Great Capital Partnership in major West End property swap

The Great Capital Partnership ("GCP") announces that it has completed a swap transaction with The Crown Estate ("the Crown") involving 580,000 sq ft in aggregate of property in central London which had a value as at 31 December 2007 of £357.6 million.

GCP is a 50:50 central London joint venture between Great Portland Estates plc ("GPE") and Liberty International subsidiary Capital & Counties Ltd ("C&C") and is managed by GPE.

In this transaction GCP has swapped three of its properties in exchange for three new leasehold properties, one freehold and more favourable terms on a number of its other leaseholds. This major transaction unlocks both immediate marriage value and future development opportunity for both GCP and the Crown. It is made up of three parts, the details of which are set out below.

1. The acquisition by GCP of the following interests from the Crown:

The freehold interest in 26/40 High Street Kensington, W8. The building was previously held leasehold by GCP with 104 years remaining paying a headrent to the Crown of 5% of gross rental value ("headrent gearing").

150 year leasehold interests in the following properties where GCP had no previous interest:

• 98 Portland Place, W1;
• 7-8 Park Crescent & 1-15 Park Crescent Mews, W1; and
• 211 Great Portland Street, W1.

2. The extension and improvement of GCP's existing leasehold interests from the Crown as follows:

GCP and the Crown have regeared various leasehold interests extending their length, reducing the rent paid to the Crown and loosening various operational, user and development restrictions which will enable GCP to significantly refurbish and redevelop the properties over time.

GCP has been granted new leases for 125 years, up from the old average unexpired terms of 79 years. The new headrent gearing is 4%, down from a weighted average of 12%:

• Walmar House, 288-300 Regent Street, W1;
• Spirella House, 266-270 Regent Street & 249 Oxford Street, W1;
• Regent Arcade House, 252-260 Regent Street & 19/27 Argyll Street, W1;
• Carrington House, 126-130 Regent Street & 36-40 Warwick Street, W1; and
• 100 Regent Street & 31-39 Glasshouse, W1.

GCP has been granted new leases for 150 years up from the old term of 74 years, at a similar nominal ground rent and now allowing residential development at:

• 10/12,13/14,16/28 Park Crescent, W1; and
• 92/96 & 77/83 Portland Place W1

3. The transfer by GCP to the Crown of the following assets:

The freehold interest in 21 Sackville Street, W1 where the Crown had no previous interest.

The leasehold interests in the following properties where the Crown already had the freehold:

• Victory House, 99-101 Regent Street, W1; and
• Kendal House, 203 Regent Street & 1 Conduit Street, W1.

These transferred assets were valued at £61.1 million at 31 December 2007 and produced an annual rent, net of ground rents of £2.6 million per annum.

A schedule showing the various holdings and interests along with the effect on GCP's net rental income resulting from the transaction is set out on the attached schedule.

The retained, improved assets were valued by CB Richard Ellis at £378.3 million as at 31 December 2007. After transaction costs estimated at £2.7 million, this valuation implies an immediate net surplus of £18.0 million over GCP's opening position principally due to the improved terms of the longer leases.

The retained assets, all located in prime West End positions are currently let at an average office rent per sq ft of only £29.37 per sq ft and, as at 31 December 2007 had an average rental value of £42.34 per sq ft . Although GCP's aggregate net rental income will, initially, fall by £1.5 million per annum, the retained assets' improved interests will provide GCP with a pipeline of exceptionally located refurbishment and redevelopment options enabling it to generate an enhanced income return over the medium term.