The period under review was an eventful one in which your Company grew significantly in size, making three important property acquisitions in Ireland. It also saw a significant change in the shareholder register and the Board is pleased to welcome a number of new shareholders to the Company.
I am pleased to report that during the period your Company’s net asset value per ordinary share increased to 51.4p per share which includes an increase of 14.2p per share arising from disposals / revaluations of properties.
The movements in the net asset value per ordinary share of your Company, are summarised below:

The Group is now invested almost entirely in Ireland, where we continue to find attractive investment opportunities.
I am also pleased that the Board have been able to announce the resumption of dividend payments.

Irish Economic Overview
The resumption of strong growth rates for the Irish economy experienced during 2004 has carried over into the first half of 2005. This is clearly evident, particularly in the pickup in employment levels with the latest figures from the Quarterly National Household Survey published by the Central Statistics Office (CSO) revealing total employment increasing by over 72,000 in the year to 31 March 2005. This is equivalent to an annual growth rate of 3.9%, the highest rate recorded since the final quarter of 2000.
The Irish economy grew by 5.3% in terms of real gross domestic product during 2004. This is compared to growth of 4.4% in the U.S., 3.1% in the U.K. and 1.8% in the Eurozone economy. The Economic and Social Research Institute (ESRI) are projecting acceleration in the rate of growth during 2005 with real GDP expected to rise by 6% during the year. The ESRI also expect this rate of performance to continue in the medium term with GDP growth of 5.1% projected for 2006.
Private investment was the main driver of economic growth during 2004, increasing by 9.3% in volume terms during the year. Private investment is projected by the ESRI to grow by 5.6% during 2005. Consumer expenditure is also a key contributor with 5.3% growth projected in the volume of consumer expenditure in 2005. Despite the continued strength of growth, inflation in the Irish economy remains low with a 2.4% increase in the Consumer Price Index for the year to May 2005.

Irish Property Market
The Irish property market continues to perform well with the SCS / IPD property index showing a total return on all property of 9.7% for the 6 months to 30 June 2005. This total return comprised capital appreciation of 6.8% with the balance of the return comprising income. Capital growth in turn is being driven by a hardening in the equivalent yield to 5.35% on average, down from 5.66% at the end of 2004. Rental values are rising also with the retail sector continuing to show the strongest performance. Office rental values are rising again with a modest 0.2% growth in average office rentals recorded in the second quarter of 2005.
The pickup in sentiment in the Dublin office market is beginning to translate through into the volume of transactions. DTZ Sherry Fitzgerald (“DTZ”) report that the total quantity of accommodation taken up by occupiers in the first half of 2005 stood at 77,400 sq. m., representing a 44% increase on the same period in 2004. DTZ estimate that take up activity during the remainder of the year will remain at the same high level, with the total for 2005 as a whole likely to be in the region of 150,000 sq. m.
Occupier demand is strongest in the IT / telecommunications and financial services sectors. Demand from the professional service sector has also been strong.
The improvement in confidence levels in the market has given rise to a number of office schemes commencing construction during the first half of the year. The total quantity of accommodation under construction is currently approximately 270,000 sq. m. of which c. 60,000 sq. m. has been pre-let. Over 50% of new construction is located in the city of Dublin where there is now a shortage of quality accommodation, particularly for occupiers seeking larger buildings of 5,000 sq. m. and over. The vacancy rate in the market overall remains high at approximately 16.3% but as previously noted, most of this over supply is located in suburban locations. Headline rents for third generation office space in prime locations in Dublin range from €450 - €480 per sq. m.
The retail sector continues to be the top performing sector in the Irish market. Strong growth in private consumer expenditure noted above is translating through into retail sales with the CSO revealing a 6% increase in the volume of sales in the first quarter of 2005 compared with the same period in 2004. The strength of retail sales in Ireland is highlighted by a European comparison with figures from Eurostat, revealing that the volume of retail sales in the Eurozone increased by an annual rate of 1.4% in March. Consequently, the demand for retail accommodation in Ireland remains strong, continuing to place upward pressure on rental values. The first phase of the Dundrum Town Centre in South Dublin opened in March 2005, attracting considerable interest. The second phase of Dundrum will include the first Harvey Nichols Department Store in Ireland and is expected to open before the end of this year.
The market for industrial property in Dublin enjoyed a high level of activity during the first half of 2005 with total space transacted during the period rising to 275,000 sq. m., 36% higher than the same period in 2004. The strength of demand for industrial space, together with the modest quantum of new space under construction, means that the vacancy rate in the Dublin market has declined to 12.8% in June, the lowest rate in three and a half years.
Demand from owner occupiers remains very strong, supported by low interest rates, while supply levels are expected to remain stable with the majority of accommodation under construction either pre-sold or pre-let.
The residential market in 2005 is characterized by an unusual combination of strong activity levels and moderate price inflation. The former suggests that there has been little reduction in the pace of demand growth and the latter that supply is now broadly matching this demand and so acting to dampen price rises. Demand for housing is as strong as ever, given the scale of employment growth, strong wage growth, low inflation and interest rates which remain at a fifty year low. Immigration too has picked up since the E.U. expanded in May 2004 and the Bank of Ireland Quarterly Review suggests that immigration may now be running at some 75,000 per year in gross terms or over 50,000 net, against an average of 34,000 in recent years.

