Final Results - Pre-tax Profit Up 53%

CLS Holdings PLC
14 February 2000


                              CLS HOLDINGS PLC
                 RESULTS FOR THE YEAR ENDED 31 DECEMBER 1999

FINANCIAL HIGHLIGHTS

-    NAV per share up 32.5% to 243.9 pence
-    Profit before tax up 53.0% to £16.9 million (1998: £11.1 million)
-    Investment division profits of £4.6 million (1998: £0.7 million)
-    £36.1 million cash at bank up 24.5%
-    Buy-back during 1999 of 9.6% of shares for £14.3 million
     (1998: 2.6% of shares for £3.6 million)
-    Proposed tender offer buy-back of 1 in 40 shares at a price
     of 185 pence per share

Key statistics 
                         31.12.99      31.12.98
NAV per share             243.9 p       184.1 p        Up 32.5%
FRS 13 adjustment          10.2 p        20.4 p      Down 50.0%
(after tax)
Earnings per share         14.0 p         8.8 p        Up 58.1%
Shares in issue           101,962       112,748       Down 9.6%
(000's)
Capital                     7.5 p       10.0p *      Down 25.5%
Distribution per
share

* includes interim dividend and in addition, an interim tender
offer buy back of shares.

The Group's financial performance is continuing to show strong
growth.

Other financial information 
                          31.12.99     31.12.98
Property portfolio        £499.2 m     £404.7 m        Up 23.4%
Net rental income          £33.7 m      £28.8 m        Up 17.3%
Other property related      £4.9 m       £2.7 m        Up 79.0%
income
Operating profit           £32.2 m      £26.6 m        Up 20.9%
Financial income            £5.7 m       £2.1 m        Up 173.9%
Profit before taxation     £16.9 m      £11.1 m        Up 53.0%
Profit after taxation      £14.8 m      £10.1 m        Up 46.5%
Net asset value           £248.7 m     £207.6 m        Up 19.8%
Cash                       £36.1 m      £29.0 m        Up 24.5%
Gearing                     100.7%        93.0%        Up  8.3%
Interest cover                1.60         1.54        Up 3.9%
                             times        times

BUSINESS HIGHLIGHTS


-    Formation of Investment Division

-    18 January 1999   Hoechst lease surrender for £8.0 million

-    2 March 1999  Acquisition of Colne House, Watford at initial
     yield of 10 per cent

-    Completion of lettings at Elan House, EC4

-    23 June 1999    £34.5 million acquisition of Solna Business Park, Sweden

-    30 June 1999      Aegis lease surrender for £1.85 million

-    Completion of lettings at 230 Blackfriars Road, SE1 to American Express    
    and Medical Defence Union

-    Completion of leisure development at One Leicester Square

-    First major letting at Solna Business Park to the Swedish Post Office of   
    up to SEK14.2  million (£1.0 million) per annum
                                  
                                  
For further information, please contact:

Glyn Hirsch, Chief Executive, CLS Holdings plc          020 7582 7766

Jilly Woolridge/Rebecca Shand, Equity Marketing         020 7242 8005



CHAIRMAN'S STATEMENT

The group enjoyed another successful year and the results show our
continued progress.

The total return to shareholders during the year was 23.6 per cent
(£49.0 million) based on movement in shareholders' funds and share
buy-backs implemented during the year.  The group achieved a  53.0
per  cent  increase  in pre-tax profits to £ 16.9  million.    Net
assets  of  the  group  increased from £207.6  million  to  £248.7
million,  giving a 32.5 per cent increase in net assets per  share to
243.9 pence (1998: 184.1 pence).  At the year end the post-tax FR13
adjustment amounted to 10.2 pence per share, down from  20.4 pence.
Rental income, represented by rents, service  charge  and other
income received from tenants increased by 17.3 per cent  to £33.7
million.  This increase would have been greater but for  the empty
space in the course of refurbishment.  Gearing at the  year end was
100.7 per cent.

The  Company's share price has improved by 23 per cent during 1999
but  still remains at an even greater discount to net asset  value
than  at last year end, despite a strong property market. In these
circumstances your Board continues to believe in the  benefits  of
distributing  cash as capital dividends by way of a  tender  offer
buy-back  in  lieu  of a cash dividend.  The Board  has  therefore
decided to recommend a tender offer buy-back of 1 in 40 shares  at a
price  of  185 pence per share, which will further enhance  net asset
value per share.

During  the year the main achievements in the property field  have
been lease surrenders at Vista Office Centre and New London House,
the successful completion of our refurbishments of 230 Blackfriars
Road  and  One  Leicester  Square, and the  acquisition  of  Solna
Business  Park  in  Stockholm.   A full  account  of  the  group's
property activities appears in the Property Review.

Additionally  £4.6m of our pre-tax profits have been derived  from
our  expanding investment division, as compared with £0.7  million in
1998.  Further details of our investments are set out  in  the
Investment Review.

