Peach Property Aktiengesellschaft : Group AG: Extraordinary factors due to nearly completed project developments depress annual earnings for 2014

• Net loss of around CHF 13 million based on preliminary figures
• Rental income from investment properties increases by more than 30 percent
• Market value of investment properties up 30 percent
• Equity ratio target remains at 40 percent

Zurich, 30 January 2015 - Peach Property Group AG, a leading investor in residential and commercial real estate, today announced that it expanded its investment property portfolio in accordance with its strategy in 2014. Compared with the previous year, the market value of the investment property portfolio increased by some 30 percent to around CHF 182 million. As a result of property handovers to buyers, the market value of the portfolio of development properties decreased by around 30 percent to just under CHF 300 million. However, this line of business, which is becoming less important for the company, had a significant negative impact on 2014 earnings due to additional write-downs. The additional negative impact concerns three development projects in Berlin and Hamburg, which will be completed shortly. The Group incurred significant additional costs due to inadequate services provided by some of the contractors who were responsible for the technical equipment of buildings in Berlin and the technical equipment and interior work in Hamburg. These companies have been commissioned after the general contractor had filed for bankruptcy in 2013. Collaboration with all three companies was terminated early in the second half of 2014 in order to complete the buildings by way of substitute performance. In the second half of 2014 additional costs incurred and expected in this connection had a one-time negative impact of around CHF 18 million on the income statement of Peach Property Group. This represents six percent of the total capital expenditure of around CHF 310 million. The additional costs caused directly by termination and substitute performance amounted to around CHF 6.5 million. However, these also resulted in costs of CHF 9 million due to the longer construction period and interest. The decrease in expected profits also resulted in write-downs of recognized loss carryforwards amounting to a further CHF 2.5 million. Peach will try to offload these cost increases to the companies responsible and has initiated legal action to this effect. The necessary commissioning of new contractors for the respective projects has been completed in the meantime so that no additional negative impact is to be expected.  By 25 January 2015, 79 of the 98 units at the "yoo berlin" project and 24 of the 44 apartments at the "H36" project in Hamburg were handed over to the buyers. These extraordinary factors are expected to result in a consolidated loss after taxes of around CHF 13 million for the 2014 reporting year.  This figure includes all extraordinary items mentioned above. In contrast, the investment portfolio of Peach Property Group performed very well. According to preliminary figures, rental income from the investment properties rose by more than 30 percent, from CHF 5.8 million in 2013 to around CHF 7.7 million in 2014.  Reflecting the Group's strategy, the portfolio was expanded further in 2014. After the acquisition of 336 apartments in Northern Hesse, which was announced in November 2014, Peach Property Group had a portfolio of 884 apartments at year's end. This compares to 548 units in the previous year. The total floor space of the investment portfolio amounted to 117,603 square metres, compared with 87,986 square metres in the previous year.  For detailed information about the portfolio, please also refer to the Asset Reporting published today. The Group's equity shown for 2014 will decrease in line with the expected loss. Since the handover of apartments also reduces the Group's total assets, Peach Property Group expects its equity ratio to remain at roughly the same level as in the previous year. For 2015, Peach Property Group expects an additional reduction in equity of CHF 6-7 million - with a simultaneous decrease in total assets - as a result of the quasi 1:1 parity of the Swiss franc to the Euro following the discontinuation of the minimum exchange rate by the Swiss National Bank. The Euro's weakness will therefore only have a minor impact on the equity ratio. Despite these extraordinary challenges in the 2014 financial year and in the current year, Peach Property Group reiterates its previously announced goal of increasing its equity ratio to 40 percent and is confident that it will be able to report a profit again in 2015. The Group is currently in the process of reviewing whether additional action needs to be taken to achieve the targets mentioned above. Thomas Wolfensberger, CEO of Peach Property Group: "Our preliminary annual result shows that our strategic decision to focus on investment properties, which provides a steady and continuous stream of income, was right. The net loss for 2014 is a disappointment. It results solely from one-time facts in connection with the major luxury property projects that were affected by general contractor bankruptcies. These projects are now almost completed, and going forward the focus of Peach Property Group will be on its portfolio of investment properties." Link to the "Asset Reporting for the 4th quarter of 2014": http://investoren.peachproperty.com/websites/peachproperty/English/5300/asset-reporting.htmlDownload as pdf   Contacts:   Media, investors and analysts Dr. Thomas Wolfensberger, Chief Executive Officer and Dr. Marcel Kucher, Chief Financial Officer [phone] | [e-mail]   Media Germany edicto GmbH, Axel Mühlhaus, Peggy Kropmanns [phone] | [e-mail]   About Peach Property Group AG Peach Property Group AG is a property investor and developer focused on investments in Switzerland and Germany. The portfolio includes an increasing number of investment properties that are designed to generate sustained income as well as attractive residential development properties. The Group's activities cover the entire value chain, from site evaluation to project planning, implementation and marketing. In the investment segment, the Group is focused on properties with a potential for achieving attractive yields based on active asset management - typically secondary locations in the catchment area of urban agglomerations. In the development segment, the Group concentrates on exceptional locations and properties with high-end specifications and amenities that meet the requirements of a demanding clientele.Peach Property Group AG is headquartered in Zurich and has its German Group headquarters in Cologne. Peach Property Group AG is listed on the SIX Swiss Exchange (PEAN, ISIN CH0118530366).For more information, see www.peachproperty.com