Sale of Star City

Capital & Regional plc
15 December 2006


                            CAPITAL & REGIONAL PLC:
                                        
                      X-LEISURE SELLS STAR CITY BIRMINGHAM
                                        

Capital & Regional plc, the co-investing property asset manager, today announces
that the X-Leisure Fund, the largest owner of leisure real estate in the UK, has
exchanged contracts unconditionally to sell Star City in Birmingham to REIT
Asset Management for £85.5m. Completion is set for 18 January 2007.

Star City comprises in excess of 390,000 sq ft and is home to the UK's largest
multiplex cinema, let to Vue, and Europe's largest casino, let to Stanley
Casino. There is also a 24-lane bowling alley and numerous restaurants and bars.

PY Gerbeau, Chief Executive of X-Leisure, commented:

"Our team has worked hard to transform Star City into a regional leisure
destination with a family focus with footfall now in excess of 4 million
visitors a year. We are selling Star City in a strong market and the capital,
together with the management time, released by the sale will be profitably
reinvested into a range of exciting new projects that will help us maintain the
outperformance of the fund."


Notes to editors:

About Capital & Regional plc

Capital & Regional is the co-investing asset manager which specialises in town
centre shopping centres, out of town retail parks, and urban entertainment
complexes.

Capital & Regional founded the Mall and Junction Funds in conjunction with
Morley Fund Management. It also founded the X-Leisure fund with Hermes
Investment Management Limited, and has a number of other joint ventures and
developments. Its shares are quoted on the London Stock Exchange.

For further information see www.capreg.com


About The X-Leisure Fund

X-Leisure is the UK's largest leisure fund, with 17 major leisure destinations
around the UK including Brighton Marina, 02 Centre London and West India Quay,
London Docklands.

The X-Leisure Fund currently has around £880 million property assets and equity
of £440 million.

About Hermes Real Estate

Hermes Real Estate offers property investment through segregated and pooled
vehicles. We operate an integrated portfolio management and research-based
approach using a philosophy of targeting high quality properties which are well
located and highly competitive in their local marketplaces.

Hermes operates across all the primary markets of retail, office and the
industrial sectors. The investment process uses top down portfolio and bottom up
property asset models to develop specific investment strategies for clients to
maximise their returns. In each of the major markets Hermes has specialist
investment managers with specific relevant expertise and market knowledge. This
approach ensures that the performance of each portfolio benefits from the input
and market insights from sector specialists not just the central fund manager.

Hermes Real Estate is one of the largest real estate managers in the UK, with
c. £11 billion of gross assets under management (at 30 September 2006).

                                    - ENDS -

For further information:

Capital & Regional:
Martin Barber, Chief Executive                         Tel: [phone]

Redwood Consulting:
Paul Haines / Debbie Cracknell                         Tel: [phone]

REIT Asset Management
Kevin McGrath                                          Tel: [phone]
        



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