Colonia Real Estate AG Decides on Share Buy Back - Primarily Use as Acquisition Currency for Future Strategic Acquisitions of Further Real Estate Portfolios and Target Companies

The executive board of Colonia Real Estate AG (Zeppelinstrasse
4-8, 50667 Cologne, ISIN: DE0006338007, WKN: 633800) decided today to
implement a share buy back programme on the basis of the authorisation
for acquisition of own shares granted by the general meeting according
to Section 71 Para. 1 No. 8 AktG (German Stock Corporation Act).
Within the scope thereof, up to 5.0% of the current share capital of
the company, i.e. up to 1,099,280 own shares shall be acquired during
the period from 24 July 2007 to 30 November 2007. The executive board
can at any time suspend the share redemption programme, and take it up
again in consideration of the legal provisions on insider trading
under the WpHG (German Securities Trade Act).

It is intended to acquire the own shares at the stock exchange.
The purchase price per share (without ancillary acquisition costs) may
not by more than 10% exceed or fall short of the closing price in
XETRA trading at the stock exchange Frankfurt am Main as determined on
the preceding stock trading day for shares of the company with the
same features.

The redeemed shares can be used for all purposes defined in the
authorisation granted by the general meeting, primarily as an
acquisition currency for future strategic acquisitions of further real
estate portfolios and other target companies, in order to consequently
continue the expansion policy. The trading in own shares shall be
excluded.

Explainatory part:

The momentarily correction of the entire listed real estate sector
as well as of Colonia Real Estate opens in the eyes of the executive
board on current share price levels an attractive opportunity to
acquire own shares of the company.

After the successful capital increase in May this year at EUR
28.50, the fundamental data of the company improved considerably
further through additional acquisitions and new asset management
mandates. The increase of the refinancing costs in the ECB zone over
the last months does not affect the current residential portfolio of
almost 19,000 units since the entire portfolio is fully refinanced and
hedged against any interest rate risks at 4.1% p.a. for 5.2 years
(including a convertible bond). The acquisition yield of Colonia Real
Estate AG's current portfolio on the basis of the annual net rental
income is 8.9% at an acquisition price of EUR 461,- per square metre
and is generating a sustainable recurring cash flow. The current fair
market value revaluation of the entire residential portfolio as of 30
June 2007 through an independent international appraiser agency could
lead - through the increased size of the portfolio and the continuos
optimization of the cost effectiveness through economies of scale - in
the current market environment to a significant revelation of hidden
reserves. The results will be released with the half year results on
August 15th 2007. The executive board is expecting a better
transparency and comparability of its own holdings in respect to other
listed real estate companies. Colonia holds solely properties which
are not subject to EK02 taxation. However, the proposal from the
government regarding a change in the EK02 taxation will lead to an
improved supply situation on the residential wholesale market and
therefore offer further very attractive acquisition possibilities.

The strong growing service divisions asset and fund management,
which already contributed in Q2 2007 almost 40% of the recurring
revenues of the company, show a better then expected volume and margin
development. The 'Herkules' portfolio - which is asset managed by
Colonia's subsidiary Resolution - is under preparation to become an
IPO as a G-REIT at the end of 2007 or early 2008.

With regards to the planned corporate tax reform in Germany by
January 1st 2008, Colonia has undergone some detailed due diligence
about the potential effect of this reform on its tax pattern. Thus,
the interest deductibility cap will have no negative impact on future
profits of the company. However, the reduction of the corporate tax
will reduce the companies entire tax rate from a current 26% to at
around 20%.

As a result of the very positive development of the company as an
integrated real estate and asset manager as well as with a positive
outlook for the coming business year, the company sees itself in a
convenient position in the current market environment. In the sense of
shareholder value, the company is using the share price level by
deciding on a share buy back predominantly as an acquisition currency
for the strategic purchase of further real estate portfolios and other
target companies to enhance consistently its further expansion path.

About Colonia Real Estate AG Colonia Real Estate AG (Reuters:
KBUG.DE / Bloomberg: KBU GY) is a listed real estate investment and
management group focusing on the German market. Its integrated
business model consists of three synergistic cornerstones: The
Investment Division concentrates on high-yield residential property
portfolios held for the company's account and opportunistic
co-investments in commercial real estate together with prominent
partners. Resolution GmbH specializes in asset management for the
Group as well as for complex domestic real estate portfolios held by
international investors, whom it also advises on transactions. The
focus is on yield optimization and realizing appreciation potential.
CRE Fonds Management GmbH's core business is the conception, the
marketing and the management of structured investment products such as
closed-end real estate funds for institutional investors and private
clients.

This release is not a prospectus and, to the extent that it may
constitute an advertisement, does not constitute an offer to sell or
the solicitation of an offer to purchase the shares or other
securities of Colonia Real Estate AG.

This news release contains forward-looking statements based on
current assumptions and forecasts made by the management of Colonia
Real Estate AG. Various risks, uncertainties and other factors could
lead to material differences between the actual future results,
financial situation, development or performance of Colonia Real Estate
AG and the estimates given here. Colonia Real Estate AG assumes no
liability whatsoever to update these forward-looking statements or to
conform them to future events or developments.

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Contact: Christoph D. Kauter Head of Corporate Finance and
Investor Relations

Colonia Real Estate AG Zeppelinstr. 4-8 50667 Koln
Telefon: +49 (0)221 71 60 71 0 Fax: +49 (0) 221 71 60 71 99
E-Mail: ir@cre.ag

Sylvia Faber
Citigate Dewe Rogerson GmbH Goethestrasse 26-28 60313
Frankfurt am Main

Tel: 0049-69 90 500 - 100 Fax: 0049-69 90 500 - 101
E-Mail: sylvia.faber@citigatedr.de
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Language: English
Issuer: Colonia Real Estate AG Zeppelinstr. 4 - 8 50667
Koln Deutschland
Phone: +49 221-716071-0
Fax: +49 221-716071-99
E-mail: info@cre.ag
Internet: www.cre.ag
ISIN: DE0006338007
WKN: 633800
Indices: SDAX, GPR 250, MSCI Germany Small Cap Index, FTSE EPRA/
NAREIT, E&G DIMAX Listed: Amtlicher Markt in Berlin, Frankfurt
(Prime Standard), Dusseldorf; Freiverkehr in Hamburg, Munchen,
Stuttgart
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