Final Results - Part 1

Great Portland Estates PLC
6 June 2000


Part 1

PRELIMINARY RESULTS
                                        
The Directors of Great Portland Estates P.L.C. announce the results of the
Group for the year ended 31 March 2000.

Highlights follow

*   Total return for the year 15%; 18% compound per annum for last three years

*   Net asset value per share up 12% to 316p (1999: 283p)

*   Profit before tax £60.5 million (1999: £57.3 million)

*   Earnings per share up 8.8% to 12.3p (1999: 11.3p)

*   Final dividend per share of 6.375p; full year up 2.7% to 9.5p 
    (1999: 9.25p)

*   80p per share to be returned to shareholders in the autumn

*   Portfolio will comprise 65% in Central London, including 50% in the West
    End

*   Average lot size will be £17 million (1999: £11 million)


Richard Peskin, Chairman, said:

'Within the space of the last twelve months, dramatic progress has been made
in the restructuring of the Group.  Our assets will be concentrated in the key
markets of Central London, primarily in the West End, and specific shopping
centres, which are dominant in their catchment area. Through this increased
focus our aim is to deliver greater shareholder value and no property or
category of properties will be sacrosanct in the Board's determination to
succeed in this endeavour.'

Enquiries:

Great Portland Estates P.L.C.           0207 580 3040
Patrick Hall, Joint Managing Director
Peter Shaw, Joint Managing Director
John Whiteley, Finance Director

Citigate Dewe Rogerson                  0207 638 9571
Sue Pemberton/Alexandra Scrimgeour


STATEMENT BY THE CHAIRMAN

In  my  Statement last June, I said that it was your directors' intention to 
be 'architects of change' and radical initiatives have certainly taken place
in the intervening  months.  Earlier this year, following a lengthy  strategic
 review, the  Board  took  the  decision  to  widen and  accelerate  the 
rationalisation programme  (which  had  already  been  announced)  in  order 
to  capitalise  on opportunities  in  the  property  and equity markets,  and 
maximise  value  for shareholders.  The majority of these disposal proceeds
are to be used to finance a  return of capital of 80p per share, and detailed
proposals were sent  out  on 18th  April;  approval was granted at an
Extraordinary General Meeting  held  on 26th  May  and  it is anticipated
that, subject to Court sanction,  shareholders will  receive their cash
payments in the autumn.  In February the Company  spent £38.4  million in
purchasing 5.5% of its ordinary share capital and, at the  EGM mentioned
above, shareholder consent was granted to buy back up to a further 15% of our
equity.

This period has been one of important change and substantial activity, and
after the  current disposal programme has been completed, the composition of
the Group's  portfolio  will be 65% in central London, with 49% in the West 
End,  23%  in shopping  centres  and  12%  in regional offices.  The  West 
End  continued  to demonstrate  strong growth and there was a champagne
performance from  our  home patch  North of Oxford Street, particularly from
the properties in the  vicinity of  the  recently 'piazzanised' Oxford Market.
We have also sold our beneficial stake  in the Pollen Trust at a good profit
over cost, simultaneously maximising our  interest  by  securing extra value
for our buildings owned  on  the  Pollen Estate.

For  the  third successive year, the occupancy level of the portfolio  stood 
at 99%, a continuing tribute to efficient management, and, as a consequence of
our determination  to  keep expenses to a minimum, once again  administration 
costs were  among the lowest in the property sector. Nor, whilst concentrating
on  the immediate  enhancement of value, have we failed to lay down the
foundations  for development  in  the future.  Over the years, large sites,
particularly  in  the West  End,  have been carefully and subtly assembled,
and planning  applications for  several  schemes  have recently been
submitted; fuller  details  of  these exciting prospects are provided in the
Operating Review.

And  so to the year under review, my last in an executive capacity, where  I 
am pleased  to  report  vintage figures and record results.   Profits  on 
ordinary activities  before  tax,  including a material contribution  from 
the  sale  of investment and trading properties, were £60.5 million and, with
earnings  up  9% at  12.3p, the Board is recommending a final dividend of
6.375p, making a  total of  9.5p for the year (1999: 9.25p).  Net assets stood
at £1.1 billion, equating to  316p  per  share, an increase of 12%, and, when
added to the  dividend,  the total  return  for  the  year  amounted to 15%. 
CB  Hillier  Parker  have  been instructed  to undertake a full valuation of
the portfolio as at 30th  September 2000 for inclusion in the interim results.

