Contracts Exchanged

WORKSPACE GROUP PLC
16 September 1999
                                       
                                       
                        SAINSBURYS OPTS FOR WORKSPACE'S
               SOUTHWARK DEVELOPMENT FOR ADDITIONAL OFFICE SPACE


Workspace Group PLC ('Workspace'), the property company that provides flexible
space  for  small  and growing businesses in London, the South  East  and  the
Midlands, has exchanged contracts to pre-let the entire floorspace  of  No.  1
Union  Street, London, SE1, to Sainsbury's Supermarkets Limited for additional
accommodation to house its central departments.  Sainsbury's has taken  a  15-
year lease at a rent of £2 million pa.

The  property which is located 500m south of the River Thames, midway  between
Waterloo  and London Bridge main line railway stations, consists of  a  19,137
sq.  m (109,123 sq. ft net lettable area) Edwardian former Post Office sorting
office.   It  was acquired by Workspace with full vacant possession  in  March
1998 for £4.1 million.

The  property  is  to  be subject to a £11.0 million refurbishment  programme,
finance  for  which is to be provided by National Westminster Bank  through  a
limited recourse structure.

Harry Platt, Managing Director of Workspace said,

'No.1  Union  Street  has  been an outstanding investment  for  Workspace.
Sainsbury's is an excellent tenant with a strong covenant.  Clearly there will
be a considerable uplift in the investment value of No. 1 Union Street.

'We bought the building originally to convert into a business centre for the
small  and medium enterprise (SME) market.  However, as with all our  property
acquisitions,  if  there  is potential to generate improved  returns  from  an
alternative  use,  we  seize the opportunities that present  themselves.   The
South  Bank is now a popular office location and we received enquiries from  a
number of tenants interested in letting the entire building.

'As competition to buy the types of property we target increases, so does the
scope to benefit from further enhanced returns from changes of use at some  of
our sites.

'With  our recent £81 million portfolio acquisition, Workspace has added  to
its  presence  on  the  South Bank of the River Thames.  We  operate  business
centres for SMEs in Southwark at the Leathermarket and Great Guildford Street,
SE1.'

Ian  Coull,  Sainsbury's main board Director responsible for property  matters
said,

'This  additional space will allow Sainsbury's to continue its programme  of
refurbishment  and  modernisation  of  existing  offices  in  nearby  Stamford
Street.'

GVA  Grimley  acted  as  letting  and  development consultants  for  Workspace
whilst Healey & Baker acted for Sainsbury's.

For further information contact:

Harry Platt, MD               Workspace Group PLC           0171-247-7614
Maddy Carragher               Workspace Group PLC           0171-247-7614
Jonathan Gillen               City Profile Group            0171-726-8588
Simon Courtenay               City Profile Group            0171-726-8588