Capital Shopping Centres Group PLC Strongly positioned for ... · Ignore Simon’s opportunistic...

Ignore Simon’s opportunistic and inadequate proposal

Capital Shopping Centres Group PLC

Strongly positioned for growth

Vote FOR the Revised Trafford Centre Acquisition

Important noticeTHIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek immediately your own personal financial advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser, who is authorised under the Financial Services and Markets Act 2000 (‘‘FSMA’’) if you are in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

CSC is well positioned for growth

CSC has strong prospects and a robust financial position

The Revised Trafford Centre Acquisition is a value enhancing transaction for CSC


1Capital Shopping Centres Group PLC

Simon’s proposal very substantially undervalues CSC and its prospectsValue potential of up to 625p

* 30 June 2010 NAV per share, pro forma for the Revised Acquisition, the Placing, updated CSC valuations to 31 December 2010 (The Trafford Centre 1 November 2010) and additional advisory fees. Does not include any retained profits subsequent to 30 June 2010.

89pIndependent assessment of additional value realisable through a disposal of the portfolio as a whole today. See page 16

390pUpdated pro forma NAV per share*.

29pReversal of Stamp Duty Land Tax deduction from property values. See page 11

419p

536p

625p

87pAdjusting property values to mid-point in the cycle. See page 12

30pUndiscounted value creation from identified active asset management and development opportunities. See page 15


2 Capital Shopping Centres Group PLC

Capital Shopping Centres Group PLC 40 Broadway, London SW1H 0BT 7 January 2011

Dear Shareholder

I am writing to set out details of the revised terms of the Trafford Centre acquisition (the “Revised Acquisition”), as well as the Board’s view of the strong prospects for CSC and why the Board believes the indicative proposal (the “Indicative Proposal”) from Simon Property Group, Inc. (“Simon”) very substantially undervalues the Company and its prospects.

The key terms of the Revised Acquisition are:

• The CSC shares being issued in respect of The Trafford Centre are being issued based on a higher price of 400 pence per share rather than the 368 pence per share originally agreed;

• As a result, the number of shares Peel will receive has reduced from 224.1 million shares to 205.9 million shares, on a fully diluted basis, a reduction of 18.2 million shares;

• Peel’s resultant holding in CSC will reduce to 23.2 per cent. of CSC’s enlarged issued share capital on a fully diluted basis (previously 24.7 per cent.), with Peel’s initial ordinary shareholding remaining at 19.8 per cent.; and

• The transaction is accretive to CSC’s NAV per share.

On 15 December 2010, Simon made the Indicative Proposal to purchase the Company at a price of 425 pence per share in cash (including the CSC expected final dividend of 10 pence per share).

The Board unanimously rejected the Indicative Proposal, which it regarded as inadequate for a number of reasons. These are set out in this document. The Board believes that Simon continues to seek to frustrate the acquisition of The Trafford Centre and that the Indicative Proposal is highly opportunistic, very substantially undervaluing the Company and its prospects (as explained below). The Board recommends that shareholders vote in favour of the Revised Acquisition at the EGM scheduled for 26 January 2011 (the “Adjourned EGM”).

Further terms of the Revised AcquisitionThe Revised Acquisition will involve the issue of 167.3 million ordinary shares, as before, and Convertible Bonds with an aggregate nominal amount of £154.3 million (reduced from £209.0 million). The initial conversion price of the Convertible Bonds has increased from 368 pence per share to 400 pence per share, resulting in a reduction in the number of ordinary shares underlying the Convertible Bonds from 56.8 million to 38.6 million. The Convertible Bonds will bear interest at the rate of 3.750 per cent. per annum (previously 4.076 per cent. per annum). As part of these revised terms, Peel’s cash subscription reduces from £74.4 million to £67.4 million.

The revised terms represent an implied discount of 4.5 per cent. to The Trafford Centre independent external valuation of £1.65 billion at 1 November 2010 on the basis of CSC’s updated NAV per share excluding the Revised Acquisition (previously a 3 per cent. discount on the basis of CSC’s 30 June 2010 NAV per share).

It has also been agreed that the Wider Peel Group will be restricted under the Relationship Agreement from holding more than 24.9 per cent. of CSC’s issued share capital on a fully diluted basis for the second and third year after completion (previously 29.9 per cent.). The 24.9 per cent. limit for the first year is unchanged.

Chairman’s letter



CSC has agreed to pay a fee to Peel of £7.5 million in the event that Shareholders do not approve the Revised Acquisition and a further fee of £9.0 million if any offer by Simon completes (or any other offer, which is announced before the completion or lapse of any offer by Simon, completes). The total amount of £16.5 million is equivalent to 1 per cent. of the value of The Trafford Centre.

Further details of the Revised Acquisition terms are set out in Appendix IV.

Strong CSC growth prospectsCSC is poised for net rental income (“NRI”) recovery which is the key driver of growth in earnings and dividends.

As set out on page 9, the independent valuers’ current estimated rental value (“ERV”) is £355 million, compared with a passing rent and other income of £289 million, indicating substantial reversionary potential in CSC.

In addition, CSC has potential to increase rental levels beyond the ERV from the following:

• the very limited amount of potential supply in the next few years of prime regional shopping centre space due to planning and economic factors;

• the rising demand for CSC’s large flagship stores and catering space, as realised through new lettings achieved in 2010;

• the structural shift in shopping patterns towards large centres with a strong catering and leisure offer;• the growth prospects for new space such as St David’s, Cardiff and Eldon Square, Newcastle which were

opened during the recent economic downturn; and• the contribution of expertise and complementary skills from Peel to further enhance CSC’s prospects, combining

best practices across CSC and The Trafford Centre and the management of shopping centres as destinations in their own right.

Like-for-like net rental income grew consistently until 2007 with an annualised compound growth rate of 5.5 per cent. per annum between 2000 and 2007. The resilience of CSC’s rental income was demonstrated by the performance in the difficult retail environment of 2008 and 2009 which saw like-for-like NRI falls of only 4.3 per cent. in 2008 and 3.4 per cent. in 2009, recovering to a fall of only 0.4 per cent. in H1 2010, with the market now projecting positive growth. Occupancy has now been restored to around 99 per cent.

CSC is in a strong financial position, with LTV of 47 per cent.*, headroom in terms of cash and committed facilities of £392 million post-Placing, and no major asset-specific debt refinancing requirements until 2015.

The property sector is barely a year past the largest decline in commercial property values that the UK has seen in decadesBy making an approach at this point in the cycle, Simon is being entirely opportunistic. Between 2006 and 2009 capital values in the IPD UK annual shopping centres capital value index declined by 40 per cent., or, to put this in context, capital values in the index are currently at the same level as in 2002. Even if CSC’s portfolio were to revalue to no better than the mid-cycle average observed since 2000, with no allowance being made for inflation, this would offer upside of 87 pence to our updated value per share of 419 pence, adjusted for SDLT costs as referred to on page 11.**

* 30 June 2010 LTV adjusted for the Placing and adjusted CSC valuations to 31 December 2010.** 30 June 2010 NAV per share, pro forma for the Revised Acquisition, the Placing and updated CSC valuations to 31 December 2010 and additional advisory fees incurred

since the Acquisition was announced.



CSC has significant value creation potential from identified development and active management opportunitiesThere is significant untapped potential for further value creation in CSC’s portfolio through redevelopment and other asset management opportunities. As an example of this, 1.4 million sq. ft. of extension opportunities have already been identified across three existing centres at Lakeside, Nottingham and Braehead, equivalent to opening a major new regional shopping centre. We estimate that there is 19 pence per share or £170–£175 million of value creation potential across these centres, once planning consent has been obtained. In addition, the Company has further value creation potential estimated to be equivalent to 11 pence per share from ongoing asset management initiatives including at The Trafford Centre.

CSC owns an unrivalled and irreplaceable portfolio of assetsIt is inconceivable that a third party could organically create a portfolio of equivalent quality and scale to that owned by CSC. The planning regime in the UK ensures that the delivery of new shopping centre schemes is tightly controlled and, indeed, there is only one large centre, greater than 500,000 sq. ft., currently under construction in the entire United Kingdom with no foreseeable prospect of planning changes to alter this position. Furthermore, no controlling stakes in the top 10 UK shopping centres have been sold in the last 10 years.

UK comparison shopping is increasingly consolidating into prime centres in what the Board believes is a structural shift, which enhances the strategic importance of such assets, and is likely to benefit CSC’s portfolio.

Taking these factors into account, DTZ considers that CSC’s assets, including The Trafford Centre, would warrant a premium of 12.5 per cent. to 16.0 per cent. over the total of the individual property valuations if disposed as a portfolio on the open market today. Applying a 12.5 per cent. premium would increase the updated pro forma NAV per share by 89 pence. Without The Trafford Centre, the premium is estimated by DTZ to be between 11.0 per cent. and 14.5 per cent.

In addition, as required under valuation guidelines, the independent valuers’ market value of each individual property is stated (in CSC’s financial statements) after deducting purchaser’s costs including Stamp Duty Land Tax (SDLT) at 4 per cent. The reversal of the SDLT deduction would add a further 29 pence of value per share to CSC. Simon would not pay SDLT on its proposed acquisition of the shares of CSC as a whole, as opposed to buying the properties individually, saving a significant transaction cost already deducted from the property valuations.

The Indicative Proposal entirely ignores the value added by The Trafford Centre acquisitionIn May 2010, Liberty International demerged its non-shopping centre activities and renamed itself Capital Shopping Centres Group PLC, to enable CSC to pursue a clear strategy as the leading owner, manager and developer of pre-eminent UK regional shopping centres, enhancing their attractiveness as destinations. The Revised Acquisition is absolutely in line with this stated intention. It is a very rare opportunity to acquire 100 per cent. of a pre-eminent UK out-of-town regional shopping centre and is expected to:

• strengthen CSC’s position as the leading operator of pre-eminent UK regional shopping centres and enhance the overall quality of the portfolio. After completing the Revised Acquisition, CSC will own fourteen UK shopping centres, including ten of the top 25 and four of the top six out-of-town shopping centres;

Chairman’s letter



• increase significantly CSC’s presence in the key North West regional retail market, alongside Manchester Arndale;

• provide an opportunity to combine management and best practices across CSC and The Trafford Centre including, for example, adding features from The Trafford Centre’s successful leisure and catering offering to CSC’s portfolio;

• enhance further the attractiveness of CSC’s portfolio to retailers;• provide significant asset management opportunities to grow ERV at The Trafford Centre with an estimated

£50 million of investment opportunities already identified; and• enhance further the overall financial position of CSC with the addition of The Trafford Centre’s high-quality

income stream and long-dated CMBS debt, which will extend CSC’s average debt maturity.

Peel’s confidence in the future value creation strategy of CSC is clearly demonstrated since Peel will not receive cash as consideration and is in fact investing further capital in the Company as part of the Revised Acquisition. Peel’s objective is to be a long-term supportive shareholder in CSC. John Whittaker will become Deputy Chairman and a non-executive Director of the Company, contributing considerable expertise to the Board.

RecommendationThe Board believes that CSC, having come through an economic period which has proved difficult for the entire UK property sector, is now strongly positioned for income and value growth which will be to the benefit of all shareholders. The Board, which has been so advised by Merrill Lynch International (“Merrill Lynch”) and UBS Limited (“UBS”), considers that, as outlined above, the Indicative Proposal very substantially undervalues CSC and its prospects and recommends that shareholders vote in favour of The Trafford Centre acquisition, now on revised terms, at the forthcoming Adjourned EGM. In providing advice to the Board, Merrill Lynch and UBS have taken into account the Board’s commercial assessments.

Shareholders will be sent further information and instructions in due course regarding the Adjourned EGM.

Yours sincerely,

Patrick Burgess Chairman

Capital Shopping Centres Group PLC 40 BROADWAY LONDON SW1H 0BT TELEPHONE: 020 7887 4220 FACSIMILE: 020 7887 4225 www.capital-shopping-centres.co.uk REGISTERED IN ENGLAND NO. 3685527 REGISTERED OFFICE: 40 BROADWAY LONDON SW1H 0BT



The Revised Trafford Centre Acquisition…

* Basedon387pbeingCSC’supdatedadjustedNAVpershare,calculatedasat30June2010NAVpershare,adjustedforthePlacingandupdatedCSCvaluationsto31 December2010,excludingtheAcquisition.TheimpliedgrossconsiderationofTheTraffordCentre(includingBartonSquareat£85m)iscalculatedaftertakingintoaccountTraffordCentreGroup’snetdebtof£798mandothernetliabilitiesof£54masat30June2010.

** Interimdividendof5pwaspaidtoshareholderson3November2010.

3 Revised terms imply a gross consideration of £1,575m*

– 4.5 per cent. discount to 1 November 2010 valuation of £1,650m before payment of the REIT entry charge and transaction costs

3 The revised issue price of CSC shares of 400p represents

– 8.7 per cent. improvement on 368p (previous issue price)

– 3.4 per cent. premium to 387p* (CSC’s updated adjusted NAV per share excluding the Acquisition)

3 CSC to acquire 100 per cent. of The Trafford Centre and £67.4m in cash (at the Placing price of 355p) in return for the issue of 167.3 million ordinary shares and £154.3m convertible bonds with a 3.75 per cent. coupon and initial conversion price of 400p (previously 368p)

– Blended price of ordinary shares and convertible bonds issued to Peel of 396p versus 367p under original terms

3 The revised terms increase the previous pro forma NAV per share by 7p

3 Post the Revised Acquisition, Peel is expected to hold 19.8 per cent. of CSC’s enlarged issued ordinary share capital (23.2 per cent. assuming conversion of convertible bonds)

– Relationship agreement between CSC and Peel, which is c. 73 per cent. held by Whittaker Family Trusts and c. 27 per cent. held by the Olayan Group

– John Whittaker, a highly regarded real estate investor, to join CSC Board as Non-Executive Deputy Chairman

– Lock up with no disposals in year 1 and constraints in years 2 to 5

– 3-year standstill, which now prohibits Peel’s shareholding exceeding 24.9 per cent. in first 3 years (on a fully diluted basis)

3 New shares have right to receive in full all dividends after closing. CSC dividend policy unchanged**

3 CSC has agreed to pay a fee to Peel of £7.5m if shareholders do not approve the revised acquisition and a further fee of £9.0m if CSC does not remain independent. The total amount of £16.5m is equivalent to 1 per cent. of the value of The Trafford Centre



…is a value enhancing transaction for CSC

“A perfect fit in CSC’s portfolio”Research Analyst 24 November 2010

“ CSC set for ‘transformational’ purchase of The Trafford Centre”

Financial Times 24 November 2010

3 Rare opportunity to acquire 100 per cent. of a pre-eminent UK out-of-town regional shopping centre 3 Strengthens CSC’s position as leading operator of pre-eminent UK shopping centre destinations333Significantly increases CSC’s presence in North West regional retail market, alongside Manchester Arndale333Significant asset management opportunities to grow ERV, including £50m of opportunities already identified. In addition, 9.3 acres of adjacent land with development potential

333Operating benefits including strengthened retailer relationships and addition of The Trafford Centre’s successful leisure and catering offerings 3 The contribution of expertise and complementary skills from Peel and combining best practices across CSC and The Trafford Centre 3 Significant benefits from John Whittaker as a new member of the Board333Peel exchanging its interest in The Trafford Centre for an investment in CSC shares is a strong endorsement of CSC’s focused strategy and value upside

* As at 1 November 2010.

3 External valuation £1,650m* 3 1.4m sq. ft. retail, 0.3m sq. ft. catering and leisure and 0.2m sq. ft. at Barton Square

3 Over 230 units including 50 catering and leisure units 3 Day 1 income: £88m, ERV £105m* 3 Occupancy 98 per cent. by rent (30 September 2010) 3 Consistent footfall growth since opening to over 35 million customer visits p.a.