There  have been a number of changes in the composition and duties of the
Board.  Having  been  an  executive director for over 31 years  and  in  the 
saddle  as Managing  Director and Chairman for 14 of them, I personally took 
the  decision that,  with the strategy in place for a slimmed down Great
Portland, it  was  an appropriate time for me to hand over the reins and the
day to day running of the Company.  On 1st April, therefore, I became
non-executive Chairman, with Patrick Hall  and  Peter Shaw assuming the roles
of joint Managing Directors.   Patrick, who  has been in direct control of
acquisitions and sales since joining in 1991, became  Deputy Managing Director
in 1994, the same year in which Peter, who  has been responsible for shopping
centres and our properties outside the M25, became an executive Director. 
They have an intimate working knowledge of the portfolio and, with their
complementary skills, the Board is confident that they provide a first-class
combination to lead the Company into its next phase.

John  Edgcumbe, as previously announced, was appointed a non-executive 
director last  August  and David Godwin will become Deputy Chairman on the
retirement  of Roger  Payton  at  the Annual General Meeting in July.  Roger 
has  been  Deputy Chairman  since 1990 and, on behalf of shareholders, I would
like to  take  this opportunity of expressing our appreciation of his
contribution over  that  time.  He  has been readily available for
consultation, and his independent counsel has proved  invaluable over a period
of considerable transition.  As always, my  co-directors have been
tremendously supportive but I must reserve a special  'thank you'  to  all 
the  staff for their hard work and enthusiasm during  challenging times   from
a  personal  point of view their demonstration  of  affection  and
loyalty has been touching and far beyond the call  of duty.

There  has been much recent comment about the third increase in stamp duty
since this  Government  came to power in May 1997.  Whilst it  is  a  cheap 
and  easy stealth  tax  to collect, it makes the market less efficient and
more  illiquid, and  I  fear  that it may prove, at these levels, to start to
be a deterrent  to investment  and development. It was, therefore,
disappointing that our  industry was so tardy in promulgating the argument
that commercial properties, which play such  an  important  role  in the
economic welfare of  the  country,  should  be 'decoupled'  from an apparently
overheating residential market.  In  any  event, shareholders should be aware
that the Chancellor's measures over the last  three years have effectively
cost them at least 16p per share in net assets.

Whatever  happened  to  the Millennium bug?  The Government,  despite  its 
dire warnings  prior  to  the event, has been remarkably taciturn since  1st 
January suffice it to say that, with much labour from our employees and
consultants  but minimal  cost  to  the  Company, the crucial date passed
uneventfully.   Or,  as Horace  expressed  it  so  aptly just over 2000 years 
ago 'parturient  montes, nascetur ridiculus mus'.

Within  the space of the last twelve months, dramatic progress has been made 
in the  restructuring  of the Group.  Our assets will be concentrated  in  the
key markets  of  central  London, primarily in the West End, and  specific 
shopping centres, which are dominant in their catchment area.  These are
markets in which favourable  rental  and capital growth can be anticipated, 
providing  excellent prospects  for the future.  Through this increased focus
our aim is  to  deliver greater shareholder value, in both the short and
medium term, and no property or category  of  properties  will be sacrosanct
in the  Board's  determination  to succeed in this endeavour.

OPERATING REVIEW

Before beginning our first Operating Review as Joint Managing Directors, it is
a fitting  moment to acknowledge Richard Peskin's contribution to the  Company
in his  thirty-one years as an executive director, including the last 
fourteen  as Chairman  and  Managing  Director. When Richard joined the  Board
the  Group's portfolio  was valued at £39 million and generated a rent roll of
£2.3  million.  Under  his  leadership  it expanded through a major
development  and  investment programme in the late 1980s and was able,
therefore, to weather the recession in the  London  property market in the
early 1990s. On a personal  note,  it  is  a tribute  to  his  management
style that he is held in such warm  regard  by  his staff,  and  we  look 
forward  to continuing to benefit  from  his  wisdom  and experience in his
new role.

OVERVIEW

In  the  year to 31st March 2000, a firm foundation was laid for the changes 
to our  business,  formally announced to shareholders on 8th March  this  year
and presaged in the Chairman's Statement twelve months ago. Sales of more than
£105 million  of  non-core  assets were the initial stage of a process  which 
should realise around £450 million and, coupled with investment of over £140
million in Central  London  and  shopping  centres, will increase  the 
proportion  of  our holdings  in  these  sectors  to some 65% and 23% 
respectively.  Above average returns  are anticipated from this refocused
asset base, which is positioned  to take  advantage  of strong Central London
market conditions and will  provide  a more concentrated, management-intensive
portfolio with greater opportunities  to add shareholder value.

