Eurocastle Investment Limited And Subsidiaries / Interim Financial Results For The Quarter Ended 31 March 2007

Guernsey (ots) -

- Cross-Reference: Interim Financial Results For The Quarter Ended
31 March 2007 are available at
http://www.presseportal.de/pm/60662/eurocastle_investment_limited
-

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

First Quarter 2007 * Dividend declared for the first quarter 2007
is EUR 0.45 per share. This compares to the first quarter 2006
dividend of EUR 0.30 per share and fourth quarter 2006 dividends
totalling EUR 0.43 per share. * Completed EUR 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 EUR 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

First Quarter 2007 * Net profit after tax of EUR 54.4 million for
the first quarter 2007, compared to EUR 92.9 million for the first
quarter 2006 and EUR 9.7 million for the fourth quarter 2006. *
Earnings per ordinary share of EUR 0.85 or EUR 0.82 per diluted
share, for the first quarter 2007, compared to EUR 2.47 per ordinary
share or EUR 2.37 per diluted share for the first quarter 2006, and
EUR 0.19 per ordinary share or EUR 0.18 per diluted share for the
fourth quarter 2006. * Funds from operations ("FFO", see Key
Financial Information) increased by 101% to EUR 27.9 million for the
first quarter 2007 from EUR 13.9 million for the first quarter 2006.
Compared to the fourth quarter 2006, FFO increased by EUR 6.0 million
or 27%. * FFO of EUR 0.44 per ordinary share, or EUR 0.42 per diluted
share for the first quarter 2007 compared to FFO of EUR 0.37 per
ordinary share, or EUR 0.35 per diluted share for the first quarter
2006 and EUR0.43 per ordinary share, or EUR 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 EUR 24.73 at the end of the fourth
quarter 2006 to EUR 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 EUR 0.44 of FFO per share reflect a
partial contribution for the quarter from the EUR 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
EUR26 million in the second and third quarters and will be available
for reinvestment or distribution in future quarters."

Key Financial Information

FUNDS FROM OPERATIONS ("FFO") (Unaudited)

( in EUR'000, except Three Months Year Ended Three Months
per share data) Ended 31 March 31 December Ended 31 March
2007 2006 2006

Reconciliation of FFO
to net profit
after taxation

Net profit after
Taxation 54,356 143,819 92,902
(Increase) in fair
value of investment
properties (41,268) (78,119) (77,236)
(Increase)/decrease
in fair value of
interest rate swaps (2,315) 425 -
(Increase)/decrease
in fair value of real
estate fund units (3,346) 5,217 (2,023)
Deferred tax charge
on investment
properties 20,503 3,366 222

Funds from operations
(FFO) 27,930 74,708 13,865
FFO per weighted
average basic share 0.44 1.66 0.37
FFO per weighted
average diluted share 0.42 1.60 0.35

FFO is an appropriate measure of the underlying operating
performance of real estate companies because it provides investors
with information regarding our ability to service debt and make
capital expenditures. Furthermore, FFO is used to compute incentive
compensation to the Manager. FFO, as defined by Eurocastle,
represents net profit after taxation (computed in accordance with
IFRS), excluding changes in the fair value of investment properties
net of attributable deferred taxation, changes in the fair value of
interest rate swaps that are taken to the income statement and
mark-to-market fluctuations in real estate fund units. The Group
considers gains and losses on resolution of its investments to be a
normal part of its recurring operations and therefore does not
exclude such gains and losses when arriving at FFO. FFO does not
represent cash generated from operating activities in accordance with
IFRS and therefore should not be considered an alternative to cash
flow as a measure of liquidity, and is not necessarily indicative of
cash available to fund cash needs. Eurocastle's calculation of FFO
may be different from the calculation used by other companies and,
therefore, comparability may be limited.

INCOME STATEMENT DATA (Unaudited)

( in EUR'000, except Three Months Year Ended Three Months
per share data) Ended 31 March 31 December Ended 31 March
2007 2006 2006

Interest income 33,599 95,970 20,420
Rental income 66,054 152,454 23,809
Service charge income 11,856 31,903 1,528
Real estate fund unit
interest income 3,756 18,636 4,730
Increase in fair value
of investment properties 41,268 78,119 77,236
Increase/(decrease) in
fair value of real estate
fund units 3,346 (5,217) 2,023
Interest expense (60,603) (150,282) (26,543)
Other operating expenses (8,715) (26,023) (5,280)
Service charge expense (14,725) (41,237) (1,994)
Operating profit before
Taxation 74,955 147,557 93,248
Operating profit after
Taxation 54,356 143,819 92,902
Earnings per weighted
average basic share 0.85 3.20 2.47
Earnings per weighted
average diluted share 0.82 3.08 2.37

BALANCE SHEET DATA (Unaudited)

( in EUR'000, except per share data) As of As of
March 31 December
2007 2006

Cash and cash equivalents 160,696 122,699
Investment property held for sale 324,514 -
Asset backed securities
(includes cash to be
invested and securities pledged under
repurchase agreements) 1,567,603 1,560,307
Real estate loans 522,010 428,370
Real estate fund units 151,834 148,077
Investment property 5,224,410 3,308,872
Total assets 8,034,012 5,662,380
Debt obligations 6,349,463 3,966,328
Shareholders' equity 1,631,684 1,570,719
Book value per ordinary share 25.58 24.73

Three Months Year Ended Three Months
Ended 31 March 31 December Ended 31 March
2007 2006 2006

Weighted Average
Ordinary Shares
Outstanding

Basic 63,601,040 44,956,083 37,644,978
Diluted 66,178,979 46,760,626 39,241,008

Ordinary Shares
Outstanding 63,776,528 63,519,083 45,604,099

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".

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Contact:
International Administration (Guernsey) Limited Company Administrator
Attn: Mark Woodall Tel: +44 1481 723450