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Interim Results

31.08.1999

RNS No 6566h
HAMMERSON PLC
31 August 1999


Hammerson Half Year Results

Hammerson plc announces unaudited results for the six months to 30 June 1999.

Financial highlights:
                               1999       1998     percentage
                                                     change
                                                        
   Net rental income          £62.3m     £60.0m       +3.8%
   
   Profit before taxation     £35.9m     £36.0m       -0.3%
   
   Adjusted profit before     £37.1m     £32.4m      +14.5%
   taxation(1)
   
   Earnings per share         10.2p      11.4p       -10.5%
   
   Adjusted earnings per      10.6p      10.1p        +5.0%
   share(1)
   
   Dividend per share         4.19p      4.13p      +5.0%(2)
   
                             30 June       31           
                               1999     December
                                          1998
                                                        
   Net asset value per         526p       485p        +8.5%
   share
                                                        
   Diluted net asset value     519p       481p        +7.9%
   per share(3)
                                                        
   Diluted net asset value     543p       495p        +9.7%
   per share including
   developments at current
   market value(3)
                                                        

   Notes:

    (1)  Excluding exceptional items
    (2)  After taking account of 0.14 pence per share in 1998 to allow for
         deferral to April 1999
    (3)  Diluted net asset value per share assumes the exercise of conversion
         rights relating to convertible bonds and of options granted over shares

Operational highlights:

-    Adjusted  profit  before  taxation increased by 14.5%  to  £37.1  million
     principally  due  to acquisitions, increased income from  the  investment
     portfolio and lower overhead costs.

-    The investment portfolio increased in value in the first half of 1999  by
     5.9%,  or 6.4% excluding the one-off effect of changes to French transfer
     taxes.

-    Excellent progress was made on the development programme with the  office
     development at 40 rue de Courcelles, Paris let to ABN Amro and The Oracle
     shopping centre, Reading now 97% let or in solicitors' hands.

The Chairman, Geoffrey Maitland Smith, said today:

     'I  am  very pleased to report on Hammerson's continued progress in 1999.
     Hammerson  has  a clear strategy to build on its position  as  a  leading
     European real estate company.  It has a first class portfolio of shopping
     centres   and  offices  which  are  performing  strongly,  some  exciting
     developments  underway and in the pipeline, and a team of  dedicated  and
     talented staff.
     
     The  directors have declared an interim dividend of 4.19 pence per  share
     payable on 3 November 1999.  This represents an underlying increase of
     5.0%, as last year's  interim  dividend included 0.14 pence to allow for
     its deferral until April 1999.
     
     Looking ahead, I believe that occupational demand across our markets will
     be  sustained.   Coupled with the limited level of  development  activity
     generally,  this  should lead to continued rental growth  and  a  further
     increase in values over the medium term.'
     
     
For further information:

Ronald R Spinney                                          Tel: 0171 887 1000
Chief Executive                                           Fax: 0171 887 1010

Simon R Melliss
Group Finance Director

Christopher D M Smith
Director of Corporate Affairs





CHAIRMAN'S STATEMENT

Introduction

In  this, my last Chairman's Statement before retirement, I am very pleased to
report  on Hammerson's continued progress in 1999.  I feel privileged to  have
been  associated with the Company over the last nine years and it is a  source
of  great  pleasure  to me that Ron Spinney will succeed me  as  non-executive
Chairman and that John Richards will become Chief Executive on 1 October.

Hammerson has a clear strategy to build on its position as a leading  European
real  estate company.  It has a first class portfolio of shopping centres  and
offices which are performing strongly, some exciting developments underway and
in the pipeline and a team of dedicated and talented staff.

Results and Dividend

Net  rental income increased by 8.6%, on a like-for-like basis, when  compared
with  the  equivalent  period  last  year.  Adjusted  profit  before  taxation
increased  by  £4.7  million, or 14.5%, to £37.1 million  principally  due  to
increased  income from the investment portfolio, acquisitions  and,  following
the sale of the Canadian business, lower overhead costs.