CB  Hillier Parker's valuation of the core portfolio, after taking into 
account capital  expenditure  and  a further rise in stamp duty  of  0.5%, 
produced  an increase  of  7.8%   the impact of the non-core properties
reduced  the  overall uplift to 4.7%.

The appreciation in book value in the year, together with surpluses realised 
by sales,  and  net rental income, produced a total annual return of 14.1%  on
the core portfolio, although this is reduced to 11.1% after taking into
account  the effect of the valuation of the non-core properties.

The  external  valuation reflected a gross running yield of  6.4%  on  the 
core portfolio  and  growth  in  rental value was a  significant  feature  of 
market movements in the year.  The reversionary potential of the portfolio in
the  next five  years is £10.3 million, of which £9.9 million is attributable
to the  core holdings, which will increase the running yield to 7.0%.

CENTRAL LONDON

The  positive  demand for real estate in Central London is demonstrated  by 
the valuation  at  31st  March 2000, particularly of our West End interests. 
Rental value  in  that  area has grown by 17.5%, resulting in capital 
appreciation  in excess  of 15%  market conditions are typified by a shortage
of supply, a  tight planning regime and tenant demand from both established
industries and those  of emergent technologies.

The  newly  refurbished 79 New Cavendish Street, W1 was let to Colt  Telecom 
at £1.3  million  per annum, equivalent to approximately £36 per  sq.ft.,  and
the pedestrianisation  of  Market  Place, W1 in partnership  with  Westminster
City Council  has  enhanced the environment, and resulted in lettings of  four
units totalling over 20,000 sq.ft. to achieve total rents of £490,000 per
annum.

Opportunities for major office development in the West End are rare,  and 
after some  years  of site assembly, we have submitted planning applications 
for  two major schemes to the north of Oxford Street totalling 424,000 sq.ft.
gross.  The larger  project, with frontages to Mortimer Street, Great
Titchfield Street  and Wells Street, will comprise 250,000 sq.ft. of primarily
office and retail space.  At  190  Great  Portland  Street, a companion
building  to  our  successful  160 development is planned, and is designed to
provide 110,000 sq.ft. of offices and 34,000  sq.ft. of mixed retail and
restaurant accommodation. The combined  value of these two medium-term schemes
would today be in the region of £200 million.

A  smaller development close to Trafalgar Square at 22/25 Northumberland
Avenue, WC2 is also the subject of a planning application which, if granted,
will see  a 45%  increase  in  floor space on a site currently providing 
18,500  sq.ft.  of offices. The refurbishment of 28/29 Savile Row, W1,
acquired in August 1999 at a cost  of  £6 million, is nearing completion, with
both ground floor and basement already let to produce £186,000 per annum and
marketing of the balance of  9,000 sq.ft. of offices on the five upper floors
about to begin.

Since  the acquisition of Ilex Limited in April 1997 we have sought to 
maximise our investment in the Pollen Estate. A successful outcome was
achieved when,  in April, we agreed terms to sell our 12.2% share in the trust
at a good profit, at the same time acquiring more valuable leasehold interests
in our four properties on the Estate.

Despite  a  positive valuation movement in our Midtown properties, there  was 
a fall  of 3% in the value of the City and Holborn portfolio, which can mainly
be attributed  to  the  three  buildings in the Bishopsgate/Camomile  Street 
area.  Whilst  these properties, which represent 30% of our City and Holborn 
holdings, individually have suffered as they approach lease expiries, they do
provide  the potential  for  a major development in the medium-term which is
currently  being evaluated.

An  important  addition to our Holborn holdings was the purchase in  October 
of Barnard's Inn, 83/86 Fetter Lane, EC4 for £36.4 million. Principally let to
MCI Worldcom at a current total annual income of £2.8 million, the
juxtaposition  of the  property  with existing ownerships in Holborn, Fetter
Lane, Norwich  Street and  Dyers  Buildings provides control over a site of
some 1.5 acres  and  total floor space of more than 260,000 sq.ft..

Our  investment  in  King's Walk Shopping Mall, SW3 has also  been  extended 
by acquisition  and development. In February the opportunity was taken to 
purchase an  adjoining income-producing retail unit at 120 King's Road for
£4.4  million, and  late  last  year planning consent was obtained to
construct  ten  flats  in airspace  to  the rear of 122 King's Road using
innovative building  techniques.  These  units  are expected to be completed
in early 2001 with an  end  value  of £5.75 million.

