Eastern Property Holdings reports a net profit ...

Eastern Property Holdings Limited (EPH) /
Eastern Property Holdings reports a net profit of $ 12.8 million for 2010, 
compared to a net loss of $66.9 million in 2009 
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  *  In the twelve months ended 31 December 2010 we generated a net profit of
    $12.81 million compared to a net loss of $66.86 million for 2009.
  * Earnings per share were $3.00 for 2010, compared to a loss per share of
    $15.13 for 2009
  * Russian property values have stabilised and begun to recover. Revaluations
    of real estate assets have been the principal factor in the volatility of
    our net profits
  * Net assets at year-end 2010 were $343.31 million compared to $332.01 million
    as of 31 December 2009
  * Net asset value per share is $80.54 at 31 December 2010, compared to $77.89
    at the end of 2009
  * Our annual report, including full financial statements, will be available on
    the company website after the closing of the Swiss stock exchange on 15
    April.


Rental Income

Our  gross rental income was $13.17 million for 2010, compared to $16.36 million
in  2009. The year on year reduction in gross rents is primarily attributable to
Petrovsky  Fort,  where,  since  2008, the  short  term  nature  of  leases, and
predominance of small locally-focused businesses - many of which were in hardest
hit  sectors like construction,  real estate, and  finance - led  to both a high
vacancy  level and significantly lower rents being paid by both existing and new
tenants.

Our  non-income  tax  expense,  which  in  our  case  is generally property tax,
increased  from  $1.03  million  in  2009 to  $3.20 million in 2010. Most of the
difference is due to the initiation of property tax payments upon the completion
of Geneva House late in 2009.

The  combination of lower gross rental income, and significantly higher property
taxes  are the primary factors  leading to a decrease  of Net rental income from
$12.91 million in 2009 to $5.93 million in 2010.

Valuation movements

Our  net valuation movements for 2010 came to a positive $41.38 million compared
to a negative $55.12 million in 2009.

As  Russia's property markets  stabilised and began  to recover, we recognised a
net gain from fair value adjustments on investment property of $48.32 million in
2010, compared  to a  loss of  $38.20 million  in 2009. Most  of the net gain in
2010 can  be attributed to Berlin House and Geneva House in Moscow. Berlin House
benefitted  from  yield  compression,  meaning  a  lower capitalization rate was
applied  to approximately the same long  term rental income stream. Geneva House
benefitted  from being delivered to the market  and signing leases with a number
of blue chip international tenants.

We recognised a net loss from fair value adjustments on financial investments of
$6.93 million in 2010, compared to a net loss of $16.92 million in 2009. Most of
the  loss for  both periods  is attributable  to our  investment in Sarnatus. We
recognised  a net  loss from  fair value  adjustment of  $13.85 million  on this
investment in 2009, and additional $6.5 million loss in 2010 as we have impaired
the value of the investment to zero.

Our  net gain from foreign currency  translation in 2009 was $5.64 million, thus
offsetting  some  negative  revaluations  to  reduce  net  losses.  In 2010, the
ruble/dollar  exchange rate was relatively stable and we recognized a modest net
loss of $0.60 million, so had little impact on net earnings.

Administrative expenses

Administrative  expenses other than accrued  performance fees were $9.78 million
in 2010, slightly lower than expenses of $10.45 million in 2009.

Pursuant to our Real Estate Management Agreement, Valartis International Ltd. is
entitled to a performance fee calculated on the basis of 15% of the appreciation
of  our investments above  their initial cost.  In 2009 downward revaluations of
assets  led to the reversal  of $3.36 million of  provisions previously made for
performance  fees.  Revaluation  gains  in  2010 resulted in provisions of $7.37
million  this year. The fees accrued  in 2010 were mostly attributable to Berlin
House and Geneva House.

Net Profit

Net operating profit before finance cost

Our  net  operating  profit  before  finance  cost  was $29.84 million in 2010,
compared to loss of $44.05 million in 2009.

Finance costs

Our  finance  costs  decreased  from  $8.65  million in 2009 to $7.64 million in
2010. The  decrease was primarily due to  the fact that in 2009 one-time charges
and  costs were  incurred in  connection with  drawing a  $40 million  loan from
UniCredit Bank.

Interest income

Interest  income decreased from $7.82 million in 2009 to $5.50 million in 2010,
primarily  due to our acquisition  of 100% of Geneva House.  As 50% owner of the
joint  venture which built the property, only 50% of the interest accrued on our
construction  loans was eliminated in  consolidation. Upon acquiring 100% of the
property in mid-2010, we consolidated 100% of the loans.

Share of associates' losses

We  recognised a loss from our associates, Hypercenter Investment SA and Vestive
Holdings Ltd. of $11.97 million in 2010, compared to $15.21 million in 2009.

Hypercenter  Investment generated  a $10.02  million loss  in 2009, and  a $2.01
million loss in 2010 as the holding was marked down to zero value in the absence
of reliable financial information.

Vestive  generated a  loss of  $5.19 million  in 2009, primarily due to negative
revaluations  of the  companies project  portfolio, and  a $9.96 million loss in
2010 as  certain  of  the  company's  projects  were lost due to cancellation of
development rights.

Net Profit

Our  net profit amounted to $12.81 million  in 2010, compared with a net loss of
$66.86 million in 2009.



*********

Eastern  Property  Holdings  Ltd.  is  an  SIX Swiss Exchange-listed real estate
development  and  investment  company  focusing  on  Russia.  The  company holds
interests   in   office,   residential,   retail   and  parking  properties  and
developments,  principally  in  Moscow  and  St.  Petersburg.  EPH is managed by
Valartis  International  Ltd.  a  wholly-owned  subsidiary of Valartis Group AG.
Additional  information on Eastern Property  Holdings is available by contacting
Terry Olin, Tel: [phone].

*********


 --- End of Message --- 

Eastern Property Holdings Limited (EPH)
Valartis Asset Management SA/Case Postale 3458 Geneva Switzerland

WKN: 250817;ISIN: VGG290991014;

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