Acquisition

Capital & Regional plc
09 August 2004


                                                                  9 August 2004




                         CAPITAL & REGIONAL PLC:

                    X-LEISURE FUND BUYS BRIGHTON MARINA



Capital & Regional plc, the co-investing property asset manager, today announces
that the X-Leisure Fund has acquired the commercial properties of Brighton
Marina for £65m. The acquisition follows the X-Leisure Fund's recent purchase of
the residual 25% of the 02 Centre, Finchley Road, London.



The gross asset value of the X-Leisure Fund following these deals will stand at
over £593m.  It is the largest leisure property fund in the UK and was created
in March 2004 with X-Leisure, the leisure division of Capital & Regional, as the
property and asset manager and Hermes as the fund manager. Following the two
recent acquisitions, the X-Leisure Fund owns and manages 19 entertainment and
leisure destinations across the UK.



Brighton Marina extends to an area of approximately 20 acres with circa
375,000sq ft of accommodation split between a leisure box element with tenants
such as David Lloyd Health & Fitness, Bowlplex and London Clubs, a new
waterfront development of bars, restaurants and a hotel, and 9,500sq ft of
factory outlet retail.  Retailers represented in the Marina include Calvin
Klein, Reebok, Virgin Cosmetics and Jane Shilton.  The commercial properties
acquired do not include the yachting activities at West Quay and the major
residential development of Residential Courts.



The vendor, Parkridge, will remain as X-Leisure's development partner with a
joint venture development agreement in place to maximise the medium to longer
term development potential of the marina.  The development plan includes up to
1,500 residential units and 250,000 sq ft of additional commercial space.



PY Gerbeau, CEO of X-Leisure, commented:

"We are thrilled to have exchanged contracts on Brighton Marina which is the
first large acquisition by the X-Leisure Fund.  Following the Xscape concept,
this is one of the most exciting leisure schemes, with a huge potential to
become one of the leading leisure/retail, experience-based destinations in the
UK.  We expect to add value through our effective and proven asset management
team.  By working closely with the Parkridge team, we look forward to adding
future developments, further enhancing the consumer experience and ultimately
our asset value."



Alasdair Evans, of Hermes, said:

"We are delighted with the first significant acquisition since our appointment
as fund manager, which we believe will add considerable value to the X-Leisure
Fund".



Montague Evans acted for Parkridge and Ashworth Sibal Welch for X-Leisure.



                                    - ENDS -



For further information:

Capital & Regional plc:
Martin Barber, Chief Executive                 Tel:  [phone]
Polly Farrell - X-Leisure                      Tel:  [phone]


Hermes Property Asset Management:
Alasdair Evans                                 Tel:  [phone]


Hudson sandler
Michael Sandler / James Benjamin               Tel:  [phone]



Notes to Editor:

About Capital & Regional plc

Capital & Regional is the co-investing asset manager which specialises in town
centre shopping centres, out of town retail parks, and urban entertainment
complexes. It founded the Mall and Junction Limited Partnerships in conjunction
with Morley Fund Management.  Its shares are quoted on the London Stock
Exchange.

For further information visit:  www.capreg.com



About X-Leisure

The £593m X-Leisure fund is the largest leisure property fund in the UK and was
founded in March 2004.  It combines the portfolios of the three MWB leisure
funds into one.  C&R is the property and asset manager and holds 10.77% of the
units and has a 15 year management contract.  Hermes Investment Management
Limited is the fund manager.



The X-Leisure fund owns and manages 19 entertainment and leisure destinations
providing 3.4m sq ft of accommodation across the UK attracting more than 45m
visitors annually.



X-Leisure is Capital & Regional's leisure arm and is the property and asset
manager of the X-Leisure fund.  X-Leisure also owns and manages the
award-winning Xscape brand, the Great Northern Warehouse in Manchester, and the
two snow slope businesses in Milton Keynes and Castleford.



For further information visit:  www.x-leisure.co.uk and www.xscape.co.uk





About Hermes

Hermes is a leading pension fund investment manager, independent of any broader
financial services organisation. Hermes' market-leading investment strategy has
for many years been based on the index/specialist approach and is increasingly
being adopted by other large pension funds.  Hermes currently invests
approximately £46bn (as at 30/06/04) on behalf of over 200 clients including
pension funds, insurance companies, government entities and financial
institutions, as well as charities and endowments.  However, Hermes' largest
client is the BT Pension Scheme (BTPS), who as owner of Hermes, gives its
investment management perspective a unique insight and close alignment to the
needs of other long-term investors and pension funds. Some of Hermes' other
major clients include the pensions funds of Royal Mail, RailPen, Sainsburys,
Unilever, Nippon Life (Japan), CalPERS (USA), PGGM (Netherlands), ATP (Denmark)
and over 30 UK Local Authorities.



At the heart of Hermes' offering are seven passively managed index tracking
funds covering the main regions of the world as well as two UK fixed interest
portfolios. These equity funds deliver reliable and accurate tracking, thereby
meeting requirements for value-creation, whilst the actively enhanced index
funds concentrate on a value-based stock selection process to achieve consistent
outperformance against the relevant benchmark. In addition Hermes invests in
index-linked gilts, property and private equity. The investment process seeks to
reveal markets or securities that are under/over performing Hermes' analysis of
fair value.



Through its exposure to index stocks, Hermes has established a broad knowledge
of business sectors which enables it to make high profile investments in direct
private equity, as well as private equity funds. In addition, Hermes operates an
integrated portfolio management and research-based approach to property
investment, ensuring that only high quality properties, which are well located
and highly competitive in their local market places, are targeted for
acquisition. As well as offering segregated investment, it also offers pooled
property investment through the Hermes Property Unit Trust.



Hermes places great emphasis on exercising stewardship rights in all the
companies in which it invests, particularly because it has long-term holdings in
index stocks and is therefore necessarily exposed to under-performing assets. As
a result, it is at the forefront of the corporate governance movement in the UK.
Hermes is the first major investment institution in the world to have
established both UK and European shareholder engagement funds - the Focus Funds.
Having identified companies underperforming their indices, Hermes' intervention
and involvement as long-term shareholders aims to unlock the latent value that
exists within the companies in which it invests.



Hermes has a 20 year history of innovative long-term fund management.
Originally known as PosTel, the in-house manager of the Royal Mail (previously
the Post Office) and British Telecommunications superannuation pension funds,
Hermes was created in 1995 when it became wholly owned by the BT pension scheme.
A continuing aim to generate value for the Royal Mail and BT pension schemes
remains central to Hermes' activities; however, its expertise has attracted
several other major investors from all areas of the economy.





Property

Property Management is a major component of what Hermes offers both BTPS and its
other co-investors. BTPS alone has over 13% of its fund allocated to the asset
class; one of the largest allocations to property in the UK. Hermes has a track
record of being highly innovative and entrepreneurial in the property market as
seen with the hugely successful public to private transaction on MEPC Ltd.
Additionally, the Hermes Property Unit Trust, currently the top performing PUT
in the market is attracting considerable attention from pension scheme
investors.






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