During  the  year the group increased its shareholding in  Citadel
Holdings  plc  from 12.3 per cent to 17.4 per  cent.   The  strong
performance of that company continues, thus increasing  the  value of
our performance warrants.  These have not been included as  an asset
in our balance sheet.  We made no significant investments in 1999 in
UK property assets apart from the acquisition  of  Colne House,
Watford  at £6.7 million.  Although we have  looked  at  a number of
opportunities we do not believe that the yields at which many
properties  are being sold provide attractive  opportunities for a
significant  increase in investment returns  in  the  near future.
We  have therefore sought to maximise returns  from  our existing
portfolio through active management and new lettings.  At the  year
end only 5.7 per cent  of our UK property portfolio  was unlet.

During  the coming year we will continue to seek further  property
investments  in the office sector both inside and outside  the  UK
which  can offer significant returns to the group.  We are pleased
that  currently  less than 0.9 per cent of our  rental  income  is
derived from retail property.  We also plan to commence three  new
developments in the UK on property we already own, comprising over
100,000  square  feet of predominantly office  use.   We  envisage
further investment in Solna Business Park to increase the lettable
space which we believe will generate considerable additional  rent
and profit.

We  also intend to continue to expand our investments outside  the
property  industry. The combination of stable and increasing  cash
returns  from  our core property activities combined  with  astute
investments in the telecommunications and high technology  sectors
has  produced  attractive returns for shareholders and  the  Board
believes that these will continue.

It  is  in  conjunction  with the development  of  our  investment
business  that  we  are delighted to announce the  appointment  of
Patrik  Granster  to  the  Board as an  additional  non-executive
director.  He  is a founder of Speed Ventures AB,  an  established
Swedish venture fund company, and his knowledge of and contacts in
the Swedish financial market will be of great benefit to this part of
our business.

The  current year has started well, we are close to letting  Drury
Lane and Vista is progressing satisfactorily.

In  September 1998 we invested £0.1 million in shares in Microcosm
and at 31 December 1999 this investment was carried in the balance
sheet  at  cost.   In  January 2000 our shares in  Microcosm  were
exchanged for shares in Conextant Systems (a NASDAQ listed company
with a market capitalisation in excess of US$10 billion) and these
shares have now been sold for £1.6 million.  The profit from  this
transaction will be included in the results for the first half  of
the year ended 31 December 2000.

I  take  this opportunity to thank my fellow Directors, our staff,
professional advisers, bankers and shareholders for their  support
during the year.


FINANCIAL REVIEW

Results   The results for the year have shown substantial growth,
with pre-tax profit amounting to £16.9 million showing an increase of
53.0  per cent over the previous year.  The Balance Sheet  has
continued to strengthen with net asset value increasing  to  243.9
pence  per  share,  an  increase of 32.5  per  cent.  Gearing  has
increased  to  100.7 per cent and cash reserves of  £36.1  million
were held at the balance sheet date.

A  number  of redevelopment and refurbishment projects  have  been
successfully completed during the year, principally One  Leicester
Square  and  230  Blackfriars Road, and  the  revenue  from  these
properties,  together  with  our new  acquisition,  will  underpin
further growth in the Group's core property activities.

During  1999  the Group has developed its investment  division  to
incorporate trading in covered share options and share investments
within  the  IT  and telecommunications sector.  These  activities
have made a contribution to profits of  £4.6 million of which £1.7
million  was  reported in the first half of the year  (1998:  £0.7
million).

In  May  1999  the  Group  increased its shareholding  in  Citadel
Holdings  plc  from  12.3  per  cent  to  17.4  per  cent.   As  a
consequence of its increased influence in this Company, the  Group
has  treated it as an associate company and has included its share of
the  results of Citadel, on a pro-rata basis.  The  Group  has also
included  its share of the results of its joint  venture  in
Teighmore Limited (the company that owns Southwark Towers), from 1
October 1999, in which it has a 25 per cent share of profits.

There  have  been no sales of property during the  year,  in  1998
gains from sale of investment properties and subsidiaries amounted to
£2.6 million.

Net  rental  income    Rental income at £33.7  million  has  been
restated  to  include  the  effect of service  charge  income  and
expenditure,  a  net  expense of £2.4 million.  This  reflects  an
increasing proportion of the portfolio, mainly relating to Swedish
properties, being invoiced at an all inclusive rent.

The  increase in net rental income of £5.0 million is  mainly  the
result of revenue generated by Solna Business Centre in the second
half  and  a full year contribution from the Vnerparken  property
portfolio acquired in September 1998.  The increase also  reflects
the  inclusion of the Group's share of joint venture and associate
company turnover, amounting to £1.2 million.

Other  property related income  Other property related income  of
£4.9  million showed an increase of £2.2 million over the previous
year. The three main elements included a profit of £2.5 million on
the  surrender of a lease at Vista Office Centre, a profit of £0.8
million  on the surrender of a lease at New London House  and  the
management charge to Citadel Holdings plc of £0.8 million.

