Trading Statement

16 November 2006

SLOUGH ESTATES: REIT CONVERSION& US STRATEGIC REVIEW

- Announces process to achieve REIT status on 1 January 2007

- Establishes new dividend policy post REIT - with high pay out ratio for
  investors

- Initiates strategic review of options for US business

- Commences process to establish the equivalent of a REIT in France - a "SIIC"

- Confirms trading performance remains strong,

- in line with our expectations


CHIEF EXECUTIVE, IAN COULL SAID

"In August, we reported a strong set of Interim Results. I can report today
that we are continuing to deliver a strong operating performance, on top of
which, the actions we have announced are important positive steps for Slough
Estates and we look forward to operating as a UK-REIT from January 2007. We are
maintaining our positive momentum and are well primed for the next chapter in
our growth story."


UK REIT Conversion

The Board of Slough Estates believes that conversion of the company into a
UK-REIT is in the best interests of shareholders and expects to become a
UK-REIT with effect from 1 January 2007. Whilst UK-REIT status confers a number
of tax benefits to most property investment companies, the legislation has
particular advantages in the context of Slough's business model. Slough's
growth strategy is development led and under the UK-REIT structure most of our
development activity will be tax exempt. In addition, it will be possible to
structure the Group's growing pan-European business in a more tax efficient
manner following REIT conversion.

Slough Estates believes that it will represent an attractive UK-REIT investment
for shareholders: it has a strong focus on a specific asset category - flexible
business space - with a high quality income profile (12 year weighted average
lease expiry ), a diversified customer base (over 1,700 customers), financial
strength (61% gearing) and good growth prospects (2.7m sq m of development
pipeline).

Following conversion to a UK-REIT, corporation tax will no longer be payable on
profits and gains from qualifying businesses in the UK - effectively reducing
the burden of taxation for most if not all investors. For Slough Estates this
will mean significant annual tax savings on its property income, the
elimination of tax in respect of capital gains and the eradication of £460m of
contingent corporation tax - giving much more flexibility with regard to the
disposal of investment assets. The cost of conversion is 2% of the market value
of the relevant assets at the date of conversion and, on the basis of the
valuation of those assets as at 30 June 2006 , this would result in a
conversion charge of approximately £73m (latest assessment).

Under a UK-REIT rule, charges may be imposed in relation to large shareholdings
in a UK-REIT, the "10% rule" as it is known. In order to avoid such charges it
is proposed to make amendments to the Articles of Association, full details of
which are included in a circular to be posted to shareholders in the next few
days. While Slough Estates is not currently aware of any such significant
shareholding, this proposal is a prudent contingency measure. Further details
of the proposed amendment are published in the circular giving notice of the
necessary Extraordinary General Meeting, scheduled for 14 December 2006.


DIVIDEND POLICY POST CONVERSION TO A UK-REIT

For any company which converts to a UK-REIT, dividends to investors may
comprise "Property Income Distributions" ("PIDs"), ordinary corporate dividends
or a combination of the two. UK-REITs will be required to distribute to
shareholders, by way of PIDs, at least 90% of the profits from their UK
tax-exempt activities (broadly calculated using the normal tax rules). Companies
may decide to distribute additional amounts over and above the minimum PID.

As a UK-REIT, Slough's primary objective will continue to be the maximisation
of total returns, comprising both dividends and capital growth. However, the
Board recognises that there is likely to be an increased focus on earnings
growth and the level of dividend payments. The Board has reviewed its overall
dividend policy in light of the impending conversion to UK-REIT status. In
determining the level of dividends following UK-REIT conversion, the Board's
aim will be to achieve a sustainable, progressive policy which satisfies
shareholders' expectations of a relatively high pay-out of recurring property
rental income, whilst supporting the ongoing needs for capital.

The precise proportion of recurring property rental income that the Slough
Group distributes may vary between years and will be flexed as appropriate,
according to the needs of the business. Ordinarily, however, the Board would
expect the total dividend to exceed the mandatory 90% PID element, and to
compris e between 85% and 95% of the aggregate of UK and overseas sourced
recurring property rental earnings plus a proportion of trading property
profits and other income from non-property activities.


