Eurocastle investments limited and subsidiaries financial results for half year and quarter ended 30 June 2006

Released: 23/08/2006

Eurocastle Investment Limited is a closed-ended investment company which focuses on German commercial real estate assets. The Company is Euro denominated and is listed on Euronext Amsterdam under the symbol “ECT”. Eurocastle’s objective is to pay out stable and growing dividends and to deliver attractive risk-adjusted returns. Eurocastle is managed by Fortress Investment Group LLC. For more information regarding Eurocastle and to be added to our email distribution list, please visit www.eurocastleinv.com.

Half Year Highlights

• Dividends declared for the second quarter 2006 is 40 cents per share on 45.7 million shares outstanding. First quarter 2006 dividend was 30 cents per share on 45.6 million shares outstanding
• Committed to purchase or entered into exclusive negotiations to purchase an additional €840 million of real estate assets towards Eurocastle’s 2006 target of €1 billion in new acquisitions. Approximately €46 million of the €840 million was funded in the second quarter 2006
• Increased real estate investment portfolio to €2.8 billion
  • Completed the acquisition of a €2 billion German property portfolio from Dresdner Bank in February 2006, via the acquisition of Dresdner Grund-Fonds
  • Funded €14.5 million in the second quarter which completes the acquisition of a €107 million retail property portfolio yielding approximately 7%, which began in the fourth quarter 2005
• Raised net proceeds of €524 million of new equity capital, helping to more than triple equity book value from year end 2005 to €935.9 million, or an increase of 66% to €20.49 on a per share basis
• Increase in net asset value includes revaluation gains of €77.3 million, which are included in operating income for the half year.
• Increased occupancy of property portfolios
• Deutsche Bank portfolio current occupancy rate of 78.2% at quarter end, up from 74.6% at 2005 year end
• Dresdner Bank portfolio increased occupancy to 81.4% at 30 June 2006, up from 80.7% at time of acquisition

Key Performance Indicators

Second Quarter 2006

• Net profit after tax of €13.7 million for the second quarter 2006, increased from €6.8 million for the second quarter 2005, an increase of 103%
• Earnings per ordinary share of €0.30, or €0.29 per diluted share, for the second quarter 2006 compared to €0.36 per ordinary share, or €0.35 per diluted share, for the second quarter 2005
• Funds from operations (“FFO”, see Key Financial Information) increased by 189% to €18.0 million for the second quarter 2006 from €6.2 million for the second quarter 2005
• FFO of €0.40 per ordinary share, or €0.38 per diluted share
• FFO return on average invested capital* was 8.9% for the second quarter 2006

First Half 2006

• Net profit after tax of €106.6 million for the first half 2006, increased from €13.2 million for the first half 2005, an increase of 707%
• Earnings per ordinary share of €2.56, or €2.46 per diluted share, for the first half 2006 compared to €0.71 per share, or €0.69 per diluted share, for the first half 2005
• Funds from operations (“FFO”, see Key Financial Information) increased by 151% to €31.9 million for the first half 2006 from €12.7 million for the first half 2005
• FFO of €0.77 per ordinary share, or €0.74 per diluted share
• FFO return on average invested capital* was 8.9% for the first half 2006

* Invested capital represents capital and reserves less hedging reserves and net unrealised gains on available-for-sale securities, real estate fund units and investment properties (net of attributable deferred taxation).

Conference Call

Management will conduct a conference call today, 23 August 2006 to review the Company's financial results for the half year and quarter ended 30 June 2006. The conference call is scheduled for 3 P.M. London time (10 A.M. New York time). All interested parties are welcome to participate on the live call. You can access the conference call by dialing +1-866-323-3742 (from within the U.S.) or +1-706-643-0550 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Eurocastle Second Quarter 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 Wednesday, 30 August 2006 by dialing +1-800-642-1687 (from within the U.S.) or +1-706-645-9291 (from outside of the U.S.); please reference access code “4508124.”