3 Key anchors: Selfridges, Debenhams, John Lewis and Marks & Spencer

3 North West is UK’s largest regional retail market outside Greater London and the South East – 8.9 million live within 70 minute drive

Overview of The Trafford Centre



Key strengths of the existing Group

3 9 of the top 25 UK shopping centres 3 Focus on large scale, high quality regional shopping centres in prime locations 3 Significant barriers to entry imposed by UK’s restrictive planning environment

3 5.5 per cent. compound annual growth in like- for-like NRI from 2000 to 2007 3 Resilience in recent downturn, with like-for-like NRI falls reducing from only 4.3 per cent. in 2008, and 3.4 per cent. in 2009 to 0.4 per cent. in H1 2010 3 Occupancy restored to pre-downturn levels of 98.8 per cent. (at 30 September 2010) 3 Positive impact from 2010 lettings above previous passing rents to emerge in future years

3 NRI growth prospects through capture of substantial reversionary potential 3 Three major extensions and additional ongoing asset management initiatives 3 11 per cent. revaluation uplift for CSC’s portfolio in 2010

Leading UK shopping centre business with focus on prime assets

3 LTV of 47 per cent.*

3 £392m of financial headroom post-Placing 3 No major asset-specific debt refinancing requirements until 2015 3 Proactively reducing financing costs and managing cost structure

Robust financial position

Significant growth prospects

Defensive and resilient rental income with recovery prospects

* Basedon30June2010LTV,updatedforPlacingandupdatedpropertyvaluationsat31December2010.ExcludestheimpactofTheTraffordCentreacquisition.



Significant net rental income growth potential

3 Passing rent and other income of £289m versus ERV of £355m as at 30 June 2010*

3 Over 40 per cent. of reversionary potential emerging within two years and approximately 80 per cent. within five years

* ExcludingTheTraffordCentre.**Asat30June2010.Source:CSC,DTZ,CBRE,KnightFrank.

£m

Progression to ERV (30 June 2010)*

400

300

200

100

0Passing

rentOther

incomeNon-

recoverablecosts

Endof rentfrees

Rentreviews

Leaseexpiry

Vacancies Overrented

ERV

Reversionary potential269

18

(15)

17 28917

3722

(10)355

£m

Cumulative reversionary potential by year**

60

50

9

22

28

36

45

52

40

30

20

10

02010 H2 2011 2012 2013 2014 2015

2015201520142013201220112010 H2

10 Capital Shopping Centres Group PLC419p 87p 30p 89p 625p

Simon’s proposal very substantially undervalues CSC and its prospectsValuepotentialofupto625p

Note:PleaserefertoAppendixIforfurtherdetails.

* 30June2010NAVpershare,proformafortheAcquisitiontermsasannouncedon25November2010,thePlacing,andupdatedvaluationsto1November2010.

** 30June2010NAVpershare,proformafortheRevisedAcquisition,thePlacing,updatedCSCvaluationsto31December2010(andTheTraffordCentreat1November2010)andadditionaladvisoryfees(refertoappendixV).

Pence per share

Pro formaNAV per share*

CSC valuationuplift,

impact of Revised

Acquisition,net of

additionaladvisory fees

Updatedpro forma

NAV per share**

Adjustingpropertyvalues tomid-point

in the cycle

Reversal of Stamp Duty

Land Taxdeduction

Independentassessment ofadditional value

realisable through a disposal of the

portfolio as awhole today

Developmentopportunities

700

600

500

400

300

200

100

0

37515 390

30

87

419

536

89 625

29


11Capital Shopping Centres Group PLC419p 87p 30p 89p 625p


SDLT on individual properties would not be payable by Simon on acquisition of the shares of CSC Group as a whole

Reversal of SDLT deduction increases value by 29p per share to 419p per share

3 Valuation guidelines require market value of each individual asset to be stated after deducting assumed average purchaser’s costs including Stamp Duty Land Tax (SDLT) at 4 per cent. 3 SDLT on individual properties would not be payable by Simon on acquisition of the shares of CSC Group as a whole rather than the individual properties, saving a significant transaction cost already deducted from property valuations 3 Remaining assumed average purchaser’s costs of c.1.2 per cent. not reversed

* GrossmarketvalueaddsbackSDLTat4percent.ofnetmarketvalue.** AdjustedforGIC’sshareofMetrocentre(40percent.).*** TheArndale,Manchester,isheldthroughaJVwhichhasa95percent.

interestinTheArndaleand90percent.interestinNewCathedralStreet.Cribbs CausewayisheldthroughaJVwhichhasa66percent.interestin The MallatCribbsCausewayanda100percent.interestintheRetailPark,CribbsCauseway.

31 December 2010

Ownership %

Net market value

(£m)

Gross market value*

(£m)SDLT (£m)

Lakeside,Thurrock 100 1,053 1,095 42Metrocentre,Gateshead 90 843 877 20Braehead,Glasgow 100 575 598 23TheHarlequin,Watford 93 353 367 14VictoriaCentre,Nottingham 100 337 351 14TheArndale,Manchester*** 48 336 349 13EldonSquare,Newcastle upon Tyne 60 250 260 10StDavid’s,Cardiff 50 243 253 10Chapelfield,Norwich 100 236 245 9CribbsCauseway,Bristol*** 33 221 230 9TheChimes,Uxbridge 100 217 226 9ThePotteries,Stoke-on-Trent 100 201 209 8TheGlades,Bromley 64 178 185 7Other 48 50 2Total CSC 5,092 5,295 190

TheTraffordCentre,Manchester(asat1November2010) 100 1,650 1,716 66Total (including The Trafford Centre) 6,742 7,011 256

12 Capital Shopping Centres Group PLC87p419p 30p 89p 625p


Adjusting property values to mid‑point in the cycle…

* December1999–December2010.

** BasedonIPDUKannualshoppingcentrescapitalvalueindex,rebasedto100 asatDecember1980,withnoadjustmentsforinflationduringtheperiod.2010 IPDannualshoppingcentres capitalvalueindexcurrentlyunavailable;2010 figurebasedon c.11 per cent. propertyrevaluationincreaseforCSC(like-for-likeexcludingTheTrafford Centre).

*** IncludingTheTraffordCentre.

Significant cyclical upside 3 Barely a year past the largest decline in commercial property values that the UK has seen in decades

3 12 per cent. increase in capital values to revert to long‑term* average for IPD UK annual shopping centre capital value index** increases value by 87p*** per share

3 IPD capital values currently at 2002 levels with 50 per cent. upside to return to peak levels**

Increase in capital values (%) 10 12 20 30 40 50

Value increase per share (pence) 72 87 143 215 286 355

13Capital Shopping Centres Group PLC87p419p 30p 89p 625p


…increases value by 87p per share

IPD UK annual shopping centres capital value indexDecember 1980 to December 2010**

Indexed to 100 as of December 1980

0

400

300

200

100

2010200820062004200220001998199619941992199019881986198419821980

1000 01 02 03 04 05 06 07 08 0999

400

300

200

100

■ Long-term average*

12% increase torevert to average,*

equivalent to87p per share***

50% increase to peak, equivalent to 355p per share***

* December1999–December2010.

** BasedonIPDUKannualshoppingcentrescapitalvalueindex,rebasedto100 asatDecember1980,withnoadjustmentsforinflationduringtheperiod.2010 IPDannualshoppingcentres capitalvalueindexcurrentlyunavailable;2010 figurebasedon c.11 per cent. propertyrevaluationincreaseforCSC(like-for-likeexcludingTheTrafford Centre).

*** IncludingTheTraffordCentre.

14 Capital Shopping Centres Group PLC87p419p 30p 89p 625p


Nominal equivalent yield at record spread over 15 year Gilts – wrong time to sell

Source:CSCreports,Datastream*ExcludingTheTraffordCentreandasat31December2010.

CSC nominal equivalent yield and 15 year Gilts*1994 to 2010

9%

8%

7%

6%

5%

4%

3%

■ CSC weighted average nominal equivalent yield■ 15 year Gilts

1994 1996 1998 2000 2002 2004 2006 2008 2010

Current spread243bps

12 per cent. increase in capital values would reduce spread over 15 year Gilts to 175bps, significantly in excess of the average (1994 – 2010) of 78bps



LakesideVictoriaCentre,

NottinghamBraehead,Glasgow Total

ActiveAssetManagementOpportunities

Estimated financials

Rentalvalue(£m) 11-13 17-18 11-12 39‑43 13-15

Developmentcost(£m)*** 140-160 225-250 140-150 505‑560 128

Yieldoncost 7.0-8.5% 7.0-8.0% 7.0-8.5% 7.0‑8.5% 10.0-12.0%

Estimated area

Netapproximateadditionalspaceincrease(’000sq.ft.) 350 500 525 1,375 N/A

Totalapproximatespaceuponcompletion(’000sq.ft.) 1,800 1,500 1,600 4,900 N/A

Key dates

Planningexpectedto be submitted 2011 2011 2012 Ongoing

Undiscounted value creation of 30p* per share from major extensions and ongoing active asset management projects

* IncludingTheTraffordCentre.** Representsmid-pointofestimateddevelopmentprofit.***Includescapitalisedinterest.

(’000 sq. ft.)

Additions to space

2,500

2,000

1,500

1,000

500

0

Metrocentre

Lakeside

Manchester, A

rndale

Braehead

Eldon Square

Victoria Centre

■ Size in 1994 or upon opening (plus acquisitions and adjacent property)■ Additions Proposed additions

Additions/proposed additions as per cent. of total size

16%

26%

34% 33%

30%

54%

3 c.1.4m sq. ft. of identified extension opportunities at existing centres, equivalent to a new major regional shopping centre. Extensions to existing prime locations carry attractive returns at a lower risk profile for CSC as developer 3 Management estimates (reviewed by DTZ) of £170–175m of development profit from identified extension opportunities once planning consent obtained, equivalent to 19p** per share 3 Active asset management projects of £128m across existing portfolio*, with added value equivalent to 11p per share



89p419p 87p 30p 625p


Disposal of portfolio as a whole would realise significantly more than valuation today

333CSC has an unrivalled and irreplaceable portfolio 3 The only pure UK shopping centre REIT

3 Lower end of DTZ range of 12.5 per cent. implies additional value of 89p per share 3 The Trafford Centre increases premium by c.1.5 per cent. to 12.5 per cent.*

��“If�sold�as�a�whole,�the�Portfolio�has�a number�of�key�characteristics�which�would�result�in�a�purchase�price�being�achieved�that�is�significantly�in�excess�of�the�sum�of�the�individual�Market�Values…�a�purchaser�should�pay�a�total�premium�of�between�12.5�per�cent.�to�16.0�per�cent.�of�the�aggregate�Market�Value�of�the�Portfolio”DTZ,�7�January�2011

£m

31 Dec 10market value**

Additionalrealisable value

12.5% ofportfoliovalue***

Portfolio sale value realisable

today

6,742

843 7,585

8,000

7,000

6,000

5,000

89p per share

Simon’s proposal does not reflect the premium CSC could deliver through selling the portfolio as a whole

Source:�DTZ��*� �Including�The�Trafford�Centre,�DTZ�estimates�the�premium�to�be�between�

12.5–16.0 per cent.,�without�The�Trafford�Centre�the�premium�is�estimated�to be between�11.0–14.5�per�cent.

**� �As�of�31�December�2010�including�The�Trafford�Centre�at�1�November�2010.***��£843�million�represents�additional�realisable�value�including�100�per�cent.�

interest in�Metrocentre,�89p�represents�per�share�value�adjusting�for�GIC�non-controlling�interest.



CSC owns more pre‑eminent shopping centres in the UK than any other operator

3 Scale strengthens relationships with leading national and international retailers

3 With The Trafford Centre, CSC’s share of the prime regional shopping centre sector will rise to 33 per cent.

Source:PMA* Numberofshoppingcentres>400ksq.ft.in50highestrentedlocations

where ownerhasatleast33percent.share.**IncludingTheTraffordCentre.

Area in sq. ft. (m) No. of shopping centres*

CSC

Ham

mer

son

PruP

IMLa

nd S

ecur

ities

Wes

tfiel

d

GIC

Hen

ders

onAv

ivaBr

itish

Land

Roya

l Mai

l Pen

sion

Trus

tees

Stan

dard

Life

Can

ada

Pens

ion

Fund

16

14

12

10

8

6

4

2

0

The Trafford Centre14

9

4 53 2 4 4

2 2 2 2

UK Shopping Centre Space(179 million sq. ft.)

UK Retail Space(1.3 billion sq. ft.)

Centres inmajor townand cities35.6m sq. ft.

District centres/other non-towncentre schemes 17.5m sq. ft.

Factory outlets9m sq. ft.

Out-of-town regional shopping centres12.2m sq. ft.

Centres in other towns and cities104.3m sq. ft.

Neighbourhood Shopping 369.2m sq. ft.

Shopping Centres178.7m sq. ft.

Retail Warehousing174.6m sq. ft.

Superstores116.8m sq. ft.

High Street 490.8m sq. ft.

CSC has a 33 per cent. share of chosen segments**

“6ofNewLook’stop25UKstoresarewithinCSC’sshoppingcentreportfolio”NigelDarwin,DevelopmentDirectorNewLook

“6ofRiverIsland’stop30storesarewithinCSC’sshoppingcentreportfolio”FrancesBaker,PropertyDirectorRiverIsland



89p419p 87p 30p 625p


CSC offers an irreplaceable portfolio of high quality assets, built up over 30 years

3 No controlling stakes in the top 10 UK shopping centres sold in last 10 years… The Trafford Centre represents a rare opportunity 3 Limited existing development pipeline due to highly regulated planning environment and challenging economic environment to finance new shopping centres 3 With The Trafford Centre, CSC will own 4 of the top 6 out‑of‑town shopping centres

“Ittakes10–15yearstodevelopamajorshoppingcentre,andithasbeendifficulttosecureplanningpermissionsincethemid1990sasthegovernmenthassoughttoprotecttowncentres,soshoppingcentresareinfinitesupply”ResearchAnalyst,29November2010

Centre Location

Controlling stake sold

in last10 years*

1 Westfield London

2 Bluewater Greenhithe

3 Meadowhall Sheffield

4 TheTraffordCentre Manchester

5 Lakeside Thurrock

6 TheMallatCribbsCauseway Bristol

7 Metrocentre Gateshead

8 CabotCircus Bristol

9 BrentCross London

10 LiverpoolOne Liverpool

11 BullRing Birmingham

12 WestfieldDerby Derby

13 MerryHillShoppingCentre BrierleyHill 3

14 Arndale Manchester

15 StDavid’s Cardiff

16 Thecentre:mk MiltonKeynes

17 Highcross Leicester 3

18 FestivalPlace Basingstoke

19 TheHarlequin Watford

20 TheGlades Bromley

21 WestQuay Southampton

22 EldonSquare Newcastle

23 WhiteRoseShoppingCentre Leeds

24 EastKilbrideShoppingCentre Glasgow 3

25 Braehead Glasgow

CSCownedshoppingcentresProposedAcquisitionTop6out-of-townshoppingcentres

Source:PMA,DTZNote:Top25shoppingcentres,wheretheshoppingcentres>400ksq.ft.in50highestrentedlocations.

*Representsinterestgreaterthan50percent.



CSC is the only pure UK shopping centre REIT

Significant scale in a structurally defensive asset class with high barriers to entry

“Thediversifiedcompaniesarefacingexternalpressuresnow…andneedtorevisitthedemergeridea”ResearchAnalyst,25November2010

UKshoppingcentreassets(£) TheTraffordCentre(£)

Source:companyfilings;CSCfiguresasof31December2010(TheTraffordCentreasat1November2010),figuresfor British LandandLandSecuritiesasof30September2010andfiguresfor Hammersonasof30June2010;includesproportionalshareofJVs.

*IncludingTheTraffordCentre(shadedpurple).

UK shopping centre assets of major UK REITs

CSC* LandSecurities

Hammerson BritishLand

100%

26%40%

14%

1.7bn

5.1bn

2.6bn2.2bn

1.2bn

UK shopping centre assets as a percentage of total portfolio value

“CSCGisagoodoperatorofitsassetsandhasbuiltanenviableplatformintheU.K.SincethedivestitureofCapital&Countiesearlierthisyear,CSCGhasbeenafocusedmallplayer.Theoperatingplatformshouldhavesubstantialvaluetoanacquirer.”ResearchAnalyst,30November2010



89p419p 87p 30p 625p


Continuing trend for retail trade to concentrate into fewer locations

Continuing structural shift in retail towards prime destinations with strong leisure and catering offerings benefits CSC’s pre‑eminent UK shopping centres

Source:CBRE,NSLSP* Comparisongoodsmarketshare-basedonNSLSPshoppingpopulation.**PortfoliobreakdownofCSCbyvalueat31December2010including

The Trafford Centreat1November2010.