SHOPPING CENTRES

The  Company's retail portfolio is now concentrated on our core in-town
shopping centres, where our strategy is to ensure that they dominate their
towns  as  the first  choice for both the occupier and the shopper. We will
continue to extend, develop  and refurbish them, where profitable, to ensure
they remain  a  central focus  in  their  communities, and we will direct our
effort  to  those  centres within  the  top  150  shopping towns in the
country, where we  believe  overall multiple  demand  will  remain strong.
Internet sales and  price  deflation  may affect  retail  profitability, but
the restrictive and lengthy planning  process limits  the  supply  of shopping
centres both in and out of  town.  The  current strength  of our centres is
demonstrated by voids of less than 1%, and continued demand, particularly from
'value' retailers requiring large units. Much  of  the UK's existing retail
stock is unsuitable for modern retail requirements, and we are actively
seeking opportunities to provide our customers, the retailers, with the  space
they  require,  bringing into use  otherwise  unusable 'back  space' through
innovative solutions for the mutual benefit of both the retailer and the
price conscious shopping public.  

At  31st March 2000, the core shopping centres were valued at £344.7 million,
an uplift of 4.3% after new acquisitions of £63 million. The running yield on 
this part of the portfolio was 6.4% and estimated rental values increased by
4.7%, or 6.1%  per annum after adjusting for purchases held for less than the
full  year.  Applying the same adjustment to capital values, the centres
increased by 4.7%.

Queen's Arcade, Cardiff, which is physically fully integrated with the St.
David's  Centre, continues to be the dominant enclosed shopping centre complex
in  the Welsh capital. The scheme is actively promoted with our neighbouring
owners, and opportunities  are  being  investigated to  create  additional 
lettable  units.  Pedestrian  flow continues to grow satisfactorily,
suggesting potential  for  an increase in rental values.

At the Harvey Centre, Harlow, two further acquisitions have been made during
the year  to reinforce its dominant position in the town. The acquisition of 
Harvey Approach  was  reported last year as a post year end event,  and  the 
adjoining 89,000  sq.ft. Little Walk scheme was acquired in March for £17.9 
million.  The latter  has  scope  to  develop a 60,000 sq.ft. variety  store 
with  completion estimated  for  early  2002, and brings our total retail
holding  in  Harlow  to 560,000 sq.ft.. The milestone of a £100 per sq.ft.
zone A letting was reached in November and the Local Authority has invited us
to resubmit proposals for  their Town  Centre  South  site  of 16.4 acres
which immediately  adjoins  the  Harvey Centre.

At  Charter  Walk, Burnley our Curzon Square extension has been  completed 
with both  of the anchor tenants, T J Hughes and Wilkinsons, now trading. In
November we  acquired an additional block of property for £5.9 million,
comprising 23,000 sq.ft.  and producing a current net income of £460,000 per
annum. We  intend  to integrate this block with our existing holding and
introduce a covered  mall  in the  same  attractive style as the refurbishment
completed in  1996.  A  further acquisition  of the former 37,500 sq.ft. Co-Op
Living store was  made  for  £2.6 million and is currently under development.
This will bring our total holding to 470,000  sq.ft., together with 741 car
parking spaces run to AA  gold  standard.  Dominant  centres  of this type
have a significant bearing on the  economic  and social  life of the local
community and it was with some pride, therefore, that in  May  we  received 
the  Mayor's millennium prize for  the  most  significant contribution to
Burnley over the last quarter century.

In December 1999, a conditional development agreement was signed with MAB for 
a 397,000  sq.ft.  retail  and leisure scheme on High  Wycombe's  Western 
Sector adjoining our Octagon Centre. Public facilities will include a new bus 
station, additional  car parking and a library, and tenants already committed 
include  a 100,000 sq.ft. House of Fraser department store and a nine screen
Warner Village Cinema.  A  three  year  development programme is envisaged 
and  the  completed combined  scheme  of  570,000 sq.ft. is expected to raise
High  Wycombe  in  the regional shopping hierarchy with concomitant increases
in rental levels. We  are examining various opportunities to optimise our
involvement in the town.

In  October, the 160,000 sq.ft., 44 unit Quedam Centre in Yeovil, with a 
strong comparison shopping catchment of 140,000, was acquired for £39.7
million  on  an income  of £2.6 million.  Tenants include Boots, River Island,
Littlewoods,  BHS and  New Look, and there are a number of opportunities being
explored to enhance the  investment both within the Centre and on immediately
adjoining land. It was acquired  on  the  basis of a zone A of £62 per sq.ft.,
and  two  months  after acquisition  the  previous highest rental was
exceeded, with £75  zone  A  being achieved on an open market letting.