The  directors  have  declared an interim dividend of  4.19  pence  per  share
payable  on 3 November 1999.  This represents an underlying increase of  5.0%,
as  last year's interim dividend included 0.14 pence to allow for its deferral
until April 1999.

Portfolio

An external valuation of the group's investment and development properties was
carried out as at 30 June 1999.  This showed an increase in the value  of  the
group's  investment  portfolio in the first half of 1999  of   5.9%,  or  6.4%
excluding the one-off effect of changes to French transfer taxes.

The  UK  retail  and office portfolios increased in value  by  6.5%  and  7.2%
respectively.  In France, there was an increase in the value of the  portfolio
of  3.0%, after taking into account a one-off reduction of 3.2% resulting from
legislative  changes  to  French transfer taxes. In  Germany  property  values
increased by 1.2%.

During the first half of the year, the group invested a total of £262 million.
In  addition  to expenditure on the development programme, this  included  the
acquisitions  of the Harbour Exchange Estate, Docklands, London  E14  for  £77
million and the Euston Square Estate, London NW1 for £84 million.  Both  these
major office investments are performing well.

The group raised a total of £68 million from disposals which included the sale
of  Saar Galerie, Saarbrucken and Shopping Etrembieres in France, each for £20
million.

Investment  activity has continued in the current half of the  year  with  the
recent  acquisition  for £28 million of a prime office development  site,  280
Bishopsgate in central London, where a start on site is anticipated this year.
In addition the group increased its leasehold interest in the Liberty Shopping
Centre,  Romford from 50% to 99.5% for £52 million.  In July, the  group  sold
Wolsey Place Shopping Centre, Woking for £46 million.

Development Programme

The  group's  phased development programme continues, with two  of  the  major
projects  virtually completed, other projects being advanced and a  number  of
new  opportunities  being secured.  At 30 June 1999 the development  portfolio
had  a  current  market  value of £385 million compared  with  the  book  cost
included in the balance sheet of £309 million.

The Oracle in Reading, a 65,000 sq.m. regional shopping centre being developed
as  a  joint  venture  with ADIA, will open in September  this  year.   It  is
virtually fully leased to high quality retailers and leisure operators.

Good progress is being made at West Quay, Southampton where we are building  a
regional  shopping  centre of 70,600 sq.m..  The centre,  a  joint  venture 
with Barclays  plc,  is  scheduled to open in Autumn 2000  and  over  half  of
 the anticipated  rental  income has either been contracted or  is  in 
solicitors' hands.

At  Brent  Cross,  the  public inquiry into Hammerson's  proposed  27,000  sq.
m.expansion concluded in June and the result is expected in the first half  of
next year.

The major refurbishment of Centennium House, London EC3 has been completed 
and
there  is  an  encouraging  level of interest  from  potential  tenants.   The
development of 16, Old Bailey, London EC4 is proceeding well, with  completion
scheduled for June 2000, and marketing of the space is now underway.

Since  30  June,  the group's 17,700 sq. m.office development  at  40  rue  de
Courcelles,  Paris has been completed and handed over to ABN Amro,  which  has
leased the building for nine years at a rent of FF3,500/sq.m., a record level
in the current cycle.

A  comprehensive  redevelopment has started at 54 boulevard  Haussmann,  Paris
with  completion  scheduled for the end of 2000.   The building  will  provide
12,700 sq.m. of space and is 97% pre-let to retail tenants.

Since 30 June, we have completed documentation for The Birmingham Alliance,  a
partnership between Hammerson, Henderson Investors and Land Securities PLC  to
redevelop  merged  property  interests in  the  retail  heart  of  Birmingham.
Hammerson now has a one third interest in the 12 hectare Bull Ring site  where
enabling  works  commenced  recently as a prelude  to  the  development  of  a
shopping  centre of 110,000 sq.m., the main construction of which is expected 
to start in 2001.  In addition, Hammerson has acquired a one third interest 
both in the nearby Martineau Place site, where work to provide 16,700 sq. m.of
shop units  is  planned  to  begin next spring and in the  adjacent  Priory 
Square Shopping  Centre.  The  latter provides good current income  and 
longer  term redevelopment potential.

