Fund Manager Rutley Capital Partners LLPRutley Capital Partners is a specialist manager of international real estate offering investment management services to institutions and private investors. Established in 2005, Rutley Capital Partners is the real estate private equity business of Knight Frank, the international property consultancy.

Rutley European Property Limited

Investment Objective

To generate a geared net IRR of not less than 12% on the issue price of the Company’s share

capital from capital growth and income derived from a portfolio of principally central and

eastern European commercial real estate assets spread across, inter alia, the office, industrial

and retail sectors and to increase the dividend each year.

Company Description

Rutley European Property Limited was incorporated on 17 November 2005 as a closed-

ended, Guernsey registered investment company, with an Independent Board of Directors.

The shares of Rutley European Property Limited are listed on the Official List of the

London Stock Exchange.

Update – January 2009

www.rutleycapitalpartners.comwww.rutleyeuropean.com

Rutley Capital Partners LLP55 Baker StreetLondon W1U 8ANT +44 (0)20 7861 1174F +44 (0)20 7861 1361

Registered Office 55 Baker Street, London W1U 8AN

Registered in England No. OC311715

Rutley Capital Partners LLP is authorised and regulated

by the Financial Services Authority

Active asset management

Mosse Zentrum, Berlin, GermanyLebenswerk has taken a retail unit of 219 sq m at a rent of €24,309 p.a.

Prater Center, Bochum, GermanyJeans Fritz has taken a five year lease on 339 sq m at a rent of €52,000 p.a.

Bad Kreuznach, GermanyREAL exercised its five year extension option at an annual rent of €1.5 million.

Mataren, Karlstad, SwedenLantmäteriet (Swedish National Land Survey) and OK Varmland have completed three year leases at SEK 1.3 million p.a and SEK 542,000 p.a. respectively.

Portfolio Activity 1 January to 31 January 2009

Key Facts

Fund Manager Rutley Capital Partners LLP

Launch Date 27 February 2006

Management Fee 2% of adjusted capital

Red. Pref. Share Price (RTY) 3.75p

(as at 31.01.2009)

NAV per Red. Pref. Share 46.4p*

NAV adjusted for Deferred Tax 46.8p*

(as at 31.12.2008)

* unaudited

Germany64%

Sweden14%

Poland12%

Netherlands5%

Belgium3%

France2%

Country Weighting

Disclaimer Issued by Rutley Capital Partners LLP (“RCP”) which is authorised and regulated by the Financial Services Authority under the Financial Services and Markets Act 2000 of the United Kingdom. The Shares and C Shares are issued by Rutley European Property Limited. Whilst all reasonable care has been taken in the preparation of this document, no responsibility can be accepted for the accuracy or completeness of the information herein or upon which opinions have been based. The information provided should not be relied upon in connection with any investment decision. Please note that the value of investments and the income derived may fall as well as rise and you may get back less than originally invested. Rutley European Property Limited invests in property assets – the value of the property assets is generally a matter of valuer’s opinion rather than fact. Past performance cannot be relied upon as a guide to future performance. Please note that RCP have or may have provided within the last 12 months, significant advice or investment services in relation to the Shares and C Shares or a related investment. Please note that Knight Frank LLP or related group entities hold, or may hold Shares and / or C Shares in Rutley European Property Limited. The contents of this report have been approved for communication in the United Kingdom by RCP. Further information is available from RCP at 55 Baker Street, London W1U 8AN.

Market Commentary & Investment Outlook

www.rutleycapitalpartners.comwww.rutleyeuropean.com

Country Location City/town % of total assets

1 Poland Buma Square Krakow 8.81

2 Germany Mosse Zentrum II Berlin 8.13

3 Sweden Karolinen 2 Karlstad 7.51

4 Germany Mosse Zentrum I Berlin 4.45

5 Germany Arnulfstrasse Munich 3.90

6 Germany Schildgasse 28-30 Rheinfelden 3.40

7 Germany 50 Kinkeler Strasse Neunkrichen/Saar 3.06

8 Germany 5 Schwabenheimer Kreuznach 2.94

9 Belgium Equinox Building Wemmel 2.61

10 Germany Frankencampus Nuremberg 2.41

Ten Largest Properties (by % of Gross Asset Value 31 December 2008)

0-2 yrs7%

2-4 yrs52%

4-6 yrs22%

6-8 yrs6% 8+ yrs

13%

Lease Expiry/Break Profile

EuropeInitial estimates from Eurostat indicate that ●

GDP fell by 1.5% in the Eurozone during Q4 2008. The latest IMF forecasts suggest that Eurozone GDP will decline by a further 2.0% in 2009, before making a small recovery to growth of 0.2% in 2010.

The European Commission’s Economic ●

Sentiment Indicator (ESI) for the Eurozone fell again in January, albeit less sharply than it had during the last three months of 2008.

Germany

The German economy contracted by 2.1% ●

in Q4 2008, largely due to a sharp fall in exports. The German government has approved a €50 billion stimulus plan aimed at boosting the economy, which includes infrastructure investments and tax relief for businesses and individuals.

In PricewaterhouseCoopers’ ● Emerging Trends in Real Estate Europe survey, published in February, four German cities were ranked in the top ten investment prospects for 2009, with Munich and Hamburg in first and second place respectively. The survey attributes this to investors’ expectations that prices will hold up more strongly in Germany than elsewhere in Europe.

FranceThe vacancy rate in the Paris office market ●

started to rise in Q4 2008, increasing from 5.0% to 5.5%. However, the majority of the available supply is dated second-hand space. New or redeveloped offices remain in short supply in central Paris, which has helped to support prime rental levels.

Belgium Take-up in the Brussels office market ●

was just over 475,000 sq m in 2008, which, although the lowest level recorded since 2004, is in line with the long-term average. The overall vacancy rate reached 10.7% at the end of the year, though availability remains tight within sought-after central districts.

Poland

According to data published by the ●

Warsaw Research Forum, office take-up in the city reached over 520,000 sq m in 2008, an increase of 7% on the previous year. The majority of leasing activity took place away from the city centre, with financial and business services driving demand.

Netherlands Prime office yields in Amsterdam have ●

moved out by around 100 basis points since reaching a low of 5.25% in mid-2007. The lack of available finance has caused the withdrawal of a significant number of investors from the market. There are still local equity buyers actively looking for product, especially from distressed sellers, but as yet there has been little evidence of forced sales taking place.

Sweden

According to the recently released ●

SFI/IPD Swedish Annual Property Index, all-property total returns in the country fell to -3.3% in 2008, a substantial reduction from the return of 14.7% recorded in 2007. Swedish property outperformed equities, which returned -39.5%, but lagged behind bonds, which delivered a return of 15.7%.