Investment management

We are continually evaluating the prospective return we can expect to generate from our portfolio and comparing it to what is available in the market. We look for buildings with opportunities for value creation through refurbishment, redevelopment and other methods designed to improve their attractiveness to occupiers. Whilst we didn´t forecast the severity of this downturn, we did take pre-emptive action. For the last 18 months, we have been net sellers of properties with £194.3 million released through disposals in the year to 31 March 2009 (at a 8.0% discount to the 31 March 2008 value). A combination of the speed of the downward in asset values and the increasing evidence of financial distress amongst some of the more aggressively leveraged property owners means that we are already seeing attractive investment opportunities as this year progresses and we expect this trend to continue.

£194m For the last year we have been net sellers of properties with £194 million (our share £103 million).

Net investment through the cycle, including our share of JVs

In June, we announced that The Great Victoria Partnership (No 2) (¨GVP2¨), had sold 208/222 Regent Street, W1 to a private purchaser for £96.6 million (our share £48.3 million). The proceeds were used to repay GVP2´s non-recourse loan of £35.4 million before distributing the balance to the Group and our partner. The building was purchased in April 2005 for £53.7 million, the headlease regeared with the Crown Estate, the space reconfigured (for a combined cost of £12.6 million) and the units let at the new benchmark rents.

In September, The Great Wigmore Partnership sold 180 Great Portland Street, W1 for £79.3 million (our share £39.6 million). The 104,000 sq ft retail and office building was substantially rebuilt in 2006 and let during the course of 2007 at an average office rent of £60.15 per sq ft, the culmination of a successful development.

In March 2009, the Great Capital Partnership (“GCP”) sold Metropolitan Wharf, E1 to a private buyer for £7.0 million (our share £3.5 million) allowing us to reduce debt and focus our energies on more attractive properties in our core markets. At 79/83 Great Portland Street, W1 we sold 15 flats for £9.8 million following the completion of this residential project necessary to meet planning obligations for larger office schemes, crystallising a project surplus of 18.9%. October 2008 saw the only property acquisition made during the year at 13/14 Great Castle Street, W1 which was bought for £4.2 million in GCP (our share £2.1 million) to augment our potential refurbishment scheme at Walmar House, Regent Street, W1.

Since the year end GCP has agreed to sell 29/35 Great Portland Street, W1 for £7.0 million (our share £3.5 million) in line with the 31 March 2009 valuation and we have agreed to sell Bond Street House, 15/16 New Bond Street, W1 for a total consideration of up to £45.0 million, approximately 4% ahead of the 31 March 2009 book value.

Our four joint venture partners have been supportive of our business plans and have approved a wide variety of initiatives including refurbishment, acquisitions, sales and planning applications. Looking forward, the BP Pension Fund has allocated up to £107 million of additional equity capital to our existing 50:50 joint venture, the Great Ropemaker Partnership, for new investment opportunities. The Company anticipates matching this new capital.

£107m allocated by the BP Pension Fund for The Great Ropemaker Partnership

Joint venture business – contribution to the Group