Balance Sheet and Cash Flow

Diluted net asset value per share increased in the six months to 30 June  1999
by  7.9%  to  519  pence, mainly due to the increase in value of  the  group's
investment portfolio. Including developments at current market value,  diluted
net asset value per share rose to 543 pence compared with 495 pence at the end
of 1998, an increase of 9.7%.

Operating  cash  flow  for  the six months to 30  June  1999  after  deducting
interest and tax was £15 million, compared with £27 million in the first  half
of  1998.   This  reflected tax paid of £20 million on  the  disposal  of  the
Canadian business.

Since  31  December  1998, the group's net borrowings have decreased  by  £144
million  to  £755 million, principally reflecting the receipt of the  proceeds
from  the  sale  of  the group's Canadian business partly  offset  by  capital
expenditure.   In June, Hammerson arranged a Euro 300 million unsecured  eight
year  bond issue at a coupon of 5.0% per annum.  The average maturity  of  the
group's borrowings is now 14 years.

Hammerson's financial condition remains strong.  Gearing was 50%  at  30  June
1999,  compared  with 64% at the 1998 year end.  With cash  balances  of  £102
million  and  undrawn  committed facilities of £369  million,  the  group  has
substantial resources for further investment.

Year 2000

Hammerson's  Year 2000 project has continued during the course of  this  year.
The  emphasis  has  been on the testing and, where necessary,  replacement  of
equipment and the preparation of effective contingency plans.  In addition, we
have  been  assessing  the  progress of our third  party  suppliers,  such  as
managing agents, in meeting our compliance targets and preparing plans for the
millennium  weekend.   The  total cost of the project  is  approximately  £1.5
million.   We  believe  that  the work carried out  and  plans  in  place  are
appropriate to ensure that the Company and its properties are able to  operate
as normal over the millennium period.

Markets and Outlook

In  the  UK, sentiment in the property markets improved markedly in the  first
six  months of 1999 and strong investment demand led to a hardening of  yields
and  an increase in values.  There was continuing demand for units in dominant
shopping centres leading to modest rental growth. Occupational demand remained
good  for prime offices in the West End and Docklands.  In the City of  London
confidence  improved during the first half of the year but rents  were  little
changed.

In  France, retailer demand for prime units continued to improve resulting  in
good  rental  growth.  The central Paris office market saw strong occupational
demand for prime accommodation and, coupled with a relatively low supply, this
led  to  an encouraging  increase in rents.  Investment interest continued  to
improve, reflecting the good prospects for rental growth, which led to a  rise
in values.

The German economy is showing signs of modest recovery. Although rental growth
in  the retail sector over the first half of the year was marginal, there  was
an  increase  in  demand  for  prime retail  units  and  this  is  continuing.
Investment yields for prime shopping centres improved slightly.

Looking  ahead,  I am optimistic that occupational demand across  our  markets
will  be  sustained.   Coupled with the limited level of development  activity
generally, this should lead to continued rental growth and a further  increase
in values over the medium term.

Board

At  the  Annual General Meeting on 13 May, I outlined the Board  changes  that
will  take  place on 1 October.  Ron Spinney will succeed me as  non-executive
Chairman  and  John  Richards  will become Chief Executive.  Two  other  Board
appointments  also  come  into effect on 1 October.   Peter  Cole  and  Gerard
Devaux,  both  of whom have over ten years experience with the  group,  become
Development   Director   and   Managing  Director   for   Continental   Europe
respectively.

I  am  confident  that, following these changes, the Board  will  continue  to
provide  the vision and skills for Hammerson to maintain its progress  in  the
future.


