Letters to Shareholders

Capital & Regional PLC
11 February 2002


    11th February, 2002.


        Capital & Regional plc ('Capital & Regional' or the 'Company').


                            Letter to shareholders.

Capital & Regional is today sending a letter to shareholders concerning both the
creation of The Mall Limited Partnership and an EGM request by certain
shareholders. The text of this letter is reproduced below.

Enquiries :  Andrew Hayes, Hudson Sandler Limited.  Telephone [phone].


                                                                11 February 2002


Dear Shareholder

           Creation of The Mall Limited Partnership with Morley, and
                      EGM request by certain shareholders

1.       The Mall Limited Partnership

Capital & Regional announced on 25 January 2002 that the Group had entered into
agreements with Morley to form The Mall Limited Partnership, a new property fund
focused on in-town covered shopping centres, which will initially be jointly
owned by the Capital & Regional Group and clients of Morley Fund Management (the
'Mall Transaction').

The Mall Transaction is conditional upon the approval of shareholders and an
Extraordinary General Meeting ('EGM') of the Company has been convened for this
purpose (the 'Mall EGM'), which is to be held at the offices of Capital &
Regional on Monday, 18 February 2002.

We sent to you, on 1 February 2002, a circular containing both further details
of the Mall Transaction and an explanation of why your Board considers that the
Mall Transaction is in the best interests of the Company and its shareholders as
a whole (the 'Mall Circular').

2.       EGM request by certain shareholders

Also on 1 February 2002, the Board of Capital & Regional received from Dawnay,
Day Properties Limited, on behalf of three shareholders (the 'Requisitionists'),
a notice requesting that certain resolutions be put before shareholders at an
EGM (the 'Dawnay Day Resolutions'). This is the second request for an EGM made
by the Requisitionists in the last six weeks. On the previous occasion the
request was withdrawn.

The resolutions now being proposed by the Requisitionists are set out in the
appendix to this letter. As these resolutions are largely incompatible with the
approval of the Mall Transaction to be considered at the Mall EGM, the Board
proposes to wait until the outcome of that meeting is known before convening the
EGM required by the Requisitionists (the 'Dawnay Day EGM').

The Board, however, believes that as the Dawnay Day EGM relates, in part, to the
terms of the Mall Transaction, it is appropriate for shareholders to be aware of
the Dawnay Day Resolutions in advance of the Mall EGM.

Your Board remains firmly of the view that the Mall Transaction is in the best
interests of the Company and its shareholders as a whole.

In so far as they relate to the Mall Transaction, the Dawnay Day Resolutions are
either incompatible with the negotiated terms, or have already been satisfied,
or the matters to which they relate had previously been considered and taken
into account by the Board.

If shareholders approve the Mall Transaction at the Mall EGM, as recommended by
your Board, the Dawnay Day Resolutions, in the terms proposed, could not be
implemented.

3.       Letter of 7 February 2002 to shareholders by the Dawnay Day Concert
         Party

The Board has become aware that Dawnay, Day Properties Limited and certain other
parties (the 'Dawnay Day Concert Party') sent to shareholders on 7 February 2002
a letter setting out certain objections to the Mall Transaction. These
objections are raised by a small minority of shareholders who have not been
clear about their own objectives regarding the Company. Shareholders should
consider the following points:

•         The Mall Transaction, as proposed, implements the Board's long stated
strategy for the Company of managing and co-investing in growing pools of
property assets for the benefit of the Company's shareholders. A forced
liquidation of the Company's assets would not, in the Board's view, be in
shareholders' best interests.

•         The Company is confident of the future performance of both the Mall
and Junction Funds and believes that these funds will be attractive investments
both for itself and for external investors. The Company also has the flexibility
to sell down up to £170 million of its investment, if the Board considers this
to be advantageous to shareholders, without jeopardising the Company's asset
management agreements.

•         It is as tax efficient for the Company to own interests in property
through a limited partnership as it is to hold property directly.

•         The Company has pledged to return £50 million of cash to shareholders
following completion of the Mall Transaction, subject to any necessary
shareholder approvals. This amount can prudently be returned and still leave the
Company in a position to implement the Board's strategy for growth.

