Interim Results for the three months ended 31 March 2007

Released: 17/05/2007

Eurocastle Investment Limited owns and invests primarily in German commercial property. The Group is Euro denominated and currently listed on Euronext Amsterdam, under the symbol “ECT”. Eurocastle’s objective is to build long-term value for its shareholders and to pay out stable and growing dividends. Eurocastle is managed by an affiliate of Fortress Investment Group LLC. For more information regarding Eurocastle and to be added to our email distribution list, please visit www.eurocastleinv.com.

Highlights

• Dividend declared for the first quarter 2007 is €0.45 per share. This compares to the first quarter 2006 dividend of €0.30 per share and fourth quarter 2006 dividends totalling €0.43 per share.
• Completed €2.2 billion of commercial property purchases, including the acquisition of 56 German commercial property assets (“the Mars portfolio”) announced in December 2006.
• Signed 76 new leases for approximately 24,500 square meters.
• Entered into an agreement to sell a portfolio of 78 non-core assets for €324.5 million at a 9% premium to 2006 year end carrying value. The transaction is expected to be completed in the second and third quarter.

Key Performance Indicators

• Net profit after tax of €54.4 million for the first quarter 2007, compared to €92.9 million for the first quarter 2006 and €9.7 million for the fourth quarter 2006.
• Earnings per ordinary share of €0.85 or €0.82 per diluted share, for the first quarter 2007, compared to €2.47 per ordinary share or €2.37 per diluted share for the first quarter 2006, and €0.19 per ordinary share or €0.18 per diluted share for the fourth quarter 2006.
• Funds from operations (“FFO”, see Key Financial Information) increased by 101% to €27.9 million for the first quarter 2007 from €13.9 million for the first quarter 2006. Compared to the fourth quarter 2006, FFO increased by €6.0 million or 27%.
• FFO of €0.44 per ordinary share, or €0.42 per diluted share for the first quarter 2007 compared to FFO of €0.37 per ordinary share, or €0.35 per diluted share for the first quarter 2006 and €0.43 per ordinary share, or €0.41 per diluted share for the fourth quarter 2006.
• FFO return on average invested capital* was 7.66% for the first quarter 2007.
• Increased equity book value per share by 3.5% from €24.73 at the end of the fourth quarter 2006 to €25.58 at 31 March 2007.

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

Commenting on the results, Bruce Snider, Managing Director of Eurocastle’s Manager, said:

“Our first quarter results of €0.44 of FFO per share reflect a partial contribution for the quarter from the €2.2 billion of German commercial property acquisitions completed at the end of February.

We are pleased with our continued success in leasing vacant space and expect that through a combination of improving rental markets and active asset management we will reach our portfolio occupancy targets. During the quarter, our new leases signed represented over 50% of our total for all of 2006 and rents achieved were approximately 10% higher than our 2006 average.

Although it is still early in the year, deal flow in Germany remains strong and we are confident of meeting our target of new German commercial property acquisitions during 2007. The sale of non-core assets announced in March will boost FFO by approximately €26 million in the second and third quarters and will be available for reinvestment or distribution in future quarters.”

Conference Call

Management will conduct a conference call today, 17 May 2007, to review the Group's financial results for the quarter ended 31 March 2007. The conference call is scheduled for 3:00 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 dialing +1-800-811-8824 (from within the U.S.) or +1-913-981-4903 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Eurocastle First 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 Thursday, 24 May 2007, by dialing +1-888-203-1112 (from within the U.S.) or +1-719-457-0820 (from outside of the U.S.); please reference access code “5512421”.