Great Portland Estates PLC 06 July 2006 6 July 2006 AGM Statement Richard Peskin, Chairman of Great Portland Estates plc, will make the following comments at today's AGM, to be held at Le Meridien, 21 Piccadilly, London, W1. "2006 was a strong year for Great Portland Estates with returns at both the property and shareholder level well ahead of our principal benchmarks. Following £83 million of disposals since the year end, 80% of the portfolio is located in the West End, and, as we have previously forecast, this market is increasingly characterised by a shortage of good quality space to let. With take up levels running ahead of the long term average and limited new supply coming on stream, we expect vacancy rates to continue falling from their current low level of 7%. As a result, West End rents, particularly outside the most expensive areas of Mayfair, are set to continue their recent run of strong growth. In the City, rental growth returned during the year for the best quality buildings and we expect rents to rise further in the near-term. However, with a significant and growing development pipeline emerging in this market, we remain more cautious on its medium-term prospects as compared to the West End. In the context of these encouraging market circumstances, our growing development business appears well placed with 8 of our 9 near-term projects in the West End. At Tooley Street, SE1 we recently forward-sold our development, crystallising more than our original forecast profit and at the same time removing the majority of the outstanding risk. Following on from our successful marketing campaign at Met Building, Percy Street, W1, our recently completed refurbishment at 21 Sackville Street, W1 is already 60% under offer at rents some 20% ahead of our valuers' March 2006 estimate. Since the year end, we have begun demolition work at Knighton House on Mortimer Street and expect to begin work on our four remaining near-term projects by this coming October. We have been working hard to build up our next pipeline of projects once those in the near-term are complete. Currently, our medium-term programme comprises 10 schemes of some 1.2 million sq ft, where our holdings at Blackfriars Road, SE1 and at Bishopsgate, EC2 are both the subject of major planning applications later this summer. Turnover in London's investment markets remains at, or close, to record levels, fuelled by strong demand from UK and overseas institutions and this weight of money continues to exert further downward pressure on yields. We expect to take advantage of these circumstances by selling properties with limited further opportunity for value creation. Since the year end, we have sold 3 properties for £83 million, generating a surplus to their March 2006 book value of 12%. We have also made a number of interesting acquisitions since the year end, including purchases next to our existing properties both at Shand Street, SE1 and our joint venture holdings in Broadway, SW1. Whilst we expect the current strong demand for central London real estate to continue, we are satisfied that our focused, value driven approach will enable us to unearth further acquisition opportunities this year. At the time of our results announcement in May, I mentioned that we were giving detailed thought to whether it was in the Company's best interest to convert into a Real Estate Investment Trust ("REIT") following the expected introduction of this new tax-efficient regime in January 2007. The all-important detailed regulations which define the operating parameters of a REIT have begun to emerge and, from what we have seen so far, we remain broadly positive about the prospects of a conversion. Your Board will be analysing the remaining details as they become available and I expect us to make a definitive statement towards the end of the year. 2006 was a busy and successful year for Great Portland and one in which the hard work of everybody at the Group over the past few years showed through to the excellent results. Looking forward, we are well positioned to take further advantage of the strength in our core markets, particularly the West End. Our development portfolio has plenty of opportunity for significant growth, our average portfolio rents are low offering material upside and the balance sheet is conservatively geared giving us ample capacity for expansion. We look forward with confidence to building on the strong returns we delivered last year and we expect to provide shareholders with an update on our progress later this month when we publish our first quarterly valuation for the three months to the end of June." Contacts: Great Portland Estates plc Toby Courtauld, Chief Executive 020 7647 3042 Finsbury James Murgatroyd 020 7251 3801 Gordon Simpson This information is provided by RNS The company news service from the London Stock Exchange