News Archive

Elephant and Castle decision

The Board of St Modwen has noted with regret today’s decision by the London Borough of Southwark (“Southwark”) to select Lend Lease rather than Key Property Investments (“KPI”) as its preferred development partner for the Elephant and Castle project.

KPI has strategic landholdings in the project area not least the Elephant & Castle shopping centre and will therefore naturally be involved in the progression of the scheme.

Anthony Glossop, Chairman of St Modwen, comments:

“I am obviously disappointed with the decision as our team has worked closely with Southwark over a period of five years and made an excellent submission. However, I welcome the fact that a decision has been made because it brings to an end a long period of uncertainty and enables the project to move forward.

Whilst the regeneration programme will be driven forward by Lend Lease and Southwark Council, KPI will be seeking to liaise with them at the earliest possible opportunity, and establishing redevelopment timescales for the shopping centre will be central to these discussions. Other key stakeholders such as the traders in the existing centre deserve a clear statement on the timescale of what lies ahead.

KPI’s asset value is not in any way adversely affected by the decision. Bid costs have been written off as they were incurred, and the value of KPI’s holdings should benefit as the scheme becomes a reality.”

24 July 2007

ENQUIRIES:

St. Modwen Properties PLC

Tel: 0121 222 9400

Anthony Glossop, Chairman

Bill Oliver, Chief Executive

College Hill

Tel: 020 7457 2020

Matthew Gregorowski

NOTE TO EDITORS:

The 235,000 sq.ft Elephant and Castle shopping centre and 90,000 sq. ft Hannibal House office building above, became one of the UK’s first major town centre redevelopments when it opened in 1964.

It was acquired by KPI in 2002 and since that time the shopping centre and offices have been carefully and actively managed. This has resulted in a broad tenant mix comprising a blend of national and local traders and businesses, all of whom serve the local community. This strategy has served to protect rental income from the asset, whilst preserving the opportunity to utilise its strategic position in the long-term regeneration of the area.

Tenants at the shopping centre include Tesco, Boots, WH Smith and Woolworths.

KPI also has a land holding on the Walworth Road, within the Elephant & Castle Regeneration area, currently let to Kwik-Fit.

KPI is a joint venture between St Modwen Properties Plc and Salhia Real Estate Company K.S.C. This is a long established joint venture, formed in 1996 and currently comprises a £350m portfolio of development properties spread across the UK.

Salhia is a real estate development and investment company quoted on the Kuwait stock exchange. The group has an established reputation for the development and long-term ownership of major mixed-use projects in Kuwait. Salhia has been investing in the UK and Germany for over 10 years.