Luxembourg, May 12, 2010 – GAGFAH S.A. (Frankfurt Stock Exchange: GFJ) today announced its financial results for Q1 2010.
William Joseph Brennan, CEO of GAGFAH S.A.'s German subsidiaries: "We are off to a good start in 2010. GAGFAH's Funds from Operations (FFO) per share was €0.21 for the first quarter. Operationally, profit from leasing was €124.9 million on a weighted average base of approximately 8,200 fewer units, growing on a per unit basis 3.1% quarter by quarter. With German residential values having held steady, and a positive Q1 behind us, we are continuing to pursue ways to grow our organic cash flow, rationalize our costs, and strengthen our balance sheet through selected asset sales."

Highlights

• Profit from the leasing of investment property
  of €124.9 million in the first quarter of 2010, from €127.2 million in the first quarter of 2009 on a weighted average of approximately 8,200 fewer units. On an average per unit basis, the profit from the leasing of investment property increased by 3.1%.

• NAV of €12.52 per share and gross asset value of €844 per square meter as of March 31, 2010.

• FFO of €0.21 per share or €46.6 million in the first quarter of 2010.

• Quarterly dividend for the first quarter of 2010 of €0.20 per share will be paid on June 11, 2010.

Rents

• Our rental growth rate was 1.0% annualized for the first quarter of 2010 on a same store basis¹⁾.

Property sales

• In the first quarter of 2010, we sold incrementally through our condo sales²⁾ channel 305 units at a margin of 23 % for a total value of €21.2 million and a net cold rent multiple of 17.5.
• In addition, we closed the sale of 2,770 units for a total value of €116.0 million in Q1 2010 that were previously contracted for sale as at year end 2009.

Vacancy

• Our vacancy rate increased to 5.4 % at the end of Q1, in part due to severe weather conditions. We anticipate being at our target vacancy rate of approximately 5.0 % by mid year.
• Excluding units held for condo sales, our vacancy rate was at 5.3%.

Cost

• Management cost per unit broadly stable at €393 on a basis of approx. 8,200 fewer units.
• We intend to continue to focus on optimizing our cost per unit and overall SG&A expenses.

¹⁾ Same store basis: Residential units GAGFAH owned at both dates: As at December 31, 2009 and as of March 31, 2010.
²⁾ Privatization / small multi-family homes
All per share data is based on the number of shares outstanding as of the respective dates.

Key Financial Information

FINANCIAL FIGURES

OPERATIONAL FIGURES

FFO is a non-IFRS financial measure used by our Group's management to report the funds generated from continuing operations. FFO is an appropriate measure of underlying operating performance of real estate companies as it provides shareholders with information regarding the Group's ability to service debt, make capital expenditures or pay dividends. The following is a reconciliation from EBIT to FFO for our Group:

FUNDS FROM OPERATIONS – FFO (€ MILLION)

Conference Call
Management will host an earnings conference call at 1:00 P.M. CET (12:00 noon London time, 7:00 A.M. New York time) later that day. All interested parties are welcome to participate in the live call. You can access the conference call by dialing 1866 966 9439 from within the U.S., or +44 (0) 1452 555 566 from the U.K., or 8002 7512 from Luxembourg, or 0800 101 4960 from Germany or +44 (0) 1452 555 566 from all other countries ten minutes prior to the scheduled start of the call; please refer to "GAGFAH Q1 2010 Earnings Call".
A webcast of the conference call will be available to the public on a listen-only basis at http://www.gagfah.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 twelve months following the call on http://www.gagfah.com/.

About GAGFAH S.A.

GAGFAH S.A. is a joint stock corporation organized under the laws of the Grand Duchy of Luxembourg qualifying as a securitization company under the Luxembourg Securitization Law of March 22, 2004. The core business of GAGFAH S.A.'s operating subsidiaries is the ownership and management of a geographically diversified and well maintained residential property portfolio located throughout Germany. With a portfolio of more than 162,000 apartments, GAGFAH is the largest German listed residential property company.

The Q1 2010 Interim Report of GAGFAH is available on http://www.gagfah.com/.

Contact:
GAGFAH S.A.
2-4, Rue Beck
L-1222 Luxembourg
Grand Duchy of Luxembourg
Tel: +352 266 366 1

Forward-Looking Statements
This press release contains statements that constitute forward-looking statements. Such forward-looking statements relate to, among other things, future commitments to acquire real estate and achievement of acquisition targets, timing of completion of acquisitions and the operating performance of our investments. Forward-looking statements are generally identifiable by use of forward looking terminology such as "may", "will", "should", "potential", "intend", "expect", "endeavour", "seek", "anticipate", "estimate", "overestimate", "underestimate", "believe", "could", "project", "predict", "continue", "plan", "forecast" or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of results from operations or of financial conditions or state other forward looking information. Our ability to predict results or the actual effect of future plans or strategies is limited. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance may differ materially from those set forth in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from forecasted results or stated expectations, including the risk that GAGFAH S.A. will be unable to extent existing financing at suitable terms, be unable to increase rents and occupancy, to privatize further units or further reduce management costs.