New Lease

Hammerson PLC
11 March 2002


Hammerson Agrees Terms with Allen & Overy for Lease of 70,000 m(2) Spitalfields
Office Scheme

Spitalfields Developments Limited ('SDL'), a subsidiary of Hammerson plc, and
the Corporation of London, today announced that leading international law firm,
Allen & Overy, has agreed heads of terms to lease a proposed 70,000 m(2)
(750,000 ft(2)) new office building at Bishops Square, Spitalfields, London E1
at an overall rent of approximately £45/ ft(2), with an 18 month rent free
period and a fitting out contribution. It is anticipated that work on the scheme
will start in the autumn, subject to planning consent, with completion in 2005.

Hammerson and the Corporation of London have agreed to advance the development
together and Hammerson will increase its percentage ownership in the scheme from
32% to 75% on receipt of planning consent. The two parties will then be
responsible for meeting their proportionate share of the development costs.
Following completion of the project, Hammerson will acquire the Corporation of
London's 25% interest in the development at market value. The freehold interest
will be retained by the Corporation of London and SDL will be granted a long
leasehold interest at a gearing of 5%.

Hammerson's total costs at 31 December 2001 in respect of Bishops Square amount
to £25 million. The group's additional costs in respect of completing its 75%
share of the development are estimated to be £260 million.

Bishops Square has been designed by architects, Foster and Partners, and
represents the final phase of the regeneration of the Old Spitalfields Market
site. A planning application for the scheme, which includes retail and
residential accommodation, together with major new public spaces, has recently
been submitted to The London Borough of Tower Hamlets. The scheme contains major
modifications to the proposals unveiled in December 2001 following close
consultation with the local community.

John Richards, Chief Executive of Hammerson, said:


             '     This scheme is in line with our strategy of creating first
        class office properties in central London, where the market fundamentals
        are attractive. I am very pleased that we have agreed terms with Allen &
        Overy. Bishops Square is a very exciting project for Hammerson and we
        look forward to creating one of the most dynamic working environments in
        the City.'

                                                                        .../....

Ted Hartill, the City Surveyor of the Corporation of London, said:


             ' The Corporation of London is delighted with recent progress in
        advancing this major scheme. Bishops Square will create many more jobs
        and encourage significant further regeneration within the London Borough
        of Tower Hamlets and adjoining boroughs over the next few years.'

John Rink, Managing Partner of Allen & Overy, said:


             '     The new office will provide first class accommodation for
        well over 3,000 staff at a very convenient City location, being close to
        the main line and underground stations at Liverpool Street, the
        Broadgate complex and Spitalfields market. Our selection of the
        Spitalfields site follows a comprehensive review of all available
        options and we are very pleased to have reached agreement with Hammerson
        and the Corporation of London on what we are confident will be an
        exciting main London office for the firm.'

The letting agents for Bishops Square are C B Hillier Parker. Allen & Overy are
advised by Healey & Baker and the Corporation are advised by Insignia Richard
Ellis.


        For further information:

        John Richards            Tel: [phone]

        Chief Executive          Fax: [phone]

Christopher Smith

Director of Corporate Affairs



                      This information is provided by RNS
            The company news service from the London Stock Exchange