                                                       Geoffrey Maitland Smith
                                                                      Chairman

                                                                31 August 1999


Unaudited Consolidated Profit and Loss Account


Year                                            Six        Six
ended                                         months    months
31 December                                   ended     ended
1998                                Notes   30 June   30 June
                                               1999      1998
  £m                                             £m        £m
                                                         
 107.4      Net rental income :         1      62.3      49.1
  20.5      Continuing operations                -       10.9
                                                         
            Discontinued operations
            
 127.9                                         62.3      60.0
 (16.3)     Administration expenses            (7.5)     (8.0)
                                                         
  93.9      Operating profit :                 54.8      43.0
  17.7      Continuing operations                -        9.0
                                                         
            Discontinued operations
 111.6                                         54.8      52.0
            Exceptional items:                           
   7.2      (Loss)/Profit on sale of           (1.2)      3.6
  12.9      investment properties                -         -
            Profit on the sale of
            Canadian operations
 131.7      Profit on ordinary                 53.6      55.6
            activities before interest                   
 (42.8)                                 2     (17.7)    (19.6)
            Cost of finance (net)
  88.9      Profit on ordinary                 35.9      36.0
            activities before taxation                   
 (20.2)                                 3      (5.2)     (2.5)
            Taxation
  68.7      Profit on ordinary                 30.7      33.5
            activities after taxation                    
  (2.3)                                        (1.4)     (0.9)
            Equity minority interests
  66.4      Profit for the period              29.3      32.6
                                                         
 (36.9)     Dividends                   4     (12.1)    (11.9)
  29.5      Retained profit for the            17.2      20.7
            period
                                                         
  23.1p     Earnings per share          5      10.2p     11.4p
  23.1p     Diluted earnings per share  5      10.2p     11.4p
  21.1p     Adjusted earnings per share 5      10.6p     10.1p

Unaudited Consolidated Balance Sheet


31 December                         Notes    30 June   30 June
1998                                            1999      1998
  £m                                              £m        £m
                                                         
               Fixed assets                                 
 2,163.2       Land and buildings       6   2,417.4    2,096.4
     0.7       Fixtures,  fittings and          0.7        1.5
               equipment
 2,163.9       Tangible assets              2,418.1    2,097.9
                                                         
   -           Investments              7       6.1        -
 2,163.9                                    2,424.2    2,097.9
                                                         
                Current assets                               
   371.6         Debtors                 8      46.7       41.1 
   165.3        Cash at bank and in           102.3      210.2
                hand
   536.9                                       149.0      251.3
                                                         
                Creditors falling due                        
                within one year
   (31.3)       Borrowings              9      (6.0)     (37.1)
  (163.1)       Other                  10    (117.1)    (100.4)
                                                         
   342.5        Net current assets             25.9      113.8
                                                         
 2,506.4        Total assets less current   2,450.1    2,211.7
                liabilities
                                                         
                Creditors falling due                        
                after more than one year
(1,032.6)       Borrowings, including    9   (851.2)   (881.3)
                convertible bonds
   (14.3)       Other                   10    (12.9)    (17.7)
                                                         
   (60.8)       Equity minority               (66.4)    (32.3)
                interests
 1,398.7                                    1,519.6   1,280.4
                                                         
         
                Capital and reserves                         
    72.1        Called up share capital        72.2      72.0
   525.9        Share premium account         527.3     525.7
   489.0        Revaluation reserve           629.9     379.0
     1.5        Other reserves                  1.5       1.5
   310.2        Profit and loss account       288.7     302.2
 1,398.7        Equity shareholders' funds  1,519.6   1,280.4


Statement of Total Recognised Gains and Losses

Year                                         Six       Six
ended                                     months    months
31 December                                ended     ended
1998                                     30 June   30 June
                                            1999      1998
   £m                                          £m       £m
                                                          
  66.4      Profit for the period           29.3      32.6
 131.1      Unrealised surplus on          109.6       -
            revaluation of properties
            Taxation on realisation of                    
 (22.8)     previous years'                    -         -
            revaluation gains
  (4.2)     Exchange translation            (7.4)     (5.2)
            movements
 170.5      Total recognised gains and     131.5      27.4
            losses for the period

Note of Historical Cost Profits and Losses


Year                                          Six       Six
ended                                      months     months
31 December                                 ended     ended
1998                                      30 June   30 June
                                             1999       1998
                                                            