Market share %*

80

70

60

50

40

30

20

10

0

200180160140120100

Trading locations

Market share 2008

806040200

Market share 1971

2008: 90 trading locations

1971: 200 trading locations

Structural shift

■ In-town centres 36 per cent.**■ Out-of-town centres 64 per cent.**

The Trafford Centre 24%

Lakeside 16%

Metrocentre 13%Braehead 9%

Cribbs Causeway 3%

The Harlequin 5%

VictoriaCentre 5%

Arndale 5%

EldonSquare 4%

Chapelfield 4%

St David’s 4%

The Chimes 3%The Potteries 3%

The Glades 3% Others 1%

“Retailerswiththefundstoexpandshouldbelookingtosecureprimespacenowas‘2012-2015willseeachronicshortageofqualityretailspace,whichwillfurtherpushuprents—particularlyintheUK’smajorregionalshoppingmalls’.”TheTimes,31December2010


Appendix I:

Supporting valuation analysis

Rationale Methodology

Incremental value per

share

CSC valuation uplift, impact of Revised Acquisition, net of additional advisory fees

3Updated valuations of the investment and development properties from 1 November 2010 to 31 December 2010 3 Impact of Revised Acquisition 3Additional advisory fees of £14m

3 Independent market valuations by DTZ, CBRE and Knight Frank

15p

Reversal of Stamp Duty Land Tax deduction

3Market value of assets stated after deducting assumed average purchaser’s costs of 5.2 per cent. including Stamp Duty Land Tax (SDLT) at 4 per cent. 3SDLT would not be payable on acquisition of CSC Group shares

3Add back 4 per cent. SDLT to 31 December 2010 valuations (1 November 2010 for The Trafford Centre)

29p

Adjusting property values to mid‑point in the cycle

3Property valuations are currently below long-term average (December 1999 – December 2010) 350 per cent. increase in shopping centre values to peak levels

3Average IPD UK annual shopping centres capital value index* (December 1999 – December 2010) implies 12 per cent. growth from current values at 31 December 2010

87p

Development opportunities

3Detailed proposals on extensions at Lakeside, Nottingham, and Braehead now completed 3Planning applications expected to be submitted in 2011 (Lakeside and Nottingham) and 2012 (Braehead) 3Ongoing active asset management initiatives across the portfolio will generate further value

3Review by DTZ of CSC’s development appraisals detailing potential development profit today assuming planning consent granted and CSC undertaking development itself 3 Incorporates impact developments will have on existing centres 3Active asset management initiatives (including The Trafford Centre) estimated to generate a 10 – 12 per cent. yield on cost

30p

Independent assessment of additional value realisable through a disposal of the portfolio as a whole today

3Market value of assets assessed on an individual asset by asset basis (as included in financial statements) 3Takes no account of the quality and size of the portfolio and the time taken to assemble 3Portfolio purchase allows immediate presence in UK shopping centre market

3DTZ assessment of portfolio premium, equating to 12.5 – 16.0 per cent. on CSC’s share of portfolio value as at 31 December 2010, including The Trafford Centre at 1 November 2010. Assumes low end of range for calculation 3Range without The Trafford Centre is 11.0 – 14.5 per cent.

89p

* 2010 IPD UK annual shopping centres capital value index currently unavailable; 2010 figure based on c.11 per cent. property revaluation increase (like-for-like excluding The Trafford Centre).


Appendix II:

Property valuations at 31 December 2010

3 Increase in property valuations of £89m* since 1 November 2010, resulting in a 10p per share increase in value

3 The Trafford Centre valuation as at 1 November 2010

31 December 2010 1 November 2010

Ownership %

Market value (£m)

Initial yield

%

Nominal equivalent

yield %

Market value (£m)

Initial yield

%

Nominal equivalent

yield %

Lakeside, Thurrock 100 1,053 5.19 5.75 1,025 5.32 5.90

Metrocentre, Gateshead 90 843 5.70 6.33 810 5.96 6.65

Braehead, Glasgow 100 575 5.20 6.12 569 5.27 6.22

The Harlequin, Watford 93 353 5.15 6.65 352 5.06 6.65

Victoria Centre, Nottingham 100 337 5.33 6.40 326 5.44 6.60

The Arndale, Manchester*** 48 336 5.76 5.99 328 5.84 6.13

Eldon Square, Newcastle upon Tyne 60 250 4.62 7.01 244 4.42 7.16

St David’s, Cardiff 50 243 3.47 6.09 237 3.24 6.40

Chapelfield, Norwich 100 236 5.22 6.80 233 5.15 6.90

Cribbs Causeway, Bristol*** 33 221 5.49 6.05 220 5.43 6.12

The Chimes, Uxbridge 100 217 6.01 6.50 214 6.09 6.60

The Potteries, Stoke-on-Trent 100 201 6.43 7.25 201 6.49 7.25

The Glades, Bromley 64 178 5.61 7.25 177 5.68 7.25

Other 48 49

Total CSC 5,092 5.32 6.30 4,985 5.39 6.46

The Trafford Centre, Manchester** 100 – – – 1,650 5.01 5.58

Total (including The Trafford Centre as at 1 November 2010) 6,742 6,635

* Net of capital expenditure and non-controlling interests. ** Yields exclude Barton Square and land. *** The Arndale, Manchester is held through a JV which has a 95 per cent. interest in The Arndale and 90 per cent. interest in New Cathedral Street. Cribbs Causeway

is held through a JV which has a 66 per cent. interest in The Mall at Cribbs Causeway and a 100 per cent. interest in the Retail Park, Cribbs Causeway.


Appendix III:

DTZ opinion letter

Our ref: PW/JPG/BN/ Direct tel: 020 3296 4422 Direct fax: 020 3296 4431 E-mail: [email protected]

7 January 2011

The Directors

Capital Shopping Centres Group plc 40 Broadway London SW1H 0BT

Merrill Lynch International 2 King Edward Street London EC1A 1HQ

UBS Limited 1 Finsbury Avenue London EC2M 2PP

Gentlemen

Property Investment Assets of Capital Shopping Centres Group PLC (the “Company”)

In accordance with your instructions, we have reported our opinion of the aggregate Market Value of the property interests (set out below) owned by the Company as at 31 December 2010, which we understand are required in connection with the Board’s consideration of a potential offer for the Company. The valuations have been prepared in accordance with the RICS Valuation Standards (6th Edition) and the relevant accounting standards. In particular, the Market Value has been assessed in accordance with PS 3.2. Under these provisions, the term “Market Value” means “The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

1. Lakeside Shopping Centre, Thurrock (Freehold);2. Braehead Shopping Centre, Glasgow and surrounding land known as Phase II lands (Feuhold);3. Harlequin Shopping Centre and Various Retail Properties on Watford High Street, Watford (Leasehold);4. Victoria Shopping Centre, Nottingham and associated land (Freehold);5. Arndale Shopping Centre and retail Properties at New Cathedral Street Manchester (Leasehold);6. Chapelfield Shopping Centre and adjoining property, Norwich (Freehold);7. The Potteries Shopping Centre, Hanley and land formerly the Swift House and Jaxx Nightclub (Freehold);8. The Chimes Shopping Centre, Uxbridge (Freehold);9. The Glades Shopping Centre, Bromley (Leasehold);10. The Mall, Cribbs Causeway, Bristol and surrounding land (Leasehold);11. Eldon Square Shopping Centre, Newcastle (Leasehold);12. The Retail Park, Cribbs Causeway, Bristol (Freehold);


Appendix III: DTZ opinion letter

In addition to the above the Company owns interests in the following assets which have been valued by Knight Frank and CBRE, again as at 31 December 2010.

1. The Metrocentre and the Metro Retail Park, Gateshead (Leasehold) – CBRE; and

2. St David’s Shopping Centres (including St David’s 2, The Hayes, Town Wall South and 50-54 Queen Street), Cardiff ( Part Leasehold, Part Freehold) – Knight Frank

For the purpose of the advice contained in this letter we have been instructed to assume that the transaction to acquire The Trafford Centre and Barton Square has been completed. The interests in these properties have been valued by Cushman & Wakefield (collectively with Knight Frank and CBRE, the “Other Valuers”), as at 1 November 2010.

1. The Trafford Centre Manchester (Freehold) – Cushman & Wakefield;

2. Barton Square Retail Park, Manchester (Freehold) – Cushman & Wakefield;

The properties set out above (to include those valued by both DTZ and the Other Valuers) are collectively referred to as the “Portfolio” in this letter.

We understand that the Board of the Company is in the process of assessing a potential offer for the Company and we have therefore been instructed to consider and provide an opinion as to the benefit to such an acquirer of acquiring the Portfolio as a whole. We are of the opinion that if the Portfolio was offered to the market, the purchase price achieved would represent a material premium to the aggregate of the reported Market Values of the individual assets.

The value of each of the properties has been assessed in accordance with the relevant parts of the current RICS Valuation Standards. The valuation of each property reflects the assumptions a valuer reasonably expects the market would apply when considering the purchase of each individual asset in isolation. On this basis, the total Market Value reported is the aggregate of the individual values and therefore does not reflect the appetite within the market to acquire a portfolio of assets of this quality and scarcity.

The Portfolio is well known to DTZ and we have based our analysis of the assets, on our knowledge of the properties and the Investment Market. Our conclusion is that, if sold as a whole, the Portfolio has a number of key, enduring characteristics which would result in a purchase price being achieved that is significantly in excess of the sum of the individual Market Values.

Stamp Duty • In accordance with standard valuation practice in assessing Market Value, the Company’s valuers will have made

deductions to reflect purchaser’s acquisition costs. The acquisition costs comprise 4% Stamp Duty plus legal and agents fees. The total Stamp Duty deducted from the aggregate Market Value of the Portfolio is £256,160,000.

Portfolio Premium • The Portfolio comprises 45% by number (43% by Gross Lettable floor area) of the regional out of town shopping centres

in the UK. The assets comprise Lakeside, Cribbs Causeway, The Trafford Centre, Metrocentre and Braehead. Current planning policy within the UK is very much in favour of protecting city centre retailing, ensuring that it is very unlikely that any new, significant out of town Regional shopping centres will be developed in the future. In addition, the very tight ownership structure of such Regional Malls makes it very rare that these types of assets will be available in the market. If they were to be offered for sale as a clean interest, i.e. good title and with a controlling share, then we would expect a very competitive bidding process. The acquisition of the Portfolio as a whole offers a purchaser the unique opportunity to own a large percentage of the key out of town shopping centres with an unrivalled geographical spread across the UK. We are therefore of the opinion that a premium equivalent to 15% – 20% of the Market Value of the five assets in this category reflects such benefit to a purchaser.

• In addition to the above, the Portfolio comprises prime, dominant in-town shopping centres which are located in the top retailing locations in the UK. We have analysed the Company’s ownerships and have identified six assets which fall into this ‘prime dominant’ category. These assets represent the best shopping centres in their catchment area and possess characteristics which would be attractive to a wide range of prospective purchasers. There are also barriers to entry in developing new schemes due to planning and the time and cost associated with site assembly. We are of the opinion that, whilst it is easier for prospective purchasers to source similar quality assets than for the regional shopping centres discussed above, the ability to acquire a portfolio of prime quality assets with national market coverage in one transaction is unique. We are therefore of the opinion that a premium equivalent to 7.5% – 10% of the Market Value of the six assets reflects the benefit to a purchaser.


• There would be considerable cost incurred by a potential purchaser to create a portfolio equivalent to the Company’s ownership. This cost would be both in terms of acquisition fees and management time. In addition, the Portfolio could not be replicated immediately as there are no equivalent portfolios in the market. On this basis the time taken to gain equivalent coverage within the UK shopping centre market would be considerable. We are therefore of the opinion that a premium of 1% – 2% of the aggregate Market Value of the Portfolio reflects the benefit to a purchaser.

On the basis of the above we are of the opinion that a purchaser should pay a total premium of between 12.5% to 16.0% of the aggregate Market Value of the Portfolio.

In addition to the above you have asked us to consider the quantum of the premium applicable to the Portfolio assuming that the acquisition of The Trafford Centre does not proceed. We are of the opinion that the analysis adopted above is still valid but the total premium would be adjusted to reflect the fact that the acquisition of the portfolio as a whole would include one less out of town regional shopping centre. On this basis, the total premium payable for the Company’s existing portfolio would be 11.0% to 14.5%.

Development Upside • The Company has provided information relating to the development of three key projects which represent major

potential extensions at Lakeside; Victoria Centre, Nottingham; and Braehead. Each project is at a different stage in terms of planning, design and commercial matters. At present, planning consent has not been obtained and as a result the Market Values for the assets do not include any significant “Hope Value”. However, our initial analysis of the detailed feasibility studies undertaken by the Company indicates that, if successful, the schemes could realise circa £170,000,000 to £175,000,000 of development profit. In assessing the development profit we have also considered the benefit the extensions, particularly in the case of Victoria Centre, will have by enhancing the existing schemes and further strengthening their relative positions within their catchments.

In conclusion, we are of the opinion that the ability to acquire the Portfolio, in a single transaction would be a highly attractive opportunity. As has been demonstrated recently within the market, investors are prepared to pay prices which reflect the scarcity and quality of the assets (eg Regent Street, Norges Bank/Crown Estate). There is evidence that there is appetite from overseas investors to acquire UK assets and it is recognised that for the “once in a lifetime opportunity” premium prices have to be paid. We are therefore confident that a premium over and above the aggregate market value would be achieved on a portfolio sale.

The contents of this letter may be used only for the specific purpose to which it refers. Before this letter, or any part thereof, is reproduced or referred to, in any document, circular or statement, and before its contents, or any part thereof, are disclosed orally or otherwise to a third party, the valuer’s written approval as to the form and context of such publication or disclosure must first be obtained. For the avoidance of doubt, such approval is required whether or not DTZ Debenham Tie Leung Limited is referred to by name and whether or not the contents of our Report are combined with others.

Yours faithfully

Paul Wolfenden Jonathan GoodeChartered Surveyor Chartered SurveyorInternational Director DirectorFor and on Behalf of For and on Behalf of DTZ Debenham Tie Leung DTZ Debenham Tie Leung


Appendix IV:

The revised acquisition terms

CSC and Peel have entered into an amendment agreement relating to the Acquisition of The Trafford Centre Group (the “Amendment Agreement”). The key terms of Acquisition as amended by the Amendment Agreement are set out below.

ConsiderationCSC will acquire The Trafford Centre Group in exchange for a total of 167.3 million Consideration Shares of 50 pence each and convertible bonds with an aggregate nominal amount of £154.3 million (previously £209.0 million) and also receive £67.4 million (previously £74.4 million) in cash. The number of Ordinary Shares and the aggregate nominal amount of Convertible Bonds to be issued has been determined such that in effect:

• 155.0 million Consideration Shares are being issued at a price per share of 400 pence (previously 368 pence), for a total of £620.0 million (previously £570.4 million) and £127.6 million (previously £177.2 million) Convertible Bonds are being issued at par in respect of the acquisition of The Trafford Centre itself, at an unchanged equity purchase price of £747.6 million; and

• 12.3 million Consideration Shares are being issued, as before, at the Placing Price, being 355 pence per share and £26.7 million (previously £31.8 million) Convertible Bonds are being issued, for £67.4 million (previously £74.4 million) in cash.

The Acquisition will result in Peel holding 169.7 million Ordinary Shares (including Ordinary Shares owned prior to the Acquisition) and £154.3 million in aggregate nominal amount of Convertible Bonds, representing 19.8 per cent. of the Enlarged Issued Share Capital of CSC (unchanged from previously) and 23.2 per cent. (previously 24.7 per cent.) assuming conversion of the Convertible Bonds.