Administrative expenditure  Administrative expenditure  increased by
£1.4 million to £4.8 million.  The principal reasons for  this
increase were:

-  The inclusion  of Solna Business Centre results in  the  second
   half  and Vnerparken for the full year resulted in an increase in
   administrative expenditure of £0.6 million over the previous year.
   
-  Costs  of  £0.2  million relating to new  computer  systems,
   partly in preparation for year 2000.

-  An  increase in personnel costs of £1.0 million,  reflecting
   staff and directors' bonuses and a strengthening of the management
   team. This included the addition of a number of senior staff  in
   late  1998 and 1999, in the areas of  development, international
   investment  and finance. Of the annual increase in staff  costs,
   £0.2 million was recovered within the management charge to Citadel
   Holdings plc.
  
Non  Recoverable  property  expenses   Non  recoverable  property
expenses amounted to £1.4 million of which £0.5 million related to
properties undergoing refurbishment.

Financial  Costs   Net interest and financial  charges  at  £15.3
million showed a decrease of £2.9 million over net expenditure  in
1998.

Interest receivable and financial income at £5.7 million, included
interest  receivable of £1.6 million, £4.6 million in  respect  of
our  investment  division  and foreign  exchange  losses  of  £0.5
million.   This  is  dealt with in more detail in  our  investment
review.

Interest payable and related charges at £21.0 million (1998: £20.4
million)  included for the first time associate and joint  venture
interest  payable  of £0.6 million.  Also included  were  interest
costs  of  £0.9  in respect of the acquisition of  Solna  Business
Park.  During the year a number of loans were refinanced  and  the
related  legal and arrangement fees are being amortised  over  the
duration  of  the loans. The overall reduction in  the  base  rate
during 1999 and the low funding cost for the Solna acquisition was
reflected in the average cost of borrowing falling to 7.5 per cent at
31  December 1999 (1998: 8.8 per cent).  The average  cost  of
borrowing for the UK portion of our debt was 8.5 per cent and  5.8
per cent for the international element.

A substantial development programme for a number of properties has
been  undertaken  during the year, principally  at  One  Leicester
Square,  230  Blackfriars Road and Vista Office Centre.  This  has
resulted  in  interest  amounting to £  1.1  million  having  been
incurred  at  One  Leicester Square and 230 Blackfriars  Road  for
which  minimal rental income was recognised during the first  nine
months  of  the year.  The interest has been expensed through  the
profit and loss account as it was incurred.  Financial costs  also
include  the depreciation of interest rate caps amounting to  £0.8
million.

Taxation    The  Group's  taxation  charge  is  maintained  at  a
relatively  low  rate as a result of substantial  corporation  tax
losses  brought  forward  in  some  subsidiaries  and  significant
capital  allowances  on  many of the  Group's  properties.   These
factors  should  continue to benefit the Group  in  the  immediate
future.

The  Group  has  made a voluntary tax payment of £2.0  million  in
order to utilise surplus ACT. The utilisation of ACT increases the
tax  losses  that  are available to be offset against  future  tax
liabilities.


Financial  Results  by Location and sector  The  results  of  the
Group have been analysed by location and main business activity as
set out below:

 
                                  Property    Property       Investment
                         Total     London    International     Division
                           £m        £m          £m              £m

Turnover (excluding       
 associate / JV)           37.4      31.7        5.7             
Operating expenses         (6.2)     (5.0)      (1.2)
Operating profit           31.2      26.7        4.5
Associate  / JV operating   
profit                      1.0       0.2        0.8
Treasury operations         4.6                                  4.6
Net  interest payable and           
 related charges          (19.9     (16.7)      (3.2)
                                  
Profit on ordinary                            
 activities before tax     16.9      10.2        2.1             4.6


Investment  Properties   The investment property  assets  of  the
group,  including plant and machinery, have increased by 23.4  per
cent  per  cent to £499.8 million (1998: £405.0 million).   During
the  year  the quality of the portfolio was substantially improved
through  refurbishment  and  redevelopment,  the  costs  of  which
amounted to £14.0 million.

Annualised rent at 31 December 1999 was £37.7 million (1998: £30.3
million) equating to a yield of 7.6 per cent (1998: 7.5 per cent).

