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Friday 24 November, 2000

Pillar Property

Offer forWatesC.Ldn.Props-Pt2

Pillar Property PLC
24 November 2000



PART 2


                                  APPENDIX I
               CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER
                                       
                                       
The Offer, which will be made by Credit Suisse First Boston on behalf of
Pillar City, will comply with the Code and any applicable rules and
regulations of the UK  Listing Authority and will be governed by English law
and be subject to the jurisdiction of the Courts of England.

1.   CONDITIONS OF THE OFFER

    The Offer will be subject to the following conditions:
   
    (a)  valid acceptances being received (and not, where permitted,
withdrawn) by 3.00 p.m. on the first closing date of the Offer (or such later
time(s) and/or date(s) as Pillar City may, subject to the Code, decide) in
respect of not less than 90 per cent. (or such lesser percentage as Pillar
City may decide) of the Wates Shares to which the Offer relates, provided that
this condition shall not be satisfied unless Pillar City (together with any
member of the Wider Pillar Group) shall have acquired or agreed to acquire,
pursuant to the Offer or otherwise Wates Shares carrying in aggregate more
than 50 per cent. of the voting rights then exercisable at general meetings of
Wates.  For the purpose of this condition:
    
         (i). the expression 'Wates Shares to which the Offer relates' shall  
              be construed in accordance with sections 428 to 430F of the     
              Companies Act 1985; and
    
         (ii). Wates Shares which have been unconditionally allotted but not  
              issued shall be deemed to carry the voting rights which they    
              will carry on issue;
    
    (b)  the  passing at an extraordinary general meeting of Pillar (or at 
any adjournment of the meeting) of all such resolutions as may be necessary
for the approval and implementation of the Offer and the acquisition by Pillar
City of Wates pursuant thereto;
    
    (c)  no  government  or  governmental,  quasi-governmental, 
supranational, statutory, regulatory, environmental or investigative body,
court, trade agency, professional association, institution or any other body
or person whatsoever in any jurisdiction (each a 'Third Party') having
instituted, implemented or threatened, or having decided to institute, or
having indicated that  it  has decided to institute, implement or threaten,
any action, proceeding, suit, investigation, enquiry or reference, or having
made, proposed or enacted any statute, regulation, order or decision or taken
any other step which would:
    
          (i). make the Offer or its implementation or the acquisition by     
               Pillar City of all or any Wates Shares, or the acquisition of  
               control of Wates, by any member of the Wider Pillar Group,     
               void, illegal or unenforceable under the laws of any relevant  
               jurisdiction, or otherwise, directly or indirectly, restrain,
               restrict, prohibit, challenge, delay or interfere with the     
               same, or impose additional material conditions or obligations  
               with respect thereto, or otherwise require material amendment  
               to the terms of the Offer or any such acquisition;
    
          (ii).require, prevent or delay the divestiture, by any member of the
               Wider Wates Group of all or any portion of its business, assets
               or property or impose any limitation on its ability to conduct 
               its business or to own its assets or properties or any part of 
               them to the extent which is material in the context of the     
               Wider Wates Group taken as a whole;
    
          (iii).impose any material limitation on, or result in a material    
                delay in, the ability of any member of the Wider Pillar Group 
                to acquire, directly or indirectly, or to hold or exercise    
                effectively all or any rights of ownership in respect of      
                shares in any member of the Wider Wates Group or to exercise
                management control over any such member;
    
          (iv). require any member of the Wider Pillar Group or the Wider     
                Wates Group to offer to acquire any shares or other securities
                (or the equivalent) in any member of the Wider Wates Group or,
                as the case may be, the Wider Pillar Group owned by a third   
                party (other than in the implementation of the Offer), such
                acquisition being material in the context of the Wider Wates  
                Group taken as a whole or the Wider Pillar Group taken as a   
                whole (as the case may be);
    
          (v). result in any member of the Wider Wates Group ceasing to be    
               able to carry on business; or
    
