Prime Office REIT-AG reported earnings results for the first quarter of 2013. The company reported income of EUR 1.1 million and funds from operations (FFO) in the amount of EUR 1.3 million based on EUR 14.5 million in revenues. The company generated EUR 14.5 million in rental and lease revenues against EUR 18.2 million for the same period in the last year, due to a temporary decline in occupancy after the expiry of the lease in Frankfurt at year-end 2012 and the sale of the property in Hamburg at the end of the year. Accordingly, the rental and lease income over the reporting period declined to EUR 11.8 against EUR 15.3 million for the same period in the last year. Operating income before valuation effects also declined over the first three months of this fiscal year because rental revenues fell to EUR 10.4 million compared to EUR 13.9 million the first quarter of 2012. The operating income before interest and taxes (EBIT) developed accordingly and also amounted to EUR 10.4 against EUR 13.9 million for the same period in the last year. Income per share declined accordingly to EUR 0.02 against EUR 0.11 for the same period in the last year. Funds from operations (FFO) were EUR 1.3 million against EUR 6.5 million for the same period in the last year. FFO per share amounted to EUR 0.02 against EUR 0.13 for the same period in the last year. The company provided earnings guidance for the fiscal year 2013. Looking ahead to the further operating business development, Prime Office confirms its guidance for fiscal year 2013. The board continues to anticipate revenues including operating costs prepayment of between EUR 51 million and EUR 53 million and FFO of between EUR 0 million and EUR 2 million on the back of temporary and refurbishment-driven vacancies.

Prime Office REIT-AG (XTRA:PMO) and OCM German Real Estate Holding AG have started negotiation regarding potential merger of both companies so as to create a listed combined company. If the talks progress positively, the two companies intends to take the necessary steps for a merger including determining the merger exchange ratio and appointing the merger auditor. The talks are a result of the strategic review conducted in 2012 by the Board of Prime Office. In the review, OCM has been identified as an attractive partner for a potential merger. "We examined attractive options to advance Prime Office in the best interest of our stakeholders. We believe that a merger of both companies offers the potential to create a leading German property company with a focus on high-quality office properties with an attractive and highly diversified tenant base across major German cities and metropolitan areas, with over 800 lease contracts and 64 buildings in 29 locations. As of December 31, 2012, we estimate that the combined company would have a gross asset value of about €2.3 billion and the potential to generate net cold rents of about €147 million based," Claus Hermuth, Chief Executive Officer of Prime Office, said. A deal, which will require an approval of the general shareholders' meetings of both companies, is expected to be concluded by the end of 2013, if all the necessary steps and measures are implemented effectively. Berenberg has been appointed to provide financial advice regarding the potential merger.

Prime Office REIT-AG, Q1 2013 Earnings Call, May 08, 2013