An  analysis  of  the location of investment property  assets  and
related loans is set out below:


                         Balance                  Total
                          Sheet       Other      Property

1999                       £m          £m           £m          %

Investment Properties      499.8                    499.8    100%
Loan                      (286.6)                  (286.6)   100%
Other                       35.5       35.5

Equity Investment          248.7       35.5         213.2    100%

Equity as a Percentage
 of Investment                                       42.7%

                           £m          £m            £m

Opening Equity             207.6       24.9         182.7
Increase during 1999        41.1       10.6          30.5

Closing equity 1999        248.7       35.5         213.2


                          London              International
                         Property               Property
                            £m         %           £m            %

Investment Properties       398.1    79.7%          101.7      20.3%
Loan                       (224.1)   78.2%          (62.5)     21.8%
Other 

Equity Investment           174.0    81.6%           39.2      18.4% 

Equity as a Percentage
 of Investment               43.7%                   38.5%  

                              £m                    £m            

Opening Equity              173.3                     9.4              
Increase during 1999          0.7                    29.8          

Closing equity 1999         174.0                    39.2            

 
The increase in equity for London properties of £0.7 million would
have  been substantially higher were it not for the fact  that  we
have extracted equity by way of refinancing some properties during
the  year.   This has been utilised within investments  and  other
assets.

Debt  Structure Financial instruments are held  by  the  Group
principally  to finance holdings of investment properties  and  to
manage   interest  and  exchange  rate  risk.    This   has   been
accomplished  by  borrowing  in local  currencies  from  reputable
lending  institutions,  the  purchase  of  interest  rate  hedging
instruments  and securing fixed rate borrowing arrangements.   The
Group has thereby hedged all of its interest rate exposure.

In addition, various other financial instruments have arisen  in
the normal course of business and the active management of Group's
treasury activities.

The  activities  of  the Group are mainly financed  through  share
capital  and  reserves  and  long term loans,  which  are  secured
against the properties to which they relate.

The Group has continued to pursue a financial strategy in relation to
its  London based portfolio to raise floating rate  long  term loans
linked to interest rate caps.  Caps are normally  purchased on  a
medium term basis with interest capped at an average rate of 7.6  per
cent in order to provide protection against  a  rise  in interest
rates.

International property acquisitions have been financed  through  a
combination  of long term fixed rate loans at an average  interest
rate  of  6.1  per  cent and floating rate for which  the  average
interest charge in 1999 was 4.75 per cent.  In addition, the Group
entered into forward foreign exchange contracts in order to  hedge
its foreign currency translation exposure.

The  net  borrowings of the Group at 31 December 1999 were  £246.2
million,  an  increase of £56.4 million over  the  previous  year,
reflecting  the  Group's active refurbishment  programme  and  the
acquisition of new properties.

Of  the  net  debt at 31 December 1999, £107.4 million  (45.6  per
cent) represented fixed rate loans.

Non-interest  bearing debt amounted to £23.1 million (1998:  £19.5
million).

The  Group  has adopted the requirements of FRS13, which addresses
among  other  things, disclosure in relation  to  derivatives  and
other financial instruments.  If our loans were held at fair value
then  the  Group's fixed rate debt at the year  end  would  be  in
excess  of  book  value  by  an amount  of  £14.9  million  (1998:
£33.2million) which net of tax at 30 per cent  (1998: 31 per cent)
equates  to  £10.4  million (1998: £23  million).   A  substantial
amount  of  this  is  attributable to one long-term  loan  secured
against  a  property  with government covenanted  income  for  the
period  of  the loan which is sufficient (without any increase  in
rent   over  the  term  of  the  lease)  to  cover  our   interest
obligations.

The  contracted future cash flows from the properties securing the
loans  are  sufficient  to  meet all  interest  and  ongoing  loan
repayment  obligations. Only £11.7 million (4.0 per cent)  of  the
Group's  total debt of £286.5 million matures within the  next  12
months  with  £117.8 million (41.1 per cent) maturing  after  five
years.

At  31  December 1999, £62.5 million (61.5 per cent)  of  overseas
asset  value  was  financed by local currency  borrowings.   These
principally  related to the acquisition of Vnerparken  and  Solna
Business Centre.

Distribution   At the half year the Company stated its  intention to
recommend a distribution to shareholders by way  of  a  tender offer
buy-back  in lieu of an interim dividend.  This  was  fully taken up
in November 1999.

With  the current share price remaining at a considerable discount to
net asset value, your Board is proposing a further tender offer buy-
back of shares in lieu of paying a cash dividend, on the basis of  1
in 40 at a price of 185 pence per share.  This will enhance net
asset  value per share and is equivalent in cash terms  to  a final
dividend  per  share  of  4.625  pence,  yielding  a  total
distribution  in cash terms of 7.44 pence per share for  the  year
(1998: 10.0 pence).  In 1998 we were one of the first UK companies to
propose  a  tender  offer  buy-back  of  shares.   This   was
implemented in addition to the 1998 interim dividend.

At  31  December  1998 there were 112,747,693 ordinary  shares  in
issue.  Since that date the Company has purchased 5,650,907 shares in
the market for cancellation and completed the 1998 year end and 1999
interim tender offer buy-backs of 5,192,218 shares.  This has
involved a total cash expenditure of £14.3.  The current number of
shares  in  issue at today's date is 101,962,238  and  should  the
current  tender offer buy back be fully taken up,  the  number  of
shares  in  issue  would  be  further  reduced  by  2,549,066   to
99,413,172.

