Landic Property hf

Registration Document

July 2008 Contents

1 Risk factors...... 3 1.1. General...... 3 1.2. Risk relating to the Issuer...... 3 1.2.1. Market risk...... 3 1.2.2. Interest rate risk...... 3 1.2.3. Inflation risk...... 4 1.2.4. Currency risk...... 4 1.2.5. Liquidity risk...... 5 1.2.6. Credit risk...... 5 1.2.7. Operational risk...... 5 1.2.8. Managing growth...... 5 1.2.9. Internal controls ...... 5 1.2.10. Key employees...... 6 1.2.11. IT and Business Continuity...... 6 1.3. Other risk...... 6 1.3.1. Impairment of goodwill...... 6 1.3.2. Tax...... 7 1.3.3. Legal and regulatory risk...... 7 1.3.4. Covenants...... 8 1.4. Risks associated with Landic Property’s mediation business...... 8 1.4.1. Business environments...... 8 1.4.2. Legal and regulatory...... 8 2 Persons responsible...... 9 3 Manager...... 9 4 Statutory auditors...... 10 5 References and glossary of terms and abbreviations...... 10 6 Documents incorporated by reference and for display...... 11 7 Notice to investors...... 11 8 Information about the Issuer...... 11 9 Description of Business...... 12 10 Organisational structure...... 13 10.1. Landic Sweden...... 14 10.2. Landic Denmark...... 14 10.3. Landic Iceland...... 15 10.4. Landic Finland...... 15 10.5. Landic Investment ...... 15 11 Administrative, management, supervisory bodies and senior management...... 16 11.1. Corporate governance...... 16 11.2. Statutory bodies ...... 16 11.3. Board of directors ...... 16 11.4. Committees of the board of directors...... 18 11.4.1. Remuneration Committee ...... 19 11.4.2. Audit Committee ...... 19 11.5. Senior Management...... 19 11.6. Compliance Officer ...... 20 12 Employees ...... 20 13 Major Shareholders...... 21 14 Legal and arbitration proceedings...... 21 15 Material Contracts...... 21 16 Selected financial information...... 22 16.1. Profit and Loss Account ...... 23 16.2. Balance sheet...... 23 16.3 No material adverse change...... 24 16.4 Financial or trading position...... 24 17 Appendix - Landic Property’s Articles of Association...... 25

2 1 RISK FACTORS

1.1. General

Landic Property hf. (hereinafter referred to as “Landic”, the “Company” or the “Issuer”) believes that the following factors may affect its ability to fulfil its obligations. Most of these factors are contingencies which may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring.

The Issuer believes that the factors described below represent the principal risk inherent in investing in its debt instruments but the inability of the Issuer to pay interest, principal or other amounts on or in connection with any of its outstanding debts may occur for other reasons that do not currently exist, that are not presently considered material, or of which the Issuer is unaware. Prospective investors should base their decision about investing in any of the Issuers debt on their own independent review and such professional advice as they deem appropriate. The risk factors discussed below are not listed in any order of priority and the subheadings in this chapter are for orientation purposes only.

1.2. Risk relating to the Issuer

1.2.1. Market risk

Landic Property is exposed to various financial market risks, as the value of its assets, liabilities and off-balance sheet instruments varies due to changes in financial market variables. Thus, there is a risk of a loss due to adverse changes in market variables. The financial risk is primarily related to the financing of the Company's real estate portfolio. Consequently, the most important types of market risk are interest rate, currency and inflation risk. Besides, the Company is exposed to liquidity risk, ie the risk of incurring a loss due to its inability to meet payment obligations by means of common liquidity reserves. Finally, the Company incurs credit risk, ie the risk of a loss due to counterparties fully or partly defaulting on their payment obligations.

1.2.2. Interest rate risk

Landic Property's main exposure to interest rate movements is through loans. Any period of unexpected or rapid increase in interest rates in the currencies that the company's debt is denominated may therefore negatively affect the company's cash flows and profitability. However, assuming a correlation between interest rates and yields on real estate (even though there may be some time lag), implies that increasing interest rates will result in lower market value on debt and also a lower valuation of properties.

In order to hedge the valuation impact, the aim is to raise long-term loans – of at least of 5 years maturity – and in case of floating rate loans, to swap the floating rates to fixed rates for the entire duration of the loan.

Traditional risk measures are applied in the management of the debt’s interest rate risk. The interest rate risk on the debt is monitored regularly in order to secure that it is kept in accordance with issued guidelines from the board of directors.

3 1.2.3. Inflation risk

Landic Property's assets and liabilities are affected by inflation. The Company aims to include CPI (Consumer Price Index) adjustments in its rental agreements. Accordingly, the majority of the Company's rental agreements are linked to the CPI or similar index that reflects price movements in the respective country. As approximately 92% of the Company’s loans are not indexed to the CPI, all things being equal, inflation has a positive effect on Landic Property through increased revenue as well as via valuation adjustment of investment properties, as the rental agreements being valued become more valuable due to higher revenue stream from the underlying lease contracts.

Approximately 8% of the Company’s debt is CPI indexed and related to ISK denominated debt. Higher inflation levels in Iceland would therefore increase the value of the liabilities and increase debt service payments in the long run. However, the effect is offset both by CPI indexed rental contracts and generally by higher property prices.

Furthermore, higher inflation levels generally increase nominal interest rates, which affect the Company as described above.

1.2.4. Currency risk

Landic Property's income and expenses, such as rental income, operational costs and debt service payments, are in several currencies. Furthermore the Company has liabilities denominated in assorted currencies and owns properties mainly in four countries. The largest part of the Company's income is in SEK, followed by ISK and DKK, EUR and other currencies.

The Company actively manages its currency risk, inter alia with income and operational costs for properties typically in the same local currency. Currency mismatches between assets and liabilities do however exist, and, consequently, expose the Company to foreign exchange risk.

The policy is to raise financing in the same currency as the underlying asset in order to create a natural currency hedge. However, there are some exceptions to this. Firstly, junior loans used to fund some of the Swedish and Danish portfolios are established through the issuance of DKK-denominated property bonds. Secondly, due to high interest rates in Iceland, some Icelandic properties are financed through a well-diversified loan portfolio with regard to the currency composition. Another reason for funding a proportion of Icelandic properties in currencies other than the Icelandic krona is that several lease agreements in Iceland are denominated in foreign currencies.

Nevertheless, the Company hedges a large part of the remaining currency risk aiming at keeping the exposure within acceptable limits.

The management of the currency risk is based upon an internal model that calculates Landic Property's gross as well as net currency position in each currency. The currency risk is monitored on an ongoing basis.

