£285m Return of Capital to Shareholders - Part 2

Great Portland Estates PLC
18 April 2000

                                       
                         GREAT PORTLAND ESTATES P.L.C.
                        ------------------------------
           GREAT PORTLAND ANNOUNCES THE TERMS OF THE GBP 285 MILLION
           ---------------------------------------------------------
         RETURN OF CAPITAL TO SHAREHOLDERS AND POSTING OF THE CIRCULAR
        --------------------------------------------------------------
                                       
PART II OF II
-------------

The Board of Great Portland today announces the terms of the GBP 285 million
return of capital and the posting of a circular to Shareholders and CULS
Holders.

Introduction
------------
                                       
On 8th March, 2000, the Board announced a major strategic initiative to
refocus the Group's property portfolio.  The announcement stated the intention
to return not less than 80 pence per share in cash to Shareholders and to seek
approval to renew the authority to make market purchases from Shareholders for
up to a further 15 per cent. of the issued ordinary share capital.  After
considering a number of methods, the Board is proposing to return 80 pence per
share (currently some GBP 285 million in aggregate) in cash to Shareholders.
This will be effected by way of a Court-approved Capital Reduction, so as to
ensure equal treatment as between all Shareholders and that the payment to
Shareholders is treated as capital rather than income for taxation purposes.
The return to Shareholders represents some 40 per cent. of the Company's
market value as at 17th April, 2000.

As a change in the CULS Trust Deed would be required to implement the
Proposals, the Company is proposing to redeem all the outstanding CULS on 1st
June, 2000 at a premium of GBP 10.50 per GBP 100 (nominal) of CULS, giving a
redemption price of GBP 110.50 per GBP 100 (nominal) of CULS.  The CULS would
otherwise be repayable at par on 1st December, 2002.  A redemption price of
GBP 110.50 per GBP 100 (nominal) represents a premium of 11.4 per cent. to GBP
99.18 per GBP 100 (nominal) being the middle market quotation of the CULS of
GBP 103 per GBP 100 (nominal) on 17th April, 2000, less the interest accrued
to that date of GBP 3.82 per GBP 100 (nominal).  On 1st June, 2000, the
Company will also make the semi-annual interest payment due to CULS Holders of
GBP 4.75 per GBP 100 (nominal), less any tax payable thereon.  These payments
will be made to CULS Holders on the register at the close of business on 19th
May, 2000.  The Redemption of CULS will be subject to the passing of the
extraordinary resolution at the Special Meeting and is being proposed
following discussions with the Association of British Insurers.

The Capital Reduction is conditional upon the approval of Shareholders, the
Redemption of CULS and is subject to the confirmation of the Court.  The
Capital Reduction will be effected by a reduction of both the share premium
account and ordinary share capital of the Company.  It is also proposed that,
if the Capital Reduction becomes effective, a sub-division and consolidation
of the ordinary share capital will take place.

The Proposals require the approval of Shareholders at an Extraordinary General
Meeting to be held on 26th May, 2000.  The Company is seeking this approval at
this stage in order to reduce the uncertainty for Shareholders and will only
apply to the Court for confirmation of the Capital Reduction once property
disposals have been made which, on completion, will generate sufficient funds
to enable the Return of Capital to take place.

The payment to Shareholders is not expected to be made prior to September
2000.  The Company will notify Shareholders of the date on which it intends to
apply to the Court in due course and will, at the same time, notify other key
dates in the implementation of the Proposals.  If the Proposals are approved
by Shareholders and the Redemption of CULS is approved and if the Court
approves the Capital Reduction and Admission occurs, Shareholders who are on
the shareholder register at the Record Time will receive 80 pence per Existing
Ordinary Share and have their holdings consolidated on the basis explained
below.

Background to the Proposals
---------------------------

In recent months there has been a pronounced dislocation between the direct
market for properties, with property values continuing to rise, and the share
prices of companies in the listed property sector, which have fallen.  The
effect has been to widen to historically high levels the discount of the share
prices of property companies to the value of their underlying net assets.  The
effect on Great Portland has been typical of companies within the sector.