Corporate  Structure  The strategy has been to continue  for  the
most   part,   to  hold  individual  properties  within   separate
subsidiary companies, each with one loan on a non-recourse basis.

Year  2000  During the year ended 31 December 1999 the Group made
considerable efforts to ensure that neither the systems  operating
within  its properties nor its domestic computer systems would  be
adversely affected by the millennium date change.  No issues  have
been noted to date.

INVESTMENT REVIEW

We  commenced investing outside real property in January 1998. Our
initial objective was to enhance cash returns on the Group's  free
cash  resources  by  using  the Board's investment  expertise  and
knowledge  of  the high technology and internet  industry.   Since
then  the Board's contacts have enabled the Group to make a series of
investments in businesses in this field prior to,  or  at  the time
of,  flotation, with a particular emphasis  on  the  Swedish market.

Our  investments have produced attractive returns to shareholders. In
1998 our investment division made profits of £0.7 million;  in 1999
these  profits increased to £4.6 million  (£1.7  million  of which
was reported in the first half).

Our   investments are held in the balance sheet at  the  lower  of
cost  or  net realisable value. At 31 December  1999 this amounted to
£4.3  million. The Directors believe that the market value  of these
investments  is  significantly  higher  than  this  figure. Indeed,
already this year we have made a profit of £1.5 million on the
disposal of our investment  in Microcosm  Communications  Ltd which
cost £0.1 million and was held at the year end at cost. This profit
will  be  included in our results for the year  ending  31 December
2000.

We  have  a  management team with experience  in  these  types  of
investments  and  have  formed an Investment Committee  comprising
Sten  Mrtstedt, Glyn Hirsch, Keith Harris and Patrik  Granster  to
advise on and to approve significant non-property investments.

Sten Mrtstedt has had thirty years' experience of stock market and
capital  management;  prior to joining CLS  Glyn  Hirsch  was  for
eleven  years  a  corporate finance director at  Phillips  &  Drew
(later  UBS Limited) and is a non-executive director of  Liontrust
Asset  Management plc and Glotel plc; and Keith Harris  was  Chief
Executive  of the Investment Banking Division of HSBC  until  last
year  and  is currently the Chairman of Sports Internet Group  plc
and  Chairman  elect  of  Talisman House plc.   Patrik  Granster's
experience is set out in the Chairman's Statement.

Some of our key investments are listed below:

Listed Companies      Country

*  Autofill           Sweden    - Automated car refuelling
*  Cell Networks      Sweden    - Provider of strategy, design and
                                  technical services related to 
                                  e-business solutions
*  Cyber Com          Sweden    - IT consultancy focusing on
                                  integration between core back 
                                  office systems and new front office 
                                  e-commerce systems
*  Effnet             Sweden    - Develops and sells high speed
                                  routers and firewalls
*  Hagstrmer &        Sweden    - Swedish stockbroker with technology
   Qviberg                        specialisation
   Fondkommission
*  Iquity Systems     Sweden    - Development and licensing of systems
                                  solutions and business concepts for
                                  communication via telephony and the
                                  internet
*  M2S                Sweden    - Interactive IT training
*  Novestra           Sweden    - Invests in smaller Nordic IT and e-
                                  commerce companies with high
                                  potential for growth
*  PC Express         Sweden    - Sales and support for Internet PC
                                  sales
*  Proffice           Sweden    - Manpower
*  Pronyx             Sweden    - IT consultancy specialising in
                                  production processes
*  Readsoft           Sweden    - Software company specialising in
                                  automated data capture solutions
*  Sectra             Sweden    - Medical imaging, security and
                                  wireless communications
*  Softronic          Sweden    - Insurance industry technology
                                  management system
*  Spray Ventures     Sweden    - Swedish supplier of low cost
                                  internet access
*  Utfors             Sweden    - Aims to deliver the next generation
                                  of full suite IP based high speed
                                  services and telephone
                                 
Unlisted Companies    Country

*  Artisan            UK        - Developing software tools to aid
   Software Tools                 development of technical systems
*  BIW.COM            UK        - Building information over the
                                  internet
*  Breakertech        UK        - Protection of digitally distributed
   Technologies                    context
*  Easy Travel        Sweden    - Internet system selling travel
                                  tickets
*  Eighteen           UK        - Golf product retailing  over the
   Global                         internet
*  Gecko Software     UK        - Development of software build to
                                  function in conjunction with
                                  existing major Management Framework
                                  Platform providers - Cabletron.
*  Mactive            Sweden    - Software packages for efficient
                                  production of sale and distribution
                                  of paper based and digital
                                  publications.
*  Microcosm          UK        - Fibre-optics
   Communications
*  Nordic Sensor      Sweden    - Biotechnology - electronic smell
   Technology                     detection and electronic tongue, for
                                  quality control purposes
*  Power Channel      UK        - Access providers for internet via TV
*  YAC.COM            UK        - Voice, e-mail and fax forwarding
                                  service
*  Yellowrent.com     Sweden    - Internet residential letting
                                  provider


PROPERTY REVIEW

Introduction  During 1999 we have continued to enhance our portfolio
through strategic refurbishment and acquisition.

