KPMG - IERE

Part IX
OPERATING AND FINANCIAL REVIEW
The following discussion and analysis of the Group’s financial condition and results of operations should
be read in conjunction with the rest of this Prospectus, including the consolidated financial statements
and related notes set out in ‘‘Historical Financial Information’’ in Part VII of this Prospectus.
The consolidated financial statements and related notes for the Group’s first accounting period cover the
period from its inception on 6 June 2005 to 30 September 2006 and have been prepared in accordance
with International Financial Reporting Standards (‘‘IFRS’’), as endorsed by the European Union, a body
of accounting principles that differs in certain material respects from United States generally accepted
accounting principles (‘‘US GAAP’’). The Group has not prepared a reconciliation or quantification of
differences between IFRS and US GAAP nor has it provided a summary of the differences between
IFRS and US GAAP. Investors must rely on their own examination of the Group, the terms of the
Offer and the financial information relating to the Group in making an investment decision. Investors are
encouraged to consult their own professional advisers for an understanding of the differences between
IFRS and US GAAP and how these differences might affect the financial information reported in this
Prospectus.
This discussion and analysis contains ‘‘forward-looking statements’’ that are subject to known and
unknown risks and uncertainties. Actual results and the timing of events may differ materially from those
expressed or implied by such forward-looking statements as a result of various factors, including those
set forth below and elsewhere in this Prospectus, in particular in the sections entitled ‘‘Risk Factors’’,
‘‘Forward-Looking Statements’’ and ‘‘Principal Bases and Assumptions’’.
Overview
The Company is a closed-ended investment company with fixed capital (société d’investissement à
capital fixe) (‘‘SICAF’’) incorporated under the form of a société anonyme under the laws of
Luxembourg and managed by Invista REIM, an indirect subsidiary of HBOS. The Company’s
investment objective is to provide Shareholders with an attractive level of income return together with
the potential for income and capital growth through investing in commercial real estate assets in
Continental Europe.
The Company holds its real estate assets indirectly through one or more intermediate holding
companies which in turn hold shares in special purpose vehicles which hold each property asset. The
Company retains all of the residual or ownership risks related to each special purpose vehicle and its
assets in order to obtain benefit from such special purpose vehicle’s assets. All of the Company’s
subsidiaries are wholly owned and fully consolidated from the date on which control is acquired by
or transferred to the Company.
Since inception on 6 June 2005 to 30 September 2006, the Group has generated A10.0 million in
rental income from a portfolio of 7 properties. At 30 September 2006, the Group was also
Committed to Acquire a further 6 logistics properties from Eurinpro International SA (‘‘Eurinpro’’).
These acquisitions are expected to be completed in the first and second quarters of the financial year
ending 30 September 2007 and will be financed in part by the proceeds of the Offer. The Company
expects the proceeds of the Offer to be fully invested by 30 September 2007, the end of its current
accounting year.
Under its current investment guidelines, the Company will generally invest in each property asset with
the expectation of a medium to long term holding period. The Company may however sell a property
within the Group’s portfolio at any time.
At 30 September 2006, the Group owned the following 7 properties:
* a logistics property near Madrid, Spain (Alovera) acquired in two transactions in July and
November 2005;
* a logistics property in Solingen, Germany acquired in December 2005;
* an office complex near Leuven, Belgium (Campus Remy) acquired in December 2005;
* a logistics property in Marseille, France acquired in December 2005;
* an office complex near Frankfurt, Germany (Campus Heusenstamm) acquired in January
2006;
* an office complex near Lyon, France (Ecully) acquired in January 2006; and
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