Development funding

Derwent Valley Holdings PLC
06 September 2005



DERWENT VALLEY HOLDINGS PLC
Paddington office development funding and a West End freehold acquisition.

Derwent Valley London Limited ("DVL"), a subsidiary of Derwent Valley Holdings
Plc, the specialist Central London property investment and development group,
has entered into a conditional funding agreement with Prudential for the 105,000
sq ft (9,750 m2) redevelopment of Eastbourne Terrace, Paddington, W2.  This will
replace Telstar House, the 89,400 sq ft (8,305 m2) building severely damaged by
fire in 2003.

Under the agreement contracts have been exchanged whereby Prudential will
acquire the freehold site from DVL for £15.53 million and provide the
development funding.  Demolition of the existing building has commenced and
completion of the scheme is scheduled for autumn 2007.  DVL will manage the
development process and has the potential to participate in any development
profits realised upon letting of the scheme.

At the same time, Derwent Valley Central Limited ("DVC"), also a subsidiary of
Derwent Valley Holdings Plc, has exchanged conditional contracts with Prudential
to acquire the freehold of 25 Savile Row, Mayfair, W1, for £5 million. DVC hold
a 48-year interest in the 41,715 sq ft (3,875 m2) office building, at a fixed
ground rent of £4,000 per annum.

John Burns, Managing Director of Derwent Valley Holdings Plc, commented:

"With a substantial pipeline of schemes in the portfolio this is an opportunity
for us to spread our risk, while retaining the development role in this
important project.  The Savile Row acquisition will allow both parties to
release substantial marriage value".

Russell Bradman Director: Investment of Prudential commented:

"We look forward to working with Derwent Valley Holdings on this exciting
project, which will be the next new building in Paddington, a location which is
proving itself to be a significant part of the West End office market".


                                                              6th September 2005

ENQUIRIES:
Derwent Valley Holdings Plc                                        020 7659 3000
John Burns, Managing Director

Prudential                                                         020 7548 6622
Russel Bradman, Director: Investment


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