At  the  Year End the portfolio comprises 44 buildings  which  are
predominantly offices, totalling 341,099 sq.m. (3,696,603  sq.ft.) of
which 90 per cent  totalling 306,760 sq.m. (3,302,000  sq.ft.) is
let  or  pre-let. Our annualised net rental  income  currently totals
£37.7 million per annum and this produces a 7.6  per  cent yield  on
the portfolio of £ 499.2 million.  Approximately  £397.5 million
(79.6 per cent) is located in the UK and £101.7 million (20.4  per cent)
is in Sweden and Germany.

Strategy  We continue to target above average returns on equity
whilst exposing our shareholders to lower than average risk.

Portfolio  Change   The London market strengthened  further  this
year  with  competitive demand increasing in both the occupational
and  investment markets. Recent interest rate increases  have  not
had any perceptible impact on confidence.

In  the  face of increasing rents and falling yields we  have  not
found  any reason to dispose of any properties but have researched
numerous acquisitions.

In  March  we  bought Colne House, Watford for £6.4 million  which
showed  an  initial yield of 10 per cent after costs.   The  2,381
sq.m.  (25,629 sq.ft.) building is let in its entirety to  Hitachi
Europe  Ltd. for a term expiring in 2010.  The entire property  is
sublet  to  a subsidiary of Cable & Wireless plc thereby  offering
active management possibilities.

The  major  acquisition of the year was the purchase  of  the  now
renamed Solna Business Park in North Stockholm. This property,  on a
12.9  acre site, is located in between the city centre and  the
airport and totals 112,900 sq.m. (1.215 million sq.ft.) of office,
distribution   and  warehouse  accommodation  in   four   adjacent
buildings.  At  purchase the net income totalled £2.1million  p.a.
(SEK  28.4  million) and on the total acquisition price  of  £34.3
million  (SEK 463 million) shows a net initial yield  of  6.1  per
cent  reflecting the fact that approximately 30,000 sq. m of space
was  un-let. Since acquisition we have agreed a street improvement
scheme  with the local authority and we have announced the letting of
8,295  sq.m.  (96,071 sq.ft.) to the  Posten  Sverige  AB  (IT
department  of the Swedish Post Office)  increasing  the  rent  by
£0.7 million per annum (SEK 9.7 million).

We  have  advanced  plans for this complex over the  coming  years
which  will  eventually  include the conversion  of  most  of  the
industrial space to offices and planning permitting, an additional
floor,  which  could  provide  a  further  18,618  sq.m.  (200,000
sq.ft.).  We hope to achieve this in one of the buildings  in  the
first  quarter  of  2000.  Our  goal, through  active  management,
environmental improvement and tenant relationships, is to increase
the rent from £4.0 million per annum to approximately £8.9 million
per annum. (SEK122.6 million).

In  October  we purchased a small freehold office in King  Street,
Hammersmith adjacent to one of our serviced offices, London House.
This 1,895 sq.m. (20,399 sq.ft.) building is currently let at £0.3
million p.a. and shows a net initial yield of 9.8 per cent. In the
medium  term  it provides us with the opportunity  to  expand  the
Business  Centre or to undertake a complete redevelopment  of  the
site should this be the more profitable solution.

Portfolio Management  Over the last year we have agreed a  number of
rent  reviews  ahead of expectations to  increase  the  rental income
by £0.3 million p.a.. We have moved several tenants within our
portfolio of buildings to facilitate our refurbishment plans.
Our  refurbishment  focus  this year has  been  at  One  Leicester
Square, Vista Office Centre in Hounslow, 230 Blackfriars Road  and
Coventry House (near Piccadilly Circus).

Leicester  Square 2,689 sq.m. (28,946 sq.ft.) is now complete  and
fully let. The majority of the property now comprises a bar, club,
restaurant and nightclub, operated by the Big Beat Group  Limited. It
is  widely considered to be the most innovative and attractive night-
spot in London.

The  refurbishment  of 230 Blackfriars Road  5,604  sq.m.  (60,319
sq.ft.)  to a full city specification has also been completed  and
fully let to American Express and the Medical Defence Union.

These  two developments will increase the portfolio rent  by  £3.7
million p.a. on an annualised basis.

The  first  phase  of  the  Vista refurbishment  is  complete  and
comprised  a  new reception hall, a state of the art  gym,  a  new
restaurant, a sports multi court and 966 sq.m. (10,400 sq.ft.)  of
the  vacant office accommodation. Phase 2 is now underway and this
includes   a  20  metre indoor swimming pool. Upon  completion  of
these  works  this  property will offer  an  attractive  range  of
facilities to tenants.