The Board has taken the initiative to take advantage of the strong property
market and, at the same time, to refocus the Group's portfolio.  Through the
disposal of approximately GBP 400 million of non-core properties, the Group's
assets will be concentrated in the key markets of central London and specific
shopping centres, where the Board anticipates more favourable rental and
capital growth and long-term performance.

By returning cash to Shareholders, the Company is splitting its net assets
into the cash to be returned, which should not attract a discount, and the net
assets which remain.  Even if the latter attract the same percentage discount
as before, the overall value to Shareholders will have increased.

The Proposals
-------------

The Proposals are conditional, inter alia, on the approval of Shareholders at
the Extraordinary General Meeting, the Redemption of CULS and confirmation of
the Capital Reduction by the Court.  The Board reserves the right to elect not
to proceed with the Proposals in the event of a change of circumstances such
that, in the Board's opinion, the Proposals are no longer in the best
interests of the Company and Shareholders as a whole.  It should be noted that
the Proposals will lapse if not approved by the Court.  The Court will require
to be satisfied that the interests of the Company's creditors will not be
prejudiced as a result of the Capital Reduction.  Whilst it is for the Court,
finally, to determine the question of whether any protection is required for
creditors and, if so, what form is should take, the Board has been advised
that the Court is unlikely to require the Company to offer additional security
for secured or unsecured creditors.

Under the Capital Reduction, 20 pence of the nominal value of each Existing
Ordinary Share, in issue at the close of business on the last business day
preceding the Hearing Date, will be cancelled.  This represents a reduction of
the issued ordinary share capital of GBP 71.4 million in aggregate and would
reduce the nominal value of the Company's Existing Ordinary Shares to 30
pence.  In addition, the share premium account of the Company will be reduced
by such sum as is required to return 80 pence in total per Existing Ordinary
Share to Shareholders.

Subject to the Capital Reduction becoming effective, the Intermediate Ordinary
Shares arising therefrom will be sub-divided and consolidated on the basis of
3 New Ordinary Shares for every 5 Intermediate Ordinary Shares held.  The
effect will be to ensure that the number of New Ordinary Shares in issue will
be approximately 40 per cent. lower than the number of Existing Ordinary
Shares in issue prior to the Capital Reduction, thus reflecting the aggregate
value of the Return of Capital to Shareholders in relation to the market
capitalisation of the Company's issued Existing Ordinary Shares as at the
close of business on 17th April, 2000.  The Share Consolidation is intended to
maintain comparability of the Company's future and historical earnings per
share, dividends per share and share price.

Following the Capital Reduction and Share Consolidation becoming effective and
Admission of the New Ordinary Shares, the Company will pay Shareholders the
sum of 80 pence in respect of each Existing Ordinary Share held.

The proportion of the issued ordinary share capital of the Company held by
each Shareholder following the Capital Reduction and Share Consolidation will,
as far as practicable, remain the same.  New Ordinary Shares will have a
nominal value of 50 pence and will carry the same rights as the Existing
Ordinary Shares.

In addition, the Company is proposing certain amendments to the Articles of
Association and is seeking permission to renew its authority to purchase its
own ordinary shares as explained below.

Effects of the Proposals
------------------------

For illustrative purposes only, Shareholders holding the following number of
Existing Ordinary Shares and who are on the register at the Record Time will
exchange:

Existing holding                        New entitlement (Note 1)
                                        excluding
1,000 Existing Ordinary Shares          for GBP 800 in cash and 600 New
                                        Ordinary Shares

5,000 Existing Ordinary Shares          for GBP 4,000 in cash and 3,000 New
Ordinary Shares

Note 1
Excluding any cash received in respect of fractional entitlements, which will
be aggregated and sold for the benefit (net of expenses) of the Shareholders
entitled thereto.