As of year end 2007, the main currency exposures on the liabilities are in SEK (43%) and DKK (33%), mirroring the fact that a large proportion of the properties is in Sweden and Denmark. Further, the Company’s net-currency exposure represented less than 1% of the equity capital as of end 2007, meaning that a unilateral depreciation of ISK of 10% results in a loss of less EUR 1 million.

4 1.2.5. Liquidity risk

The management of liquidity is based upon forecast for the various business units within the Company and cash position at various points in time. The present liquidity management practice enables Landic Property to act proactively to potential financing needs, where the Company’s primary liquidity risk is refinancing of maturing debt.

Landic Property depends on external financing of its business. The Company's funding is mainly based on bank loans from reputable banks. Furthermore, Landic Property has issued bonds on OMX Nordic Exchange Iceland hf. and Copenhagen.

Historically, there have been periods during which banks and the capital markets have been restrictive in their lending. Refinancing of maturing debt, at times when financing conditions are difficult might result in financing under unfavourable terms.

Since Landic Property owns long-life assets, the policy is to raise long-term debt with a maturity of at least 5 years. The aim is to create a smooth maturity profile in order to minimize the exposure to refinancing conditions at any given point in time.

1.2.6. Credit risk

Landic Property’s credit risk is mainly due to deposits with banks and the positive market value of derivative instruments.

Landic Property primarily conducts business with reputable banks of a certain rating and therefore the counterparty exposure is perceived as limited. Landic Property monitors the financial condition of and exposure to its counterparties periodically in order to reduce the credit risk exposure.

1.2.7. Operational risk

Operational risk is the risk of direct loss, indirect loss, or damage as a result of people’s error, misconduct, or fraud, system failure, inadequate or failed internal processes, or from external events.

1.2.8. Managing growth

Although the organisation and Landic Property's management have extensive experience in acquiring companies, an acquisition and the ensuing organisational merger is and will continue to be a challenge. This and a future expansion of Landic Property's operations require greater allocation of management resources away from, e.g. daily operations and cost. The failure of Landic Property to effectively address these issues and the Company's growth, at the same time as maintaining an adequate focus on its current operations, may have a material adverse effect on the Company. Another acquisition related risk is that Landic Property might assess potential acquisitions too positively. If Landic Property’s management assesses a potential acquisition too positively it might lead to Landic Property overpaying for properties or property companies. In addition, acquisitions can require significant financial resources, and Landic Property may use a substantial amount of its cash and other financial resources to consummate an acquisition.

1.2.9. Internal controls

Operational risk relates to the inner workings of Landic Property, the competence of its employees, and the reliability and effectiveness of work processes. Inadequate work processes and internal

5 controls may result in more frequent and possibly larger operational loss events, decreasing the ability to detect fraud and human error. Ineffective procedures may also result in a lack of information reliability and possibly foregone opportunity. Landic Property documents and regularly reviews all major work processes in order to keep them up to date. Internal limits are set and enforced. Despite efforts to maintain consistent internal controls there is still the risk that a lack of them may have a negative effect on the Company´s financial results.

1.2.10. Key employees

Landic Property depends on its central and local management teams and employees. If Landic Property should become unable to attract and retain qualified central managers or a sufficient number of qualified employees and specialists it could harm its business and prevent the Company from implementing its strategy.

1.2.11. IT and Business Continuity

Landic Property relies on numerous computer systems that allow it to track and bill its services, communicate with customers, manage its employees and gather information upon which management makes decisions regarding its business. The administration of Landic Property's business is increasingly dependent on the use of these systems. As a result, system failures or disruptions resulting fro m computer viruses, hackers or other causes may have a material adverse effect on Landic Property's business, results of operations or financial condition.

Specifically, Landic Property has taken several measures to prevent operational interruptions in case of evacuation of its headquarters and has a plan of action in the possible event of such an evacuation. No assurance can be given that these measures will adequately prevent disruption to the Company's operations.

1.3. Other risk

1.3.1. Impairment of goodwill

The majority of the Company’s goodwill relates to Landic Property acquisition of Keops A/S on 3 September 2007. The allocation of the purchase price was determined only provisionally for the year ended 31 December 2007. The final allocation of the purchase price will be completed before 3 September 2008 and any adjustments to the provisional values which might result from the completion of the initial accounting will be accounted for from the acquisition date.

Because the initial accounting for the acquisition of Keops A/S could be determined only provisionally by the end of the year 2007, it has also not been possible to complete the initial allocation of the goodwill acquired before the end of the year 2007. Accordingly, the initial allocation of goodwill to cash-generating units (CGUs) has also been determined provisionally.

Goodwill acquired in a business combination is allocated to the cash generating units which are expected to benefit from the synergies of the business combination. Landic Property performs impairment tests on goodwill annually and whenever there is an indication that intangibles may be impaired. Impairment tests are carried out per business area by country as this represents the lowest level of CGUs to which goodwill can be allocated on a non-arbitrary basis. This level of allocation is also the lowest level within the Company at which the goodwill is monitored for internal management purposes.

6 1.3.2. Tax

Changes in laws and rules regarding direct and indirect taxes and other duties can adversely impact the Company and its investors. This may involve a reduction in the Company's profitability and free cash flow. Property tax and corporate income tax levels are for example important to the Company. Tax implications of Group's transactions are to some extent based on judgment of applicable tax law and regulation. Even if the Group is of the opinion that it has assessed tax law in good faith, the authorities may be of a different opinion. Conflicting and/or complicated tax rules – and changes in such rules and legislation – mean that there is a risk that the Group inadvertently makes less optimal choices or commits mistakes when filing tax returns etc. Equally, the risk of inadvertently making business decisions that lead to unforeseen tax consequences exists, since tax rules can be complex and are often subject to uncertainty as to their interpretation. The Group realises a number of internal transactions that are covered by the rules on transfer pricing. Transfer pricing is a complicated area and will always contain a tax risk as this area is under influence of political judgement in each country. In spite of the fact that Landic Property employs people with expertise within the tax area and/or uses external specialist assistance, there can be no assurance that circumstances as described above will not lead to significant, unforeseen or unintended expenses and thereby have a material adverse effect on Landic Property's business, results of operations or financial condition.

1.3.3. Legal and regulatory risk

Landic Property has acquired several companies in recent years and intends to continue to pursue an acquisition strategy. Although Landic Property carries out due diligence work in the course of its acquisitions, the Company may be exposed to potential liabilities arising from the acquired businesses, which may not be covered by warranties and indemnities in contractual agreements with sellers. If any such potential liabilities materialize, such liabilities may have a material adverse effect on Landic Property's business, results of operations or financial condition.

