Acquisition

Balfour Beatty PLC
12 February 2008


12 February 2008


 BALFOUR BEATTY AGREES TO ACQUIRE GMH'S MILITARY PPP ACCOMMODATION BUSINESS IN
                          THE US FOR $350 MILLION CASH

 Continuing expansion of US presence with high-quality concession portfolio and
                             support service skills


                               K E Y   P O I N T S

-  Creates, together with Balfour Beatty Construction LLC (formerly Centex
   Construction), a proven, comprehensive, in-house offering, integrating
   construction, support services and financing, to the US military and other US
   markets

-  Secures a reliable, long-term profit and cash flow from a high-quality
   portfolio of PPP concessions in the US

-  Adds an experienced and successful management team to develop our presence in
   the growing US PPP market

-  Takes Balfour Beatty's portfolio of PPP concessions and other infrastructure
   investments to 42, including preferred bidder positions

-  Adds a strong support services capability to our US business mix

-  Immediately earnings enhancing(1)

'The acquisition of GMH's military accommodation business is central to
implementing our US strategy of building a high-quality, domestic US business
similar to our very successful UK model. It adds a major, high-quality PPP
business to our US group in one of our key target market sectors. GMH will be an
excellent springboard into other emerging PPP and support service sectors in the
US market, will immediately enhance earnings* and generate significant value for
our shareholders.'
                                      Ian Tyler, Chief Executive, Balfour Beatty

                                * * * * * * * * *
                                        

 BALFOUR BEATTY AGREES TO ACQUIRE GMH'S MILITARY PPP ACCOMMODATION BUSINESS IN
                          THE US FOR $350 MILLION CASH

 Continuing expansion of US presence with high-quality concession portfolio and
                             support service skills


Acquisition of GMH

Balfour Beatty, the international engineering, construction, investment and
services group, announces today that it has agreed to acquire the military PPP
accommodation business of GMH Communities Trust, the US real estate investment
trust, for a cash consideration of $350 million. GMH is a leader in the military
accommodation PPP concession market, having secured 15 concessions at 42 bases.
Its concessions are executed in partnership with Balfour Beatty Construction
LLC, acquired by Balfour Beatty plc in March 2007.

Commenting on the acquisition today, Balfour Beatty plc Chief Executive, Ian
Tyler, said:

'The acquisition of GMH's military accommodation business is central to
implementing our US strategy of building a high-quality, domestic US business
similar to our very successful UK model. It adds a major, high-quality PPP
business to our US group in one of our key target market sectors. GMH will be an
excellent springboard into other emerging PPP and support service sectors in the
US market, will immediately enhance earnings* and generate significant value for
our shareholders.

'The military accommodation market is firmly established and is based on strong,
long-term relationships between service providers and the US military. Through
Balfour Beatty Construction LLC, we have a strong long-term relationship with
GMH and its senior management team, who share our philosophy of long-term
partnership with the customer. We attach great importance to the skills and
experience of GMH's management team, who will play a key role in the further
development of the business.'

The transaction is conditional upon certain US military division, funder and
regulatory consents. It will be funded from Balfour Beatty's existing cash
resources.

GMH

GMH Military Housing, a leader in its market, is responsible for the
development, renovation, financing, operation and management of military
accommodation projects for the US Department of the Army, US Department of the
Navy and US Department of the Air Force. To date, it has been awarded 15
military accommodation projects (three of which are at preferred bidder stage)
and provides development and property management services for these projects. It
is based in Philadelphia and employs approximately 800 people, 750 of whom are
in on-base support service roles.

GMH's 15 concessions cover 42 bases across the US and approximately 30,000
family housing units, including 15 Army bases, 19 Naval bases and 8 Air Force
bases.

Balfour Beatty Construction LLC, acquired in March 2007, is the principal
supplier to GMH's Military Housing Division, taking responsibility for the
construction of new housing stock. As a result, GMH is already a well-known and
well-respected partner to Balfour Beatty.

