The company said the completion of asset management initiatives, notably in Kaiserslautern, had partly offset market declines.
But it said the polarisation of investor demand on prime assets and the lack of debt financing for secondary properties continues to have a negative effect on the value of the portfolio, particularly in weaker markets such as Spain.
The valuations are provided by the independent valuer (CBRE) in accordance with the Royal Institution of Chartered Surveyors appraisal and valuation standards.
The company's loan-to-value as at 31 December is 68.7% (30 June 2012: 67.7%) , the banking LTV remains at 67.4% until it is next tested on 20 March.
This is above the 65% threshold over which the cash sweep operates and below the maximum LTV covenant of 75%.
As at 31 December the all-in cost of debt financing is 542bps, representing a bank loan margin of 275bps and a weighted average swap rate of 267bps.
As at 31 December 2012 the value of the interest-rate derivatives was a liability of Â£4.3m, representing a decrease in the liability since 31 December 2011 (Â£6.9m).
Over the course of the year, Â£4.4m has been deployed to reduce the group's foreign-exchange capital hedge contract.
The capital hedge is now to exchange â‚¬86.7m for Â£58.5m in June 2014. The income hedge remains unchanged to exchange â‚¬5.0m to Â£3.7m on a quarterly basis until June 2014. The total FX contract represents a liability of Â£15.0m as at 31 December 2012, a decrease of Â£10.6m from 31 December 2011.
The board intends to continue reducing the capital hedge on a quarterly basis.
At 8:31am: [LON:ERET] share price was +2.25p at 97p
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