Landic Property has divested several assets and companies and property portfolios during recent years. As a result of its divestments, the Group is exposed to potential liabilities arising from the divested businesses, because of guarantees or covenants in relation to the financing of those assets and/or warranties and indemnities made in contractual agreements with buyers. If any such potential guarantees and/or warranties and indemnities materialize, such liabilities may have a material adverse effect on Landic Property's business, results of operations or financial condition.

Some of the areas in which the Group operates its properties can possibly become subject to new conservation regulation aimed at preserving the environment, artistic and cultural heritage, or historic sites. If too restrictive, regulation of that nature can derail plans for extensions and property improvements with effects on property value. However, these regulations can also preserve the value and attractiveness of many of the buildings owned by Landic Property.

Changes in municipality zoning plans can also change numerous factors which impact property values and rent levels. Stricter laws on quality and safety standards of properties and construction material can adversely impact property value and force the Group to enter into costly and unscheduled maintenance projects.

Landic Property's activities and financing is based on an assumption that no approvals or licenses are required. Change in law and rules, court rulings or decisions from authorities may affect Landic Property's current and future activities or need for approvals or licences. If Landic Property's current or future activities require approvals or licences, which it has not obtained, Landic Property may not be able to obtain such approvals or licences and/or such requirements may have a material adverse effect on the Company’s business, results of operations or financial condition. A decision from the Danish FSA requiring a banking licence for structures similar to the structures used in certain of Keops A/S' bond issues has been appealed to the Danish Commerce and Companies Appeal Board. The appeal

7 decision is expected to be rendered within the next 6 months. The consequience of the Danish Commerce and Companies Appeal Board decision may be that certain of the Keops A/S bond issuers should have obtained a banking license, the lack of which may be subject to penalty, and that the relevant bonds will have to be repaid, which may have a material adverse effect on the relevant Keops A/S bond issuers' and Landic Property's business, results of operations or financial condition. Due to the size of the operation of Landic Property in Iceland, all major acquisitions of real estate companies or real estates already on the market in Iceland are, according to the Competition Act subject to be declared to the Icelandic Competition Authority, which could limit its flexibility. A case is now pending before the competition authorities in relation with the acquisition of Landsafl ehf.

Landic Property is and may in the future be subject to legal claims or orders from tenants, authorities, including tax authorities and other third parties. No assurance can be given to the outcome of such claims. The renegotiation of site leasehold, lease contracts and property pre-emption rights are particular areas where disputes have risen and are likely to arise in the future.

1.3.4. Covenants

A number of financial contracts contain financial covenants, which are customary in nature. The financial loan covenants in Landic Property Group's loan agreements relate to e.g. equity ratio, interest coverage, debt service coverage ratio, loan-to-value, sale or other dispersion of assets, change of ownership and/or control of the Company etc. Not fulfilling the covenants could mean accelerated repayment of bonds, loans, cross-defaults, and/or technical default requiring prohibition of dividend and re-negotiation with creditors under distress. Such an event would almost always be preceded by a significant adverse development in the Group's financial performance. In addition, events such as a drop in market prices of the Issuer’s assets could mean that loan-to-value covenants would trigger the need for more equity.

1.4. Risks associated with Landic Property’s mediation business

1.4.1. Business environments

Landic Property's subsidiary, Landic Investment A/S, mediates commercial property ownership to third party investors and provides various advisory services related thereto. Landic Investment generates its income mainly from two activities: fees for mediating commercial properties in different corporate formats; and fees for company administration services for companies owning mediated properties. For both these activities Landic Investment operates in a rather competitive environment. It cannot be guaranteed that Landic Investment can continuously maintain the pipeline of mediated properties at the expected level; this risk includes not finding properties suitable for mediation, property yield compression, increased funding and interest costs as well as financial market constraints, which may make Landic Investment’s mediation projects less attractive than projects offered by peers or by other investment sectors.

Over time the Danish public opinion about mediated property projects (incl. those with tax planning aspects) may turn negative, which might be critical to Landic Investment’s future revenue generation. The current strained financial situation in the credit market has an impact on Landic Property’s mediation activities since access to effective and sufficient funding is imperative for financing of projects. Should the current situation in the credit market continue, it may have a material adverse effect on Landic Property’s business, results of operations or financial condition.

1.4.2. Legal and regulatory

Changes to Danish or foreign tax, accounting or other rules could make property investments less appealing to investors. For example less attractive tax treatment of depreciation on commercial

8 properties, might cause investors not to invest in new mediated property projects. Apart from this the Danish tax authorities have fought the view that participants in the mediated limited partnership constructions (K/S) have no deduction for the mediation fee paid to companies like Landic Investment A/S. The Supreme Court in Denmark has not ruled on this issue, but is expected to do so in 2008. In the Issuer's opinion the matter was adequately dealt with in past prospectuses associated with the sale of projects. However, it cannot be ruled out that investors may consider legal claims in this respect, in addition to negative impact on Landic Investment of a more reputational nature. It is a risk related to property mediation projects that investors in past or new projects may raise claims against Landic Investment including seeking to rescind their purchases or claim compensation, if the projects were facilitated on incorrect or incomplete terms, although Landic Investment seeks to mitigate such risks through use of professional advisors and thorough due diligence reviews. Also, since Landic Investment provides various advisory services to investors in relation to the mediation of properties, investors may raise claims for compensation for alleged inaccurate advice in relation to mediation projects, which claims may adversely impact Landic Investment. Moreover, Landic Investment’s provision of company administration services in relation to mediated properties may also in some cases cause damage claims against Landic Investment for inadequate services. Further, non-renewal or termination of company administration contracts may reduce Keops Investment’s revenue creation.

2 PERSONS RESPONSIBLE

The Board of Directors and the CEO, on behalf of the Issuer, named below, hereby declare that, having taken all reasonable care to ensure that such is the case, the information contained in the Registration Document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import.

Reykjavík, 30 July 2008

On behalf of the Board of Directors and Landic Property hf., Kringlan 4-12, 103 Reykjavík, Iceland.

______Kristín Jóhannesdóttir Skarphéðinn Berg Steinarsson Chairman of the Board CEO

3 MANAGER

The Manager, Glitnir banki hf., Corporate Finance, Icelandic ID No. 550500-3530, registered office at Kirkjusandur 2, 155 Reykjavík, Iceland, has been the advisor to the Issuer in the preparation of this Registration Document. Having taken all reasonable care to ensure that such is the case the information contained in the registration document is, to the best of the manager’s knowledge, in accordance with the facts and contains no omission likely to affect its import. The Manager has not independently verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Manager as to the accuracy or completeness of the information contained or incorporated in this document or any other information provided by the Issuer in connection with the Bonds.

