Joint Venture

Berkeley Group Holdings (The) PLC
04 July 2006


            JOINT VENTURE BETWEEN PRUDENTIAL AND THE BERKELEY GROUP



The Prudential Assurance Company Limited ('Prudential') and The Berkeley Group
Holdings plc ('Berkeley') are delighted to announce that they have today agreed
on the establishment of a new joint venture. The new business will trade as St
Edward Homes Limited and will develop major residential and mixed-use
development schemes across the UK.


PRUPIM has facilitated the agreement on behalf of its client Prudential. PRUPIM
will work in conjunction with Berkeley to pursue land and properties for major
redevelopment to deliver sustainable residential, commercial and mixed-use
schemes.


The joint venture's initial focus will be to develop three major residential
schemes in the South East with a land bank of over 2,500 homes.


The arrangement is conditional on St Edward Homes finalising terms to acquire
Prudential's land at GreenPark in Reading and a building in Kensington. Berkeley
will also provide land and properties for the joint venture, which are currently
being identified. The consideration for these sites and the cost of their
subsequent development will be partly funded from initial equity and bank debt
of the joint venture company and partly from profits generated. The acquisition
and pricing of these sites is conditional upon their unencumbered release for
development and the receipt of necessary planning permission. It is PRUPIM and
Berkeley's ambition to commence development activity on the first site in 2007.



Berkeley and Prudential will become shareholders of St Edward Homes Limited,
each owning 50% of the equity. Funding will be through a combination of
shareholder loans and bank funding at an equity to debt ratio of approximately
50:50. The initial equity investment of each shareholder will be £12 million,
which when combined with bank debt, will result in the joint venture having
available funding of approximately £48 million. These funds will be drawn down
to meet the working capital requirements of the joint venture company as they
fall due. Sufficient working capital will be retained in the business to fund
on-going activity with any surplus returned to Berkeley and Prudential as agreed
between them.


The acquisition and development of further sites will be funded from profits
generated and retained by the joint venture company and also from additional
shareholder funding if necessary.


Martin Moore, Managing Director of PRUPIM described the joint venture, St Edward
Homes, as a logical and powerful combination of two companies' strengths and
complementary skills.


'We are hugely excited about the potential for St Edward Homes. Over many years
we have built a substantial land portfolio extending across the UK. Today, we
can bring the fruits of our forward thinking to this partnership and begin to
unleash the tremendous latent value from this portfolio alongside further sites
that the joint venture may acquire. With a clear demand for more homes, a strong
performing residential sector, and a specialist partner, we believe the timing
could not be better for this strategic and powerful combination,' said Moore.


PRUPIM has been undertaking major urban development projects across the retail,
office and industrial sectors since the 1970's.


'This is a major opportunity for us to further expand our development operation
into the highly specialist residential sector. We currently manage over 5
million square feet of commercial projects throughout the UK, however we are
constantly looking to grow and expand our business to produce even higher
returns for our investors. With Berkeley as our long-term partner, I believe we
have created the best possible vehicle for Prudential to enter the exciting
residential sector.'


PRUPIM is one of the leading real estate investment managers in the UK managing
in excess of £17.2 billion of real estate assets for a wide variety of clients.
PRUPIM provides core services and expertise in fund management, asset management
and property management.


Berkeley is a mixed-use urban regenerator operating at the forefront of the land
development industry. With a highly skilled management team, Berkeley combines
the vision and commitment necessary to drive the renaissance of neglected parts
of towns and cities, creating communities which people choose as a destination
for work, for pleasure and for making their home.


Berkeley has historically carried out a number of joint ventures with a wide
range of partners including Land Securities, Development Securities and
Chelsfield and these arrangements are an ongoing part of Berkeley's ordinary
business. Current joint ventures include St James with Thames Water and a number
of joint ventures with Saad Investments.


Commenting on the new joint venture, A W Pidgley, the Group Managing Director of
Berkeley, said: 'We are delighted to be forming this new joint venture, which
from the outset will be driven by a remarkably powerful combination of
complementary skills. Prudential's financial strength and PRUPIM's commercial
development expertise, working in combination with Berkeley's passion and talent
for creating sustainable new communities, is an inspiring prospect and should
ensure an exciting future for St Edward Homes. This is a unique opportunity and
I relish this opportunity to be in a joint venture with one of the most
respected and admired companies in the United Kingdom.'


                                      Ends





Notes to Editors

PRUPIM

PRUPIM is one of the largest property investors in the UK with over £17.2
billion invested in a broad spread of properties across all UK sectors and
overseas (as at 31/12/05). PRUPIM is part of M&G, the investment arm of
Prudential plc in the UK and Europe.


For further information, please contact:

A W Pidgley, Berkeley (01932 868555) Natalie Brooke, PRUPIM (0207 548 6976)

R C Perrins, Berkeley (01932 868555) Martin Moore, PRUPIM (0207 548 6571)



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