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.

Monthly Update – October 2008

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

Buma Square, Krakow, PolandSix new leases have been completed producing additional income of e835,000 p.a. for 5,301 sq m. One new tenant is Sabre Polska, who has taken 4,496 sq m.

Karolinen, Karlstad, Sweden A new lease has been signed for 61 sq m at SEK 91,000 p.a.

Mosse Zentrum, Berlin, GermanyHumboldt University has taken a lease for 130 sq m at e17,160 p.a.

Bayreuth, GermanyLohnsteuerhilfe and Germania have agreed to extend their lease by five years until 2014 at a rent of e36,600 p.a.

Portfolio Activity 1 October to 31 October 2008

Key Facts

Fund Manager Rutley Capital Partners LLP

Launch Date 27 February 2006

Management Fee 2% of adjusted capital

Red. Pref. Share Price (RTY) 15.25p

(as at 31.10.2008)

NAV per Red. Pref. Share 59.9p*

NAV adjusted for Deferred Tax 62.8p*

(as at 30.09.2008)

* unaudited

Germany63%

Sweden16%

Poland11%

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 20 Hanover Square, London W1S 1HZ.

Market Commentary & Investment Outlook

www.rutleycapitalpartners.comwww.rutleyeuropean.com

Country Location City/town % of total assets

1 Sweden Karolinen 2 Karlstad 8.54

2 Poland Buma Square Krakow 8.32

3 Germany Mosse Zentrum II Berlin 8.09

4 Germany Mosse Zentrum I Berlin 4.55

5 Germany Arnulfstrasse Munich 3.66

6 Germany Schildgasse 28-30 Rheinfelden 3.22

7 Germany 50 Kinkeler Strasse Neunkrichen/Saar 3.13

8 Germany 5 Schwabenheimer Kreuznach 2.85

9 Belgium Equinox Building Wemmel 2.59

10 Sweden Bryggaren 12 Karlstadt 2.48

Ten Largest Properties (by % of Gross Asset Value 30 September 2008)

0-2 yrs31%

2-4 yrs30%

4-6 yrs15%

6-8 yrs8%

8+ yrs16%

Lease Expiry/Break Profile

EuropeThe European Commission’s autumn ●

economic forecast suggests that European GDP will remain at a virtual standstill in 2009, before gradually improving in 2010.

According to Markit’s Purchasing Managers ●

Index, business activity within the 15 country Eurozone fell to a 10 year low in November. In Germany, the index slumped to its lowest level since 1993.

Eurozone inflation fell to 3.2% in October, ●

having reached a peak of 4% in the middle of 2008 and is set to fall further into 2009 as energy prices ease and weakening economic performance is reflected in consumer confidence and spending.

Germany

The German market has until recently ●

managed to weather the level of turmoil seen in the likes of Spain, the UK and the US. The government’s intervention in September to rescue Hypo Real Estate and to freeze redemptions of open ended funds reflects a movement in market sentiment.

While there has been a shift in the investment ●

market, the occupational markets have remained stable. Office vacancy levels generally fell in Q3, while demand for retail space continued at the same level.

FranceThe Parisian office market is on course to ●

record one of the highest levels of take-up in its history. An excess of 1.8 million sq m has been let by the end of Q3, with the year end total set to stand somewhere between 2.2 and 2.4 million sq m.

BelgiumOccupier demand in the Brussels office market ●

has remained relatively constant over the course of the year to date. Rental values are holding firm, as has the overall vacancy rate, while the amount of space under construction has started to fall.

The economic climate has been reflected ●

in a cooling of demand for logistics property. However, rental and supply levels remain stable.

PolandRents on prime Warsaw CBD offices have ●

escalated in light of the ongoing lack of supply in the market.

NetherlandsThe economy has performed relatively well ●

over the course of 2008. However, the heavy exposure of the economy to international trade flows will hamper demand as the rate of consumption slows in neighbouring countries.

The All Property total return measured by ●

ROZ/IPD for Q3 2008 was 1.4%, compared to 2.1% in Q2.

SwedenThe negative sentiment in the investment ●

market is in contrast to the continued robust performance of the occupier market. Q3 saw strong levels of take-up in the office sector and headline rental levels were maintained. However, demand in the medium-term is likely to be tempered by the weaker economic performance.