9 Reykjavík, 30 July 2008

On behalf of the Manager

______Jóhannes Baldursson Executive Vice President of Capital Markets Iceland DIV

4 STATUTORY AUDITORS

Landic Property’s Statutory Auditors at the time covered by the historical financial information in the Registration Document was KPMG hf., and on their behalf Anna Þórðardóttir. Anna Þórðardóttir is a member of the Institute of State Authorized Public Accountants in Iceland.

Landic Property’s Statutory Auditors have not resigned or been removed from their positions during the period covered by the historical information. Landic Property’s Statutory Auditors have been re- appointed during the period covered by the historical information.

The Company’s financial statements for the years ending 31 December 2006 and 31 December 2007, respectively, have been audited and endorsed without comment by KPMG hf., the Company’s independent auditors.

5 REFERENCES AND GLOSSARY OF TERMS AND ABBREVIATIONS

References to the “Issuer”, “Landic Property”, “Landic”, “Fasteignafélagið Stoðir” and the “Company” in this Registration document shall be construed as referring to Landic Property hf., Icelandic ID No. 450599-3529, unless otherwise clear from the context, and its subsidiaries and affiliates, unless otherwise clear from the context. Landic Property hf. is the legal name of the Issuer.

References to “OMX ICE” in this Registration Document shall be construed as referring to the OMX Nordic Exchange Iceland hf., unless otherwise clear from the context.

References to “ISD” in this Registration Document shall be construed as referring to the Icelandic Securities Depository, i.e. to Verðbréfaskráning Íslands hf., Icelandic ID No. 500797-3209, Laugavegi 182, 105 Reykjavík, Iceland, unless otherwise clear from the context.

Reference to the “Manager” in this Registration Document shall be construed as referring to Glitnir banki hf., Corporate Finance division, Icelandic ID No. 550500-3530, unless otherwise clear from the context.

Reference to “CPI” in this Registration Document shall be construed as referring to the Consumer Price Index of the respective country.

10 6 DOCUMENTS INCORPORATED BY REFERENCE AND FOR DISPLAY The audited consolidated annual financial statements of the Issuer for each of the financial years ended 31 December 2006 and 31 December 2007, shall be deemed to be incorporated in, and form part of, this Registration Document. Documents incorporated by reference may be viewed and obtained from the Issuer’s website www.landicproperty.com.

For the life of this Registration Document the following documents may be inspected and certified copies thereof may be obtained at the registered office of the issuer:

• The Articles of Association for Landic Property hf. • The annual account of Stodir Real Estate (now Landic Property hf.) for the operating year 2006. • The annual account of Landic Property hf. for the operating year 2007.

7 NOTICE TO INVESTORS

This Registration Document concerns the issue of bonds by Landic Property hf. which are expected to be admitted to trading on OMX ICE. The listing is conducted in accordance with Icelandic law and regulations, including Act No. 108/2007 on Securities Transactions and Directive 2003/71/EC of European Parliament and of the Council 4 November 2003 (the “Prospectus Directive”) which has been implemented by national law. The Registration Document is prepared pursuant to current legislation and rules for issuers of bonds on OMX ICE that apply to the listing. OMX ICE has scrutinized and approved this Registration Document, which is only published in English.

The Company complies with OMX ICE rules regarding on-going information disclosure for bond issuers. Investors are advised to follow the news announcements and notifications concerning Landic Property, which will be published on Landic Property’s website.

The purchase of bonds is inherently a risk investment. Each investor must base a decision to invest in bonds issued by Landic Property on his own examination and analysis of the information presented in the Registration Document and the Securities Note. Investors are advised to study their legal position, including taxation issues that may be relevant to their transactions in Landic Property’s bonds. Investors are urged especially to acquaint themselves well with the discussion of risk provided in the “Risk factors” chapter of the Registration Document.

This Registration Document and any document forming a part of the Prospectus shall not be distributed and must not be mailed or otherwise distributed or sent in or into any country in which distribution would require any additional registration measures or other measures to be taken, other than as applicable under Icelandic law and regulations, or would be in conflict with any law or regulation in the respective country.

8 INFORMATION ABOUT THE ISSUER

Landic Property hf., ID No. 450599-3529, Kringlan 4-12, 103 Reykjavík, Iceland, telephone number +354-5759000, was established and registered as an Icelandic limited liability company on 3 May 1999. The name of the Company was changed on 17 October 2007 from Fasteignafélagid Stodir hf. to Landic Property hf. Its operations are governed by Act. no. 2/1995 on Private Limited Liability Companies. The Company’s share capital amounts to ISK 5,398,055,016 – five billion three hundred

11 ninety eight million fifty five thousand and sixteen Icelandic krona – and is divided into shares of one krona each. All shares carry the same rights.

Landic Property’s history began in 1999 when Baugur and Kaupþing Bank founded the Company to manage their property assets. Landic Property expanded rapidly and soon became the largest property company in Iceland. Commercial and office premises were the core of its portfolio from the outset – and this is still the case today.

After such fast-paced growth in Iceland, it became apparent that opportunities for further development lay mainly abroad. The focus was on Landic Property’s immediate Nordic neighbours where Icelandic companies had already paved the way for strong foreign expansion, where market operations were similar to Iceland’s and where the countries’ histories had intertwined for centuries.

The Company began investing abroad at the end of 2005, with initial purchases in Denmark. The property company Atlas Ejendomme was acquired, bringing with it a number of highly attractive properties in central Copenhagen. Well-known properties in Denmark include the Illum, ØK and Tietgen buildings.

A major step was taken in 2007 when Landic Property took over the Danish property company Keops. With this merger, the size of the Company more than doubled, increasing its portfolio to around 2.6 million square meters. The purchase of Keops added a larger number of properties in Sweden, and a foothold in Finland. Landic Property also acquired Keops Investments (now Landic Investment), one of the best-known property investment companies in Denmark, and Keops Development, one of the country’s largest property development companies. When Landic Property acquired Keops in September 2007 it was clear that Kepos Development did not fit its business model, and that the Company would be divested. In May 2008 Landic Property sold Keops Development to a Danish investment company, Stones Invest.

In a relatively short time, Landic Property has become a large international property company operating across many countries.

9 DESCRIPTION OF BUSINESS

Landic Property hf. is an Icelandic real estate company which specialises in the sale and leaseback of real estate property to strong corporate customers. It ’s Articles of Association (Art. 1.3.) state that its objectives are the buying and selling of real estate and movable property, the rental of properties, property development, securities transactions and other related activities.