The  face-lift  to  complete  weather protection to Union  Square,  Torquay 
was finished in November  in Bridgend, we are continuing discussions with the 
Welsh Development  Agency and the local authority, for a 140,000 sq.ft. 
extension  to the  Rhiw  Shopping Centre, and negotiations have begun for a 
department  store anchor.

OTHER DEVELOPMENTS

Detailed  planning  consent was granted in December for the 200,000  sq.ft. 
in-town,  multi-storey  leisure  complex, Sol  Central  in  Northampton. 
Following intensive   archaeological  investigations  on  this   sensitive  
Saxon   site, construction work has started and completion is scheduled for
next  summer.  The ten  screen  cinema and 150 bed hotel are both let, and
terms have  been  agreed with occupiers of the nightclub and health and
fitness centre.

One  investment  outside Central London which is expected to  generate 
superior returns  is  the  72,000 sq.ft. warehouse at Frimley, Surrey,  let 
to  Toshiba.  Acquired  in  1995 for £4 million, the building currently
produces £405,000  per annum from a lease expiring three years hence. The
prominent position of the 3.9 acre site on a highway interchange is ideally
suited to office development in an area  of  the  South East where demand from
high technology users is  especially strong. Planning consent has been
obtained for 81,500 sq.ft. of offices with 475 car  spaces, and development is
expected to begin in 2003, with an end value  of over £27 million.

PORTFOLIO RATIONALISATION

At  this  time last year, the Chairman declared our intention to dispose  of 
at least  £150  million  of  non-core assets over the  ensuing  two  years, 
whilst increasing  the  concentration in Central London and specific shopping 
centres.  During  the  year,  the  Board took the decision to  widen  and 
accelerate  the rationalisation  programme, and by autumn 2000, we anticipate 
net  proceeds  of some  £450 million from the sale of these properties, of
which £115 million  has already been received or exchanged. The overall impact
of the programme will  be to  realise a small loss, before costs, of less than
4% on March 1999 values for the non-core portfolio.


PROSPECTS

A great deal was achieved in the year under review, and the first full
financial year of the new Millennium will be no less active. The radical
initiatives which have  been  taken  to  enhance  materially  shareholder 
value  will  create   a concentrated investment portfolio expected to produce
above average returns  and bring forward some exceptional development
opportunities.

The restructured portfolio will initially comprise some 88 properties valued 
at £1.5 billion, increasing the average lot size from £7 million four years
ago  to approximately £17 million.

We  fully  recognise  the challenges which we face, and will  be  tackling 
them vigorously to take the Company forward to the next phase of its
evolution.


FINANCIAL REVIEW

Profit  after tax, excluding profit on sale of investment properties, 
increased from £40.6 million to £41.4 million.

RESULTS

Profit  on ordinary activities after tax, excluding profit on sale of
investment properties,  increased from £40.6 million to £41.4 million in the
year  to  31st March  2000,  and corresponding earnings per share rose from
10.8p to  11.1p.  A final dividend of 6.375p has been proposed, making a total
for the year of  9.5p (1999: 9.25p).

Rent  receivable  rose by £4.5 million, or 4%, to £119.8 million.  The 
increase comprised  £3.1 million from acquisitions made this year and £2.2 
million  from those  of  the  year  before,  £4.6 million was provided  by 
new  lettings  and renewals,  and  £2.4 million by rent reviews  against these
increases,  property disposals  caused  a fall in rental income of £4.0
million,  and  expiries  £3.8 million. Properties earmarked for disposal in
the year to March 2001 contributed rental  income of £29.0 million in 2000,
but the extent to which that income  is lost in the new year will be dependent
upon the timing of the sales.

Property  costs and administration expenses of £8.0 million were  in  line 
with last  year,  but in 2001 will include an exceptional cost, associated 
with  the current  capital  reduction exercise, of some £2.5 million. Trading 
profits  of £1.0  million  were made on the disposal of £4.1 million of High 
Street  shops, leaving  only  a development of residential flats within our
trading  portfolio, the  sale of which is expected within the next eighteen
months. Profits  on  the sale  of investment properties of £4.7 million were
generated from disposals  of £101.4 million, representing a gain over 1999
values of 4.6%, after costs.

Higher   borrowings  during  the  course  of  the  year  financing  net 
capital expenditure  left net interest payable slightly higher in 2000 at
£55.0  million (1999:  £51.7  million). The early redemption of the 9.5%
Convertible  Unsecured Loan  Stock 2002 on 1st June 2000 will incur an
exceptional loss of £5.0 million on  the face of the profit and loss account
in the year to 31st March 2001,  but will  provide interest savings of £3.2
million in the subsequent two and a  half years.  In  accordance  with  the
Group's accounting  policy,  no  interest  was capitalised into the cost of
developments in 2000, and operating profit  covered net interest 2.0 times
(1999  2.1 times).