Terms of Convertible BondsThe £154.3 million Convertible Bonds will be perpetual subordinated bonds, convertible into Ordinary Shares of the Company at the option of the bondholder any time after two years from the date of issue or earlier in certain limited circumstances (including on the making of a takeover offer for the Company). The initial conversion price will be 400 pence per Ordinary Share (previously 368 pence per Ordinary Share). The initial conversion price may be adjusted downwards from time to time in accordance with the terms and conditions of the Convertible Bonds, including in circumstances where the Company pays a dividend in respect of its Ordinary Shares in excess of 15.0 pence in respect of any fiscal year. Claims of bondholders will, on a winding up of the Company, be subordinated to claims of senior creditors of the Company, but will rank in priority to claims of holders of all classes of the Company’s share capital. The Convertible Bonds will bear interest at the rate of 3.75 per cent. per annum payable semi-annually in arrear (previously 4.076 per cent. per annum). The Company shall at its sole discretion have the right to defer payments of interest on the Convertible Bonds. If the Company elects to defer payments of interest on the Convertible Bonds, the Company will not be permitted under the terms of the Convertible Bonds to pay a dividend in respect of the Ordinary Shares until such time as all arrears of interest have been paid.

Although the Convertible Bonds do not have a fixed redemption date, the Company may elect to redeem the Convertible Bonds at their principal amount on the third anniversary of the issue date or on any interest payment date thereafter, and in certain other limited circumstances.

The Company intends to make an application for the admission to listing of the Convertible Bonds on the official list of the FSA and to trading on the Professional Securities Market of the London Stock Exchange.

Relationship AgreementCSC and Peel have agreed that the Wider Peel Group will be restricted under the Relationship Agreement from holding more than 24.9 per cent. of CSC’s issued share capital on a fully diluted basis for the second and third year after completion (previously 29.9 per cent.). The 24.9 per cent. limit for the first year is unchanged. These limits exclude any shares acquired pursuant to any scrip dividend arrangement.


ConditionalityThe Acquisition remains conditional upon, inter alia, the passing of the resolution by CSC shareholders to approve the Revised Acquisition at the Adjourned EGM, and the admission of the Consideration Shares to trading on the London Stock Exchange and to listing on the Official List. The long stop date for the satisfaction or waiver of each condition is 31 January 2011.

Fee ArrangementsCSC shall pay a fee of £7.5 million (the “First Fee”) to Peel if CSC’s shareholders do not pass the shareholder resolution to approve the Acquisition at the Adjourned EGM, or the Adjourned EGM is adjourned until after the long stop date in the Acquisition Agreement so that CSC shareholder approval of the Acquisition cannot be obtained before such long-stop date.

If, and only if, the First Fee becomes payable, CSC will pay a second fee of £9 million (the “Second Fee”) to Peel if Simon or any person acting in concert with it makes a firm offer (including an offer to be implemented by way of a scheme of arrangement, and whether or not subject to pre-conditions) to purchase more than 50 per cent. of the issued share capital of CSC (other than any shares already held by such an offeror) for the purposes of Rule 2.5 of the Code either (i) prior to the Adjourned EGM or (ii) with the consent of the board of directors of CSC, within six months of an announcement being made by Simon pursuant to Rule 2.8 of the Code, and in any such case such offer (as subsequently amended) is declared unconditional in all respects or is otherwise completed.

CSC will also be liable to pay the Second Fee if any other person makes a firm offer (including an offer to be implemented by way of a scheme of arrangement, and whether or not subject to pre-conditions) to purchase more than 50 per cent. of the issued share capital of CSC (other than any shares already held by such an offeror) for the purposes of Rule 2.5 of the Code prior to the lapse or completion of any offer made by Simon as referred to in the paragraph above and such offer (as subsequently amended) is declared unconditional in all respects, becomes effective or is otherwise completed.

CSC shall not be obliged to pay any amount which the Panel determines would not be permitted under the Code.

A copy of the Amendment Agreement may be inspected during usual business hours on any Business Day, up to and including the date on which admission of the Consideration Shares occurs, at the registered office of the Company, at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ, United Kingdom, and at the offices of Merrill Lynch 251 South Africa (Pty) Ltd, 138 West Street, Sandown, Sandton 2196, South Africa and will also be available for inspection at the Adjourned EGM on 26 January 2011 for at least 15 minutes prior to and during the meeting.


The unaudited pro forma statement of net assets set out below has been prepared to illustrate the effect of the Placing and the Revised Acquisition as if those events had taken place as at 30 June 2010. The unaudited pro forma statement of net assets, which has been produced for illustrative purposes only, by its nature addresses a hypothetical situation and, therefore, does not represent the Group’s actual financial position or results. The unaudited pro forma statement of net assets is presented on the basis of the accounting policies adopted by the Group in preparing the unaudited interim report for the half year ended 30 June 2010. The unaudited pro forma statement of net assets has been prepared on the basis set out in the notes below and in accordance with the requirements of items 1 to 6 of Annex II to the PD Regulation and item 13.3.3R of the Listing Rules of the UK Listing Authority.

Pro forma statement of net assetsAdjustments

(£m)

CSC 30 June

2010(1) Placing(2)

Trafford Centre Group

31 March 2010(3)

Other adjustments(4) Pro forma

Assets

Investment, development and trading properties 4,915.5 – 1,678.4 124.4 6,718.3

Goodwill – – – 10.8 10.8

Cash and cash equivalents 127.7 216.2 44.2 48.4 436.5

Investments 48.0 – – (5.0) 43.0

Derivative financial instruments 23.0 – 0.2 – 23.2

Trade and other receivables 111.0 – 19.0 12.8 142.8

C&C US – assets 429.6 – – – 429.6

Other assets 8.2 – 0.4 – 8.6

Total assets 5,663.0 216.2 1,742.2 191.4 7,812.8

Liabilities

Borrowings (2,884.5) – (847.5) 5.0 (3,727.0)

Trade and other payables (216.0) – (77.4) (33.0) (326.4)

Derivative financial instruments (413.5) – (24.3) – (437.8)

C&C US – liabilities (285.6) – – – (285.6)

Deferred tax – – (343.8) 343.8 –

Other liabilities (1.4) – – – (1.4)

Total liabilities (3,801.0) – (1,293.0) 315.8 (4,778.2)

Net assets 1,862.0 216.2 449.2 507.2 3,034.6

Net assets (diluted, adjusted)(5) 2,309.1 3,489.4

Net external debt(6) 2,622.4 3,156.1

Loan to value(7) 53% 47%

Diluted number of shares (million)(8) 626.7 894.9

Net assets per share (diluted, adjusted)(9) 368p 390p

Appendix V:

Pro forma statement of net assets


Notes:(1) The financial information of the Group has been extracted without material adjustment from the unaudited interim report of the Group for the half year ended 30 June 2010.(2) The proceeds of the placing completed on 25 November 2010 in which the Group issued 62.3 million new ordinary shares at 355 pence per share, net of costs of £5 million.(3) The financial information of The Trafford Centre Group has been extracted without material adjustment from the historical financial information in Part A of Part VIII of the Original Prospectus (‘‘Historical Financial Information of The Trafford Centre Group’’).(4) Adjustments to reflect the Revised Acquisition and consolidation of The Trafford Centre Group are included as follows:(a) Pre-acquisition adjustment to reflect the fact that a liability of £12.8 million recognised in the 31 March 2010 Trafford balance sheet will be met by the Peel Group as it falls due under the terms of one of the ancillary documents to the Acquisition Agreement. This results in the recognition of an asset of £12.8 million within trade and other receivables.(b) The Original Prospectus included investment and development property valuations that had been updated to 1 November 2010, which resulted in an adjustment of £21.9 million representing an increase of £57.9 million in respect of the Group investment and development property and a decrease of £36.0 million in respect of The Trafford Centre Group investment and development property. The Group investment and development property valuations have been updated to 31 December 2010 resulting in a further adjustment of £102.5 million. This increase combined with the £21.9 million adjustment for the period to 1 November 2010 results in a total adjustment of £124.4 million in respect of the Enlarged Group investment and development property.The 1 November 2010 valuations were included in Part X and Part XI of the Original Prospectus. The 31 December 2010 valuations of the Group’s properties are included in Appendix VII of this document.(c) On acquisition, as part of the Enlarged Group, The Trafford Centre Group automatically enters the REIT regime. As such a REIT entry charge liability of £33.0 million, based on the market value of the acquired property at 1 November 2010, is recognised in trade and other payables and the deferred tax position is revised to reflect the changed tax position resulting in a reduction in the deferred tax liability of £343.8 million.(d) As part of the Revised Acquisition the shareholders of The Trafford Centre Group will subscribe £67.4 million for Consideration Shares and Convertible Bonds which is reflected as an increase in cash. (e) Acquisition and advisory costs of £19.0 million are reflected as a movement in cash.(f) Reclassification of £5.0 million of investments held by Group to eliminate against borrowings of The Trafford Centre Group.(g) Acquisition accounting adjustments would be required when reflecting the acquisition in the Group financial statements under IFRS. No estimation has been made of the fair value adjustments that would be required at the date of acquisition as these are dependent upon values at that date. Consideration consists in effect of 155.0 million Consideration Shares and £127.6 million Convertible Bonds. The fair value of the shares issued as consideration will be calculated for acquisition accounting purposes based on the share price at the date the acquisition completes. An estimation of the fair value of the shares issued as consideration has been made using 400 pence per share based on the Revised Acquisition terms as detailed in Appendix IV. The difference between the consideration and the net assets of The Trafford Centre Group results in goodwill of £10.8 million that would be recognised on the balance sheet and is calculated as follows:

£m

Consideration Shares 620.0

Perpetual convertible bond 127.6

747.6

Adjusted net assets:

At 31 March 2010 449.2

Pre-acquisition adjustment(4a) 12.8

Investment and development property adjustment(4b) (36.0)

Taxation/REIT adjustments(4c) 310.8

736.8

Goodwill 10.8


Appendix V: Pro forma statement of net assets

(5) Net assets (diluted, adjusted) has been calculated as equity shareholders’ funds, diluted for the effects of unexercised share options and convertible bonds, adjusted for the unrecognised surplus on trading properties, fair value of derivative financial instruments, deferred tax on investment and development property, the non-controlling interest on these adjustments and non-controlling interest recoverable balances not recognised.(6) Net external debt represents total borrowings less the £134.4 million compound financial instrument relating to the 40 per cent, third party interest in Metrocentre less cash and cash equivalents, as detailed in the table below:

Adjustments

CSC 30 June

2010 Placing

Trafford Centre Group

31 March 2010Other

adjustments Pro forma

Borrowings 2,884.5 – 847.5 (5.0) 3,727.0

Metrocentre compound financial instrument (134.4) – – – (134.4)

Gross external debt 2,750.1 – 847.5 (5.0) 3,592.6

Cash and cash equivalents (127.7) (216.2) (44.2) (48.4) (436.5)

Net external debt 2,622.4 (216.2) 803.3 (53.4) 3,156.1

(7) The loan to value ratio has been calculated as the ratio of net external debt to the total value of investment, development and trading properties. The pro forma loan to value ratio has been updated for the 31 December 2010 property valuations.(8) The unadjusted diluted number of shares represents the Group’s issued share capital at 30 June 2010 adjusted for treasury shares and those held in the ESOP, diluted for the effects of unexercised share options and convertible bonds. This number of shares is further adjusted for the effects of the transaction, including the issue of Consideration Shares, the dilution impact of the Convertible Bonds issued as consideration, and the issue of the Placing Shares.(9) Net assets per share (diluted, adjusted) is calculated by dividing the net assets (diluted, adjusted) by the diluted number of shares.(10) No account has been taken of the results and financial performance of the Group since 30 June 2010, nor of The Trafford Centre Group since 31 March 2010, other than the updated investment and development property valuations of the Group as at 31 December 2010 and The Trafford Centre as at 1 November 2010.(11) The pro forma statement of net assets presented in the Original Prospectus has been updated to reflect:(a) the Revised Acquisition terms which has resulted in the nominal value of the Convertible Bonds being issued reducing from £177.2 million to £127.6 million and the cash from the subscription from Consideration Shares and Convertible Bonds reducing by £7.0 million.(b) investment and development property valuations as at 31 December 2010 for the Group and updated estimated acquisition and advisory costs. Group investment and development property has increased by £102.5 million since the 1 November valuations while estimated acquisition and advisory costs have increased by £14.0 million.


Appendix VI:

Presentation of information, sources and bases

1. General1.1. This document contains statements that are or may be forward-looking with respect to the financial condition, results of operations and businesses of CSC.

These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, valuation, performance or achievements of CSC, or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements

1.2. Percentages in certain tables and graphs in this document have been rounded and accordingly may not add up to 100 per cent. Certain financial data in this document has also been rounded. As a result of this rounding, the totals of data presented in this document may vary slightly from the actual arithmetic totals of such data

1.3. The Company confirms that the information in this document obtained from third-party sources has been correctly and fairly reproduced. So far as the Company is aware and has been able to ascertain from information published by such third parties, no facts have been omitted which would render the reproduced information inaccurate or misleading. The Company does not have access to the facts and assumptions underlying the data extracted from publicly available sources. As a result, the Company is unable to verify such information and data

2. Sources and bases – Page references The relevant bases of calculation and sources of information are provided below in the order in which such information appears in this document (except for

information included up to page 5 of this document, which if repeated elsewhere in this document is sourced in that alternative location), and by reference to page numbers of this document. Where such information is repeated in this document, the underlying sources and bases are not repeated.

Page 2 (a) The reference to Simon’s proposal is sourced from the letter from David Simon, Chairman of the Board and Chief Executive Officer of Simon Property

Group, to the Board of Directors of CSC dated 15 December 2010 Page 3 (a) The reference to capital values in the IPD annual shopping centres capital value index declining by 40 per cent. between 2006 and 2009 is sourced

from IPD Page 4 (a) The reference to only one large shopping centre, greater than 500,000 sq. ft. currently under construction in the UK is sourced from CBRE as at

December 2010 Page 6 (a) The reference to gross consideration of £1,575 million is calculated as follows:

£ million

387p multiplied by 186.9 million fully diluted shares issued to Peel in relation to the Revised Acquisition, excluding the cash subscription component 723

The Trafford Centre Group’s net debt as at 30 June 2010 sourced from page 3 of the Prospectus 798

The Trafford Centre Group’s other net liabilities as at 30 June 2010 sourced from page 3 of the Prospectus 54

1,575

387p is based on 30 June 2010 NAV, updated for the Placing and CSC valuations to 31 December 2010

(b) The reference to the 4.5 per cent. discount is the discount of the £1,575 million implied gross consideration to the independent market valuation of The Trafford Centre as at 1 November 2010 of £1,650 million

(c) The reference to blended price of ordinary shares and convertible bonds issued to Peel of 396p is a weighted average of the 155 million ordinary shares and 31.9 million ordinary shares underlying the convertible bonds issued at 400p and the 12.3 million ordinary shares and 6.7 million ordinary shares underlying the convertible bonds issued at 355p, as part of the terms of the Revised Acquisition

(d) The reference to blended price of ordinary shares and convertible bonds issued to Peel of 367p is a weighted average of the 155 million ordinary shares and 48.2 million ordinary shares underlying the convertible bonds issued at 368p and the 12.3 million ordinary shares and 8.6 million ordinary shares underlying the convertible bonds issued at 355p, as part of the terms of the Acquisition as announced on the 25 November 2010

(e) The reference to the increase from previous pro forma NAV per share of 7p is the difference between 375p as stated on page 143 of the Prospectus and 382p, being the pro forma net assets on page 143 of the Prospectus less the £7.6 million reduction in cash subscription divided by the diluted number of shares, based on the Revised Acquisition terms, of 894.9 million

(f) The reference to the c.73 per cent. held by the Whittaker Family Trusts and c.27 per cent. held by the Olayan Group is sourced from page 40 of the Prospectus

Page 7 (a) The reference to £50 million of identified asset management opportunities at The Trafford Centre is sourced from internal Company estimates

(b) The reference to 9.3 acres of adjacent land at The Trafford Centre is sourced from the independent market valuation by Cushman & Wakefield found on page 187 of the Prospectus

(c) The references to external valuation of £1,650 million is sourced from the independent market valuation undertaken by The Trafford Centre’s valuers, Cushman & Wakefield as at 1 November 2010 on page 180 of the Prospectus

(d) The reference to The Trafford Centre having over 230 units including 50 catering and leisure units is sourced from page 1 of the Prospectus

(e) The reference to day 1 income of £88 million and ERV of £105 million for The Trafford Centre is sourced from page 40 of the Prospectus

