to make good progress in reducing our debt, remaining focused on strengthening our balance sheet and returning to an investment grade credit rating.

"We have completed over 350,000 square metres of leasing activity during the quarter and our portfolio valuation has remained flat, demonstrating the quality of our assets and the continued stability in the broader real estate markets.

"Our top priority to delever the balance sheet remains on track, with loan-to-value reduced further to 51.1% following the repayment of a €51 million secured loan originally due to mature in October 2014. In addition, Moody's has improved our corporate credit rating outlook to positive from stable. We maintain our belief that PEPR warrants an investment grade credit rating and will continue to work to achieve this result.

"During the quarter, Prologis increased its ownership in PEPR to 92.3% of ordinary units following a mandatory tender offer and market purchases. We remain committed to acting in the best interests of PEPR as a whole and all its unitholders."

Prologis tender offer

On 21 April 2011, Prologis (NYSE: PLD) announced an increase in its ownership of PEPR to approximately 39% and a mandatory tender offer to acquire all of the outstanding ordinary units and convertible preferred units it did not own. The initial offer price of €6.10 per unit for both ordinary and preferred units was increased to €6.20 per unit on 6 May 2011.

At the end of the offer period, Prologis owned 89.6% of the ordinary units and 94.6% of the preferred units. At 30 June 2011, Prologis owned 92.3% of the ordinary units and 94.6% of the preferred units.

Market outlook

The European economic recovery remains in progress, with growth expected to total 2.0% in 2011 before moderating to 1.6% in 2012, but remains susceptible to concerns over sovereign wealth defaults within the Eurozone.

Occupier demand remains steady as the migration from older, obsolete properties into modern facilities continues, although the economic uncertainty has dented customer confidence leading to a delay in customers taking additional space. As a result, prime rent levels and lease incentives have remained broadly stable in most markets, with incentives on lease renewals decreasing noticeably.

Investment flows into Europe's core logistics property markets have moderated during the second quarter, particularly in the UK. The majority of investor interest continues to be focused on prime, long-leased assets with low activity in core-plus or value-add opportunities which remain more difficult to debt finance. Prime yields in most markets have remained stable, with some improvement in strongly performing countries such as Germany and Sweden. The general absence of yield movement and the moderation in transaction activity suggests investors are reassessing the identifiable value at the prime end of the market while also reflecting the lack of available product.