          (vi).otherwise materially and adversely affect in any respect the   
               business or profits of the Wider Wates Group taken as a whole;
               and  all  applicable waiting and other time periods during     
               which  any  such Third  Party  could decide to take, institute,
               implement  or  threaten  any action,  proceeding,  suit,       
               investigation, enquiry or reference  under  the laws   of  any 
               relevant  jurisdiction  having  expired,  lapsed  or   been
              terminated;
    
     (d)  all authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and approvals
('Authorisations') necessary or appropriate for or in respect of the Offer or
the proposed acquisition of all or any Wates Shares or control of, Wates by
any member of the Wider Pillar Group having been obtained in terms and in a
form reasonably satisfactory to Pillar City from all appropriate Third Parties
or persons with  whom  any member of the Wider Wates Group has entered into
contractual arrangements and all such Authorisations, together with all
Authorisations necessary or appropriate to carry on the business of any member
of the Wider Wates Group remaining in full force and effect;
    
     (e)  all necessary filings or applications having been made in connection
with the Offer, and all appropriate waiting periods (including extensions
thereof)  in respect of the Offer or its implementation under any applicable
legislation  or regulations of any relevant jurisdiction having expired,
lapsed or been terminated  (as appropriate) and all necessary statutory or
regulatory obligations in any jurisdiction having been complied with in
connection with  the Offer or the acquisition by any member of the Wider
Pillar Group of any  shares or control of, Wates;
    
     (f)  save as disclosed in writing to Pillar, Pillar City or their
respective  advisers prior to 24 November 2000 there being no provision of any
agreement, arrangement, licence, permit or other instrument to which any
member of the Wider Wates Group is a party or by or to which any such member
or any of its  assets may be bound, entitled or subject, which in consequence
of the Offer or  the proposed acquisition of any Wates Shares or because of a
change in the  control or management of Wates, would reasonably be expected to
result in to an  extent which is adverse to and material in the context of the
Wider Wates Group taken as a whole:
    
         (i). any monies borrowed by or any other indebtedness (actual or
contingent) of  or grant available to any such member, being or becoming
repayable or capable of being declared repayable immediately or earlier than
their or its stated  maturity date or repayment date or the ability of any
such member to borrow  moneys or incur any indebtedness being withdrawn or
inhibited;
    
         (ii). any such agreement, arrangement, licence, permit or instrument
or the  rights, liabilities, obligations or interests of any such member
thereunder  being terminated or adversely modified or affected or any onerous
obligation or  liability arising or any adverse action being taken or arising
thereunder;
    
         (iii). any assets or interests of any such member being or falling to
be disposed of or charged or any right arising under which any such asset or
 interest could be required to be disposed of or charged;
    
         (iv). the creation or enforcement of any mortgage, charge or other
security  interest over the whole or any part of the business, property or
assets of any such member, or any such security (whether arising or having
arisen) becoming enforceable; or
    
         (v). any such member ceasing to be able to carry on business under
any name under which it presently does so; 

and  no  event having occurred which, under any provision of any agreement,
arrangement,  licence, permit or other instrument to which  any  member  of
the  Wider Wates Group is a party or by or to which any such member or  any of
 its  assets  is bound, entitled or subject, to results in  any  of  the
events referred to in sub-paragraph (i) to (v) of this paragraph (f); 

       (g)  save as disclosed in the annual report and accounts of Wates for
the year ended 31 December 1999 or in the statement of interim results for the
period ended 30 June 2000, or in the circular to Wates Shareholders dated 8
September 2000, or as otherwise publicly announced through the London Stock
Exchange prior to 24 November 2000,  or as disclosed in writing to Pillar,
Pillar City or any of their respective advisors no member of the Wider Wates
Group having, since 31 December 1999:
    
         (i). issued or agreed to issue, authorised or proposed the issue of, 
              additional shares or securities convertible into shares of any  
              class or rights, warrants or options to subscribe for, or       
              acquire, any such shares or convertible securities (save as     
              between Wates and wholly-owned subsidiaries of Wates or for     
              options granted and for Wates Shares issued upon exercise of    
              options granted, on or prior to the date of announcement of the 
              Offer, pursuant to the Wates Share Option Schemes);
    