The effective rate of tax of 23.7% was distorted by the profit on sale of
investment properties  on an adjusted basis it was 25.7%, which was less than
the standard rate of corporation tax due primarily to the benefit of capital
allowances available on plant and equipment within the investment property
portfolio. A final dividend will be paid, subject to shareholders  approval,
on 21st July 2000 to shareholders on the register at 16th June  the total
dividend for the year of 9.5p (1999: 9.25p) was covered 1.2 times by adjusted
earnings (1999: 1.2 times). Following the capital reduction, as detailed
below, the Company is proposing to consolidate the number of its shares in
issue in order to maintain direct comparability of the share price, earnings
per share and dividends per share after the capital reduction.

FINANCING

There was virtually no change in the Company's gross debt at the year end and,
as the vast majority of borrowings were at fixed rates, the weighted average
cost of debt has remained unchanged at 8.3%. Gearing at 31st March 2000 was
60% (1999: 55%), net of cash balances of £85.4 million, and the Group had in
place committed undrawn bank facilities of £40 million. Under FRS 13, the
market value of the Group's financial instruments at 31st March 2000 exceeded
the amount at which they were shown in the consolidated balance sheet by
£114.3 million, representing a potential reduction in net asset value per
share of 32p before tax, or 22p after tax. Such a valuation before tax
represents the fair value at which the financial instruments would be
recognised in the balance sheet of a company acquiring them on 31st March
2000, but does not reflect the significant premium which would be required to
be paid on their early redemption.

In a three day period in February 2000, we embarked on a share buy-back
programme, cancelling 5.5% of our equity at a cost of £38.4 million; the
immediate impact of the share buy-backs was to increase net asset value per
share by 6p and marginally to increase gearing and future earnings per share.
At the Extraordinary General Meeting held on 26th May 2000, the Company
received shareholder authority to buy in a further 15% of its issued share
capital, and will be seeking to renew that authority at the Annual General
Meeting in July.

On 1st June 2000, the Company redeemed its 9.5% Convertible Unsecured Loan
Stock 2002, and in March 2001, new interest rate swaps on borrowings of £150
million will become effective, reducing the cost of such borrowing from an
average rate of 8.63% to 6.28%. Accordingly, by 31st March 2001 the weighted
average cost of borrowing of the Group is due to fall to 7.8%. Following the
capital reduction and payment to shareholders of 80p per share, net gearing is
due to rise from its current level of 60% to 80%.

CASH FLOW

The Group Statement of Cash Flows is set out on page 44. Net cash from
operating activities, after the payment of interest and tax, was £45.4
million, of which £35.4 million was distributed by way of dividend. £87.4
million was withdrawn from short-term deposit to finance net capital
expenditure of £58.8 million, share buy-backs of £38.4 million and loan
redemptions of £3.5 million, leaving a reduction in the net cash position at
31st March 2000 of £3.3 million.

NET ASSETS

Shareholders' funds increased by £58.9 million to £1,127.8 million at 31st
March 2000. This movement comprised the revaluation of fixed assets of £85.7
million and retained reserves of £11.6 million, off-set by share buy-backs of
£38.4 million. There would be no liability to taxation on capital gains if the
investment properties were to be sold at their valuation at 31st March 2000,
and net asset value per share at that date was 316p, an increase of 12% over
283p twelve months earlier. Following the capital reduction and share
consolidation, pro forma net assets per share will rise to 393p.

PORTFOLIO

Following the completion of the current disposal programme of non-core
properties, the refined portfolio will comprise some 88 properties with an
average lot size of over £17 million (1999: £11 million) and containing around
1,340 tenants (1999: 1,070 tenants) contributing to a rent roll of £123
million (1999: £117 million).

ACCOUNTING STANDARDS

There have been two Accounting Standards, FRS 15 Tangible fixed assets and FRS
16 Current tax, which apply this year for the first time, but neither
materially affects the Group accounts. The Accounting Standards Board has,
however, issued a discussion paper which, in the fullness of time, may become
a Financial Reporting Standard. The paper, Leases: implementation of a new
approach, proposes a single method of accounting for all leases which is to
apply to tenants and landlords alike. From a tenant's point of view it makes a
great deal of sense, but to apply the same principles to a landlord would
imply that rental income is really interest on a finance lease of an asset
which has a residual value which ought to be shown separately from the
discounted stream of cash flows deriving from it. That may suit a piece of
machinery or equipment, but I doubt whether it sensibly describes the true
economic value of an investment property.

