Acquisition

DERWENT VALLEY HOLDINGS PLC
5 August 1999


Derwent Valley Holdings Plc ('Derwent Valley')

Acquisition of £70m Central London Portfolio



Derwent Valley announces it has exchanged contracts to
acquire a 20,000 sqm (215,000 sqft) Central London
portfolio of eight freehold properties and one leasehold
property from Moorfield Capital Partners for a
consideration of £70million, excluding costs.  The
portfolio is reversionary and currently produces net
rental income of approximately £4.62million per annum.
The acquisition will be financed from the company's bank
facilities.  Completion will be no later than 30 December
1999.

Derwent Valley's strategy is to identify and invest in
Central London properties where the group's proven skills
in lease management and refurbishment can enhance value.
The board considers that this portfolio, which is located
in the group's core operating area, has the scope for
such opportunities.  Lease management opportunities exist
at the four properties in Covent Garden, WC2, which
comprise adjacent office and retail buildings, with a
small element of residential.  An immediate retail/office
refurbishment scheme is planned at Panton House,
Haymarket, SW1, where the majority of the building is
vacant.  The remaining four properties are multi-
tenanted, three being located in Holborn and one in St
James.

Description of Properties

Heron House, 319-325 High Holborn, WC1.
Freehold office and retail building of 5,680 sqm (61,100
sqft) with 49 car spaces in the basement.  There is
office accommodation on eight floors, four ground floor
retail units and seven self-contained flats.  The office
and retail space is let until 2005 to nine tenants
including BG plc, Unisys Ltd, Holland and Barratt Ltd and
Pret a Manger.  The current rent from the property is
£1,481,000 per annum, with £1,207,000 of the income from
the offices, £255,000 from the retail and the remainder
from the residential.

40-43 Chancery Lane, WC2 and 2-3 Cursitor Street, EC4.
Two inter-connecting office buildings held under a
headlease expiring in 2029 at a fixed ground rent of
£7,400 per annum.  The buildings provide 5,090 sqm
(54,800 sqft) of multi-let accommodation, with 16 car
spaces in the basement, and are let to 12 tenants on
leases expiring between 2002 and 2012.  The current rent
from the property is £760,000 per annum and tenants
include Royal and Sun Alliance Insurance plc, The Bar
Council and Pitman Training Ltd.

20-21 Tooks Court, EC4.
Freehold period office building with a floor area of 650
sqm (7,000 sqft).  Located adjacent to the Chancery
Lane/Cursitor Street property and let to five tenants on
leases which expire between 2002 and 2004.  The current
rent is £54,000 per annum and there is 260 sqm vacant.

Panton House, 25-27 Haymarket, SW1.
Freehold 2,190 sqm (23,500 sqft) six storey corner
building at the junction of Haymarket and Panton Street
with 740 sqm retail/restaurant on ground and basement and
1,450 sqm offices on the upper floors.  There is 1,470
sqm vacant.  The current rent is £127,000 per annum from
9 tenancies, with the principal income from the Woolwich
Building Society on part of the ground floor on a lease
expiring in 2003.  The offices are let on short lease
terms, all with three month rolling breaks.

101-102 Jermyn Street, SW1.
Freehold retail and office building of approximately 900
sqm (9,600 sqft) with two car parking spaces at the rear.
The building is let to four tenants on leases expiring
between 2000 and 2009.  The current rent is £310,000 per
annum and tenants include Cheltenham and Gloucester plc
and British Sugar plc.

Covent Garden Properties

27-32 King Street, WC2.
Freehold period retail and office property comprising
approximately 2,270 sqm (24,400 sqft).  There are four
retail units on basement and ground floor totalling 1,190
sqm, which are let to Moss Bros Group plc and Hackett
Ltd, on leases expiring in 2013 and 2023, with breaks in
2009.  The office accommodation of approximately 1,080
sqm is let on a single lease to a firm of solicitors on a
term expiring in 2009.  The total current rent from the
property is £922,600 per annum.

34 Rose Street, WC2.
Freehold office property of approximately 340 sqm (3,700
sqft) occupied by Paul Smith Limited at a current rent of
£96,500 per annum on a term expiring in April 2009.

19-26 Floral Street, WC2.
Freehold 1980's office building of 2,100 sqm (22,600
sqft) with five car parking spaces.  The property is let
to Royal and Sun Alliance Insurance plc for a term
expiring 2014, at a current rent of £743,000 per annum.
In addition, there are six self-contained flats, five of
which are let on annual leases and one is vacant.  The
total income from the property is £815,000 per annum.

19a Floral Street, WC2.  Freehold turn of the century
retail and office building of  790 sqm (8,500 sqft), let
to three tenants with leases expiring in 2009 and with
one tenant holding over.  The current rent from the
property is £55,000 per annum and 390 sqm, including the
retail unit, is vacant.

Commenting on the transaction, John Burns, Managing
Director said; 'This acquisition offers good rental and
capital growth prospects and continues Derwent Valley's
ongoing strategy of investing in Central London.  The
properties in this portfolio are well located buildings
which will be suited to our active management approach
with opportunities to increase value in the medium term
through both lease management and refurbishment.  The mid-
town properties, Heron House and Chancery Lane/Cursitor
Street, are multi-tenanted buildings with varying lease
profiles that give opportunities for renewals or taking
back space for refurbishment and re-letting.   It is
intended to completely refurbish Panton House, which
currently has over two thirds of the space vacant.  The
properties at Jermyn Street and Covent Garden are prime
retail and office buildings where again, lease management
opportunities exist.'



Contacts:

Derwent Valley Holdings plc    John Burns
                               Tel: [phone]

Citigate Dewe Rogerson         Patrick Toyne Sewell
                               Tel: [phone]