         (ii). recommended, declared, paid or made or proposed to recommend,  
               declare, pay or make any bonus, dividend or other distribution 
               whether payable in cash or otherwise other than between Wates  
               and/or members of the Wates Group which are wholly owned       
               subsidiaries of Wates;
    
         (iii). authorised or proposed or announced its intention to propose  
                any merger or demerger with or from any body corporate or any 
                acquisition or disposal or transfer of, any mortgage, charge  
                or creation of any security interest over, any assets or any  
                right, title or interest in any asset  (including shares and  
                trade investments);
    
         (iv). made or authorised or proposed or announced an intention to    
               propose any material change in its loan capital other than     
               between Wates and/or members of the Wates Group which are      
               wholly owned subsidiaries of Wates;
    
         (v). issued, authorised, or proposed the issue of any debentures or  
              incurred or increased any indebtedness which, in both cases, is 
              material in the context of the Wider Wates Group taken as a     
              whole;
    
         (vi). purchased, redeemed or repaid or announced any proposal to     
               purchase, redeem or repay any of its own shares or other       
               securities or reduced or made any other change to any part of  
               its share capital;
    
         (vii). implemented, effected or authorised, proposed or announced its
               intention to enter into, any reconstruction, amalgamation,     
               scheme, or other transaction or arrangement otherwise than in  
               the ordinary course of business;
    
         (viii). entered into or varied or authorised, proposed or announced  
                 its intention to enter into or vary any material contract,   
                 transaction or commitment (whether in respect of capital     
                 expenditure or otherwise) which is of a long term, onerous or
                 unusual nature or magnitude which is (in any case)
                 material in the context of the Wider Wates Group taken as a  
                 whole or which is or is likely to be restrictive on the      
                 business of any member of the Wider Wates Group or which     
                 involves or is likely to involve an obligation of such a     
                 nature or magnitude or which is other than in the ordinary   
                 course of business and which is material in the context of   
                 the Wider Wates Group taken as a whole;
    
         (ix). entered into or varied the terms of any service agreement with 
               any director or senior executive of Wates;
    
         (x). taken or proposed any corporate action, or had any legal        
              proceedings threatened or instituted, for its winding-up        
              (voluntary or otherwise), dissolution or for the appointment of 
              a receiver, administrative receiver, administrator, trustee or  
              similar officer over all or any of its assets or revenues;
    
         (xi). waived or compromised any claim otherwise than in the ordinary 
               course of business which is material in the context of the     
               Wider Wates Group taken as a whole; or
    
         (xii). entered into any contract or agreement or passed any          
               resolution or made any offer (which remains open for           
               acceptance) with respect to or announced any intention to, or  
               to propose to, effect any of the transactions, matters or      
               events referred to in this condition;
    
     (h)  save as disclosed in writing to Pillar, Pillar City or its advisers
prior to 24 November 2000 or as disclosed in the annual report and accounts
for the year ended 31 December 1999 or in the statement of interim results for
the six months ended 30 June 2000 or as otherwise announced through the London
Stock Exchange prior to 24 November 2000, since 31 December 1999:
    
         (i). no adverse change or deterioration having occurred in the       
              business, assets, financial or trading position or profits of   
              Wates or any member of the Wider Wates Group which is material  
              in the context of the Wider Wates Group taken as a whole;
    
         (ii). no litigation, arbitration proceedings, prosecution or other   
              legal proceedings to which any member of the Wider Wates Group  
              is a party (whether as a plaintiff, defendant or otherwise) and 
              no investigation by any Third Party against or in respect of any
              member of the Wider Wates Group having been commenced, announced
              or threatened in writing by or against or remaining outstanding 
              in respect of any member of the Wider Wates Group which in any  
              case would have a material adverse effect on the Wider Wates    
              Group taken as a whole; and
    
         (iii). no contingent or other liability having arisen or become      
                apparent which is likely to have a material adverse effect on 
                the Wider Wates  Group taken as a whole;
    
     (i)  Save as disclosed to Pillar, Pillar City or its advisers prior to
the date of this announcement, Pillar City not having discovered after the
date of this announcement that any financial or business information
concerning Wates or the Wider Wates Group which has been disclosed at any time
in writing to Pillar by Wates or has been made publicly available by or on
behalf of any member of the Wider  Wates  Group  is  materially misleading, 
contains  a  material misrepresentation of fact or materially omits to state a
fact necessary to make such information not materially misleading where such
matter has a material adverse financial effect on the Wider Wates Group taken
as a whole such as  would require a provision to be made in the audited
accounts of the Wates Group, drawn up as at the date of those circumstances.
         
