tsche EuroShop AG with positive start into FY 2004

- Sales up 4 %
- Income from investments up 54 %
- Consolidated net income up 18 %
- Free cash flow up 14 %

Hamburg, 25 May 2004 - Deutsche EuroShop AG (ISIN: DE0007480204) looks back on a good Q1 2004. With increased sales and income from investments the higher expenses and weaker net interest income could be more than compensated. The earnings per share increased by 18 % compared with the same period of the previous year.

Sales up 4 %
Sales climbed 4 % year-on-year to Euro 12.6 million. The modernisation measures completed in 2003 at the Rhein-Neckar Zentrum and the conclusion of a large number of rental contracts for the Centro Commerciale Tuscia in Viterbo, Italy contributed to this increase.

Rising income from investments Income from our investees jumped 54 % to Euro 2.2 million, after the shopping centers in Dresden and Kassel generated clearly higher income and our new equity interest in Wroclaw contributed to earnings for the first time.

Increased expenses due to investment At around Euro 3.0 million, other operating expenses were up by just under Euro 1.0 million on the previous year. This was due partly to investment-related expenses of around Euro 260 thousand incurred in relation to the Forum Wetzlar shopping center currently under construction and partly to expenses of Euro 800 thousand resulting from the ongoing renovation of the roof at the Centro Commerciale Friuli in Udine, Italy which will be completed in Q2 2004.
Net interest income weaker At Euro 0.7 million, interest income was down by around Euro 1.0 million due to the high level of investments and the investment of cash and cash equivalents in money market funds. However, the sale of shares in money market funds resulted in price gains of around Euro 0.4 million, which are reported under other operating income and are equivalent to interest income. At Euro 5.1 million, interest expenses were up by around Euro 350 thousand on the previous year, which is solely due to the construction period interest for the Forum Wetzlar shopping center currently under construction.

Consolidated net income up 18 % Overall, this meant that the result from ordinary activities was down by Euro 755 thousand year-on-year. After the deduction of taxes and minority interests, the net income for the period amounted to Euro 450 thousand. This is equivalent to an 18 % rise as against the same period of the previous year.

Outlook
The management board expects a further improvement in the Group's earnings situation. As of the second quarter, the shopping center in the Hungarian city of Pécs, which was opened end of March, will also contribute to this trend. The construction of our investment properties in Hamburg and Wetzlar is progressing as planned. With regard to investments, the management of Deutsche EuroShop is currently considering several projects to expand and optimise the shopping center portfolio. Initial results are expected by the middle of the year. From today's perspective the management board is confident that a dividend of Euro 1.92 per share can be distributed for financial year 2004. This is based on the fact that the distributable free cash flow of Deutsche EuroShop AG increased again by approx. 14 % to Euro 7.1 million in comparison to the prior-year quarter.

Key Group Figures

in Euro million      1 Jan.-31 Mar. 2004  1 Jan.-31 Mar. 2003      Change
Sales                               12.6                 12.1                               +4%
Income from
investments                          2.2                1.4                                +54%
Net interest
expense/income                      -4.4           -3.1                                -44%
Result from
ordinary activities                  2.0                2.8                                -27%
Consol. net profit
for the period                       0.5                 0.4                               +18%
EBITDA *                            11.8             11.2                                +5%
EPS in Euro                         0.03               0.02                              +18%
* incl. investment income
                                 31 Mar. 2004      31 Dec. 2003
Total assets                       983.2                980.7
Equity                               535.5                535.7
Liabilities                          418.4                417.1
Equity ratio                       54.5%              54.6%

Complete report available as download
Both the English and German versions can be downloaded as PDF files on the Internet at http://www.deutsche-euroshop.de/englisch/investor/berichte.php' target='_blank'>http://www.deutsche-euroshop.de/englisch/investor/berichte.php

Deutsche EuroShop - The Shopping Center Company
Deutsche EuroShop AG is Germany's only public company that invests solely in shopping centers. The SDAX-company currently has equity interests in 14 European shopping centers in Germany, France, Hungary, Italy and Polan