Since  taking the surrender from Hoechst we have let  4,278  sq.m.
(46,050  sq.ft.)  at a rent of £0.7 million  p.a.   We  have  also
converted  one  of  the  floors into a Business  Centre  which  is
approximately 50 per cent occupied and this will be expanded  once
occupation reaches 80 per cent.

Letting  of the upgraded accommodation has commenced and  we  hope
that  by  the end of 2000 a rental increase of  £0.3 million  p.a.
should  be achieved after a further investment of £0.5 million  on
two  floors. This follows the surrender of the occupational  lease on
the  building  in  1998 for £8.0 million as  reported  at  the
interim stage.

We  expect  that  the refurbishment of 17 apartments  at  Coventry
House will be finished during 2000.
These will be made available to let.

During   1999  we  let  a  further  6,163  sq.m.  (66,348  sq.ft.)
throughout the portfolio following minor refurbishment to generate an
additional annualised income of £1.0 million p.a..

We  have  Business Centres in four locations now, totalling  6,474
sq.m.  (69,686  sq.ft.). Gross revenues total  £1.2  million   per
annum and we are actively appraising suitable acquisitions.

1999  has been an active year. We have invested £ 14.0 million  in
our refurbishment programme in the UK and have increased rents by £
3.7 million per annum.  At this stage we anticipate investing up to
an  additional £21 million in the properties at  Solna  and  a
further  £3.7  million on the UK portfolio and we are  considering
extending a number of our buildings this year if planning  consent
can  be  achieved.  This expenditure should  result  in  a  rental
increase  of  £4.9 million per annum in Solna and a  further  £0.5
million p.a. in the UK.



Set out below is an analysis of the portfolio:


                                                            Yield
                                                          based on
                       Area        Area     Year End     receivable
                       sq.m.      sq.ft.   Book Value       rent
Property              (000's)    (000's)       £m             %

Inernational           173.7    1,895.1         101.7          8.06

London Property
let > 10 years          58.0      624.7         186.9          7.01

London Property
let 5-10 years          53.1      571.6         122.0          7.47

London Property
let < 5 years           38.9      418.7          56.3         10.47

Referbishment
Projects                17.4      186.9          32.3          4.43

Totals                 341.1    3,697.0         499.2          7.55


                                                               Yield
                                      Rent                    based on
                                   Contracted       ERV      receivable
                     Receivable      Not yet     of unlet      rent +
                        Rent       receivable      space     potential
Property Type            £m            £m           £m         rents
                                                                 %

Inernational                8.2           0.7         4.9        *11.25

London Property
let > 10 years             13.1           1.7           -          7.92

London Property
let 5-10 years              9.1           0.2         0.8          8.28

London Property
let < 5 years               5.9             -         0.1         10.66

Referbishment
Projects                    1.4           0.2         1.6         *8.89

Totals                     37.7           2.8         7.4         *9.14



  
The  above  table shows the categories of assets we  own  and  the
future potential available from new lettings and refurbishments

*  Yields  based on receivable rent and potential rents have  been
calculated  on  the  assumption that year  end  book  values  will
increase by anticipated refurbishment expenditure of £21.0 million
for   international  assets  and  £3.7  million  in   respect   of
refurbishment projects.


Consolidated Profit and Loss Account...
for the year ended 31 December 1999
                                                       1999       1998
                                           Notes       £000       £000
                                              

Net rental income (including associates &           
 joint ventures)                                     33,732     28,758
Less: Joint venture                                    (190)         -
      Associate                                      (1,047)         -
                                                     32,495     28,758

Other property related                                4,907      2,741
income
                                                     37,402     31,499

Administrative expenses                    2,3       (4,791)    (3,397)
Net property expenses                                (1,427)    (1,460)
                                                     (6,218)    (4,857)
Group Operating Profit                               31,184     26,642



Share of joint ventures' operating profit               184         -
Share of associates' operating profit                   837         -
                                                     
Operating Profit including joint ventures            32,205    26,642
and associates

Gains from sale of                                        -       465
subsidiary
Gains from sale of investment property                    -     2,131

Profit on Ordinary Activities Before                 32,205    29,238
Interest

Interest receivable and financial income:
   Group                                              5,675     2,080
   Joint Venture                                          -         -
   Associate                                             23         -

Interest payable and related charges:       4
   Group                                            (20,373)  (20,264)
                                                        
   Joint Venture                                       (173)        -
   Associate                                           (444)        -

Profit on Ordinary Activities Before        3,       16,913    11,054
Taxation                                    6

Tax on Profit on ordinary activities:




   Group                                             (2,121)     (961)
   Joint Venture                                          -         -
   Associate                                             (4)        -

Profit For The Financial                    9        14,788    10,093
Year

Dividends                                   10            -    (3,406)