(f) The references to The Trafford Centre’s occupancy of 98 per cent. by rent, consistent footfall growth since opening to over 35 million customer visits p.a., and to 8.9 million people living within a 70 minute drive of The Trafford Centre are sourced from page 41 of the Prospectus

Page 8 (a) The reference to 9 of the top 25 UK shopping centres (excluding The Trafford Centre) is sourced from data provided by PMA which takes into account

all shopping centres in the 50 highest rented locations in the UK with over 400,000 sq. ft. of space and where the owner has at least 33 per cent. share of ownership


Appendix VI: Presentation of information, sources and bases

(b) The reference to compound annual growth in like-for-like net rental income from 2000 to 2007 is sourced from page 29 of Liberty International’s 2009 Annual Results and Proposed Demerger Presentation dated 9 March 2010

(c) The reference to like-for-like change in net rental income for 2008, 2009 and H1 2010 is sourced from page 48 of the Prospectus

(d) The reference to occupancy of 98.8 per cent. and the new lettings is sourced from CSC’s Interim Management Statement dated 3 November 2010

(e) The reference to the three major extensions and ongoing asset management initiatives is sourced from internal Company estimates

(f) The reference to CSC’s revaluation uplift between 31 December 2009 and 31 December 2010 is sourced from independent market valuations by CSC’s valuers, DTZ, CBRE and Knight Frank as at 31 December 2009 and 31 December 2010 and takes into account property disposals and reclassifications

(g) The reference to LTV of 47 per cent. is based on 30 June 2010 balance sheet values of net external debt £2,622 million updated for the net proceeds from the Placing of £216 million and the book value of investment, development and trading property of £4,916 million, updated for estimated revaluation gains for the period 30 June 2010 to 31 December 2010 of £160 million

(h) The reference to £392 million of financial headroom post-Placing is based on headroom of £176 million at 30 September 2010, as referenced on page 34 of the Prospectus, and £216 million net proceeds from the Placing sourced from page 1 of the Prospectus

(i) The reference to no asset-specific debt refinancing requirements until 2015 is sourced from page 49 of the Prospectus Page 9 (a) The reference to passing rent and other income of £289 million and ERV of £355 million as at 30 June 2010 is sourced from page 5 of the Company’s

Interim Report for the half year ended 30 June 2010

(b) The Progression to ERV chart is sourced from page 5 of the Company’s Interim Report for the half year ended 30 June 2010

(c) The reference to approximately 80 per cent. of reversionary potential to ERV within five years is sourced from page 34 of the Company’s Interim Results Presentation for the half year ended 30 June 2010

(d) The cumulative reversionary potential by year chart and reference to approximation of reversionary potential to ERV within 2 years is sourced from CSC management analysis, based on information supplied by DTZ, Knight Frank and CBRE

Page 10 (a) The reference to CSC’s updated pro forma NAV per share of 390p is detailed in Appendix V of this document

(b) The basis for the calculation of the Stamp Duty Land Tax (SDLT) is sourced from HM Revenue & Customs website at http://www.hmrc.gov.uk/sdlt/ and is detailed on page 11 of this document

(c) The reference to adjusting property values to mid cycle is based on a 12 per cent. increase in capital values to revert to the IPD UK annual shopping centres capital value index long-term average using the like-for-like property revaluation increase required from CSC’s capital values as of 31 December 2010 to return to the average capital value index between December 1999 to December 2010 which equates to an increase of £775 million, equivalent to 87p per share and is detailed on page 12 of this document

(d) The reference to development opportunities of 30p per share is sourced from CSC’s development appraisals (reviewed by DTZ) for the three major extension opportunities at Lakeside, Braehead and Victoria Centre (equivalent to 19p per share), plus ongoing active management schemes estimated to generate a 10–12 per cent. yield on cost across CSC’s existing portfolio, and The Trafford Centre (equivalent to 11p per share) and is detailed on page 15 of this document

(e) The reference to independent assessment of additional value realisable through a disposal of the portfolio as a whole today of 89p is based on 12.5 per cent. being the lower end of DTZ’s portfolio premium range, multiplied by the 31 December 2010 property valuation of £6,742 million adjusted for the third party non-controlling interest at Metrocentre of 40 per cent. of £843 million, divided by the total number of shares outstanding pro forma for the Revised Acquisition of The Trafford Centre of £894.9 million is detailed on page 16 of this document

Page 11 (a) The net market value of the shopping centres is sourced from independent market valuations undertaken by CSC’s valuers, DTZ, CBRE and Knight

Frank as at 31 December 2010 and The Trafford Centre’s valuers, Cushman & Wakefield as at 1 November 2010

(b) The basis for the calculation of the Stamp Duty Land Tax (SDLT) is sourced from HM Revenue & Customs website at http://www.hmrc.gov.uk/sdlt/, and is calculated as 4 per cent. multiplied by the net market value for each asset

(c) The gross market value, as stated on this page, represents the net market value adding back SDLT at 4 per cent. of the net market value, and excludes the reversal of any other additional assumed purchaser’s costs

(d) Valuation guidelines are in accordance with the appropriate sections of the Practice Statements (“PS”) and United Kingdom Practice Statements (“UKPS”) contained within the RICS Valuation Standards, 6th Edition (the “Red Book”)

(e) Remaining assumed average purchaser’s costs of 1.2 per cent. calculated as 5.2 per cent., representing total average purchaser’s costs for CSC’s total property assets at 31 December 2010, less 4.0 per cent. Stamp Duty Land Tax deduction

Page 12 (a) The reference to capital values today being at 2002 levels is based on a comparison of estimated IPD annual shopping centres capital value index

as at December 2010 against the period December 1999 – December 2010

(b) The reference to 50 per cent. upside to return to peak levels is based on the discount of December 2010 capital values to peak levels in December 2006 following a 40 per cent. decrease to the IPD annual shopping centres capital value index between December 2006 and December 2009, and CSC’s like-for-like property revaluation increase of approximately 11 per cent. in 2010

(c) The data in the table shows value increases on a pence per share basis, based on various capital value increases to the 31 December 2010 independent valuation of £6,742 million (The Trafford Centre as at 1 November 2010), after adjusting for non-controlling interests

Page 13 (a) The data used in the chart “IPD UK annual shopping centres capital value index” to December 2009 is sourced from IPD

(b) 2010 data is based on like-for-like property revaluations on CSC’s existing portfolio (excluding The Trafford Centre), based on independent market valuations by CSC’s valuers, DTZ, CBRE and Knight Frank as at 31 December 2010 (as 2010 annual IPD data is not yet available)

(c) The reference to a 50 per cent. increase in shopping centre capital values required to return to peak levels is based on the like-for-like property revaluation increase required from CSC’s capital values as of December 2010 to return to the peak capital value as of December 2006, representing uplift of £3,179 million, equivalent to 355p per share


Page 14 (a) The data for the graph titled “CSC nominal equivalent yield and 15 year Gilts” is sourced from:

i. CSC Group interim results as at 30 June 2010 and the CSC segment information within historical Liberty International annual accounts for the historic weighted (by value) average nominal equivalent yield updated for the independent market valuations as at 31 December 2010, from which the long run average is derived

ii. Datastream, which provides the data for the 15 year Gilts, as at 31 December for each year.

(b) The reference to the current spread of 243bps is based on the difference between CSC’s weighted average nominal equivalent yield of 6.30 per cent. as at 31 December 2010 and the 15 year Gilt yield of 3.87 per cent. as of 31 December 2010

(c) The reference to a 12 per cent. increase in capital values reducing spread over 15 year Gilts to 175bps is based on the difference between CSC’s implied nominal equivalent yield as at 31 December 2010 assuming a like-for-like property revaluation increase to CSC’s existing portfolio of 12 per cent. (with no change in rents) and the 15 year Gilt yield as of 31 December 2010

Page 15 (a) The data for the graph titled “Additions to space” is sourced from internal management estimates

(b) The reference to £170–£175 million of value creation once planning consent obtained is sourced from internal management estimates, supported by an opinion letter from Paul Wolfenden and Jonathan Goode of DTZ dated 7 January 2011 and set out on pages 23 to 25 in Appendix III of this document

(c) The reference to £128 million of active asset management projects is obtained from two sources:

i. The reference to £78 million of identified asset management projects is sourced from page 49 of the Prospectus

ii. The reference to the remaining £50 million of identified asset management projects is sourced from internal management estimates

(d) The data in the table on this page is sourced from internal management estimates Page 16 (a) The quotation from DTZ and references to the portfolio premium percentage ranges are sourced from an opinion letter from Paul Wolfenden and

Jonathan Goode of DTZ dated 7 January 2011 and set out on pages 23 to 25 in Appendix III of this document

(b) Additional value of £843 million is based on 12.5 per cent., being the lower end of DTZ’s portfolio premium range, multiplied by the 31 December 2010 net market valuation of £6,742 million (including The Trafford Centre valued as at 1 November 2010)

(c) The reference to the portfolio sale value of CSC including The Trafford Centre is the addition of £843 million in (b) above to £6,742 million in the reference for page 10 (e)

Page 17 (a) The reference to CSC owning more shopping centres in the UK than any other operator is based on data provided by PMA that takes into account

all shopping centres in the 50 highest rented locations in the UK with over 400,000 sq. ft. of space and where the owner has at least 33 per cent. share of ownership, sourced from PMA 2010

(b) The data for the graphs showing UK Retail Space and UK Shopping Centre Space is sourced from PMA as of November 2010 Page 18 (a) The data for the table showing the top 25 shopping centres in the UK is based on data provided by PMA as of November 2010 that takes into account

all shopping centres in the 50 highest rented locations in the UK with over 400,000 sq. ft. of space and where the owner has at least 33 per cent. share of ownership

(b) Controlling stakes sold defined as transfers of interests of greater than 50 per cent. in the property asset

(c) The reference to a limited existing pipeline is in relation to UK shopping centres and is based on CBRE data for UK shopping centres under construction or with planning consent as at December 2010

Page 19 (a) The information on CSC being the only pure UK shopping centre REIT is based on company filings for each company referred to on page 19.

CSC figures are as of 31 December 2010 (except for The Trafford Centre which is as at 1 November 2010), figures for British Land and Land Securities as of 30 September 2010 and figures for Hammerson as of 30 June 2010; including proportional share of joint ventures. The information is based on the market value contributed by each asset class and compared to the total portfolio value of the company. The information for the overall portfolio value of CSC including The Trafford Centre is sourced from independent market valuations by CSC’s valuers, DTZ, CBRE and Knight Frank as at 31 December 2010 and The Trafford Centre’s valuers, Cushman & Wakefield as at 1 November 2010

Page 20 (a) The information of comparison goods market share in 1971 and 2008, against the number of trading locations is sourced from CBRE and NSLSP

(b) The data for CSC value distribution across portfolio assets is sourced from independent market valuations by CSC’s valuers, DTZ, CBRE and Knight Frank as at 31 December 2010 and The Trafford Centre’s valuers, Cushman & Wakefield as at 1 November 2010

Pages 36 – 54 (a) Reconciliation of property values from the aggregate of the valuation reports of £5.35 billion and the market value of the Group’s investment and

development properties of £5.1 billion

Table of market values from each valuation report of the Company’s properties as at 31 December 2010 (Appendix VII)

Market value £ millions

DTZ 3,992

CBRE 845

Knight Frank 513

5,350

The most significant reason for the difference between the aggregate of the valuation reports of £5.35 billion (see table above and Appendix VII), and the market value of the Group’s investment and development property of £5.1 billion (see Appendix II page 22), is related to the valuation of joint venture interests. In particular, St David’s, Cardiff has been valued by Knight Frank at £0.5 billion whereas the Group’s economic interest amounts to approximately £0.25 billion.


Appendix VI: Glossary

The following terms apply throughout this document, unless the context requires otherwise:

Adjusted, diluted net asset value (NAV)

NAV adjusted to exclude the fair value of derivative instruments and related tax and deferred tax on investment and development property and to include any unrecognised post-tax surplus on trading properties

Adjusted, diluted net asset value per share (NAV per share)

Net asset value per Ordinary Share

EPRA European Public Real Estate Association, the publisher of Best Practice Recommendations intended to make financial statements of public real estate companies in Europe clearer, more transparent and comparable

ERV (estimated rental value)

The external valuers’ estimates of the Group’s share of the current annual market rent of all lettable space net of any non-recoverable charges, before bad debt provision and adjustments required by International Accounting Standards regarding tenant lease incentives

Initial yield Annualised net rent (after deduction of revenue costs such as head rent, running void, service charge after shortfalls, empty rates and merchant association contribution) on investment properties expressed as a percentage of the gross market value before deduction of theoretical acquisition costs, consistent with EPRA’s net initial yield calculation

IFRS International Financial Reporting Standards as issued by the International Accounting Standards Board

IPD Investment Property Databank Ltd

LTV Net external debt divided by the balance sheet value of investment and development property plus trading property

Net rental income (NRI) The Group’s share of net rents receivable as shown in the income statement, having taken due account of non-recoverable charges, bad debt provisions and adjustments to comply with IFRS including those regarding tenant lease incentives

Occupancy The passing rent of let and under offer units expressed as a percentage of the passing rent of let and under offer units plus ERV of un-let units, excluding development and recently completed properties and treating units let to tenants in administration as un-let

Nominal equivalent yield The effective annual yield to a purchaser from the assets individually at market value after taking into account notional acquisition costs but assuming rent is receivable annually in arrears rather than reflecting the actual rental cash flows

Passing rent The Group’s share of contracted annual rents receivable at the balance sheet date. This takes no account of accounting adjustments made in respect of rent free periods or tenant incentives, the reclassification of certain lease payments as finance charges or any irrecoverable costs and expenses, and does not include excess turnover rent, additional rent in respect of unsettled rent reviews or sundry income such as from car parks etc. Contracted annual rents in respect of tenants in administration are excluded

Property revaluation Comparison of capital values on a like-for-like basis in reference to investment properties which have been owned throughout both periods without significant capital expenditure in either period. This will also include assets owned at the previous reporting period end but not throughout the prior period

Real Estate Investment Trust (REIT)

Real estate vehicle which is subject to a tax regime which exempts from corporation tax the rental profits and capital gains of the REIT’s qualifying investment property activities. In the UK, the regime must be elected into and the REIT must meet certain ongoing qualifications, including the requirement to distribute at least 90 per cent. of qualifying rental profits to shareholders. The Group elected for REIT status with effect from 1 January 2007

Reversion The estimated change in rent at review based on today’s market rents expressed as a percentage of passing rent at review

Stamp Duty Land Tax (SDLT)

The tax charged on land and property transactions in the UK

Sq. ft. Square foot

Yield on cost Annual rental value on completion divided by the development cost of the project


Appendix VI: Definitions

The following definitions apply throughout this document, unless the context requires otherwise:

Adjourned EGM The extraordinary general meeting of the Company scheduled to be held on 26 January 2011

Board The board of directors of CSC

CBRE CB Richard Ellis Ltd

Company or CSC Capital Shopping Centres Group PLC, a company incorporated under the laws of England and Wales (registered under no. 03685527), with its registered office at 40 Broadway, London SW1H 0BT and registered as an external company in South Africa (registered under No. 1999/012910/10), with its registered external office at 4th Floor, Liberty Life Centre, 1 Ameshoff Street, 2001 South Africa

Cushman & Wakefield Cushman & Wakefield LLP

Directors The directors of CSC

DTZ DTZ Debenham Tie Leung Limited

Gordon Family Sir Donald Gordon, his family and related trusts

Group CSC and, where appropriate, its subsidiaries from time to time

Knight Frank Knight Frank LLP

Merrill Lynch International Merrill Lynch International of 2 King Edward Street, London EC1A 1HQ

Ordinary Shares or Shares The ordinary shares of 50 pence each in the share capital of the Company

Placing The placing of the 62.3 million CSC shares at 355 pence by Merrill Lynch International and UBS Limited, on behalf of the Company undertaken on 25 November 2010

PMA Property Market Analytics

pounds, sterling, £ or pence The lawful currency of the United Kingdom

Prospectus The combined circular and prospectus published by CSC entitled “Proposed acquisition of The Trafford Centre Group and Admission of 167,316,817 Consideration Shares and 62,300,000 Placing Shares” dated 26 November 2010

Relationship Agreement The relationship agreement between CSC and the Seller to be dated the date of completion of the Acquisition

Revised Acquisition Acquisition of The Trafford Centre Group in accordance with the revised terms agreed with Peel as announced on 7 January 2011

Shareholder Holder of Ordinary Shares

Shares or CSC shares Ordinary shares of 50 pence each in the capital of CSC

Simon Simon Property Group, Inc.

