Project Update

Terrace Hill Group PLC
28 June 2007


28 June 2007



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


                    Gateshead Baltic Business Quarter Update


Terrace Hill, the AIM-listed property group, announces that it has forward sold
a 19,500 sq ft office building at its pioneering £300 million Baltic Business
Quarter by the River Tyne at Gateshead to The Open University for £5.25 million.
Work will begin on the buildings construction in July 2007 and will be ready for
occupation in April 2008.

The Baltic Business Quarter will transform 50 acres of derelict land into a
thriving commercial community. At the Quarter, Terrace Hill, in partnership with
Gateshead Council, is also building a speculative 24,000 sq ft office block,
which it believes will attract considerable interest and will satisfy the
growing demand for much-needed quality office space in Newcastle and Gateshead.
Furthermore, the Company's development of a new 160,000 sq ft Gateshead College
is progressing well and is on schedule to open in January 2008 with the capacity
for 15,000 students.

Group Managing Director, Philip Leech, said, 'This is very good news for the
Baltic Business Quarter, our most prestigious scheme in the North East, and for
Gateshead itself, highlighting the fact that this development has the capacity
to attract quality occupiers from across the country. This and further
developments at the Quarter are likely to add significantly to the profitability
of the Company.'


                                  * * 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 is an AIM-listed property group with three key divisions:
Commercial Development, Residential Investment and Development and House
Building. It has a total development programme of £1.3bn and a market
capitalisation of around £200m.




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