Bruce Robinson, the President of GMH Military Housing, and its three Executive
Vice-Presidents in charge of Project and Portfolio Management, Finance and
Accounting and Business Development and Renovations will all join Balfour Beatty
as part of the transaction. Mr Robinson, who joined GMH in 1986, has been
central to the development of the military accommodation business. The Executive
Vice-Presidents, Denise Hubley, Richard Taylor and Christopher Williams, have an
average of over 15 years' service with the company.

The Military Accommodation Market

The US Government's Military Personnel Housing Initiative (MPHI) was introduced
in 1996 to improve the quality of married status accommodation to assist in the
retention and motivation of US military personnel. Under MPHI, the Department of
Defense awards projects to private sector companies to develop, construct,
renovate, update and maintain family accommodation on US military bases over a
50-year term.

Projects are owned jointly by the military and the private sector service
provider, which makes an equity contribution of between 1%-5% of the project's
capital value, the balance being provided by project financing, which is
non-recourse. Income is received in the form of equity returns and development,
management, renovation and asset management fees. The structure of each
concession anticipates additional building construction and fee generation
during the 50-year concession period.

At least 14 military family accommodation projects, involving over 14,000 new
units, have yet to be awarded.

Initial trials, in which GMH is a participant, have taken place to extend the
MPHI model to Unaccompanied Military Personnel Housing, a market which is
expected to become comparable in size to the established programme for military
families and to be rolled out over the next decade.

Performance

In 2006, GMH's military accommodation business had gross assets of $102 million
and profits from operations of $26.8 million, a 15% increase on 2005. In its
most recent quarterly earnings announcement, GMH Communities Trust reported that
its military accommodation business had profits from operations of $24.4 million
for the first nine months of 2007. 2008 and 2009 are expected to yield
significant further earnings growth as new concessions come on stream. The
company's concessions, typically, provide double-digit yields on the equity
invested and its facilities management activities provide a reliable, long-term
support service fee stream.

GMH Military Housing has a successful record of profitable growth over recent
years. The business is well-placed to secure a number of the remaining 14
projects still to be let under the married status military accommodation
programme. The business is also expected to be a key participant in the emerging
market for single status accommodation, for which it has secured two of the
seven single-status pilot projects currently under way.

The US PPP Market

In addition to the PPP military accommodation market, other PPP markets in the
US, most notably for hospitals and schools accommodation, are growing and an
increasing number of states are exploring the potential of PPP procurement for
the extension of their road and rail transport systems. Taken together with the
business being acquired, Balfour Beatty's established strengths in professional
and technical services, building, civil and rail engineering offer the same
integration of delivery, management and financing which has been a key factor of
our growing success in the UK market.

Balfour Beatty in the US

Following the completion of the GMH acquisition, Balfour Beatty's US business
will comprise leading market positions in Public Private Partnerships,
professional and technical service provision to the major building market,
building construction in selected state markets and the California and Texas
civil engineering markets. It is also a nationwide rail contractor, serving the
mass transit, Class 1 and private service markets and a high-quality support
service provider.

                                      ENDS

* Statements as to earnings per share enhancement do not constitute a profit
forecast and should not be interpreted to mean that Balfour Beatty's earnings
per share will necessarily exceed or match those of any prior year.

Enquiries to:

Tim Sharp
Tel: [phone]
www.balfourbeatty.com

                               * * * * * * * * *

THERE WILL BE A BRIEFING FOR ANALYSTS TODAY AT 11.30 AM AT ABN AMRO, 250
BISHOPSGATE, LONDON, EC2.

There will be a live webcast of this presentation on www.balfourbeatty.com and
the slides presented will be available on the website from 11.30 am.

                               * * * * * * * * *

High resolution photographs are available to the media free of charge at
www.newscast.co.uk (tel [phone]).

                               * * * * * * * * *

Citigroup Global Markets Limited acted as exclusive financial adviser to Balfour
Beatty in connection with the transaction. Allen and Overy were US legal
advisers.



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