FINANCIAL INSTRUMENTS

The Group raises finance through equity and borrowings, and places surplus
cash on short-term deposit. The primary sources of borrowing are debenture
loans, convertible loans, and bank and other loans. The Group also enters into
interest rate swaps, collars and caps, but solely as a way of managing the
interest rate risks arising from some of the Group's sources of finance,
primarily bank loans.

The main risks arising from the Group's financial instruments are interest
rate risk, liquidity risk and credit risk. The policies for managing these are
reviewed by the Board, and have been in place throughout the year ended 31st
March 2000.

INTEREST RATE

Borrowings are made either at fixed rates of interest, or at floating rates,
which can be fixed simultaneously, and co-terminously, by means of interest
rate swaps. The Group's policy has been to ensure that most of its borrowings
were at fixed rates  at 31st March 2000 99% of borrowings were at fixed rates
after taking account of interest rate swaps.

LIQUIDITY

The Group operates a long-term business, and its policy is to finance it
primarily with equity, and medium-term and long-term borrowings. Accordingly,
at the year-end 56% of the Group's borrowings were due to mature in more than
15 years. Short-term flexibility is achieved by cash balances and overdraft
facilities.

CREDIT

At 31st March 2000, the Group had £85.4 million on short-term deposit with
financial institutions. It is the Board's policy that deposits and derivative
contracts are placed only after consideration of the current credit worthiness
of the counter-party.

CAPITAL REDUCTION

The Company is in the process of implementing a capital reduction, details of
which were issued to shareholders on 18th April 2000. On 26th May,
shareholders approved the proposed capital reduction at General Meeting, and
on the same day holders of the 9.5% Convertible Unsecured Loan Stock 2002
voted in favour of its early redemption. On 1st June 2000, the loan stock was
duly redeemed in full. Following the disposal of the Group's non-core
properties, application will be made to the Court to reduce the Company's
issued share capital and share premium account in order to generate 80p per
share which will be distributed to shareholders. Simultaneously, the number of
shares in issue will be reduced in a three for five share consolidation, the
consequence of which will be an increase in pro forma net asset value per
share of 24% to 393p, and a rise in pro-forma net gearing to 80%.


GROUP PROFIT AND LOSS ACCOUNT
For the year ended 31st March 2000
                                                          2000      1999
                                              NOTES         £m        £m
-------------------------------------------------------------------------
Rent receivable                                   2      119.8     115.3
Ground rents                                              (2.0)     (1.8)
                                                       ---------  --------
Net rental income                                        117.8     113.5

Property and refurbishment costs                  3       (3.5)     (4.0)
Administration expenses                           4       (4.5)     (4.0)
                                                       ---------  --------
                                                         109.8     105.5

Trading profits                                            1.0       1.3
                                                       ---------  --------
Operating profit                                         110.8     106.8

Profit on sale of investment properties                    4.7       2.2
                                                       ---------  --------
Profit on ordinary activities before interest            115.5     109.0

Interest receivable                               6        3.0       4.3
Interest payable                                  7      (58.0)    (56.0)
                                                       ---------  --------
Profit on ordinary activities before taxation             60.5      57.3

Tax on profit on ordinary activities              8      (14.4)    (14.5)
                                                       ---------  --------
Profit on ordinary activities after taxation              46.1      42.8

Dividends                                         9      (34.5)    (34.9)
                                                       ---------  --------
Retained profit for the year                              11.6       7.9

Earnings per share - basic                       10      12.3p     11.3p
                                                       ---------  --------
Earnings per share - adjusted                    10      11.1p     10.8p
                                                       ---------  --------

A statement of the movement on reserves is given in note 22


GROUP BALANCE SHEET
As at 31st March 2000
                                                          2000      1999
                                              NOTES         £m        £m
-------------------------------------------------------------------------
Tangible fixed assets
Investment properties                            11    1,845.0   1,713.6
Investments                                      13       14.9      11.7
                                                      ---------  --------
                                                       1,859.9   1,725.3
                                                      ---------  --------
Current assets
Stock of trading properties                                1.4       3.4
Debtors                                          14       21.6       9.6
Cash at bank and short-term deposits                      85.4     174.6
                                                      ---------  --------
                                                         108.4     187.6