SLOUGH ESTATES USA ("SEUSA") - STRATEGIC REVIEW

Consistent with the Group's previously stated strategy of focusing on the
provision of flexible business space in the UK and in Continental Europe,
Slough Estates is currently exploring the strategic options for its US
business. This process, which is still at an early stage, involves
consideration of a range of possible options, including an immediate or phased
divestment and also joint venturing or merging Slough's US business with a
third party. In assessing the options the Board will have regard to all
relevant considerations including the current and potential future value of the
business as well as the tax implications of the various options. 

There is no certainty that the review will result in any transaction, or, if
there is a transaction, on what terms it would be based.


FRENCH SIIC STATUS

Slough Estates' business in France accounts for over 40 per cent of its
investment portfolio in Continental Europe and France is a key target market
for the Group as we pursue our ambitious plans for growth.

Slough Estates announces today that it has applied for a secondary listing of
the Company's shares on Euronext, Paris, the French Stock Exchange. Following
this, it is Slough Estates' intention to also elect into France's tax exempt
regime for real estate companies - the Sociétés d'Investissements Immobiliers
Côtées ("SIIC" - similar to the UK-REIT regime) with effect from 1 January
2007. Slough Estates would, in return for a conversion charge of approximately
€19m, become largely exempt from tax on income and capital gains. Based upon
the value of eligible assets as at 30 June 2006, this would result in the
eradication of €41m of deferred tax liability.


BUSINESS UPDATE

Overall performance, market conditions and business outlook are very much in
line with our expectations and with those trends we indicated at the time of
our 2006 interim results announcement in August. We continue to deliver our
major development programme in all three geographic regions.

In the UK the strong momentum of lettings built up in the first half of the
year has continued , with steady occupier demand being maintained in most areas
of the business. Although rental levels continue to be constrained in most
regions, there is evidence of pockets of higher rental growth in locations such
as Bristol and Heathrow. Overall , most regions in the UK continue to see
cautious signs of rents edging upwards in line with the trends reported in
August. Meanwhile, investment market yields for prime industrial assets have
continue d to tighten in the second half of the year, albeit at a slower rate
than we experienced in the first half. The IPD Monthly index for prime
industrial yields fell by 2 3 basis points in the four months to the end of
October - with the average equivalent yield for industrial standing at 6.3 0
per cent at the end of October.

Our Continental European business continue s to deliver a strong performance
into the second half of the year, having concluded over 60,000 sq m of lettings
and €70m of trading properties transactions. Occupier demand continues to be
positive with healthy and increasing enquiry levels. Certain regions are seeing
signs of rental increases - for example, in light industrial markets in France
and in the logistics market in France, Belgium and Central Europe. Investment
yields remain considerably higher than in the UK and continue to experience
compression, as demand from investors has continued to increase.

In the US, although most commentators are expecting slower economic growth, our
specialist biotechnology business in California is continuing to expand with
increase s in venture capital funding flowing into our markets in both San
Francisco and San Diego , resulting in growing demand, especially for smaller
units. The outlook for San Diego is therefore improving , whilst the outlook
for the San Francisco Bay area remains strong with further negotiations
underway and a healthy level of enquiries.

A shortinterview with Ian Coull and David Sleath in video/audio and text is
available on Investor Presentations page of our corporate website http://
www.sloughestates.com and on http://www.cantos.com"

For further information please contact:

Slough Estates plc                      Maitland                               
Michael Waring                          Colin Browne /Peter Ogden              
Tel: [phone]                     Tel: [phone]                     

Notes to editors

Slough Estates plc or Slough Estates International (SEI)

The leading European provider of flexible business space, SEI owns business
parks in Europe and North America, with property assets of £5.6bn, more than
four million square metres of business space and more than 1,700 customers. SEI
has an annual rent roll of £289m and a weighted average unexpired lease length
of 11.9 years. Flexible business space is industrial sites or business parks
put to multiple uses such as; manufacturing, light industrial, distribution
(both `small' and `big-box'), research and development, offices and
warehousing. SEI's properties are in suburban locations in close proximity to
main business centres with long-term demand for business accommodation. The
company continues to develop new business parks with the long-term objective of
building shareholder value and enhancing its reputation for quality buildings
offering excellent value to customers.(Figures quoted as at 30 June 2006)

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