Press Release

NEW INVESTMENT STRATEGY IN ACTION

3 October 2005

The Crown Estate is pleased to announce the purchase of a 92 acre site at the Cabot Park development in Avonmouth, near Bristol for £58 million. The property is fully let to Honda Motor Europe Ltd and is used as their vehicle storage facility in the UK. This facility can hold up to 18,000 vehicles at any one point in time.

A separate deal has seen the sale of Meudon House, an office building in Farnborough, to a private client of HDG Mansur. Meudon House is currently let to IBM, who have a lease for a further eleven years.

These deals are the first evidence of the implementation of The Crown Estate’s new investment strategy, which is seeking to maximise the potential of existing core holdings and making judicious disposals and acquisitions to secure good long-term financial performance across its £5 billion portfolio. It is likely that further investment activity will follow soon.

Jim Yates, Head of the Regional Portfolio at The Crown Estate said: “These are good deals for The Crown Estate. The acquisition in Avonmouth improves our regional and sector diversification, provides us with an excellent customer in Honda Europe and is a site with strong long-term potential. With the potential for further transactions across The Crown Estate, these are exciting times to be part of the asset management team.”

Honda Motor Europe Ltd has a further 15 years on their lease and pays an annual rent of nearly £4 million. The lease incorporates fixed annual uplifts at 3% compound per annum and the deal provides a net initial yield of 6.19%.  The site was previously owned by GSE, the Kent based construction and development group.

Howard Richards, Head of National Investment at Drivers Jonas said of the Avonmouth purchase: “This is an excellent asset with an attractive yield profile, an income stream with annual fixed uplifts, underpinned by the long term value of a major strategic distribution site in a leading logistics location.”

The Crown Estate was represented by Drivers Jonas whilst the GSE Group, the previous owners of Avonmouth, were represented by Knight Frank.

Meudon House had previously been acquired by The Crown Estate in April 2000 as part of a swap deal with Norwich Union. Knight Frank acted on behalf of The Crown Estate in the sale.