The Company’s strategy is to buy and hold long-term leases where the properties are well located and the tenants have financial strength. It therefore focuses on acquiring well positioned and sought-after property for long-term lease to solid corporate customers, who either wish to free their capital or avoid tying capital in operations which are not part of their core activities. For this purpose it both buys used properties and develops new properties where needed, in addition to providing extensive services for the maintenance of its properties.

The Company conducts its business in such away that it tries to ensure that its investments are well diversified with regards to their location, the types of business conducted and the type of tenant. In the Company’s opinion such broad risk diversification creates a strong property portfolio and it feels that in many cases the location of the properties themselves is a fundamental basis for the business conducted with them. The Company’s aim is therefore to minimise as far as possible the risks which are inherent in its business.

12 The huge and ongoing expansions of Landic Property’s core activities and market penetration has been supported by a new structure and improved business processes. Landic Property’s head-office functions are now dealt with in Iceland and Denmark, with regional offices managing local portfolios in other locations. This structure ensures the best possible leverage of local market knowledge, and the most timely and appropriate response to the needs of the Company’s clients.

The head office functions cover the overall administration of the Company and operate central financial support departments. The Company runs six business units. The regional offices in Iceland, Denmark, Sweden and Finland handle all aspects of property portfolio management in their respective countries. In addition there are four facility management offices in Sweden offering local services to customers. Local managing directors are responsible for day-to-day operations in each country. The two other business units are Keops Investment and Funds. Keops Investment brokers a variety of investment properties to private, primarily Danish investors, who are attracted by factors such as the advantageous tax rules for this type of investment in Denmark.

The idea behind the organizational structure of Landic Property is to be able to offer local service and pan-Nordic property solutions. Furthermore, this structure allows the sharing of local knowledge throughout the company for the benefit of the customers.

10 ORGANISATIONAL STRUCTURE

At the date of issue of this Registration Document Landic Property is the parent company of the following legal entities, all of which are its fully owned subsidiaries:

• Landic Iceland • Landic Denmark

13 • Landic Sweden • Landic Finland • Landic Investment

The Issuer it is not dependent on its subsidiaries or its affiliates in performing its business.

Landic Property’s legal entities are described in the following text:

10.1. Landic Sweden

The largest portion of Landic’s portfolio lies in Sweden. The portfolio comprises a wide variety of property types, with office buildings especially prominent, and the tenants include government agencies as well as large international companies.

Landic Sweden - general information 31.12.2007 Economic occupancy % 1 91.30% Number of properties 322 Number of tenants 2,586 Total square meters 1,762,967 Average lease length (years) 3.1 Number of employees 75 Market value of portfolio (EUR million) 1,639

10.2. Landic Denmark

The Danish portfolio consists of more than 400,000 square meters under rent, chiefly within central Copenhagen. The estate comprises many beautiful and historic buildings, with over 40 properties and around 400 tenants. The portfolio is divided between office and retail space.

Landic Denmark - general information 31.12.2007 Economic occupancy % 96.3% Number of properties 44 Number of tenants 410 Total square meters 417,088 Average lease length (years) 8.7 Number of employees 19 Market value of portfolio (EUR million) 931

1 Economic Occupancy is the actual gross cash collected (after vacancy, credit and collection loss) as a percentage of the total potential rents.

14 10.3. Landic Iceland

Landic Iceland is one of the largest real estate company in the country. It owns more than 130 commercial properties all over the country. They include shopping centres, hotels, offices and high- profile industrial premises. The assets are diverse in terms of location, function and tenant type. This means that the risk in the portfolio is minimised.

Landic Iceland - general information 31.12.2007 Economic occupancy % 99.3% Number of properties 131 Number of tenants 334 Total square meters 413,694 Average lease length (years) 7.5 Number of employees 16 Market value of portfolio (EUR million) 1,098

10.4. Landic Finland

The Finnish portfolio consists of 10 properties comprising nearly 50,000 square meters under management. They include office and retail premises. They are situated all over the country, chiefly in provincial centres that have strong positive growth potential. The portfolio was previously managed fro m the Swedish office but in February 2008 the Company opened an office in Finland to manage and expand the Finish operations.

Landic Finland - general information 31.12.2007 Economic occupancy % 97.2% Number of properties 10 Number of tenants 87 Total square meters 48,386 Average lease length (remaining) 4.1 Number of employees 1 Market value of portfolio (EUR million) 71

10.5. Landic Investment

Landic Investment handles the acquisition mediation and divestment of investment properties in the Nordic countries and Northern Europe, for wealthy individuals and professional bodies. Landic Investment seeks to identify and exploit the most lucrative sub-markets in Northern Europe and has since 1989 mediated more than 260 individual investment projects.

15 11 ADMINISTRATIVE, MANAGEMENT, SUPERVISORY BODIES AND SENIOR MANAGEMENT

As an Icelandic limited liability company, the organisational structure of Landic Property hf. is governed by Act no. 2/1995 on Private Limited Liability Companies.

11.1. Corporate governance

Corporate governance at Landic Property is defined as the framework by which the Company is directed and controlled and the means by which relationships among the Company’s management, its board, its shareholders and other stakeholders are conducted. This framework is largely set out in its Articles of Association and is supplemented by the relevant provisions of Act no. 2/1995 on Private Limited Liability Companies. Furthermore the Company has observed the corporate governance guidelines developed by the Icelandic Chamber of Commerce, the OMX Nordic Exchange Iceland hf. and the Confederation of Icelandic Employers in 2005 and which are inter alia outlined in the internal rules of the Company. Landic Property follows the recommendation except for the following: • Landic Property does not prepare quarterly reports as prescribed by the recommendations. • Assessment of the competence and expertise of the Supervisory Board members as well as evaluation of the Supervisory Board’s work is carried out on an ongoing basis and presently does not observe a formal plan as prescribed by the recommendations. • Some members of the Supervisory Board have more Supervisory Board positions than prescribed by the recommendations. The extent of such Supervisory Board positions is assessed not to damage the handling of the Supervisory Board work in Landic Property. • The total remuneration of the Supervisory and Executive Boards appears from the annual report. For reasons of discretion, the Company does not wish to disclose the Company’s remuneration policy or each Supervisory Board member’s remuneration or the individual remuneration of the Executive Board members or about retirement programs, as prescribed by the recommendations.