The Trafford Centre The Trafford Centre, including Barton Square

UBS Limited or UBS Investment Bank

UBS Limited of 1 Finsbury Avenue, London EC2M 2PP

Valuers DTZ, CBRE and Knight Frank

Capitalised terms used in this letter but not defined herein shall have the meaning attributed to them in the announcement released by the Company at 7:00 a.m. on 25 November 2010 in connection with the Acquisition.


Appendix VII: Valuation reports

DTZ

Ourref: PW/JPG/BN/ Directtel: 02032964422 Directfax: 02032964431 E-mail: [email protected]

7January2011

TheDirectors

CapitalShoppingCentresGroupPLC40BroadwayLondonSW1H0BT

Gentlemen

Property Investment Assets of Capital Shopping Centres Group PLC (the “Company”)Market Valuation as at 31 December 2010

1 Instructions Inaccordancewithyourinstructions,wereportouropinionoftheMarketValueoftheFreeholdand/orleasehold(and

Scottishequivalent)interests(asappropriate)ineachofthepropertieslistedinparagraph2(the“Properties”).

ItisunderstoodthatourValuationReport(together,the“ValuationReport”)isrequiredinconnectionwith,andfortheinclusionin,theshareholderletter(the“ShareholderLetter”)tobepreparedbytheCompany.

ThevaluationhasbeenpreparedasanindependentvaluationinaccordancewithRule29oftheCityCodeonTakeoversandMergersandtheRICSValuationStandards.WeconfirmthatthesevaluationsareeachpreparedforaRegulatedPurposeasdefinedintheValuationStandards,6thEdition(the“RedBook”)issuedbytheRoyalInstitutionofCharteredSurveyors(the“RICS”).

Theeffectivedateofthevaluationis31December2010(the“ValuationDate”).

ThePropertiesvaluedaredescribedinSection12.

2 Brief summary of the Properties ThepropertiesformpartofaportfolioandvaluationsreportedhereinrelateonlytothePropertiescomprisingthePortfolio.

1. LakesideShoppingCentre,Thurrock; 2. BraeheadShoppingCentre,GlasgowandsurroundinglandknownasPhaseIIlands; 3. HarlequinShoppingCentre,Watford; 4. VictoriaShoppingCentre,Nottingham; 5. ArndaleShoppingCentre,Manchester; 6. ChapelfieldShoppingCentre,Norwich; 7. ThePotteriesShoppingCentre,HanleyandlandformerlytheSwiftHouseandJaxxNightclub; 8. TheChimesShoppingCentre,Uxbridge; 9. TheGladesShoppingCentre,Bromley; 10. TheMall,CribbsCauseway,BristolandsurroundinglandknownasSite4; 11. EldonSquareShoppingCentre,Newcastle; 12. TheRetailPark,CribbsCauseway,Bristol; 13. VariousRetailPropertiesonWatfordHighStreet,Watford; 14. RetailPropertiesatNewCathedralStreet,Manchester; 15. RiversideDevelopment,Braehead,Glasgow; 16. FormerBTBuilding,CribbsCauseway,Bristol; 17. 36-38StStephensStreet,Norwich; 18. 178HuntingdonStreet,Nottingham; 19. No1OldEldonSquare,Newcastleand 20. ChapelfieldGardens,Norwich;

ThetenureofeachofthePropertiesisdetailedinSection12.


3 Inspections AllthePropertieshavebeenthesubjectofinspectionsduringOctoberandNovember2010.

4 Compliance with Appraisal and Valuation Standards WeconfirmthatthevaluationshavebeenpreparedinaccordancewiththeappropriatesectionsofthePractice

Statements(“PS”)andUnitedKingdomPracticeStatements(“UKPS”)containedwithintheRICSValuationStandards,6th Edition(the“RedBook”)aswellasinaccordancewiththerequirementsofRule29oftheCityCodeonTakeoversandMergers.

Wefurtherconfirmthatourreceivinginstructioninthismatterwasnotconditionalupontheappraisals/valuationsproducingmaximumvalues,specificvalues,orvalueswithinagivenrange.

5 Status of valuer and conflicts of interest Weconfirmthatwehavesufficientcurrentknowledgeoftherelevantmarkets,andtheskillsandunderstandingto

undertakethesevaluationscompetently.WealsoconfirmthatwheremorethanonevaluerhascontributedtothevaluationstherequirementsofPS1.5.4oftheRedBookhavebeensatisfied.Finally,weconfirmthatwehaveundertakenthevaluationsactingasExternalValuersqualifiedforthepurposeofthevaluation.

WefurtherconfirmthatDTZprovidedvaluationadvice,inconnectionwiththeCompany’sre-financingofLakesideShoppingCentre,ThurrockinJune2004;ThePotteries,HanleyinDecember2004andMarch2007;Harlequin,WatfordandBraehead,RenfrewinApril2005;theVictoriaCentre,NottinghaminOctober2005;Chapelfield,Norwich,theGlades,Bromley,theChimes,UxbridgeinApril2006,and41a,43-45,55,63-67and73-75WatfordHighStreet,WatfordinAugust2007.DTZalsoactasvaluerstotheCompanyandhavebeenundertakingyear-endandhalfyearvaluationsofthemajorityofassetsownedbytheCompany,foraccountingpurposesandmoregeneralvaluationadvicesince1994.

DTZundertakevaluationsforCapitalShoppingCentresDebenturePLCfortheirinterestsheldinEldonSquareShoppingCentre,NewcastleandPotteriesShoppingCentre,Hanley.

DTZundertakevaluationsforPrudentialAssuranceCompanyLimitedforthepropertyinterestsjointlyheldwiththeCompanywhichareasfollowsArndaleShoppingCentre,Manchester,RetailPropertiesatNewCathedralStreet,Manchester,TheMall,CribbsCauseway,BristolandsurroundinglandknownasSite4,TheRetailPark,CribbsCauseway,BristolandtheFormerBTBuilding,CribbsCauseway,Bristol.

ThishasbeendiscussedwiththeCompanyandnotwithstandingourpreviousinvolvement,theCompanyhaveconfirmedthatwemayproceedwiththevaluation.

AtalltimeswehaveadheredbytheRICSrecommendationstotheCarsbergReport.

6 Purpose of the valuation WeunderstandthatthisValuationReportisrequiredforinclusionintheShareholderLetterandthatthisValuationReport

willassisttheCompanyforthispurpose(the“PurposeofthisValuationReport”).

7 Disclosures required under the provisions of PS 1.8 and UKPS 5.37.1 Name of Signatory PaulWolfendenhasbeenthesignatoryofvaluationreportsprovidedtotheCompanyforthesamepurposeasthe

purposeofthisValuationReportforacontinuousperiodsince1994.DTZhasbeencarryingoutthisvaluationinstructionfortheCompanyforthesameperiod.JonathanGoodehasbeensignatorytothevaluationreportssince1November2010.

7.2 DTZ’s relationship with client AsmentionedaboveunderSection5,DTZactasvaluerstotheCompany,CapitalShoppingCentresDebenturePLCand

PrudentialAssuranceCompanyLimitedandundertakehalfyearlyvaluationsofthemajorityofassetsownedbytheCompany,foraccountingpurposesandmoregeneralvaluationadvice.

WedonotconsiderthatanyconflictofinterestarisesforusinpreparingtheadvicerequestedbytheCompanyandtheCompanyhasconfirmedthistous.

WeconfirmthatwedonothaveanymaterialinterestintheCompany,oranyoftheProperties.


AppendixVII:ValuationreportsDTZ

7.3 Fee income from the Company DTZisawhollyownedsubsidiaryofDTZHoldingsplc(the“Group”).IntheGroup’sfinancialyearto30April2010,the

proportionoftotalfeespayablebytheCompanyandCapitalShoppingCentresDebenturePLCtothetotalfeeincomeoftheGroupwaslessthan5%.Itisnotanticipatedthatthissituationwillvaryintermsofourfinancialyearto30April2011.

7.4 DTZ involvement in the Properties in previous 12 months DTZhavenotreceivedanyintroductoryfeesoracquisitionfeesinrespectofthePropertieswithinthe12monthspriorto

thedateofvaluation.

8 Report format Section12ofthisValuationReportcomprisesdetailsofthePropertiesandourvaluations.

9 Basis of valuation9.1 Market Value ThevalueofeachofthePropertieshasbeenassessedinaccordancewiththerelevantpartsofthecurrentRICS

ValuationStandards.Inparticular,wehaveassessedMarketValueinaccordancewithPS3.2.Undertheseprovisions,theterm“MarketValue”means“Theestimatedamountforwhichapropertyshouldexchangeonthedateofvaluationbetweenawillingbuyerandawillingsellerinanarm’s-lengthtransactionafterpropermarketingwhereinthepartieshadeachactedknowledgeably,prudentlyandwithoutcompulsion”.

InundertakingourvaluationsonthebasisofMarketValuewehaveappliedtheconceptualframeworkwhichhasbeensettledbytheInternationalValuationStandardsCommitteeandwhichisincludedinPS3.2.OurvaluationsarealsoinaccordancewiththerequirementsofRule29oftheCityCodeonTakeoversandMergers.

9.2 Taxation and costs Wehavenotmadeanyadjustmentstoreflectanyliabilitytotaxationthatmayariseondisposal,norforanycosts

associatedwithadisposaloftherespectivelegalinterestsinthePropertybytheowner.Noallowancehasbeenmadetoreflectanyliabilitytorepayanygovernmentorothergrantsortaxationallowancethatmayariseondisposal.

Wehavemadedeductionstoreflectanassessmentofpurchaser’sacquisitioncostswhereappropriateincludingStampDutyat4%,havingregardtothesizeandvalueoftheasset.

10 VAT WehavebeenadvisedbytheCompanythat,withtheexceptionof1OldEldonSquare,Newcastle,electionshavebeen

madeforthePropertiestobesubjecttoVAT.

TheMarketValuescontainedinthisreportare,therefore,quotednetofVAT.

11 Assumptions and sources of information Inundertakingourvaluation,wehavemadeanumberofAssumptionsandhavereliedoncertainsourcesofinformation.

AnAssumptionisreferredtointheGlossarytotheRedBookasa“suppositiontakentobetrue”.Assumptionsarefacts,conditionsorsituationsaffectingthesubjectof,orapproachto,avaluationthat,byagreement,neednotbeverifiedbyavalueraspartofthevaluationprocess.

WehavemadenoSpecialAssumptions.

Whereappropriate,theCompanyhasconfirmedthatourAssumptionsarecorrectsofarastheyareaware.IntheeventthatanyoftheseAssumptionsprovetobeincorrectthenourvaluationsshouldbereviewed.TheAssumptionswehavemadeforthepurposesofourvaluationsarereferredtobelow:

11.1 Title WehavereliedontheCertificatesofTitle,whichwerepreparedbytheCompany’ssolicitors(the“CertificatesofTitle”).

WehavereflectedthecontentsoftheCertificatesofTitleinourvaluations.ItisstatedintheCertificatesofTitlethattheCompanyispossessedofgoodandmarketablefreeholdorleaseholdtitlesasappropriateineachcase.

ExceptasdisclosedbytheCertificatesofTitle,wehavemadeanAssumptionthatthePropertiesarefreefromrightsofwayoreasements,restrictivecovenants,oronerousorunusualoutgoings.WehavealsomadeanAssumptionthatthePropertiesarefreefrommortgages,chargesorotherencumbrances.


11.2 Condition of structure and services, deleterious materials, plant and machinery and goodwill DueregardhasbeenpaidtotheapparentstateofrepairandconditionoftheProperties,butasinstructedcondition

surveyshavenotbeenundertaken,norhavewoodworkorotherpartsofthestructureswhicharecovered,unexposedorinaccessible,beeninspected.Therefore,weareunabletoreportthatthePropertiesarestructurallysoundorarefreefromanydefects.WehavemadeanAssumptionthatthePropertiesarefreefromanyrot,infestation,adversetoxicchemicaltreatments,andstructuralordesigndefectsotherthansuchasmayhavebeenmentionedinthisreport.

Wehavenotarrangedforinvestigationstobemadetodeterminewhetherhighaluminacementconcrete,calciumchlorideadditiveoranyotherdeleteriousmaterialhavebeenusedinconstructionoranyalterationsandthereforewecannotconfirmthatthePropertiesarefreefromriskinthisregard.Forthepurposesofthesevaluations,wehavemadeanAssumptionthatanyinvestigationwouldnotrevealthepresenceofsuchmaterialsinanyadversecondition.

WehavenotcarriedoutanasbestosinspectionandhavenotactedasanasbestosinspectorincompletingthevaluationinspectionoftheProperties.Wehavenotmadeanenquiryofthedutyholder(asdefinedintheControlofAsbestosofWorkRegulations2002),oftheexistenceofanAsbestosRegisterorofanyplanforthemanagementofasbestostobemade.Whererelevant,wehavemadeanAssumptionthatthereisadutyholder,asdefinedintheControlofAsbestosofWorkRegulations2002andthataRegisterofAsbestosandEffectiveManagementPlanisinplace,whichdoesnotrequireanyimmediateexpenditure,orposeasignificantrisktohealth,orbreachtheHSEregulations.Weadvisethatsuchenquiriesbeundertakenbyalawyerduringnormalpre-contractorpre-loanenquiries.

Nomining,geologicalorotherinvestigationshavebeenundertakentocertifythatthesitesarefreefromanydefectastofoundations.WehavemadeanAssumptionthattheloadbearingqualitiesofthesiteofeachpropertyaresufficienttosupportthebuildingsconstructedthereon.WehavealsomadeanAssumptionthattherearenoabnormalgroundconditions,norarchaeologicalremainspresentonanyofthesites,whichmightadverselyaffectthepresentorfutureoccupation,developmentorvalueofeachproperty.

Notestshavebeencarriedoutastoelectrical,electronic,heating,plantandmachinery,equipmentoranyotherservicesnorhavethedrainsbeentested.However,wehavemadeanAssumptionthatallservices,includinggas,water,electricityandsewerage,areprovidedandarefunctioningsatisfactorily.

Noallowancehasbeenmadeinthesevaluationsforanyitemsofplantormachinerynotformingpartoftheserviceinstallationsofthebuildings.Wehavespecificallyexcludedallitemsofplant,machineryandequipmentinstalledwhollyorprimarilyinconnectionwiththeoccupants’businesses.Wehavealsoexcludedfurnitureandfurnishings,fixtures,fittings,vehicles,stockandloosetools.

Further,noaccounthasbeentakeninourvaluationsofanybusinessgoodwillthatmayarisefromthepresentoccupationofanyoftheProperties.

ItisaconditionofDTZoranyrelatedcompany,oranyqualifiedemployee,providingadviceandopinionsastovalue,thattheclientand/orthirdparties(whethernotifiedtousornot)acceptthattheValuationReportinnowayrelatesto,orgiveswarrantiesasto,theconditionofthestructure,foundations,soilandservicesofanyoftheProperties.

WehavebeenadvisedbytheCompanythatconstructionanddesignwarrantiesexistinrelationtoChapelfield,NorwichandtheChimes,Uxbridge.TheCompanyhasconfirmedthatithasthelegalbenefitofthesewarrantiesandthattheyareassignabletopurchasers.



11.3 Environmental matters WehavemadeenquiriesoftheCompanyinorder,sofarasreasonablypossible,toestablishtheriskoffloodingatthe

Propertiesandthepotentialexistenceofcontaminationarisingoutofpreviousorpresentusesofthesiteandanyadjoiningsites.

Wehaveexamined,inrespectofthevaluationscarriedoutasat28February1994andreportedunderaReportdated16 March1994,anenvironmentalreviewreportpreparedbyParkmanEnvironmentinJanuary1994inrespectofLakeside,Thurrockandupdatedbyanenvironmentalreviewreportpreparedin2004.WewerealsoprovidedwithcopiesofenvironmentaldeskreviewreportsundertakenbyMessrsTraversMorganinJanuaryandFebruary1994inrespectoftheremainingproperties,excepttheofficebuildingat1EldonSquare,Newcastle,BraeheadandTheChimes.