•         The Dawnay Day Concert Party lays great emphasis on certain corporate
governance issues which they allege are raised by the Mall Transaction. The Mall
Circular describes in full, and explains the rationale for, the arrangements put
in place to balance fairly the Company's interests with those of external
investors in the funds. The Board rejects these criticisms unequivocally.

•         The Company's share price has risen to 274p on 8 February 2002 from
235p on 16 November 2001, the last working day before the announcement of talks
relating to the formation of the Retail Park Investment Fund with Morley. The
discount at which the Company's shares trade to Capital & Regional's pro forma '
triple net' assets per share shown in the Mall Circular has therefore narrowed
from 28 per cent. to 17 per cent. over this period.

4.       Action to be taken

You need take no action at this time in respect of the Dawnay Day Resolutions.
If the Dawnay Day EGM is convened, your Board will write to you again and
explain what action you are recommended to take.

Your Board rejects the views of the Dawnay Day Concert Party and recommends that
you ignore the blue form of proxy they have sent you. Your Board draws your
attention to the Mall Circular sent to you recently. Your Board unanimously
recommends that you vote in favour of the resolution to be proposed at the Mall
EGM for the reasons stated in that circular. Your vote is important and your
Board encourages you to complete the white form of proxy, a further copy of
which is enclosed with this letter, and return it as soon as possible but in any
event so as to be received by the registrar by no later than 12.00 pm on 16
February 2002.

                                Yours sincerely



                                  Tom Chandos

                                    Chairman


Appendix

Dawnay Day Resolutions

Extracted without amendment from text of letters submitted to the Board of
Capital & Regional

'The object of the meeting is as follows:

A.      To consider the following resolutions:

1.       That the Directors be authorised to distribute to shareholders in
specie (i) all the interest in the 'Junction' Retail Park Investment Fund which
the Company is permitted to dispose of under the terms of its agreement with
Morley Fund Management (ii) all interests held or to be acquired by the Company
in the proposed new 'Mall' Shopping Centre Fund and (iii) all interests held or
to be acquired by the Company in any other similar fund in which the Company
participates.

2.       That the Directors be requested to establish arrangements for interests
in the Retail Park Investment Fund and the proposed new Shopping Centre Fund and
any other fund in which the Company participates to be capable of being traded.

3.       That the Directors be requested to ensure that the proposed new
Shopping Centre Fund and any other fund in which the Company participates be
constituted such as to:

          (a)     permit investors to redeem their interests in the relevant
fund once in every period of 12 months by not less than 6 month's notice in
writing, subject to a maximum aggregate redemption by all investors in the
relevant fund on any one occasion being limited to 20 per cent. of the relevant
fund;

          (b)     promote liquidity in dealings in interests in the relevant
fund throughout the life of the fund.

4.       That the Directors be requested to ensure that in establishing,
participating and/or acquiring an interest in the proposed new Shopping Centre
Fund or any other fund, they protect the interests of the Company, its
shareholders, the relevant fund and investors in the relevant fund by the
omission of any provision which would operate to the detriment of the Company,
its shareholders, the relevant fund or investors in the relevant fund in the
event of a change of control or change of management of the Company or the
relevant fund.

5.       That the Company put on display for inspection by shareholders all
documents relating to the constitution of the Retail Park Investment Fund and
disclose to shareholders by way of circular in writing all provisions of any
such documents which relate to, or are affected by, any change of control or
change of management of the Company or the Retail Park Investment Fund and in
each case an estimate of the likely liability that might be incurred by any
person pursuant to any such provision in the event of the occurrence of any such
change of control or management as at the date of the Meeting.

B.      To give the directors an opportunity to report to the Company, failing
which to request that they do report to the Company, on:

          (a)     what proposals they have to effect a distribution along the
lines of that mentioned at resolution (1) above, whether they have investigated
the possibility of such a distribution and the results of that investigation;

          (b)     what proposals they have to implement a scheme along the lines
of those mentioned at resolutions (2) and (3) above, whether they have
investigated the possibility of such a scheme, and the results of that
investigation;

          (c)     the extent to which they presently comply with the requests
referred to at resolution 2 above and the extent to which the Company's
commercial interests are vulnerable to any change of control or change of
management.'





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