11.2. Statutory bodies

The supreme authority in the affairs of Landic Property hf., within the limits established by its articles of association and by statutory law, rests with legitimate shareholders’ meetings. Shareholders’ meetings may be attended by shareholders, their representatives and/or their advisors. Furthermore, the CEO and the auditor of the Company have full rights to speak at, and submit motions at, shareholders’ meetings. Shareholders’ meetings are open to representatives of the press and of the OMX Nordic Exchange Iceland hf. At shareholders’ meetings, each share carries one vote. Decisions at shareholders’ meetings are taken by majority vote, unless there are provisions otherwise in the Company’s articles of association or prescribed by law. The annual general meeting will be held before the end of June each year.

11.3. Board of directors

The board of directors is composed of seven members, all of whom are non-executive, to be elected at the Company’s annual general meeting for a term of one year. The eligibility of members of the board shall be subject to statutory law. Those who wish to stand for election shall notify the board of their

16 intention with at least seven day’s notice. Information on the candidates shall be available to the shareholders of the Company at the Company’s domicile no later than two days prior to the shareholders’ meeting.

The board is responsible for protecting the interests of all shareholders and will perform a supervisory role. The board of Landic Property is the highest authority in the Company’s affairs between shareholders’ meetings. The board of directors manages the Company’s general affairs and ensures that its organization and operation are at all times correct and appropriate and in line with the Company’s accounts and disposal of the Company’s property. Furthermore, the board of directors ensures that the handling of the Company’s funds is sufficiently supervised.

The board of directors is, among other things, responsible for confirming key aspects of internal organization, and making decisions on mergers, and on the establishment or closure of foreign subsidiaries. The board may not involve itself in decisions on individual dealings transactions, unless their scope is substantial in relation to the size of the Company’s business. Individual board members may not involve themselves in decisions on individual dealings transactions.

The board of directors elects a chairman of the board from its members, and allocates other tasks as required. The chairman is the public representative of the board, unless otherwise decided by the board. The board appoints the CEO of the Company and decides on the terms of his employment. The board also establishes the CEO’s working procedures, setting out in further detail the performance of the CEO’s duties.

The members are:

Kristín Jóhannesdóttir

Ms. Jóhannesdóttir is the chairman of Landic’s board of directors; from 2002 she was also chairman of the board of directors of Landic (old Fasteignafélagið Stoðir). In addition, she is a board member of Baugur Group hf. and managing director of Fjárfestingafélagið Gaumur ehf. Ms Jóhannesdóttir practised law as a district court attorney at the law offices of Lögmenn Garðastræti from 1988 to 1995.

Ms. Jóhannesdóttir has a degree in law (Cand.jur) from the University of Iceland and a certificate in investment management from the Icelandic Ministry of Commerce. She also sits on the board of directors of Þyrping hf, Latibær ehf. and Goldsmiths Group Ltd, and on the supervisory body of Íslenski lífeyrissjóðurinn, Samtök atvinnulífsins (Confederation of Icelandic Employers) and Viðskiptaráð Íslands (Chamber of Commerce).

Ingibjörg Pálmadóttir

Ms. Pálmadóttir joined the board of directors in 2002. She is the chairman of the board of directors of Stoðir Eignarhaldsfélag (former FL Group) and on the directorate of Baugur Group hf., Á bleiku skýi ehf., Þyrping hf., Lýsi hf., Eignarhaldsfélagið ISP ehf. and 101 Capital ehf, and holds a degree from the Parsons School of Design in New York.

Eiríkur Jóhannsson

Mr. Jóhannsson joined the board in 2007, and sat in the Landic (old Fasteignafélagið Stoðir) board in 2004 and the board of Keops A/S from 2006. Mr. Jóhannsson is the CEO of Styrkur Invest ehf. He has a B.Sc in economics from the University of Iceland and studied international finance at Vanderbilt University in Nashville, TN. He also sits on the boards of many subsidiaries of Baugur Group hf., is the chairman of Samherji hf., and a member of the board of Stoðir Eignarhaldsfélag (former FL Group), Landic Investment, Capinordic and Capinordic bank.

17 Pétur Már Halldórsson

Mr. Halldórsson joined the board in 2007. He has been managing Fons hf. investment portfolio since 2006. He previously held managing positions with Flaga Group hf., SIF hf. and Samskip hf. Mr. Halldórsson took his B.Ed at the Icelandic University of Education, and studied for his master’s degree in international business and marketing at the University of Iceland. He is chairman of the board of Securitas hf. and Plastprent hf., and a board member for Hamleys Ltd, Whittard of Chelsea, Julian Graves Ltd, Woodward Ltd and (via Aurum Holdings) Gloldsmiths, Mappin & Webb and Watches of Switzerland.

Gunnar Jónsson

Mr. Jónsson joined the board of directors in 2007. He is a partner of Jónsson & Hall Law Firm. Mr. Jónsson graduated with Cand. Jur. degree in law from the University of Iceland in 1985. In 1992 he received an LL.M. from the Cleveland Marshall College of Law. In addition to being a director of Landic Property hf., Mr. Jónsson is a director of a number of companies, including Frontier Energy á Íslandi ehf., Sjóklæðagerðin hf., Kristín Þórisdóttir ehf., Jónsson & Hall Law Firm, Glitnir Funds hf. and an alternate director of Glitnir Bank hf.

Elín Þórðardóttir

Ms. Þórðardóttir joined the board of directors in September 2007. She was also a board member between 2004 and 2006. Ms. Þórðardóttir is CEO of Opin Kerfi Group hf. Ms. Þórðardóttir has a Cand. Merc (M.Sc.) degree from the Aalborg University in Denmark, where she also received a B.Sc. degree in business. In addition to being a board member of Landic Property hf., Ms. Þórðardóttir is the member of the board of directors of the following companies: Stjörnu-Oddi hf., Nikita ehf. and the supervisory body of Frjálsi lífeyrissjóðurinn.

Einar Þorsteinsson Mr. Þorsteinsson joined the board of directors in April 2008. He is a Director at Stoðir Eignarhaldsfélag (former FL Group), working in Private Equity. Prior to joining Stoðir Eignarhaldsfélag (former FL Group) he worked at Glitnir Banks's Corporate Finance and Glitnir Research. Einar holds a B.Sc. in Business Administration from Reykjavík University and has a certification as a public stockbroker. In addition to being a board member of Landic Porperty hf., Mr. Þorsteinsson is the member of the board of directors of the following companies: Geysir Green Energy ehf., Enex and Northern Travel Holding and the supervisory body of Hitaveitu Suðurnesja hf.

In the Company’s opinion there are no conflicts of private interest and or other duties between individual members of the board of directors of Landic Property hf., its managers, auditors and compliance personnel, on one hand, and the Company, on the other.

The business address of the board of directors, as well as senior management is Landic Property hf., for the attention of the relevant person, Kringlan 4-12, 103 Reykjavík, Iceland.

