Liberty Internationals AGM statement (UK)

Liberty International’s preliminary results were released some five weeks ago on 9 February 2005. The most important corporate event since that date has been the major UK regional shopping center transaction with Prudential Assurance Company Limited ("Prudential") which was announced on 15 March 2005.

Transaction with Prudential
For an aggregate consideration of £653 million, the Liberty International group has acquired a 50% interest in Prudential's holdings in two of the UK's leading regional shopping centers, The Mall at Cribbs Causeway, Bristol, and the Manchester Arndale, together with associated properties.

Cribbs Causeway represents one of the limited number of regional out-of-town shopping centers in the UK while Manchester Arndale will, on completion of the Northern Extension development in 2006, rank as the UK's largest city center shopping center.

The transaction substantially enhances Liberty International's market position in the UK shopping center industry, where our holdings now include nine of the country's top twenty five shopping centers. Furthermore, we believe the association with Prudential should provide long-term strategic benefits to Liberty International.

Capital Shopping Centers
Retailer demand for space at our completed shopping centers remains at strong levels with the overall level of void units still a negligible percentage of total units. Our rent review program is continuing to produce settlements in line with expectations, importantly at Braehead, Renfrew, near Glasgow, where the first round of reviews since the center opened in 1999 is now well underway. At this early stage of the year, it is premature to draw conclusions on retailers' trading performance but footfall levels and turnover figures indicate that our centers are maintaining their overall attractiveness to the UK public.

The group's aggregate development program remains unchanged from the £1.3 billion reported at the year end of which £1.15 billion related to Capital Shopping Centers.

Our next major development project to be opened is Chapelfield, Norwich, a new 510,000 sq.ft. center, scheduled for Autumn 2005. Letting progress has continued from the position reported at the year end, when 89 per cent of the space and 82 per cent of anticipated rents were either committed or under offer.

In respect of the £850 million potential but as yet uncommitted long-term shopping center development program, progress continues to be made on the joint venture projects at Cardiff and Oxford and on the major extensions to existing centers, Eldon Square, Newcastle, and The Harlequin, Watford.

Capital & Counties
Investment sentiment remains strong in Central London and provincial retail sectors. Other than two shop units at Swansea market, we have no UK retail vacancies. We are in discussion with the Administrator of Allders in respect of their lease of the major store at The Headrow, Leeds.

Office tenant interest in the West End of London continues to improve and our ongoing refurbishment program has enabled us to achieve satisfactory lettings. A planning application was submitted in February for the 380,000 sq. ft. refurbishment and redevelopment of the King's Reach complex on London's South Bank.

At 31 December 2004, the group had cash balances of £438 million and committed facilities of £675 million representing over £1.1 billion of available financial resources. We have already reported the successful £600 million refinancing this year of MetroCentre, Gateshead, through the commercial mortgage-backed securities market (the CMBS market) at significantly reduced interest rate margins.

In order to provide suitable long-term financing for the Prudential transaction and the group's development commitments, we are now embarked on arranging inter alia finance linked to the Braehead shopping center, which has no attached debt following the MetroCentre refinancing.

As reported at the year end, substantially all interest payments over the next

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