IFRS Statement

Great Portland Estates PLC
15 July 2005


15 July 2005

The effect of IFRS on the financial reporting of Great Portland Estates
Introduction

On 7 June 2002, the European Parliament approved a Regulation requiring all
listed companies in the European Union to prepare consolidated financial
statements under International Financial Reporting Standards ('IFRS') for
financial periods beginning on or after 1 January 2005. Great Portland Estates
plc ('GPE') will report its results under IFRS for the year ending 31 March
2006; its first results to be reported under the new standards will be for the
six months ending 30 September 2005.

In order to comply with IFRS in 2006, GPE will need to provide comparative
numbers. The purpose of this paper is to show how balance sheets and income
statements previously prepared under UK generally accepted accounting practice
('UK GAAP') will change under IFRS, and to explain the adjustments to reconcile
the figures from one basis of accounting to the other. The main reconciling
items are explained in Appendix 1, and their effects on the balance sheet and
income statement are set out as follows:

Appendix 2 - Balance Sheet at 31 March 2005
Appendix 3 - Income Statement for the year ended 31 March 2005
Appendix 4 - Balance Sheet at 30 September 2004
Appendix 5 - Income Statement for the six months ended 30 September 2004

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Basis of Preparation

The figures have been restated on the basis of our interpretation of all IFRS
currently applicable, and are unaudited. It is possible that conventions which
differ from our current interpretation will evolve within the property sector,
and IFRS are subject to ongoing amendment; accordingly, the amounts disclosed in
this paper may be subject to revision.

IFRS 1 First-time Adoption of International Financial Reporting Standards allows
choices for first time adoption of IFRS and a number of specific exceptions from
the full retrospective adoption of certain IFRS. Two of those choices are
material to GPE: we have chosen to apply IAS 39 Financial Instruments:
Recognition and Measurement fully and have restated the comparative information
accordingly; and we have opted to bring onto the group balance sheet the full
net liabilities of the Group's pension fund at each balance sheet date and to
account for any movement in full in those net liabilities either in the income
statement or in reserves, as appropriate, in the year which they occur.

Key Changes

The main differences between UK GAAP and IFRS for the financial statements under
review are:

   • Head leases - leasehold investment property and long-term liabilities
     are increased by an estimation of future ground rents payable, and the
     majority of ground rents payable in the year are disclosed as interest
     payable;

   • Lease incentives - amortised over the term of the lease, or to the first
     break option date, in each case typically longer than under UK GAAP;

   • Events after the balance sheet date - a proposed dividend is no longer
     considered to be an adjusting post-balance sheet event, but is instead a
     deduction from reserves in the year in which it is paid;

   • Convertible bond - the convertible bond is split between debt and
     equity;

   • Pension fund - the net assets of the Group's pension fund are included
     within the group balance sheet, and any changes thereto are taken to the
     income statement or to reserves;

   • Hedge accounting - the fair value of derivatives are recorded in the
     balance sheet and the movement in their value is taken to reserves or to the
     income statement;

   • Property revaluations - surpluses or deficits on investment property
     revaluations are shown on the face of the income statement rather than as a
     movement in reserves; only a valuation movement above the cost of a
     development property is still taken direct to the revaluation reserve; and

   • Deferred tax - contingent capital gains tax implicit within a property
     valuation is accrued as a deferred tax liability.


Presentation of Financial Statements

Under IFRS, the profit and loss account is renamed the income statement, but
there is no set format or layout of financial statements prepared under IFRS
akin to those of Schedule 4 Companies Act 1985; these will develop over time
through industry practice. Accordingly, the presentations set out in Appendices
2 to 5 do not necessarily represent how the income statements and balance sheets
will look, but have been designed to demonstrate as clearly as possible the
specific differences between UK GAAP and IFRS.

There are, however, some presentational changes arising out of IFRS:

   • investment property will be split between completed properties and those
     under development;

   • property acquired for development will not be classified as investment
     property until completed, but will nevertheless be revalued throughout the
     term of the development as at present; and

   • service charge and other income will be shown separately on the face of
     the income statement.

Performance Reporting

The effect of adopting IFRS as at 31 March 2005, and for the year then ended, on
our key performance measures are set out below:

                                               UK GAAP      Change        IFRS
Net assets                                     £543.3m    £(28.3)m     £515.0m
Diluted adjusted net assets*                   £604.0m    £(30.4)m     £573.6m
Adjusted net gearing*                              49%          2%         51%

Diluted adjusted net assets per share*            333p       (16)p        317p
Diluted adjusted triple net assets per share*     303p          4p        307p
Earnings per share                               14.3p       21.4p       35.7p
Adjusted earnings per share**                    11.3p      (0.5)p       10.8p

* Excluding deferred tax on accelerated capital allowances under both UK GAAP
and IFRS.
** Excluding exceptional items, profits or losses on sales of investment
property and deferred tax on capital allowances (under UK GAAP), and,
additionally, excluding surpluses or deficits on revaluation of investment
property, and the associated contingent CGT (under IFRS).

Occupational Finance Leases

GPE has 248 tenants under 324 occupational leases with a weighted average lease
length of 6.4 years. IAS 17 Leases has required a review of each lease to
establish whether it should be accounted for as an operating lease in the same
way as under UK GAAP, or as a finance lease. Based on that review, GPE will not
be required to account for any of its occupational leases as finance leases.

Cash Flow

The introduction of IFRS will not affect the cash flows of the business. The
presentation of the cash flow statement for GPE will not differ significantly
from that under UK GAAP and, therefore, an analysis of the cash flow statement
does not fall within the scope of this paper.

Dividend Policy and Distributable Reserves

At 31 March 2005 GPE had distributable reserves of £176.6 million, after
declaring a full year dividend of £17.3 million in aggregate. As the individual
company financial statements of GPE and each of its subsidiary undertakings will
continue to be prepared under UK GAAP, the introduction of IFRS will not affect
GPE's distributable reserves. Accordingly, the dividend policy of the Group is
not affected by the introduction of IFRS.

Taxation

As the financial statements of GPE and each of its subsidiary undertakings will
continue to be prepared under UK GAAP, the introduction of IFRS will have no
impact on the taxation status or tax payments of the Group.


Contact:

Great Portland Estates plc
John Whiteley Finance Director 020 7612 1434

Finsbury
Edward Orlebar 020 7251 3801
Gordon Simpson 020 7251 3801




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