11.4. Committees of the board of directors

In accordance with the rules of procedure issued by the board of directors, the board can divide its tasks between its members, and is entitled to elect sub-committees for that purpose. The board has established two such sub-committees: an Audit Committee and a Remuneration Committee.

18 11.4.1. Remuneration Committee

The board shall elect three of its members to the Remuneration Committee. The role of the committee is to act in a guiding capacity to the board regarding the remuneration of the Company’s directors and senior managers, and to give advice on remuneration policy, which shall be reviewed each year and submitted to the annual general meeting. In addition, the committee observes the remuneration of the senior managers to ensure it is within the framework of the remuneration policy, and will present a report to the board on this point each year, in connection with the annual general meeting.

The members are:

• Kristín Jóhannesdóttir • Gunnar Jónsson • Pétur Már Halldórsson

11.4.2. Audit Committee

The Audit committee shall have three members and its primary operation is to assist the board in the supervision of the following:

• Accounting and financial reporting processes and the integrity of the Company’s financial statements; • Considering the audit scope and procedures, including the qualifications, independence and performance of the external auditors; • Internal control systems and risk management.

The members are:

• Kristín Jóhannesdóttir • Einar Þorsteinsson • Eiríkur Jóhannsson

The committee has the authority to conduct any investigation appropriate to fulfil its responsibilities.

11.5. Senior Management

The CEO and the board of directors are jointly responsible for the management of Landic Property. The CEO is responsible for day-to-day operations, and in this regard observes the policies and directions of the board. The CEO ensures that the company’s accounts and finances conform to law and accepted standards. The CEO provides the board of directors and the auditors of the company with all necessary information on the operations of the company which they might request, and which should be granted according to statutory law.

Skarphéðinn Berg Steinarsson was appointed CEO of Landic in June 2007. Prior to that, he spent five years as managing director of Nordic Investments for Baugur Group and also sat on Landic’s (former Fasteignafélagið Stoðir) board of directors. Mr. Steinarsson served as head of department at the Prime Ministers Office from 1998 to 2002, and was executive director of the state privatisation committee from 1992 to 2002 at the Ministry of Finance. Mr. Steinarsson has a degree in business administration (Cand.oecon) from the University of Iceland, an MBA from the University of

19 Minnesota, and further post-graduate qualifications from Oklahoma State University. He also sits on the board of directors of Þyrping hf.

Gunnar Petersen has bee Landic’s CFO since March 2008. Prior to that he was the Company’s COO and the managing director at Landic (old Fasteignafélagið Stoðir). Mr Petersen has also worked as a client executive at HSH Nordbank, in the capital markets department at VBS Investment Bank, and as a senior derivatives dealer at Icebank. Gunnar holds a degree in business, economics and finance from the University of Iceland, and is a chartered stock broker.

Michael Sheikh has been Landic’s CDO since the acquisition of Keops in 2007. Prior to that he was an asset manager for Keops. Mr Sheikh studied philosophy at Ärhus University and has worked in the property world since 1990 in a variety of companies, with important positions at CW Obel Ejendomme, TK Development and MT Højgaard. In addition to his current post with Landic, Michael sits on the boards of several of Landic’s subsidiaries, and is also a board member of PKD Holding and Keops Kollegiet Bispebjerg.

Tommy Sundbom is the newly appointed COO of Landic. Tommy had been the managing director of Landic Sweden since 2005. Before that, he spent two years as a partner at the newly founded Volerra Property Company. His CV also includes senior roles with TiFiC, Serco and ABB Svenska Fläkt. Tommy graduated from Chalmers University of Technology in Gothenburg with a B.Sc. in engineering, where he studied real esta te economy and law.

11.6. Compliance Officer

A compliance officer is employed within the Company. The compliance officer is directly responsible to the CEO and is independent in his or her duties. The compliance officer monitors the implementation of insider rules adopted by the Company, including rules regarding securities trading by employees and primary insiders. The compliance officer makes proposals for improved working procedures for various positions within the Company and helps develop and maintain the compliance monitoring system.

12 EMPLOYEES

At the date of this Registration Document the total number of employees at Landic and its subsidiaries was 192.

• Landic Property: 53 • Landic Sweden: 73 • Landic Denmark: 19 • Landic Iceland: 18 • Landic Finland: 3 • Landic Investments: 26

20 13 MAJOR SHAREHOLDERS

The ten largest shareholders of Landic Property as of 28 July 2008 are:

Shareholder list Stoðir Eignarhaldsfélag ehf (former FL Group hf.) 34,58% Ingibjörg Pálmadóttir / 101 Capital / ISP ehf. 16,38% Stapi fjárfestingarfélag ehf. 12,96% RBC Dexia Investor Services Tru/Fons hf. 7,93% Glitnir banki hf./Glitnir Bank Luxembourg 6,79% Landsbanki Íslands hf 5,44% Ic ebank hf. 4,17% Arion safnreikningur 2,98% Fjárfestingarfélagið Máttur ehf. 2,84% SJ1 ehf. 1,42%

Share of 10 largest shareholders 95,49%

Stoðir Eignarhaldsfélag (former FL Group hf.) and Ingibjörg Pálmadóttir (along with her investment companies 101 Capital ehf. and ISP ehf.) own 50,96% of the Company’s total issued share capital. Stoðir Eignarhaldsfélag ehf. is an international investment company and Ingibjörg Pálmadóttir is an experienced professional investor with widely distributed holdings in Icelandic companies. For further information on Stoðir Eignarhaldsfélag see the company’s website www.stodir.is. For further information on Ingibjörg Pálmadóttir, s ee the discussion on the board of directors.

Stapi fjárfestingarfélag ehf. is fully owned by Tómas Hermannsson (TH ehf.).

RBC Dexia Inverstor Services Tru is a security custody service, owned by Landsbanki Luxembourg S.A. Fons hf. owns shares nom. 405.717.327 (7,52%) in Landic Property, which are in custody of RBC Dexia Inverstor Services Tru. Pálmi Haraldsson, ID No. 220160-3789, is the largest shareholder of Fons hf., with a 60% of the total issued share capital. Jóhannes Kristinsson, ID No. 170549-4229, owns 40% of issued shares in Fons hf.

Minority interests are safeguarded by the provisions of Act No. 2/1995, on Limited Liability Companies and the Company’s Articles of Association.

14 LEGAL AND ARBITRATION PROCEEDINGS There have been no governmental, legal or arbitrational proceedings in the last 12 months which may have or have had significant effects on the issuer and/or group’s financial position or profitability.

