RE Landflex Letting

Land Securities Group Plc
28 May 2004

28 May 2004

LAND SECURITIES GROUP PLC ('Land Securities'/'Group')

METROPOLITAN POLICE TO TAKE LANDFLEX SOLUTION ON EMPRESS STATE

The Metropolitan Police Authority ('MPA') has given approval to agree terms for
a single building outsourced property accommodation contract with Land
Securities for occupation by the Metropolitan Police Service ('MPS') of the 30-
storey 41,000 sq m (442,000 sq ft) Landflex building, Empress State in Earl's
Court.

In line with the MPA's estate strategy 'Building Towards a Safer City', the
accommodation will offer the MPS flexible and modern office space and will allow
staff to be relocated from existing buildings which are expensive to maintain
and are no longer fit for the purpose.  As the MPS grows towards 35,000
officers, there is also a need to plan for additional accommodation to support
staff and facilities.

In conjunction with the Land Securities' Landflex team, the MPS team has
designed a bespoke property solution that:

•  Allows the MPS to occupy the building in phases over time

•  Ensures that the building is maintained by Land Securities to provide a 
   modern environment throughout the term

•  Provides complete price certainty over the term of the lease.

In a move away from the traditional property market approach, which involves an
occupier taking risks on market rental increases and repairs, the contract
enables the MPS to benefit from a modern approach to leasing and property
occupation.

The solution combines elements and skills from across the Land Securities Group
into a number of linked agreements with the MPS:

•  A 15 year institutional lease of the whole building with annual
   indexation of rent provides security to both the MPS and Land Securities

•  An agreement with Landflex to manage sub-lettings on behalf of the
   MPS and to provide a range of property support services until the MPS is 
   ready to occupy the whole building in five years time. The first sub-letting 
   is of three floors to Transport for London who will take occupation in 
   September.

•  A further agreement to cover the repairs, maintenance and life cycle
   replacement, ensuring that the MPS is not put in the position of occupying
   under-maintained buildings.

Further discussions are taking place regarding the provision of additional
services to the MPS at Empress State, including fit-out, furniture and some IT
services.

Matthew Punshon, Landflex Director, said:  'The agreement with the Metropolitan
Police Authority truly demonstrates the different and innovative solutions that
Land Securities can provide through Landflex.  The Group has had a long
relationship with the Metropolitan Police and we are extremely pleased that,
following our successful Landflex letting to them at Soho Square, we have been
able to tailor further our products and services to provide a solution which
fully meets their future operational objectives.'

Catherine Crawford, Clerk of the MPA, said: 'The provision of flexible,
cost-efficient and appropriate accommodation for MPS staff is, and will continue
to be, a very high priority for the MPA.'

Alan Croney, MPS Director of Property Services, said:  'We have been seeking to
update and improve the accommodation occupied by the MPS as much of the estate
is old, under-funded and poorly positioned.  The move to modern accommodation is
part of our strategy to reinvest, refresh and recycle the estate in innovative
ways.'

Connected to this transaction is a lease surrender for an agreed premium by the
MPS of Wellington House, Victoria, back to Land Securities.

Cushman & Wakefield Healey & Baker and Jones Lang LaSalle acted for Land
Securities, with Ernst & Young acting for the MPS.

Landflex is actively seeking buildings to add to its portfolio.

For further information

Matthew Punshon/Emma Denne
Landflex/Land Securities
020 7413 9000

Jonathan Brill/Dido Laurimore
Financial Dynamics
020 7831 3113

Notes to Editors

About Landflex

Landflex is an integrated accommodation package that allows a company to match
their business accommodation requirements to their business plan and reduce
their total accommodation costs. This is achieved by providing a blend of leases
in specially designed buildings and a range of customer services.

Landflex was created by Land Securities, the UK's largest listed property
company, following feedback from its existing customers and in response to the
needs of modern businesses.  Landflex substantially exceeds the requirements set
by the Code of Practice for commercial leases which requests that landlords
offer priced alternatives to their tenants on a number of aspects of their lease
including length, rent review process and break clauses.

7 Soho Square, the inaugural Landflex building, was fully let within 9 months of
launch and has secured a diverse tenant base on a blend of lease profiles.
Customers include Ryder HKS, Expedia, MPS, TMA Global, and Marketpipe.

Empress State provides 415,000 sq ft of offices; meeting and conference
facilities, fitness centre, childcare and a 200-cover restaurant.

Land Securities aims to expand Landflex to some 1.5 million sq ft across Central
London in the medium term. With the success of the first two Landflex buildings,
an active search is underway for additional buildings.

About the MPA / MPS

  • Overall responsibility for the Metropolitan Police estate is vested in the
    Metropolitan Police Authority, the statutory organisation responsible for
    ensuring an efficient and effective police service for London.

  • Day-to-day management of the police estate is delegated by the MPA to the
    Metropolitan Police Service's Property Services Department.  The estate
    comprises over 600 operational buildings and 1,116 residential properties,
    used by 42,000 police officers and staff, and is valued at circa £1.5
    billion



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