SFL: First Half 2006 Results

SFL (PARIS:FLY):

-- Profit Attributable to Equity Holders of the Parent: EUR 31.6
million

-- Current Cash Flow (Before Disposal Gains): EUR 40.4 million

-- NAV Per Share (Including Transfer Costs): EUR 53.3

The Board of Directors of Societe Fonciere Lyonnaise (PARIS:FLY),
chaired by Yves Mansion, met on 25 July 2006 to approve the financial
statements for the six months ended 30 June 2006, which show a healthy
level of rental revenues and a sharp rise in NAV..

Results

-- Rental revenues for the period totalled EUR 78.7 million, an
increase of 2.9% compared with EUR 76.4 million for the first
half of 2005.

-- Operating profit came to EUR 45.9 million, an increase of
4.9%.

-- Capital gains on property disposals amounted to EUR 4.1
million compared with EUR 29.2 million in the year-earlier
period. A limited number of properties were sold during the
period, whereas in 2005 substantially all of the disposal
programme was carried out in the first six months.

-- Profit for the period declined to EUR 31.6 million from EUR
59.2 million, primarily reflecting the lower volume of capital
gains.

-- Current cash flow before disposal gains contracted to EUR 40.4
million from EUR 57.1 million, which represented a high basis
of comparison due to the gains realised on sales of treasury
stock and of an equity interest.

Business review

-- The occupancy rate at 30 June 2006 was a high 95.4%.

-- Renovation programmes underway during the period concerned
four properties, all located in the Golden Triangle,
representing nearly 27,000 square meters of office and retail
space. These programmes, which are scheduled for completion in
2007/2008, will increase the underlying value of the
properties, as well as their rental value.

-- In July, three new properties were acquired for a total of
EUR 250 million:
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-- 247-251 rue St Honore, Paris 1: 22,000 square meters, to
be renovated for use as either offices or a luxury hotel

-- 103 rue de Grenelle, Paris 7: 17,000 square meters, to be
renovated for use as offices

-- Issy les Moulineaux: 5,600 square meter office building,
fully let.

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Portfolio value and NAV

-- The estimated market value of the property portfolio at 30
June 2006 was EUR 2,977 million excluding transfer costs, an
increase of 13.8% compared with EUR 2,615 million at 31
December 2005. The estimated replacement value - including
transfer costs - at 30 June 2006 was EUR 3,149 million. The
portfolio continues to comprise mainly office properties in
the prime business districts of Paris, together with a number
of retail properties on the capital's finest shopping streets.

-- At 30 June 2006, the loan-to-value ratio stood at 24.4%.

-- On this basis, at 30 June 2006 SFL's fully diluted NAV per
share including transfer costs stood at EUR 53.3, up 19.5%
compared with EUR 44.6 at 31 December 2005 and 30.6% compared
with EUR 40.8 at 30 June 2005. NAV per share excluding
transfer costs was EUR 49.1 versus EUR 41.3 at 31 December
2005 and EUR 37.8 at 30 June 2005.

Prospect of a change of control

-- The Board of Directors has been informed of the cash offer
made by Spain's Inmocaral for the entire capital of Colonial,
the parent company of SFL. If this offer is successful, it may
trigger a cash offer for the 20.4% of SFL's capital not held
by Colonial. The Board has retained the services of two
investment banks, Calyon and UBS, and the Orrick Rambaud
Martel law firm to act as its advisors in this matter.

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Profile : With an exceptional portfolio of properties valued at some
EUR 3 billion net of transfer costs, essentially located in the Paris
Central Business District, SFL is a preferred vehicle for investors
wishing to invest in the Paris office and retail property market. As
the leading player in this market, the Group is firmly focused on
pro-actively managing high-quality property assets. SFL has elected to
be taxed as an SIIC since 2003.

Stock Market: Eurolist Compartiment A - Euronext Paris ISIN
FR0000033409 - Bloomberg: FLY FP - Reuters : FLYP PA
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