 £m                                           £m         £m
                                                          
  88.9      Profit on ordinary               35.9       36.0
            activities before taxation
            Realisation of previous                       
  30.9      years' revaluation              (33.4)      10.3
            (losses)/gains
            Historical cost profit on                     
 119.8      ordinary activities before        2.5       46.3
            taxation
            Historical cost                               
  37.6      (loss)/profit  for the          (16.2)      31.0
            period after taxation,
            equity minority interests
            and dividends



Reconciliation of Movements in Shareholders' Funds

  Year                                        Six       Six
 ended                                     months    months
31 December                                 ended     ended
                                          30 June   30 June
                                             1999      1998
                                                       
   £m                                         £m         £m
                                                          
    29.5    Retained profit for the           17.2     20.7
            period
   104.1    Other recognised gains and       102.2     (5.2)
            losses
    12.3    Issue of shares                    1.5     12.1
   145.9    Net increase in                  120.9     27.6
            shareholders' funds
 1,252.8    Shareholders' funds at 1       1,398.7  1,252.8
            January
 1,398.7    Closing shareholders'          1,519.6  1,280.4
            funds


Unaudited Consolidated Cash Flow Statement


  Year                                        Six       Six
 ended                                      months    months
31 December                                  ended     ended
1998                              Notes    30 June   30 June
                                              1999      1998
  
  £m                                           £m         £m
                                                          
 115.9      Net cash flow from         12    57.0       48.7
            operating activities
            
 (52.8)     Returns on investment and  12   (22.2)     (20.0)
            servicing of finance
            
 (26.5)     Corporation tax paid            (20.3)      (2.1)
                                                          
(262.5)     Capital expenditure        12  (193.8)    (157.4)
            
 (78.9)     Acquisitions and           12    320.7       -
            disposals
            
 (11.5)     Equity dividends paid           (36.8)     (11.5)
            
            Cash inflow/(outflow)                         
(316.3)     before movements in              104.6    (142.3)
            liquid resources and
            financing
            
 (74.6)     Decrease/(Increase) in           100.5    (125.7)
            liquid resources
            
 399.9      Net cash (outflow)/inflow  13   (167.4)    271.0
            from financing
            
   9.0      Increase in cash in the           37.7       3.0
            period


Unaudited Reconciliation of Net Cash Flow to Movement in Net Debt


  Year                                         Six       Six
 ended                                       months   months
31 December                                  ended     ended
                                           30 June   30 June
                                              1999      1998
  
    £m                                          £m        £m
                                                         
   9.0      Increase in cash in the           37.7       3.0
            period
(399.2)     Decrease/(Increase) in           168.9    (271.0)
            debt
  74.6      (Decrease)/Increase in          (100.5)    125.7
            liquid resources
(315.6)     Change in net debt               106.1    (142.3)
            resulting from cash flows
            
            Disposal of secured bank                     
  26.5      debt on disposal of                -         -
            subsidiary
            Adoption of secured bank                     
 (28.5)     debt on acquisition of             -         -
            property
  (0.2)     Exchange adjustment               37.6      14.9
(317.8)     Movement in net debt in          143.7    (127.4)
            the period
(580.8)     Opening net debt                (898.6)   (580.8)
(898.6)     Closing net debt                (754.9)   (708.2)



Notes to the Accounts


1      NET RENTAL INCOME

  Year                                       Six        Six
 ended                                    months     months
31 December                                ended      ended
1998                                     30 June    30 June
                                            1999       1998
                                                      
  £m                                          £m         £m
                                                         
  80.0      United Kingdom                  47.1       39.0
  20.7      France                          10.9        6.9
   6.7      Germany                          4.3        3.2
 107.4      Continuing                      62.3       49.1
            operations
  20.5      Discontinued                     -         10.9
            operations-Canada
 127.9                                      62.3       60.0

The net rental income of £60.0m for the six months ended 30 June 1998 was
equivalent to £60.7m translated at 30 June 1999 exchange rates.