Creditors: amounts falling due within one year   15       79.1      79.0
                                                      ---------  --------
Net current assets                                        29.3     108.6
                                                      ---------  --------
Total assets less current liabilities                  1,889.2   1,833.9
                                                      ---------  --------
Creditors: amounts falling due after 
 more than one year
Debenture loans                                  16      454.1     456.0
Convertible loans                                17      109.6     110.9
Bank and other loans                             18      197.7     198.1
                                                      ---------  --------
                                                         761.4     765.0
                                                      ---------  --------
                                                       1,127.8   1,068.9
                                                      ---------  --------
Capital and reserves
Called up share capital                          20      178.4     188.7
Share premium account                            21      238.4     238.4
Revaluation reserve                              22      607.3     556.1
Other reserves                                   22       19.3      61.7
Profit and loss account                           22       84.4      24.0
                                                      ---------  --------     
Equity shareholders' funds                             1,127.8   1,068.9
                                                      ---------  --------     
                                               



GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 31st March 2000

                                                          2000      1999
                                                            £m        £m
-------------------------------------------------------------------------
Profit for the year                                       46.1      42.8
Unrealised surplus on revaluation of fixed assets         85.7      73.7
                                                      ---------  --------     
Total recognised gains and losses for the year           131.8     116.5
                                                      ---------  --------     


GROUP STATEMENT OF CASH FLOWS

For the year ended 31st March 2000
                                        2000      2000    1999      1999
                                          £m        £m      £m        £m
-------------------------------------------------------------------------
Net cash inflow from 
 operating activities                            112.7             112.4

Returns on investments and servicing 
 of finance
Interest received                        3.5               4.2
Interest paid                          (57.8)            (56.3)
                                    ---------          -------- 
Net cash outflow from returns on 
investments and servicing of finance             (54.3)            (52.1)

Corporation tax paid                             (13.0)            (12.2)

Capital expenditure
Payments to acquire investment 
 properties                           (144.7)            (78.4)
Receipts from sales of investment 
 properties                             86.4              22.2
Payments to acquire investments         (0.5)             (0.3)
                                    ---------          -------- 
Net cash outflow from capital 
 expenditure                                     (58.8)            (56.5)

Equity dividends paid                            (35.4)            (34.3)
                                               ---------          -------- 
Net cash outflow before use of liquid
resources and financing                          (48.8)            (42.7)

Management of liquid resources
Cash withdrawn from/(placed on) 
 short-term deposit                               87.4             (56.1)

Financing
Issue of debenture loan                    -              99.8
Drawdown of bank loans                     -              40.0
Purchase of shares                     (38.4)                -
Redemption of loans                     (3.5)            (38.8)
Cost of loan issues                        -              (0.9)
                                    ---------          -------- 
Net cash (outflow)/inflow 
 from financing                                  (41.9)            100.1
                                               ---------          -------- 
(Decrease)/increase in cash                       (3.3)              1.3
                                               ---------          -------- 


RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES


                                                          2000      1999
                                                            £m        £m
-------------------------------------------------------------------------
Operating profit                                         110.8     106.8
Decrease in stock of trading properties                    2.0       2.1
(Increase)/decrease in debtors                            (1.3)      0.2
(Decrease)/increase in creditors                           2.2       3.3
                                                      ---------  --------    
Net cash inflow from operating activities                112.7     112.4
                                                      ---------  --------    


RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT


                                                          2000      1999
                                                            £m        £m
-------------------------------------------------------------------------
(Decrease)/increase in cash in the year                   (3.3)      1.3
Cash (withdrawn from)/placed on short-term deposit       (87.4)     56.1
Cash inflow from increase in debt                            -    (138.9)
Cash outflow from redemption of loans                      3.5      38.8
                                                      ---------  --------     
Change in net debt arising from cash flows               (87.2)    (42.7)
Other non-cash movement                                    0.2       0.3
                                                      ---------  --------
Movement in net debt in the year                         (87.0)    (42.4)
Net debt at 1st April 1999                              (590.5)   (548.1)
                                                      ---------  --------
Net debt at 31st March 2000                             (677.5)   (590.5)
                                                      ---------  --------


ANALYSIS OF NET DEBT

                               At 1st April Cash Flow Non-Cash At 31st March
                                       1999            Changes          2000
                                         £m        £m       £m            £m

Cash                                    1.8      (3.3)       -          (1.5)
Short-term deposits                   172.8     (87.4)       -          85.4
Debt due within one year               (0.1)       0.1       -             -
Debt due after one year              (765.0)       3.4     0.2        (761.4)
                              -----------------------------------------------
                                     (590.5)     (87.2)    0.2        (677.5)
                              -----------------------------------------------

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