Inaddition,wehavealsobeenprovidedwithaBuildingandEnvironmentalDueDiligenceReportpreparedbyWatermanPartnershipLtdanddatedMarch2005forBraeheadandTheHarlequinCentre;anEnvironmentalDueDiligenceReport,preparedbyWatermanEnvironmentalanddatedFebruary2007inrelationtothePotteriesandanEnvironmentalPhase1PropertyDueDiligenceAssessment,preparedbyWatermanEnvironmentaldatedJuly2007inrelationto41a,43-45,55,63-67and73-75HighStreet,Watford.

Wehavereflectedthecontentsofalloftheseenvironmentalreportsandreviewsinourvaluations.

InaccordancewithourinquiriesoftheCompanyandthecontentsoftheabovementionedreports,wehavemadeanAssumptionthatnocontaminationorotheradverseenvironmentalmattersexistinrelationtothePropertiessufficienttoaffectvalue.Otherthanasreferredtoabove,wehavenotmadeanyinvestigationsintopastorpresentuses,eitherofthePropertyoranyneighbouringlandtoestablishwhetherthereisanycontaminationorpotentialforcontaminationtotheProperties.CommensuratewithourAssumptionssetoutabovewehavemadenoallowanceinthisvaluationforanyeffectinrespectofactualorpotentialcontaminationoflandorbuildings.Apurchaserinthemarketmight,inpractice,undertakefurtherinvestigationsthanthoseundertakenbyus.IfitissubsequentlyestablishedthatcontaminationexistsatthePropertiesoronanyneighbouringlandorthatanyofthepremiseshavebeen,orarebeing,puttoanycontaminativeusethenthismightreducethevaluesnowreported.

Flooding WehavemadeenquiriesoftheEnvironmentAgencywebsiteandareadvisedthatthePropertiesfalloutsidetheextentof

theextremeflood.Thisiscategorisedasbeingachanceoffloodingequivalentto0.1%(1in1,000)orless.

Albeit,wehavemadetheAssumptionthatbuildinginsuranceisinplaceregardingfloodingandavailabletoberenewedtothecurrentoranysubsequentownersoftheProperties,withoutpaymentofanexcessivepremiumorexcess.

YoushouldbeawarethattheAssociationofBritishInsurershaveissuedguidanceoninsuranceissuesinwhichtheystatethat,subjecttoGovernmentcommitmenttohavealong-termstrategytomanagefloodrisk,insurershavecommittedtoprovidefloodinsuranceforexistingbuildinguntilJune2013;however,nocommitmentshavebeenmadeforbuildingbuiltafter1January2009.

11.4 Areas TheCompanyhasprovideduswithdetailsoffloorareasinrelationtoeachproperty.Inaddition,wehavetakencheck

measurementsonsiteateachCentreandhavesatisfiedourselvesthatthefloorareasprovidedareinaccordancewiththecurrentCodeofMeasuringPracticepreparedbytheRoyalInstitutionofCharteredSurveyorsandmaybevalidlyadoptedforthepurposesofthisvaluation.


11.5 Statutory requirements and planning UnlessstatedtothecontraryintheCertificatesofTitle,orwherewehavebeenotherwiseadvisedbytheCompany,we

havemadeanAssumptionthatthebuildingshavebeenconstructedinfullcompliancewithvalidtownplanningandbuildingregulationsapprovals,thatwherenecessarytheyhavethebenefitofcurrentFireRiskAssessmentscompliantwiththerequirementsoftheRegulatoryReform(FireSafety)Order2005.Similarly,wehavealsomadeanAssumptionthatthepropertiesarenotsubjecttoanyoutstandingstatutorynoticesastotheirconstruction,useoroccupation.Unlessourenquirieshaverevealedthecontrary,wehavemadeafurtherAssumptionthattheexistingusesofthepropertiesaredulyauthorisedorestablishedandthatnoadverseplanningconditionsorrestrictionsapply.

Noallowanceshavebeenmadeforrights,obligationsorliabilitiesarisingundertheDefectivePremisesAct1972,andwehavemadeanAssumptionthatthepropertiescomplywithallrelevantstatutoryrequirements.

InEnglandandWales,theGovernmenthasimplementedtheEnergyPerformanceofBuildingsDirectiverequiringEnergyPerformanceCertificates(“EPC”)tobemadeavailableforallproperties,whenboughtorsold,subjecttocertainexemptions.InrespectofanyofthesubjectpropertieswhicharenotexemptfromtherequirementsofthisDirective,wehavemadeanAssumptionthatanEPCismadeavailable,freeofcharge,tothepurchasersoftheinterestswhicharethesubjectofourvaluation.

Wewoulddrawyourattentiontothefactthatemployeesoftownplanningdepartmentsnowalwaysgiveinformationonthebasisthatitshouldnotberelieduponandthatformalsearchesshouldbemadeifmorecertaininformationisrequired.Weassumethat,ifyoushouldneedtorelyupontheinformationgivenabouttownplanningmatters,yoursolicitorswouldbeinstructedtoinstitutesuchformalsearches.

11.6 Leasing TheCompanyhasprovideduswithdetailsrelatingtothetermsofexistingoccupationaltenanciesanduses.Wehave

readallofthedocumentsprovidedtousandwehavemadeanAssumptionthatcopiesofallrelevantdocumentshavebeensenttousandthattheyarecompleteanduptodate.

Wehavenotundertakeninvestigationsintothefinancialstrengthofanyofthetenants.Unlesswehavebecomeawarebygeneralknowledge,orwehavebeenspecificallyadvisedtothecontrarywehavemadeanAssumptionthatthetenantsarefinanciallyinapositiontomeettheirobligations.UnlessotherwiseadvisedwehavealsomadeanAssumptionthattherearenomaterialarrearsofrentorservicecharges,breachesofcovenants,currentoranticipatedtenantdisputes.

However,ourvaluationsreflectthetypeoftenantsactuallyinoccupationorresponsibleformeetingleasecommitments,orlikelytobeinoccupation,andthemarket’sgeneralperceptionoftheircreditworthiness.

WehavemadeanAssumptionthatwhereverrentreviewsorleaserenewalsarependingorimpending,withanticipatedreversionaryincreases,allnoticeshavebeenservedvalidlywithintheappropriatetimelimits.

11.7 Information WehavemadeanAssumptionthattheinformationtheCompanyanditsprofessionaladvisershavesuppliedtousin

respectofthepropertiesisbothfullandcorrect.

ItfollowsthatwehavemadeanAssumptionthatdetailsofallmatterslikelytoaffectvaluewithinyour/theircollectiveknowledgesuchasprospectivelettings,rentreviews,outstandingrequirementsunderlegislationandplanningdecisionshavebeenmadeavailabletousandthattheinformationisuptodate.

12 Valuation12.1 Market Value WeareoftheopinionthattheMarketValueasat31December2010ofthefreehold,feuholdandlongleaseholdproperty

interestsdescribedherein,subjecttotheAssumptionsandcommentsinthisreportis:

£3,992,433,500(Three Billion Nine Hundred and Ninety Two Million Four Hundred and

Thirty Three Thousand Five Hundred Pounds)



Thiscanbeapportionedbetweenthefreehold/feuholdandlongleaseholdpropertiesasfollows:

Freehold/Feuhold: £2,706,033,500 (Two Billion Seven Hundred and Six Million Thirty Three Thousand and Five Hundred Pounds)

Longleasehold: £1,286,400,000 (One Billion Two Hundred and Eighty Six Million Four Hundred Thousand Pounds)

TherehasbeennomaterialchangetothevaluesofthePropertiessince31December2010.

Property Address Use TenureMarket Value as at 31 December 2010

Lakeside,Thurrock ShoppingCentre Freehold £1,053,000,000

BraeheadShoppingCentreandRetailPark,Glasgow ShoppingCentre Feuhold £572,000,000

TheHarlequin,Watford ShoppingCentre Leasehold £353,000,000

VictoriaCentre,Nottingham ShoppingCentre Freehold £337,000,000

ArndaleCentre,Manchester ShoppingCentre Leasehold £314,500,000

Chapelfield,Norwich ShoppingCentre Freehold £236,100,000

ThePotteries,Hanley,Stoke-on-Trent ShoppingCentre Freehold £201,200,000

TheChimes,Uxbridge ShoppingCentre Freehold £217,100,000

Glades,Bromley ShoppingCentre Leasehold £177,700,000

TheMall,CribbsCauseway ShoppingCentre Leasehold £170,000,000

EldonSquare,Newcastle ShoppingCentre Leasehold £249,300,000

TheRetailPark,CribbsCauseway RetailPark Freehold £49,500,000

WatfordHighStreet,Watford HighStreetRetail Freehold £16,436,000

NewCathedralStreet,Manchester HighStreetRetail Leasehold £21,900,000

Phase2Lands,Braehead Land Feuhold £13,472,250

RiversideDevelopment,Braehead,Glasgow Offices Feuhold £3,450,000

FormerBTBuilding,CribbsCauseway Industrial Freehold £1,000,000

36-38StStephensStreet,Norwich HighStreetRetail Freehold £1,295,000

178HuntingdonStreet,Nottingham Offices Freehold £1,900,000

1OldEldonSquare,Newcastle(including44Band44CBlackettStreet HighStreetRetail Freehold £1,050,000

SwiftHouseandJaxxNightclub,Hanley Land Freehold £1,366,000

6ChapelfieldGardens,Norwich Residential Leasehold £148,500

Site4,CribbsCauseway Land Freehold £15,750


13 Confidentiality and disclosure ThecontentsofthisValuationReportmaybeusedonlyforthespecificpurposetowhichtheyrefer.BeforethisValuation

Report,oranypartthereof,isreproducedorreferredto,inanydocument,circularorstatement,andbeforeitscontents,oranypartthereof,aredisclosedorallyorotherwisetoathirdparty,thevaluer’swrittenapprovalastotheformandcontextofsuchpublicationordisclosuremustfirstbeobtained.FortheavoidanceofdoubtsuchapprovalisrequiredwhetherornotDTZDebenhamTieLeungLimitedisreferredtobynameandwhetherornotthecontentsofourReportarecombinedwithothers.

ThisValuationReporthasbeenpreparedforinclusionintheShareholderLetter.

ForthepurposesoftheCityCodeonTakeoverandMergers,weareresponsibleforthisValuationReportandwewillacceptresponsibilityfortheinformationcontainedinthisValuationReportandconfirmthattothebestofourknowledge(havingtakenallreasonablecaretoensurethatsuchisthecase),theinformationcontainedinthisValuationReportisinaccordancewiththefactsandcontainsnoomissionlikelytoaffectitsimport.ThisValuationReportcomplieswith,andispreparedinaccordancewith,andonthebasisof,theCityCodeonTakeoversandMergers.

ThisreportcomplieswithRule5.6.5GoftheProspectusRulesandparagraphs128to130ofCESR’srecommendationsfortheconsistentimplementationoftheEuropeanCommission’sRegulationonProspectusesno.809/2004.

Yoursfaithfully

Paul Wolfenden Jonathan Goode CharteredSurveyor CharteredSurveyorInternationalDirector DirectorForandonBehalfof ForandonBehalfofDTZDebenhamTieLeungLimited DTZDebenhamTieLeungLimited



CBRE

CBRichardEllisLimitedKingsleyHouseWimpoleStreet

LondonW1G0RE Switchboard +44(0)2071822000 Fax +44(0)2071822001

Report Date 7January2011

Addressee TheDirectorsCapitalShoppingCentresGroupPLC40BroadwayLondonSW1H0BT

The Properties AslistedintheSummaryofCapitalValuessetoutbelow.

Instruction TovalueonthebasisofMarketValuethePropertiesasatthevaluationdateinaccordancewithyourinstructions(the“Valuations”).

WeunderstandthatthisValuationReport(the“ValuationReport”)isrequiredforinclusioninashareholderlettertobepreparedtomeettherequirementsofRule29oftheCityCodeonTakeoversandMergers,whichistobepublishedbyCapitalShoppingCentresGroupPLC(“CSC”or“theCompany”).

Valuation Date 31December2010

Capacity of Valuer External.

Purpose of Valuation ForinclusioninashareholderlettertobepreparedtomeettherequirementsofRule29oftheCityCodeonTakeoversandMergers,whichistobepublishedbytheCompany.

ForthepurposesoftheCityCodeonTakeoversandMergers,weareresponsibleforthisValuationReportandwewillacceptresponsibilityfortheinformationcontainedinthisValuationReportandconfirmthattothebestofourknowledge(havingtakenallreasonablecaretoensurethatsuchisthecase),theinformationcontainedinthisValuationReportisinaccordancewiththefactsandcontainsnoomissionslikelytoaffectitsimport.ThisValuationReportcomplieswithandispreparedinaccordancewithandonthebasisoftheCityCodeonTakeoversandMergers.

www.cbre.comRegisteredinEnglandNo3536032CBRichardEllisLimitedisregulatedbytheRICSandisanappointedrepresentativeofCBRichardEllisIndirectInvestmentServicesLimitedwhichisauthorisedandregulatedbytheFinancialServicesAuthority.


Market Value £845,150,000 (EIGHT HUNDRED AND FORTY FIVE MILLION ONE HUNDRED AND FIFTY THOUSAND POUNDS) exclusiveofVAT,asshownintheSummaryofCapital Valuessetoutbelow.

WehavevaluedthePropertiesindividuallyandnoaccounthasbeentakenofanydiscountorpremiumthatmaybenegotiatedinthemarketifallorpartoftheportfoliowastobemarketedsimultaneously,eitherinlotsorasawhole.

OuropinionofMarketValueisbasedupontheScopeofWorkandValuationAssumptionsattachedandhasbeenprimarilyderivedusingcomparablerecentmarkettransactionsonarm’s-lengthterms.

Compliance with Valuation Standards

TheValuationshavebeenpreparedinaccordancewithTheRICSValuationStandards,SixthEdition(“TheRedBook”),aswellasinaccordancewiththerequirementsofRule29oftheCityCodeonTakeoversandMergers.

Weconfirmthatwehavesufficientcurrentlocalandnationalknowledgeoftheparticularmarkets,andtheskillsandunderstandingtoundertakethevaluationcompetently.WheretheknowledgeandskillrequirementsofTheRedBookandRule29oftheCityCodeonTakeoversandMergershavebeenmetinaggregatebymorethanonevaluerwithinCBRichardEllis,weconfirmthatalistofthosevaluershasbeenretainedwithintheworkingpapers,togetherwithconfirmationthateachnamedvaluercomplieswiththerequirementsofTheRedBook.

Assumptions ThepropertydetailsonwhicheachvaluationisbasedareassetoutinthisValuationReport.Wehavemadevariousassumptionsastotenure,letting,townplanning,andtheconditionandrepairofbuildingsandsites–includinggroundandgroundwatercontamination–assetoutbelow.

Ifanyoftheinformationorassumptionsonwhichthevaluationisbasedaresubsequentlyfoundtobeincorrect,thevaluationfiguresmayalsobeincorrectandshouldbereconsidered.

Variation from Standard Assumptions

None.

Valuer ThePropertieshavebeenvaluedbyavaluerwhoisqualifiedforthepurposeofthevaluationinaccordancewithTheRedBookandRule29oftheCityCodeonTakeoversandMergers.

Independence Thetotalfees,includingthefeeforthisassignment,earnedbyCBRichardEllisLtd(orothercompaniesformingpartofthesamegroupofcompanieswithintheUK)fromtheAddressee(orothercompaniesformingpartofthesamegroupofcompanies)islessthan5.0percent.ofthetotalUKrevenues.

Responsibility ThisValuationReporthasbeenpreparedforinclusionintheshareholderlettertobeissuedbytheCompany.

ForthepurposesoftheCityCodeonTakeoversandMergers,weareresponsibleforthisValuationReportandwewillacceptresponsibilityfortheinformationcontainedinthisValuationReportandconfirmthattothebestofourknowledge(havingtakenallreasonablecaretoensurethatsuchisthecase),theinformationcontainedinthisValuationReportisinaccordancewiththefactsandcontainsnoomissionslikelytoaffectitsimport.ThisValuationReportcomplieswithandispreparedinaccordancewithandonthebasisoftheCityCodeonTakeoversandMergers.


