Transaction Discussions

Capital & Regional PLC
11 January 2002

                                                               11 January 2002



                            CAPITAL & REGIONAL PLC

             DISCUSSIONS RELATING TO A NEW SHOPPING CENTRE FUND.



Capital & Regional plc announces today that it is currently in talks, which
may or may not lead to a transaction, regarding the formation of a new
shopping centre fund.  Under the proposals currently under discussion, the
Company and clients of Morley Fund Management would each contribute shopping
centres into the new fund and take a 50 per cent. interest in that fund.  The
management roles of the Company and Morley would be similar to those
undertaken in the Retail Park Investment Fund announced on 29 November 2001.
Morley is a member of the CGNU plc group of companies.



The creation of the fund would be in line with Capital & Regional's stated
strategy under which it has been changing from a diversified property
investment company to a focussed owner and manager of covered in town shopping
centres, out of town major retail parks and retail and leisure complexes
branded as Xscape.  Capital & Regional is committed to leveraging its
management expertise across a larger asset base to generate greater value for
shareholders and was pleased to announce the completion of the Retail Park
Investment Fund on 3 January 2002.



The proposals currently under consideration would, given the transaction size,
require shareholder approval under the Listing Rules, which approval will be
sought if negotiations reach a successful conclusion.





Enquiries:



Hudson Sandler

Michael Sandler
Andrew Hayes
Wendy Baker:               Tel:  [phone]