2      COST OF FINANCE (net)

  Year                                         Six        Six
 ended                                      months     months
31 December                                  ended      ended
1998                                       30 June    30 June
                                              1999       1998
                                                         
  £m                                            £m         £m
                                                         
  66.0      Interest payable and similar      30.8       29.3
 (11.8)     charges                          (7.5)       (5.1)
 (11.4)     Interest payable capitalised     (5.6)       (4.6)
            Interest receivable
  42.8                                        17.7       19.6

The net cost of finance of £19.6m for the six months ended 30 June 1998 was
equivalent to £20.0m translated at 30 June 1999 exchange rates.


3      TAXATION

The tax charge for the six months ended 30 June 1999 is based on the projected
effective  tax  rate for the full year.  The charge reflects the  recovery  of
advance  corporation  tax previously written off and  allowances  for  capital
expenditure.  The charge includes overseas taxation of £0.3m  (30  June  1998:
£0.8m).  No tax has been charged on the sale of investment properties  in  the
period.   The  tax charge for the year ended 31 December 1998 included  £14.3m
which related to the disposal of Hammerson Canada Inc.


4      DIVIDENDS

The  directors  have  declared an interim dividend of  4.19  pence  per  share
payable  on  3 November 1999 to shareholders on the register at the  close  of
business on 10 September 1999.


5      EARNINGS PER SHARE

Earnings per share has been calculated on the profit for the financial  period
of  £29.3m and the weighted average number of shares in issue during  the  six
months  ended 30 June 1999 of 288.5m.  Diluted earnings per share assumes  the
exercise of options granted over shares.  Adjusted earnings per share excludes
exceptional  items  and tax on property disposals and  is  calculated  on  the
adjusted  profit  for  the  period  of £30.5m.   Exceptional  items  decreased
earnings per share by 0.4 pence in the six months to 30 June 1999.


6      LAND AND BUILDINGS

                              Fully      Properties       
                          developed   in the course
                         properties  of development       
                       at valuation         at cost       Total
                                                           
                                 £m              £m           £m
                                                           
Balance at 1 January 1999   1,958.7           204.5         2,163.2
Exchange and other            (43.4)           (4.4)          (47.8)
adjustments                                                
Additions at cost             190.1            58.1           248.2
Disposals at valuation        (69.6)            -             (69.6)
Transfers                     (43.7)           43.7             -
Development outgoings           -               6.9             6.9
capitalised
Revaluation surplus           116.5              -            116.5
Balance at 30 June 1999     2,108.6           308.8         2,417.4
                                   


Fully  developed  properties are stated at market value as at  30  June  1999,
valued  by  professionally  qualified external valuers,  Jones  Lang  LaSalle,
Chartered Surveyors. In the United Kingdom the valuation was performed jointly
with  Donaldsons,  Chartered Surveyors, who also  acted  in  the  capacity  of
external  valuers.  The valuations have been prepared in accordance  with  the
Appraisal   and  Valuation  Manual  of  The  Royal  Institution  of  Chartered
Surveyors.

On  1  January  1999,  new transfer tax legislation was introduced  in  France
reducing  the  rate  of tax payable by purchasers of commercial  property  and
increasing  the  rate  of tax on the transfer of shares  in  companies  owning
commercial  property. The effect of this change in legislation was  to  reduce
the value of the French portfolio by £10m.

At  30  June  1999  the  market value of properties held for  development  was
£385.3m.   The total amount of interest included in development properties  at
30 June 1999 was £14.3m.

Should  the group's properties be sold at their book value a tax liability  of
approximately £63m would arise. No provision for this contingent liability has
been  made  as  it  is  not  expected that any liability  will  arise  in  the
foreseeable future.



7      INVESTMENTS

Investments  represent  a  30%  interest in  Value  Retail  Investors  Limited
Partnership  which  has an interest in a designer outlet centre  in  Bicester,
United  Kingdom. The interest was acquired in January 1999 at a cost  of  £6m.
The  investment is included at its market value at 30 June 1999 of £6.1m,  the
property  element  of  which  has  been  appraised  by  Donaldsons,  Chartered
Surveyors.