           
For  the  purposes of these conditions the 'Wider Wates Group' means Wates 
and its  subsidiary undertakings, associated undertakings and any other
undertaking in  which Wates and/or such undertakings (aggregating their
interests)  have  a significant  interest  and  the  'Wider Pillar  Group' 
means  Pillar  and  its subsidiary  undertakings, associated undertakings and
any other undertaking  in which  Pillar  and/or such undertakings (aggregating
their  interests)  have  a significant   interest   and  for  these  purposes 
'subsidiary   undertaking', 'associated  undertaking'  and 'undertaking' have
the  meanings  given  by  the Companies  Act 1985, other than paragraph
20(1)(b) of Schedule 4A to  that  act which  shall be excluded for this
purpose, and 'significant interest'  means  a direct  or indirect interest in
more than twenty per cent. of the equity  share capital (as defined in that
Act).

Pillar  City reserves the right to waive, in whole or in part, all  or  any 
of conditions  (b) to (i) inclusive.  Conditions (b) to (i) must be  satisfied
 as at,  or  waived on or before the twenty first day after the later of the 
first closing date of the Offer and the date on which condition (a) is
fulfilled  (or in  each  case such later date as the Panel may agree).  Pillar
City  shall  be under no obligation to waive or treat as fulfilled any of
conditions (b) to (i) inclusive  by  a  date  earlier than the latest date
specified  above  for  the fulfilment thereof notwithstanding that the other
conditions of the  Offer  may at  such  earlier date have been fulfilled and
that there are at  such  earlier date  no  circumstances indicating that any
of such conditions may be incapable of fulfilment.

If Pillar City is required by the Panel to make an offer for Wates Shares
under the provisions of Rule 9 of the Code, Pillar City may make such
alterations  to the above conditions of the Offer, including condition (a), as
are necessary to comply with the provisions of that Rule.

The  Offer  will  lapse if it is referred to the Competition Commission 
before 3.00 p.m. (London time) on the first closing date of the Offer or the
time  and date on which the Offer becomes or is declared unconditional as to
acceptances, whichever  is  the  later. In such circumstances, the Offer will 
cease  to  be capable  of further acceptance and persons accepting the Offer
and Pillar  City shall thereupon cease to be bound by Forms of Acceptance
delivered on or before the date on which the Offer so lapses.


                                  APPENDIX II
                                       
                                  DEFINITIONS
                                       

'Abbey National Treasury Services'   Abbey National Treasury Services plc

'Adjusted Net Asset Value'           Wates'  reported unaudited pro forma net 
                                     asset value as  at  30  June 2000,       
                                     adjusted for the disposal  of properties 
                                     to Prudential and the acquisition of  the
                                     remaining  50 per cent. interest in      
                                     Vintners'  Place Limited,  as  set  out  
                                     in  the  circular  to  Wates             
                                     Shareholders, dated 8 September 2000

'Bank of Scotland'                   The Governor and Company of the Bank of  
                                     Scotland

'Business Day'                       a  day on which banks are normally open  
                                     for business in London

'Closing Price'                      the  closing middle market quotation of  
                                     the relevant share  as  derived  from the
                                     Stock  Exchange  daily official list

'CLOUT'                              City of London Offices Unit Trust

'Code'                               the City Code on Takeovers and Mergers

'Credit Suisse First Boston'         Credit Suisse First Boston (Europe)      
                                     Limited

'CSFB'                               Credit Suisse First Boston (London       
                                     Branch)

'DePfa'                              DePfa Bank AG, London Branch

'Deutsche Bank'                      Deutsche Bank AG London

'Form of Acceptance'                 the form of acceptance, authority and    
                                     election relating  to  the  Offer to be  
                                     despatched  to  Wates Shareholders with  
                                     the Offer Document