Redemption of CULS
------------------

As a change in the CULS Trust Deed would be required to implement the
Proposals, the Company is proposing to redeem all the outstanding CULS on 1st
June, 2000, at a premium of GBP 10.50 per GBP 100 (nominal) of CULS, giving a
redemption price of GBP 110.50 per GBP 100 (nominal) of CULS.  The CULS would
otherwise be repayable at par on 1st December, 2002.  A redemption price of
GBP 110.50 per GBP 100 (nominal) represents a premium of 11.4 per cent. to GBP
99.18 per GBP 100 (nominal) being the middle market quotation of the CULS of
GBP 103 per GBP 100 (nominal) on 17th April, 2000, less the interest accrued
to that date of GBP 3.82 per GBP 100 (nominal).  On 1st June, 2000, the
Company will also make the semi-annual interest payment due to CULS Holders of
GBP 4.75 per GBP 100 (nominal), less any tax payable thereon.  These payments
will be made to CULS Holders on the register at the close of business on 19th
May, 2000.  The Redemption of CULS will be subject to the passing of the
extraordinary resolution at the Special Meeting and is being proposed
following discussions with the Association of British Insurers.

In accordance with its normal practice, Royal Exchange Trust Company Limited,
as trustee of the CULS for the benefit of the CULS Holders, expresses no
opinion as to the merits of the Redemption of CULS.  It has, however,
authorised it to be stated that, on the basis of the information contained in
the circular to Shareholders, it has no objection to an extraordinary
resolution seeking approval to the Redemption of CULS and to the necessary
amendment to the CULS Trust Deed being placed before CULS Holders for their
consideration.

Current trading and prospects
-----------------------------

Over the last few months the Group, has concentrated on its chosen areas of
central London and in-town shopping centres, and these will form the vast
majority of the portfolio following the disposal of the non-core properties.
Furthermore, rental growth is expected to continue in the Company's continuing
portfolio based on good occupational demand.

In the past twelve months, the Group has extended its interests in central
London and shopping centres with acquisitions of over GBP 100 million. These
primarily comprise London purchases of 86 Fetter Lane, EC4, 28 Savile Row, W1
and 10/12 Cork Street, W1, and the shopping centre additions of The Quedam
Centre, Yeovil and increments to our holdings in Burnley, Harlow and Cardiff.

Over the same period, rental growth has continued in these core markets, based
on good occupational demand, especially in the West End, and disposals of
approximately GBP 100 million of non-core properties have been completed.

Renewed authority for the Company to purchase its own shares
------------------------------------------------------------

The Company also wishes to renew the authority from Shareholders in accordance
with the Act to purchase up to 14.99 per cent. of the Existing Ordinary Shares
in issue or of the New Ordinary Shares in issue following the Proposals
becoming effective.  This authority will be exercised as and when appropriate
to ensure the Group maintains an efficient capital structure.

Effect of the Proposals on the Convertible Bonds
-----------------------------------------------

Convertible Bondholders will not be entitled to participate in the Return of
Capital except to the extent that any such Convertible Bonds are converted
into Existing Ordinary Shares issued prior to the Record Time.

The Company has been advised by its auditors, Ernst & Young, that it is fair
and reasonable in accordance with clause 8 of the trust deed constituting the
Convertible Bonds and condition 7 thereof for the conversion price to remain
unchanged.

Great Portland Share Option Scheme
----------------------------------

The Company has been advised by its auditors, Ernst & Young, that it is fair
and reasonable that the relevant number of options and the exercise price for
options granted under the Great Portland Share Option Scheme be adjusted as a
result of the Proposals as set out below:

Number              Adjusted number     Current             Adjusted
of options                    of options                    exercise price
exercise price

26,227              26,588              200.34 pence        197.61 pence
52,455              53,178              175.22 pence        172.84 pence
116,525             118,132             212.47 pence        209.58 pence
152,490             154,593             167.23 pence        164.95 pence

Dividend policy
---------------

Following completion of the non-core disposals and the implementation of the
Proposals the Board intends to retain its traditional dividend policy which is
based on sustainable earnings, notwithstanding that these Proposals will
result in increased gearing.