8      DEBTORS

   31                                       30 June   30 June
December                                      1999     1998
1998
                                                         
   £m                                          £m       £m
            Due within one year                          
  17.5      Trade debtors                     18.7     15.2
 324.8      Due from sale of Canadian          -         -
  20.3      operation                         23.4     19.9
   5.2      Other debtors                      0.1      0.1
   3.8      Corporation tax                    4.5      5.9
            Prepayments
 371.6                                        46.7     41.1


9      BORROWINGS

   31                                       30 June   30 June
December                                      1999     1998
  1998
                                                         
   £m                                          £m       £m
                                                         
  452.8      Bank loans and overdrafts         71.6     203.1
  445.9      Other loans: Unsecured           635.8     551.7
   57.5                           Secured      42.0      55.9
  107.7      Convertible bonds                107.8     107.7
1,063.9                                       857.2     918.4

On 29 June 1999 the Company issued Euro 300m 5.0% bonds. The bonds are
redeemable at par on 29 June 2007.

Maturity

   31                                      30 June    30 June
December                                      1999       1998
  1998                                        
                                                          
                                Bank   Other               
  Total                        loans   loans  Total    Total
                                 and    
                          overdrafts    
                                
   £m                             £m     £m      £m       £m
                                                          
   771.3  After 5 years          2.3   698.3   700.6    604.7
   260.3  From 2-5 years        63.9           150.0    276.4
     1.0  From 1-2 years          -     86.1     0.6      0.2
                                         0.6
 1,032.6  Due after more        66.2   785.0   851.2    881.3
          than 1 year           
    31.3  Due within 1 year      5.4      0.6    6.0     37.1                 
  
 1,063.9                        71.6    785.6  857.2    918.4
                                         


Analysis by currency

   31                                      30 June   30 June
December                                      1999      1998
  1998
                                                          
   £m                                          £m         £m
                                                          
   319.4  Sterling                           408.9     319.9
   228.5  Canadian dollars                     -       230.9
   516.0  Euro currencies                    448.3     367.6
 1,063.9                                     857.2     918.4



Undrawn committed facilities

   31                                      30 June    30 June
December                                    1999         1998
  1998
                                                          
   £m                                          £m          £m
                                                          
   5.5    Expiring in 1999                     3.6       36.6
    -     Expiring in 2000                     -         -
   3.9    Expiring after 2000                365.5      257.7
   9.4                                       369.1      294.3
                                                                              



10     CREDITORS - OTHER

   31                                      30 June   30 June
December                                      1999      1998
  1998
                                                         
   £m                                          £m         £m
            Falling due within one                       
            year
  32.6      Trade creditors                   35.9      35.4
  23.0      Other creditors                   18.7      18.9
  39.8      Taxation                          23.9      19.3
  36.9      Dividends payable                 12.1      11.9
  30.8      Accruals                          26.5      14.9
 163.1                                       117.1     100.4
            Falling due after more than                  
            one year
  14.3      Other creditors                   12.9      17.7


11     FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

 31 December                   30 June 1999      30 June 1998
    1998
 Book          Fair                  Book       Fair      Book      Fair
value         value                 value      value     value     value
   £m            £m                     £m         £m        £m       £m
                                                           
  (986.1)  (1,109.9)  Borrowings    (779.9)   (867.5)   (850.4)   (942.2)
  (107.7)    (102.0)  Convertible   (107.8)   (127.1)   (107.7)   (126.1)
                      bonds                              
   -           (9.8)  Interest         -       (15.3)      -         0.7
                      rate swaps
    29.9       16.8   Currency        30.5      31.0      39.7      42.2
                      swaps
(1,063.9)  (1,204.9)  Total         (857.2)    (978.9)  (918.4) (1,025.4)
                      borrowings                           

The fair value of financial assets is the same as their book value. The fair
values shown above are before any tax relief.