'GEPT'                               General Electric Pension Trust

'Grosvenor'                          Boundary  Limited,  a  wholly  owned     
                                     subsidiary  of Grosvenor Limited

'LIBOR'                              London  Inter  Bank  Offer  Rate  for    
                                     three   month sterling deposits

'Loan Notes'                         the  guaranteed floating rate loan notes 
                                     of  Pillar City   to  be  issued pursuant
                                     to  the  Loan  Note Alternative

'Loan Note Alternative'              the   alternative  under  the  Offer     
                                     whereby  Wates Shareholders (other than  
                                     Wates Shareholders who  are US   Persons 
                                     and  certain  other  overseas   Wates
                                     Shareholders) validly accepting the Offer
                                     may  elect to  receive Loan Notes instead
                                     of all or part of the cash consideration 
                                     to which they would otherwise  be
                                     entitled under the Offer

'London Stock Exchange'              London Stock Exchange Limited


'Offer'                              the offer to be made by Credit Suisse    
                                     First  Boston on  behalf  of  Pillar City
                                     to acquire  all  of  the issued  and to  
                                     be issued share capital of Wates  not
                                     already  owned  by  Pillar City or  its  
                                     associates, subject  to the terms and    
                                     conditions to be  set  out  in  the      
                                     Offer  Document and the Form of          
                                     Acceptance including  where the context  
                                     permits  any  elections available        
                                     thereunder   and/or   any    subsequent
                                     revision,  variation, extension or       
                                     renewal  of  such offer

'Offer Document'                     the  document  to  be  sent  to  Wates   
                                     Shareholders setting  out the terms and  
                                     conditions of  the  Offer including its  
                                     appendices

'Official List'                      the official list of the UK Listing      
                                     Authority

'Panel'                              the Panel on Takeovers and Mergers

'Pillar' or 'Company'                Pillar Property PLC

'Pillar Board'                       the Board of Directors of Pillar

'Pillar Circular'                    the  circular  to be sent to Pillar      
                                     Shareholders  in connection with the     
                                     approval of the Offer

'Pillar City'                        Pillar  City  PLC,  a  wholly  owned     
                                     subsidiary  of Pillar

'Pillar Shareholders'                holders of ordinary shares in Pillar

'Prudential'                         The Prudential Assurance Company Ltd

'Schroders'                          Schroder Property Managers (Jersey)   
                                     Limited

'Securities Act'                     the  US  Securities Act of 1933, as      
                                     amended and  the rules and regulations   
                                     promulgated thereunder

'SITQ International'                 SITQ International Inc

'Spiregold'                          Spiregold Limited

'United Kingdom' or 'UK'             United   Kingdom  of  Great  Britain  and
                                     Northern Ireland

'US'                                 the  United  States of America, its      
                                     territories  and possessions,  any  state
                                     of  the  United  States  of America,  the
                                     District of Columbia  and  all  other
                                     areas subject to its jurisdiction

'UK Listing Authority'               the  Financial  Services  Authority      
                                     acting in  its capacity  as  the         
                                     competent authority  for  listing under
                                     part IV of the Financial Services Act    
                                     1986

'US Person'                          a  US  person as defined in Regulation S 
                                     under  the Securities Act

'Wates'                              Wates City of London Properties plc

'Wates Board'                        the Board of Directors of Wates

'Wates Shareholders'                 holders of ordinary shares in Wates

 'Wates Shares'                      the  existing unconditionally allotted or
                                     issued and fully  paid  ordinary shares 
                                     of 25p  each  in  the capital  of Wates
                                     and any further such shares  which are   
                                     unconditionally allotted or issued  fully
                                     paid after  such date and prior to the
                                     date on which  the Offer  closes (or such
                                     earlier date as  Pillar  City may, 
                                     subject to the Code, decide) as  a 
                                     result  of the  exercise  of  options 
                                     under the Wates  Share Option Schemes or
                                     otherwise

'Wates Share Option Schemes'        the Wates 1984 Executive Share Option     
                                    Scheme and the Wates 1992 Unapproved      
                                    Employee Share Option Scheme



                                               

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