Taxation
--------

The Company has been advised that the proposed return of cash to Shareholders
should be treated as a capital receipt for UK tax purposes, but is seeking
clearance under section 707 of the Taxes Act 1988.  The Proposals are not
conditional upon such clearance being obtained.

The premium paid to CULS Holders upon the Redemption of CULS will be treated
as income for the purposes of UK taxation but the Company will not be required
to deduct withholding tax from the amount of the premium.

Shareholders and CULS Holders who are in any doubt as to their tax position
should consult their independent professional advisers.

Overseas Shareholders
---------------------

Shareholders or CULS Holders who are resident overseas should consult their
professional advisers to ascertain whether the Proposals in respect of them or
the Redemption of CULS will be subject to any restrictions or require any
compliance with any formalities imposed by the laws or regulations of any body
or authority location in the jurisdiction in which they are resident.

Articles
--------

It is also proposed that an amendment to the Articles be adopted to increase
the limit on the total annual fees for non-executive Directors from GBP
125,000 to GBP 300,000 and to remove the share qualification requirement of
Directors.  It is also proposed that amendments to the Articles be adopted at
the Extraordinary General Meeting, conditional on the Proposals becoming
effective, which reflect the Share Consolidation.

Meetings and action to be taken
-------------------------------
Special Meeting - CULS Holders
-------------------------------

The Special Meeting will be held at 10.00am on Friday, 12th May, 2000 at
Knighton House, 56 Mortimer Street, London W1.  If this meeting is required to
be adjourned, it will be reconvened to be held at 10.00am on Friday, 26th May,
2000 at Le Meridien, 21 Piccadilly, London W1.

At the Special Meeting, an extraordinary resolution will be proposed to enable
the Company to proceed with the Redemption of CULS.  The quorum for the
Special Meeting will be one or more CULS Holders representing not less than a
majority in nominal value of the CULS outstanding and, at an adjourned
meeting, it will be any CULS Holders present.

Extraordinary General Meeting - Shareholders
--------------------------------------------

The meeting will be held at 10.15am on Friday, 26th May, 2000 at Le Meridien,
21 Piccadilly, London W1, or otherwise immediately following the conclusion of
the Special Meeting, if adjourned.

At the meeting, special resolutions will be proposed to:

(i)       approve the Capital Reduction;
(ii)      amend the Articles of Association;
(iii)     approve the Share Consolidation; and
(iv)      authorise the Company to make market purchases of its own shares.

The quorum for the Extraordinary General Meeting will be two or more
Shareholders present in person or by proxy.

Recommendation
--------------

The Directors, who have been advised by Lazard, consider that the Proposals
are in the best interests of Great Portland and its Shareholders as a whole.
In providing advice to the Directors, Lazard has placed reliance on the
Directors' commercial assessment of the Proposals.

Accordingly, the Directors unanimously recommend that Shareholders vote in
favour of the special resolutions to be proposed at the Extraordinary General
Meeting.  The Directors intend to vote in favour of all of the special
resolutions in respect of their own beneficial holdings amounting to 5,555,717
of the Existing Ordinary Shares representing approximately 1.56 per cent. of
the issued ordinary share capital.


Enquiries
---------

Great Portland Estates P.L.C.                     Tel: [phone]
-----------------------------
Patrick Hall (Joint Managing Director)
Peter Shaw (Joint Managing Director)
John Whiteley (Finance Director)

Lazard                                            Tel: [phone]
------
Nicholas Jones
William Rucker

Cazenove & Co                                     Tel: [phone]
-------------
Richard Cotton
Duncan Hunter

Citigate Dewe Rogerson                            Tel: [phone]
----------------------
Sue Pemberton

Words defined in the circular to Shareholders dated 18th April, 2000 shall
have the same meaning in this announcement unless the context otherwise
requires.

Lazard, which is regulated in the United Kingdom by the Securities and Futures
Authority Limited, is acting for Great Portland and no one else in connection
with the Proposals and will not be responsible to anyone other than Great
Portland for providing the protections afforded to customers of Lazard or
for providing advice in relation to the Proposals.