Irish Property Portfolio
The total value of the Irish Property Portfolio including both investment and development properties as well as interests in properties held in joint ventures grew to €850 million as at 30 June 2005.
The period saw a total valuation uplift of €53.0 million (£35.8 million) on the Irish Property Portfolio comprising an uplift of €28.9 million (£19.5 million) in the valuation of wholly owned properties held by Castle Market Holdings and an uplift of €24.1 million (£16.3 million) in the Company’s 50 per cent share of the valuation of properties held through our joint venture company, Havenview Investments Limited.
During what was a very busy period for your company, the first 6 months of 2005 witnessed the acquisition of 3 major new properties. The largest of these was a property in Barrow Street in Dublin’s south inner-city. This property comprises a 5,500 sq. m. office building currently under construction and pre-let to a major firm of Dublin Solicitors. This building is due for completion in February 2006. The Barrow Street property also includes a 2,000 sq. m. office building let under a 25 year lease to Treasury Holdings as well as a large adjoining office / residential development site.
The second major acquisition during the period was the M1 Business Park, located on the main Dublin, Belfast motorway approximately 10 minutes from Dublin Airport. This development comprises approximately 150 acres and will include industrial, distribution as well as science and technology accommodation. Planning Permission has also been secured for a large Motorway Services Area to include a hotel and restaurant, petrol filling station and retail comprising in total approximately 13,500 sq. m. The M1 Business Park is the first property which the Company has acquired in the industrial sector of the market and is likely to be developed in phases over the next three to five years.
The last significant acquisition during the period was the purchase of a parcel of residential land close to Enniskerry Village in County Wicklow. This transaction had contracted by the end of 2004 and was concluded in the early part of 2005.
We were also busy in relation to our development portfolio during the period. Full Planning Permission was secured for a 44,000 sq. m. mixed use development on the Allegro site at Sandyford in Dublin, while full Planning Permission was also secured for a further phase of development at Central Park in Leopardstown. This new phase at Central Park will comprise approximately 45,000 sq. m. of residential and commercial development.
Other significant projects currently passing through the planning process include Stillorgan Shopping Centre, Blakes and the Balgaddy site in Clondalkin. In all cases, we anticipate that these projects will be well advanced by year end.

UK Property Portfolio
As at 30 June 2005, the Group’s remaining two UK properties were valued at £5.5 million, a decrease of £250,000 from the valuations as at 31 December 2004. Since the period end, and in accordance with the Group’s strategy to dispose of the UK property portfolio, a contract for the sale of Thameside House, Brentford, for £2.8 million has been entered into. This represents a premium of £200,000 over the valuation as at 30 June 2005.

Financing
The principal changes in the Company’s financing during the period were associated with the acquisitions referred to above. Over the period borrowings in Ireland have increased by a net €80.7 million. Net of share buy-backs, 56.0 million new ordinary shares were issued at 58.5p per share.
As at 30 June 2005 the Company held cash balances of £78 million.
The Company’s interim financial statements comply with UK GAAP. Financial Reporting Standards (FRS) 25 and 26 have recently been introduced and the interim financial statements within this document have been prepared in accordance with the requirements of each of these standards. This has had two major impacts on the balance sheet. The first is the reclassification of the Zero Dividend Preference Shares: under FRS 25 these are now deemed to be debt rather than equity and are shown under non-current liabilities. This requirement does not impact on the net asset value attributable to ordinary shareholders. The second major impact results from the implementation of FRS 26 which requires financial instruments to be accounted for at fair value. Interest rate swap contracts are defined as such instruments and hence are now stated in the balance sheet at fair value. As the interest rate swaps held by the Company are currently “out of the money” following a long period of falling Euro interest rates, the effect is to reduce the net asset value by £13.5 million. Applying the same accounting policy to the Company’s 31 December 2004 balance sheet would have produced a reduction of £10.355 million in net assets (see summary set out under the ‘Introduction’ to this statement). The Company has chosen not to restate its comparative period in accordance with the transitional rules of this accounting standard.

Litigation
The Company continues to seek compensation for substantial losses suffered in its income portfolio in 2001 and 2002. Since the period end, the Company has served proceedings on Aberdeen Asset Managers Jersey Limited, Aberdeen Asset Managers Limited and UBS Limited and is waiting for their responses.

Outlook
Your Company now has a substantial, diverse and very attractive portfolio of properties in Ireland and is expected to benefit from favourable market conditions during the second half of the year. With a continued high level of activity throughout the portfolio, further good gains in value can be anticipated over the period. The Board continues to look for new opportunities in Ireland and elsewhere.

R Y F Horney
Chairman

28 September 2005