Retained Profit For The                     23       14,788     6,687
Year

Basic Earnings per Share                    11         14.0p      8.8p

Diluted Earnings per                        11         14.0p      8.8p
Share



Consolidated Balance Sheet...
at 31 December 1999
                                                       1999       1998
                                          Notes        £000       £000
                                            

Fixed Assets
Tangible assets                            12       499,847    404,966
Investments:                               13
Interest in joint
venture:
   Share of gross                                     9,856          -
assets
   Share of gross                                    (9,165)         -
liabilities
                                                        691          -
Interest in associate                                 6,631          -
Other  Investments                                      391      4,435
                                                    507,560    409,401
Current Assets
Stocks    - trading                        14             -         83
properties
Debtors - amounts falling due after more   15         2,952      2,597
than one year
Debtors - amounts falling due within one   15         5,754      4,735
year
Investments                                           4,326      3,217
Cash at bank and in hand                             36,072     28,975

                                                     49,104     39,607
Creditors: amounts falling due within one  17       (33,984)   (29,764)
year                                                                

Net Current Assets                                   15,120      9,843

Total Assets Less Current Liabilities               522,680    419,244

Creditors: amounts falling due after more
than one year
Bank and Other Loans                       18      (273,962)  (211,674)
                                                                  

Net Assets                                          248,718    207,570
Capital and Reserves
Called up share capital                    21        25,491     28,187
Share premium account                      23        38,047     49,211
Revaluation reserve                        23       117,848     80,707
Capital Redemption                         23         3,460        723
Reserve
Other reserves                             23        18,977     19,010
Profit and loss account                    23        44,895     29,732

Total Equity Shareholders' Funds                    248,718    207,570


Consolidated Cash Flow Statement...
for the year ended 31 December 1999
                                      Notes            1999       1998
                                                       £000       £000

 Net cash inflow from operating         24           37,905     28,389
activities


Returns on investments and
servicing of finance
    Interest received                                 5,978      2,020
    Interest paid                                   (19,295)   (18,730)
    Interest rate caps purchased                       (925)       (51)
Net cash outflow from returns on
investments and servicing of finance                (14,242)   (16,761)
                                                       
Taxation                                             (3,344)      (899)
                                                         
Capital expenditure and financial
investment
    Purchase and enhancement of                     (53,970)   (51,352)
    properties                                          
    Sale of investment properties                         -     41,392
    Disposal of other fixed                              17         53
    assets
    Purchase of other fixed                            (913)     (296)
    assets
    Purchase of own                                 (14,695)   (3,614)
    shares                                             

 Net cash outflow for capital expenditure and
financial investment                                (69,561)  (13,817)
                                                        
                                                        
 Acquisitions and disposals
    Investment in associate                          (2,072)        -
    undertaking                                         
    Sale of subsidiary undertaking                        -     2,803

 Equity dividends                                         -    (3,517)
paid                                                             

 Net cash outflow before  use of liquid resources   (51,314)   (3,802)
and financing                                           

 Management of liquid resources
    Cash  released / (placed) on                      4,824   (10,324)
    short term deposits                                         
    Current asset                                    (1,790)   (1,576)
    investments                                          
                              Financing
    Issue of ordinary share capital                     162         -
    Expenses paid in connection with                     -         (9)
    share issue
   New loans                                        101,916     51,733
                                                         
    Repayment of                                    (41,877)   (36,310)

    loans                                               

 Net cash inflow from financing                      60,201     15,414

 Increase / (Decrease)  in cash          25          11,921       (288)

                                  

                                  

Statement of Total Recognised Gains & Losses.
for the year ended 31 December 1999
                                                      1999       1998
                                                      £000       £000

Profit for the financial                            14,788     10,093
year

Unrealised surplus on revaluation of                41,404     19,478
properties
Currency translation differences on foreign           (509)       118
currency net investments


Other recognised gains relating to the              40,895     19,596
year

Total gains and losses recognised since             55,683     29,689
last annual report


Reconciliation of Historical Cost Profits &
Losses.
For the year ended 31 December 1999
                                                      1999       1998
                                                      £000       £000

Profit for the financial year                       14,788     10,093

Realisation of property revaluation gains and        4,050      2,476
losses of previous years

Historical cost profit for the financial            18,838     12,569
year


Reconciliation of Movements in Shareholders' Funds.
for the year ended 31 December 1999
                                                     1999        1998
                                                     £000        £000

Profit for the financial                           14,788      10,093
year
Dividends                                               -      (3,406)
                                                                 
                                                   14,788       6,687
Other recognised gains relating to the             40,895      19,596
year
New share capital issued                              162       3,787
Purchase of own shares                            (14,468)     (3,614)
                                                                 
Expenses of share issue/purchase of own              (229)         (9)
shares

Net additions to                                   41,148      26,447
shareholders' funds

Opening shareholders' funds                       207,570     181,123
                                                                 

Closing shareholders' funds                       248,718     207,570