15 MATERIAL CONTRACTS

The Issuer has not entered into any contracts since its latest published financial information, that are material to the Issuer’s ability to meet its obligation on security holders in respect of the securities being issued.

21 16 SELECTED FINANCIAL INFORMATION

Below are selected financial information from the audited annual accounts for the year ending 31 December 2006 and 2007.

(All amounts in ISK millions)

Profit & Loss Account 2007 2006 Revenue 16,588 6,191 Operating expenses (5,390) (1,281) Value adjustments, investment properties, derivatives and debt, net 6,769 16,212 Operating profit 15,842 20,853 Net financial expenses (11,005) (7,155) Pre-tax profit 4,837 13,698 Income tax (273) (2,303) Profit for the year 2,524 11,395

Cash Flow Cash flows from operating activities 2,202 2,144 Cash flows from investing activities (15,531) (38,942) Cash flows from financing activities 23,982 37,202

Balance Sheet (ISK millions) 2007 2006 Total non-current assets 399,130 151,800 Total current assets 52,945 4,834 Total assets 452,075 156,634 Equity 70,596 22,717 Subordinated loans 4,335 2,303 Deferred tax 15,436 10,136 Long term debt, excluding subordinated loan and deferred tax 263,318 98,546 Current debt, excluding subordinated loan 98,390 22,932

Total equity, sub. loans and liabilities 452,075 156,634

The Company’s accounts for the years ending 31 December 2006 and 2007, respectively, have been audited and the annual accounts for these years have been endorsed without remarks by KPMG Endurskoðun hf., ID No. 590975-0449, Borgartúni 27, Reykjavík, Iceland, and on their behalf Anna Þórðardóttir, a state authorised public accountant. Landic Property’s statutory auditors have neither resigned nor been removed from their positions during the period covered by the historical information. The consolidated financial statements of Landic Property for the year ending 31 December 2006 and 2007 have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and additional Icelandic disclosure requirements for consolidated financial statements of listed companies.

The Company’s account for the years ending 31 December 2006 are in the name of Stodir Real Estate (now Landic Property).

22 16.1. Profit and Loss Account

Revenue Total revenues amounted to ISK 16.6 billion in 2007, against ISK 6.2 billion in the previous year. The income statement includes Landic’s full year operations and Keops’ operation from 3 September 2007. The full impact of the expanded portfolio will lead to significant revenue increase for the Company in 2008.

Earnings Landic Property’s gross profit before valuation adjustments in 2007 totalled ISK 11.2 billion, against ISK 4.9 billion in 2006. Profit after tax totalled ISK 4.6 billion as compared with ISK 11.4 billion in the previous year.

Other income statement items Changes in the value of investment properties totalled ISK6.8 billion compared to ISK 16.2 billion in 2006. The largest part of 2007 value adjustments, ISK 4.3 billion, comes from the Icelandic portfolio, and ISK 1 billion from the Danish portfolio. Keops properties were included at fair value at the day of acquisition so value adjustments to those assets since the day of acquisition are of less significance. Operating expenses totalled ISK 5.4 billion in 2007, against ISK 1.3 billion for the previous year. This increase in cost is due to the increased scale of Landic Property´s operation.

Financial income and expenses Net financial income and expenses amounted to ISK 11.0 billion in 2007 compared to ISK 7.2 billion in 2006. This increase in financial expenses is related to the growth of the company, since it is now financing a considerably larger portfolio than it was in 2006. The impact of foreign exchange rates changed from a loss of ISK 2.1 billion in 2006 to a gain of ISK 1.2 billion in 2007.

Income tax The discontinued operations for 2007 result to Keops Development, which shows a loss of ISK 1.2 billion from September – December 2007.

The company´s tax for the year 2007 totalled ISK 273 million compared to ISK 2.3 billion in 2006. The effective tax rate amounted to 5.6% compared to 16.8% in 2006. This decrease is mainly due to the reduction of Danish corporation tax rate (from 28% to 25%).

16.2. Balance sheet

Assets Landic Property’s total assets amounted to ISK 452.1 billion as of 31 December 2007, an increase of ISK 295.4 billion.

Investment properties totalled ISK 341.5 billion at the end of 2007. This is an increase of ISK 196.8 billion, or 135%, since the beginning of the year. The main reason for this change is the acquisition of Keops and Landsafl increasing Landic Property´s portfolio significantly.

23 The Group’s goodwill amounted to ISK 40.8 billion at the end of 2007 of which ISK 7.9 billion relates to deferred tax. ISK 11.5 billion is allocated to the value of Keops Investment, a business unit mediating properties for investors. The remaining part relates to the investment property arm where synergies and new opportunities have arisen due to a bigger asset base and a more diversified risk profile. The goodwill has been tested for impairment.

Assets classified as held for sale totalled ISK 36.8 billion as of 31 December 2007 and include primarily Keops Development. Cash and cash equivalents increased significantly and amounted to ISK 11.1 billion at the end of 2007.

Equity and liabilities Landic Property´s equity totalled ISK 70.6 billion as of 31 December 2007, and has increased by ISK 47.9 billion since the beginning of the year.

Equity to assets ratio at 31 December 2007 was 15.6%. Together with deferred tax and subordinated loans the Group’s equity amounted to ISK 90.4 billion, representing a ratio to total assets of 20.0% as at 31 December 2007.

On 13 February 2008, Landic Property hf. acquired a number of international property funds from Stoðir Eignarhaldsfélag (former FL Group hf.) which were financed by a subordinated loan of ISK 20.4 billion. Assuming unchanged total assets from 31 December 2007, this improves the ratio (equity + deferred tax + subordinated loans) to total assets to 23.4%.

Landic Property’s total liabilities amounted to ISK 381.5 billion as of 31 December 2007, an increase of ISK 247.5 billion since the beginning of the year. This reflects the significant acquisition made during the year. Included in liabilities are subordinated loans that totalled ISK 4.3 billion at the end of 2007.

Non-current liabilities totalled ISK 280.8 billion at the end of 2007. Included in non-current liabilities is the Group’s deferred tax liability amounting to ISK 15.4 billion at the end of 2007, against ISK 10.1 billion at the beginning of the year. Total current liabilities totalled ISK 100.7 billion at the end of the year compared to ISK 25.2 billion at year end 2006.

16.3 No material adverse change

The Issuer submits that there has not been any material adverse change in the prospects of the Issuer since the date of its latest published financial information.

16.4 Financial or trading position

There have not been any significant changes in the Issuer’s financial or trading position since the end of the last financial period.

24 17 APPENDIX - LANDIC PROPERTY’S ARTICLES OF ASSOCIATION

25