12     ANALYSIS OF CASH FLOWS

  Year                                         Six       Six
 ended                                       months    months
31 December                                   ended     ended
1998                                        30 June   30 June
                                               1999      1998
 
                                                
   £m                                           £m         £m
            Reconciliation of                            
            operating profit to net
            cash inflow from operating
            activities
                                                         
 111.6      Operating profit                  54.8       52.0
   0.7      Depreciation                       0.2        0.3
   0.2      Letting costs written off            -         -
  (5.3)     Increase in debtors               (8.1)      (6.3)
   8.7      Increase in creditors             10.1        2.7
 115.9                                        57.0       48.7
                                                         
            Returns on investment and                    
            servicing of finance
                                                         
  11.9      Interest received                  5.7        5.1
 (63.8)     Interest paid                    (26.3)     (24.2)
  (0.9)     Dividend paid to minorities       (1.6)      (0.9)
 (52.8)                                      (22.2)     (20.0)
                                                         
            Capital expenditure                          
                                                         
(330.0)     Purchase and development of     (262.2)    (195.3)
  67.5      property                          68.4       37.9
            Sales of property
(262.5)                                     (193.8)    (157.4)
                                                         
            Acquisitions and disposals                   
                                                         
 (14.9)     Disposal of subsidiary company   320.7       -
 (64.0)     Purchase of subsidiary             -         -
            companies
 (78.9)                                      320.7       -


13     ANALYSIS OF CASH FLOW FROM FINANCING

  Year                                         Six       Six
 ended                                       months   months
31 December                                   ended    ended
 1998                                       30 June  30 June
                                               1999     1998
                                                         
   £m                                            £m       £m
                                                         
 197.0      Issue of bonds                    193.7    197.0
   0.7      Issue of shares                     1.5       -
 212.1      (Decrease)/Increase in medium    (386.1)    78.2
  (9.9)      term borrowings                   23.5     (4.2)
            Increase/(Decrease) in short
            term borrowings
 399.9                                       (167.4)   271.0


14     OTHER INFORMATION

The  financial  information  contained in  this  report  does  not  constitute
statutory  accounts  within the meaning of section 240 of  the  Companies  Act
1985.  The results for the year ended 31 December 1998 are an abridged version
of  the full accounts for that year which received an unqualified report  from
the  auditors which did not contain a statement under s237(2) or  (3)  of  the
Companies  Act  1985.  The full accounts for the year ended 31  December  1998
have been filed with the Registrar of Companies.

The unaudited financial information contained in this report has been prepared
on  the basis of the accounting policies set out in the full accounts for  the
year  ended  31  December  1998, except that the property  portfolio  was  not
revalued at 30 June 1998.


PROPERTY PORTFOLIOINFORMATION

       
                                      Fully    Underlying     Net Vacancy    
                                  developed      valution  rental   
                                 investment         change income
                                 properties    
                               at valuation
                                       £ m              %     £ m       %     
   
United        Retail  London and      456.9           7.3    13.4     1.3
Kingdom               South of                   
                      England

                      Midlands &      273.6           5.1     6.6     5.0
                      North of                   
                      England
                                      730.5           6.5    20.0     2.7     
  
                                                               
              Office  City            384.4           1.8    13.9     6.7     
  
       
                      West End        371.9          11.5     9.9     0.7     
  
                      Docklands       150.9          11.5     3.3    12.8     
 
                      and Other
                                      907.2           7.2    27.1     6.6     
  
                                                               
              Total United          1,637.7           6.9    47.1     4.6     
  
              Kingdom
                                                                       
Continental   Retail  France          315.7            3.1    9.9     1.6     
  
Europe                Germany         145.0            1.2    4.3     7.5
 
                                      460.7            2.5   14.2     4.4     
  
                                                               
              Office  France           10.2            1.7    1.0       -     
   
                                                               
              Total                   470.9            2.4    15.2    4.3     
  
              Continental
              Europe
                                                             
Group         Retail                1,191.2            4.9    34.2    3.4     
  
                                                               
              Office                  917.4             7.1    28.1    6.5    
   
                                                              
              Total Group           2,108.6             5.9    62.3    4.5    
   
              
                                                             
 Number of property holdings by value
                                   Between    Between             
                           Above    £50m and       £25m  Below       
                           £100m       £100m   and £50m   £25m    Total
                                             
                                                               
              Retail           4           6          3      2       15
       
                                                               
              Office           3           3          6     11       23
                                                               
                                                                
              Total            7           9          9     13       38
                                                               

END

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