Investment

Kier Group PLC
8 October 2001

                                                                8 October 2001


                                KIER GROUP plc

                   £2.5M INVESTMENT IN PARTNERSHIP HOUSING

Kier Group plc, the major construction, support services and housebuilding
group, today announces that it has made a minority equity investment in Belan
Limited, a company formed to effect a management and employee buyout of Beazer
Partnerships from Persimmon plc.

Under the terms of the agreement Kier has subscribed £392,000 in exchange for
49% of the ordinary shares in Belan Limited, with management and employees
holding 51%. In addition, Kier has subscribed £2,108,000 for loan stock,
bringing its total investment to £2.5 million. Kier also has board
representation in Belan Limited and holds an option, exercisable in certain
circumstances, over the equity shares held by management and employees. In
addition, there will be pre-emption rights between the two classes of
shareholders.

Belan Limited has acquired the business of Beazer Partnerships, renamed
Partnerships First, and also the related business of Torwood, which
manufactures timber frames, principally for the social housing market. The
consideration paid is £4.7 million. Belan Limited has raised senior debt and
overdraft facilities totalling £5.5 million to provide working capital as well
as bonding facilities totalling £5.0 million.

Commenting on the transaction, Colin Busby, Chairman of Kier, said:

        'This is a sound investment for Kier in a sector where we are
        under-represented and is expected to be earnings enhancing in the
        current financial year. John Cadwallader and his team are highly
        experienced and Beazer Partnerships is a major player in this
        important market. I am confident that Partnerships First will be very
        successful. By giving all the employees an opportunity to invest in
        the buyout, John will have a very committed and enthusiastic team
        behind him.'

Reasons for the investment

Beazer Partnerships, the social housing arm of the Beazer Homes Group prior to
its acquisition by Persimmon, is one of the largest businesses in this
important and expanding sector of the housing market. Kier Group is currently
under-represented in this market and is highly supportive of the management
team, led by John Cadwallader, and their plans to develop the business
independently of a national private housebuilding group.

In the year to 30 June 2000 (the latest audited accounts), Beazer Partnerships
made an operating profit of £1.1 million on turnover of £46.6 million on the
sale of 884 housing units. In the same period Torwood made an operating profit
of £0.4 million on turnover of £6.4 million on the sale of 1,367 frame units.


For further information, please contact:

Colin Busby

Kier Group plc                                     Tel: [phone]

Bella Jowett / Caroline Sturdy

Bell Pottinger Financial Limited                          Tel: [phone]