Trading update

Terrace Hill Group PLC
08 February 2007

8 February 2007



             Terrace Hill Group PLC ('Terrace Hill' or 'the Group')

                                 Trading update


Terrace Hill, the AIM-listed property group, is pleased to announce a trading
update prior to the announcement of its full year results to the 31 October 2006
on 21 February 2007. This update includes details on the Group pre-selling a
large development in Newcastle, being appointed as the development partner for a
new 80 acre business park in the South West, receiving planning consent for two
large office developments in the South East, the purchase of a 16 acre retail
and mixed use development site in Middlesbrough and a multi-let office building
in Bristol with redevelopment opportunities.


The key details for each of the Group's recent deals are as follows:


•  The Group has fully let and forward sold its 83,141 sq ft joint
   venture development, Time Central, at Gallowgate in Newcastle to a UK
   institution a year ahead of completion for £32.5m, representing a net initial
   yield of 4.52%. The price achieved is ahead of initial expectations and a
   record initial yield for a Newcastle office investment.

•  Terrace Hill has been chosen by Persimmon Homes as its preferred developer at 
   Weston Park, a new 80 acre business park at Junction 21 of the M5 close to 
   Weston-super-Mare. The park is part of the redevelopment of the former Weston 
   Airfield, a mixed-use scheme where the Company has plans for up to one 
   million sq ft of B1 office space, leisure facilities, restaurants and a 
   hotel. Phase one of the project, which will see work commence towards the end
   of 2007, is for the construction of 50,000 sq ft of office space over three
   acres.

•  At Pinewood in Wokingham, the Group has received detailed planning consent 
   for a 200,000 sq ft office building, which will be developed for Johnson & 
   Johnson Medical as its UK headquarters. Construction is planned to start in 
   spring 2007 and is expected to have a completed value of approximately £40m.

•  At Cargo Fleet Lane between Terrace Hill's Middlehaven office development and 
   Middlesbrough's town centre, the Group has paid £8m for a 16 acre retail and 
   mixed use development site. The site benefits from an existing planning 
   consent for 63,000 sq ft of bulky goods retail floor space and it is
   anticipated that this could be extended to add additional retail space as 
   well as leisure and car showroom uses.

•  At Vanwall Business Park, Maidenhead, the Group has obtained detailed 
   planning consent for 120,000 sq ft of new offices. The development will be 
   carried out through a joint venture between Terrace Hill and clients of
   Jones Lang LaSalle Corporate Finance. The site, which was purchased for 
   £9.3m, has been sold to the JV for £17.85m. Terrace Hill retains a 50% stake 
   in the JV.

•  In Bristol the Group has contracted to purchase Canningford House at 38 
   Victoria Street, a multi-let office investment comprising 20,456 sq ft in a 
   prime city centre location for £2.5m. The property provides an excellent 
   opportunity for redevelopment in medium term.

•  All 38 of the private and affordable residential units at Davis House, 
   Victoria, the Group's £85m mixed use scheme, have been forward sold for
   £14.5m. The development is due for completion towards the end of 2007.


Group Managing Director, Philip Leech, said, 'We have had an excellent start to
2007. The sale and two planning consents have realised values in excess of
initial expectations and the development sites at Weston Park, Middlesbrough and
Bristol add considerably to our strategic landbank and future flow of
development projects.'

Chairman, Robert Adair, said, 'I am delighted with these excellent deals which
give me confidence for our prospects for the current financial year. We look
forward to the release of our results for the year to October 2006 which will be
reported on 21st February.'


                                  * * ENDS * *


For further information visit www.terracehill.co.uk or contact:

Philip Leech, Group Managing Director                        Tel: [phone]
Alasdair Robinson, Noble & Company Limited                   Tel: [phone]
Isabel Crossley, St Brides Media & Finance Ltd               Tel: [phone]



Notes to editors:

Terrace Hill Group PLC - AIM-listed property group with two key divisions,
Commercial Development and Residential Investment and Development and a total
development programme of £1.1bn and a market capitalisation in excess of £200m.




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