AppendixVII:ValuationreportsCBRE

Disclosure TheprincipalsignatoryofthisreporthascontinuouslybeenthesignatoryofvaluationsforCSCandvaluationpurposeasthisValuationReportsince2004.

CBRichardEllisLtdhascarriedoutValuation,AgencyandProfessionalservicesonbehalfofCSCforinexcessof20years.

Reliance and Publication NoreliancemaybeplaceduponthecontentsofthisValuationReportbyanypartyforanypurposeotherthaninconnectionwiththePurposeofValuation.BeforetheValuationReport,oranypartthereof,isreproducedorreferredto,inanydocument,circularorstatement,thevaluer’swrittenapprovalastotheformandcontextofsuchpublicationordisclosuremustfirstbeobtainedsuchapprovalnottobeunreasonablywithheldordelayed.Suchpublicationordisclosurewillnotbepermittedunless,whererelevantitincorporatestheAssumptionsreferredtoherein.

Current Valuation TherehasbeennomaterialchangetothevaluesofthePropertiessincetheValuationDate.

Yoursfaithfully Yoursfaithfully

Michael Brodtman FRICS Jennifer Thomasson MRICSExecutiveDirector Director

Forandonbehalfof ForandonbehalfofCBRICHARDELLISLTD CBRICHARDELLISLTDT:02071822674 T:[email protected] [email protected]

CBRichardEllis–ValuationAdvisoryT:02071822000F:02071822273W:www.cbre.co.uk

SCOPE OF WORK AND SOURCES OF INFORMATION

Sources of Information WehavecarriedoutourworkbaseduponinformationsuppliedtousbyCSC,assetoutwithinthisValuationReport,whichwehaveassumedtobecorrectandcomprehensive.

Inspections WeinspectedthePropertiesinNovember2010.

Areas WehavenotmeasuredthePropertiesbuthaverelieduponthefloorareasprovidedwhichwehavebeeninformedhavebeenmeasuredincompliancewiththecurrenteditionoftheCodeofMeasuringPracticeissuedbytheRICS.

Environmental Matters Wehavenotundertaken,norareweawareofthecontentof,anyenvironmentalauditorotherenvironmentalinvestigationorsoilsurveywhichmayhavebeencarriedoutonthePropertiesandwhichmaydrawattentiontoanycontaminationorthepossibilityofanysuchcontamination.WehavenotcarriedoutanyinvestigationsintothepastorpresentusesoftheProperties,norofanyneighbouringland,inordertoestablishwhetherthereisanypotentialforcontaminationandhavethereforeassumedthatnoneexists.

WehaveassumedthatthePropertiespossesscurrentEnergyPerformanceCertificates(EPCs)asrequiredundertheGovernment’sEnergyPerformanceofBuildingsDirective.


Repair and Condition Wehavenotcarriedoutbuildingsurveys,testedservices,madeindependentsiteinvestigations,inspectedwoodwork,exposedpartsofthestructurewhichwerecovered,unexposedorinaccessible,norarrangedforanyinvestigationstobecarriedouttodeterminewhetherornotanydeleteriousorhazardousmaterialsortechniqueshavebeenused,orarepresent,inanypartoftheProperties.Weareunable,therefore,togiveanyassurancethatthePropertiesarefreefromdefect.

Town Planning Wehavenotundertakenplanningenquiries.

Titles, Tenures and Lettings Detailsoftitle/tenureunderwhichthePropertiesareheldandoflettingstowhichtheyaresubjectareassuppliedtous.Wehavenotgenerallyexaminednorhadaccesstoallthedeeds,leasesorotherdocumentsrelatingtotheProperties.Whereinformationfromdeeds,leasesorotherdocumentsisrecordedinthisValuationReport,itrepresentsourunderstandingoftherelevantdocuments.

Wehavenotconductedcreditenquiriesonthefinancialstatusofanytenants.Wehave,however,reflectedourgeneralunderstandingofpurchasers’likelyperceptionsofthefinancialstatusoftenants.

VALUATION ASSUMPTIONS

Capital Values Eachvaluationhasbeenpreparedonthebasisof“MarketValue”whichisdefinedas:

“Theestimatedamountforwhichapropertyshouldexchangeonthedateofvaluationbetweenawillingbuyerandawillingsellerinanarm’s-lengthtransactionafterpropermarketingwhereinthepartieshadeachactedknowledgeably,prudentlyandwithoutcompulsion”.

Noallowanceshavebeenmadeforanyexpensesofrealisationnorfortaxationwhichmightariseintheeventofadisposal.Acquisitioncostshavenotbeenincludedinourvaluation.

Wehavedeductedusualpurchasers’costsinarrivingatouropinionsofMarketValue,includingfullliabilityforUKStampDutyLandTaxasapplicableatthevaluationdate.

Noaccounthasbeentakenofanyinter-companyleasesorarrangements,norofanymortgages,debenturesorothercharges.

NoaccounthasbeentakenoftheavailabilityorotherwiseofcapitalbasedGovernmentorEuropeanCommunitygrants.

Rental Values RentalvaluesindicatedinourValuationReportarethosewhichhavebeenadoptedbyusasappropriateinassessingthecapitalvalueandarenotnecessarilyappropriateforotherpurposes,nordotheynecessarilyaccordwiththedefinitionofMarketRent.

The Properties Whereappropriatewehaveregardedtheshopfrontsofretailandshowroomaccommodationasforminganintegralpartofthebuilding.

Landlord’sfixturessuchaslifts,escalators,centralheatingandothernormalserviceinstallationshavebeentreatedasanintegralpartofthebuildingandareincludedwithinourvaluations.

Processplantandmachinery,tenants’fixturesandspecialisttradefittingshavebeenexcludedfromourvaluations.

Allmeasurements,areasandagesquotedinourValuationReportareapproximate.


AppendixVII:ValuationreportsCBRE

Environmental Matters Intheabsenceofanyinformationtothecontrary,wehaveassumedthat:

(a) thePropertiesarenotcontaminatedandarenotadverselyaffectedbyanyexistingorproposedenvironmentallaw;

(b) anyprocesseswhicharecarriedoutonthePropertieswhichareregulatedbyenvironmentallegislationareproperlylicensedbytheappropriateauthorities.

Highvoltageelectricalsupplyequipmentmayexistwithin,orincloseproximityof,theProperties.TheNationalRadiologicalProtectionBoard(NRPB)hasadvisedthattheremaybearisk,inspecifiedcircumstances,tothehealthofcertaincategoriesofpeople.Publicperceptionmay,therefore,affectmarketabilityandfuturevalueoftheproperty.Ourvaluationreflectsourcurrentunderstandingofthemarketandwehavenotmadeadiscounttoreflectthepresenceofthisequipment.

Repair and Condition TherehashistoricallybeendifferentialgroundsettlementinpartoftheMetrocentre,Gateshead,whichhasbeensubsequentlyunderpinnedandremediedbutcontinuestobemonitored.Asaprovision,againstanypotentialfutureinsuranceclaim,wehavemadeanallowanceof£1,220,000inourvaluationofthepropertytocoveranyinsuranceexcess.Intheabsenceofanyinformationtothecontrary,wehaveassumedthat:

(a) therearenoabnormalgroundconditions,norarchaeologicalremains,presentwhichmightadverselyaffectthecurrentorfutureoccupation,developmentorvalueoftheProperties;

(b) thePropertiesarefreefromrot,infestation,structuralorlatentdefect;

(c) nocurrentlyknowndeleteriousorhazardousmaterialsorsuspecttechniqueshavebeenusedintheconstructionof,orsubsequentalterationsoradditionsto,theProperties;and

(d) theservices,andanyassociatedcontrolsorsoftware,areinworkingorderandfreefromdefect.

WehaveotherwisehadregardtotheageandapparentgeneralconditionoftheProperties.Commentsmadeinthepropertydetailsdonotpurporttoexpressanopinionabout,oradviseupon,theconditionofuninspectedpartsandshouldnotbetakenasmakinganimpliedrepresentationorstatementaboutsuchparts.

Title, Tenure, Planning and Lettings

UnlessstatedotherwisewithinthisValuationReport,andintheabsenceofanyinformationtothecontrary,wehaveassumedthat:

(a) thePropertiespossessagoodandmarketabletitlefreefromanyonerousorhamperingrestrictionsorconditions;

(b) allbuildingshavebeenerectedeitherpriortoplanningcontrol,orinaccordancewithplanningpermissions,andhavethebenefitofpermanentplanningconsentsorexistinguserightsfortheircurrentuse;

(c) thePropertiesarenotadverselyaffectedbytownplanningorroadproposals;

(d) allbuildingscomplywithallstatutoryandlocalauthorityrequirementsincludingbuilding,fireandhealthandsafetyregulations;

(e) onlyminororinconsequentialcostswillbeincurredifanymodificationsoralterationsarenecessaryinorderforoccupiersofeachPropertytocomplywiththeprovisionsoftheDisabilityDiscriminationAct1995;


(f) allrentreviewsareupwardonlyandaretobeassessedbyreferencetofullcurrentmarketrents;

(g) therearenotenant’simprovementsthatwillmateriallyaffectouropinionoftherentthatwouldbeobtainedonrevieworrenewal;

(h) tenantswillmeettheirobligationsundertheirleases,andareresponsibleforinsurance,paymentofbusinessrates,andallrepairs,whetherdirectlyorbymeansofaservicecharge;

(i) therearenouserrestrictionsorotherrestrictivecovenantsinleaseswhichwouldadverselyaffectvalue;

(j) wheremorethan50percent.ofthefloorspaceofapropertyisinresidentialuse,theLandlordandTenantAct1987(the“Act”)givescertainrightstodefinedresidentialtenantstoacquirethefreehold/headleaseholdinterestintheproperty.Wherethisisapplicable,wehaveassumedthatnecessarynoticeshavebeengiventotheresidentialtenantsundertheprovisionsoftheAct,andthatsuchtenantshaveelectednottoacquirethefreehold/headleaseholdinterest.Disposalontheopenmarketisthereforeunrestricted.

(k) whereappropriate,permissiontoassigntheinterestbeingvaluedhereinwouldnotbewithheldbythelandlordwhererequired;and

(l) vacantpossessioncanbegivenofallaccommodationwhichisunletorisletonaserviceoccupancy.

Capital Shopping Centres Group PLC – Summary of Capital Values

Company FreeholdLongLeasehold*

(£) Total

TheMetrocentrePartnership** 843,400,000 843,400,000

CSC–Flat10,WhaddonHouse 1,750,000 1,750,000

CapitalShoppingCentresGroupPLCTotal 845,150,000 845,150,000

* Morethan50yearsunexpired.

**CSChasa60percent.holding.



KnightFrank

Directors

CapitalShoppingCentresGroupPLC(the“Company”)40BroadwayLondonSW1H0BT

7January2011

DearSirs

Capital Shopping Centres Group PLC (the “Company”)The St David’s Centre, Cardiff – Valuation Report as at 31 December 2010

InaccordancewiththetermsofengagementagreedwiththeCompany,wehavepleasureinreportingtoyouasfollows:

1.0 Scope of Instructions1.1 WehavebeeninstructedtoreporttoyououropinionastothevalueofcertainpropertiesheldwithinTheStDavid’s

LimitedPartnership(“thePartnership”)betweenCapitalShoppingCentresPLCandLandSecuritiesPLCasat31December2010.ThisValuationReportistoassisttheDirectorsinconnectionwith,andforinclusionin,theshareholderlettertobepreparedbytheCompany.ThevaluationcontainedhereinhasbeenpreparedasanindependentvaluationinaccordancewithRule29oftheCityCodeonTakeoversandMergersandtheRICSValuationStandards.

1.2 OurvaluationisoftheentiretyoftheinterestheldbythePartnershipanddoesnotthereforerepresentavaluationoftheCompany’ssharesorstakeinsuchproperties.Thevaluationincludespropertieswhicharerecentlycompleteddevelopments.Weconfirmthat,ifappropriate,thesepropertieshavebeenvaluedhavingregardtotherecommendationsincludedinIAS40(TheValuationofInvestmentPropertyunderConstruction).

2.0 The Properties2.1 ThePropertiescomprisefreeholdandleaseholdinterestsheldbythePartnership.

3.0 Basis of Valuation3.1 TheInvestmentPropertieshavebeenvaluedindividuallyonthebasisof“MarketValue”subjecttotheexistingtenanciesat

theValuationDate(orreflectingvacantpossessionwherenotenanciesexist)inaccordancewiththerelevantdefinitions,commentaryandassumptionscontainedintheRICSValuationStandards(sixthedition)andinaccordancewiththerelevantprovisionsoftheListingRulesandtheProspectusRulesissuedbytheFinancialServicesAuthority,Rule29oftheCityCodeonTakeoversandMergersandCESR’srecommendationsfortheconsistentimplementationoftheEuropeanCommission’sRegulationonProspectusesNo.809/2004andEU-Directive2003/71/EC.

3.2 ThevaluationshavebeenundertakenbyusasExternalValuersasdefinedintheRICSValuationStandards.WeconfirmthattheValuermeetstherequirementsoftheRICSValuationStandardsPS1.5andRule29oftheCityCodeonTakeoversandMergershavingsufficientknowledgeoftheparticularmarketandtheskillsandunderstandingtoundertakethevaluationcompetently.ValuationsbasedonMarketValueadoptthedefinitionandtheconceptualframeworksettledbytheInternationalValuationStandardsCommittee.“MarketValue”isdefinedforthesepurposesas:

“Theestimatedamountforwhichapropertyshouldexchangeonthedateofvaluationbetweenawillingbuyerandawillingsellerinanarm’s-lengthtransactionafterpropermarketingwhereinthepartieshadeachactedknowledgeably,prudentlyandwithoutcompulsion.”

3.3 PropertiesheldasTradingStockarevaluedonthebasisofRealisableValuedefinedas“theestimatedsellingpriceintheordinarycourseofbusiness,lesstheestimatedcostscompletionandtheestimatedcostnecessarytomakethesale(IAS2paragraph6)”

3.4 ThetotalvaluationofthePropertiesrepresentstheaggregateoftheindividualvalues.


3.5 ThemajorconstructionworksatthePropertieshavebeencompletedandthePropertiesareheldasInvestmentswiththeexceptionofTheHayesApartmentswhichareheldforsaleandthereforecategorisedasTradingProperty.InrespectofanypartsofthePropertieswhereanyfurtherworkremainstobecompletedorthepaymentofdevelopmentcostshasnotbeenfinalised,theMarketValuereflectsouropinionofvalueofthecompletedpropertyassumingthatithadbeencompletedatthedateofthevaluation,lesstheanticipatedcostsoutstanding.Inarrivingatourvaluationitisthusassumedthatallcontractsandsimilaragreementswithcontractorscontinueandthatallusualguaranteesandwarrantieswouldbeavailabletoapurchaseroftheproperty.

3.6 WehavemadenoSpecialAssumptions.

4.0 Tenure and Tenancies4.1 Wehavenotreaddocumentsoftitleorleasesand,forthepurposeofourvaluations,haveacceptedthedetailsoftenure,

tenancies,planningconsentsandallotherrelevantinformationwithwhichwehavebeensuppliedbytheCompanyandthePartnershiporitsadvisors.Weassumethatthisinformationiscompleteandcorrect.Savewheremattershavebeenspecificallydrawntoourattention,orwehavebeennotifiedtothecontrarypriortothedateofthisreport,ourvaluationwasonthebasisthat:

(a) eachpropertypossessedagoodandmarketabletitle,freefromanyunusuallyonerousrestrictions,covenantsorotherencumbrances;

(b) alldocumentationhasbeensatisfactorilydrawnoninstitutionallyacceptableterms;

(c) therearenounusualoutgoings,planningproposals,onerousrestrictionsorlocalauthorityintentionswhichaffectanypropertynoranymateriallitigationpending;

(d) inrespectofleaseholdproperties,therewerenounreasonableorunusualclauseswhichwouldaffectvalueandnounusualrestrictionsorconditionsgoverningtheassignmentordisposaloftheinterest;

(e) leasestowhichthepropertiesweresubjectwereonfullrepairingandinsuringtermsandcontainednounusualoronerousprovisionsorcovenantswhichwouldaffectvalueandwheretherepairingtermsweresubjecttoschedulesofcondition,thesewouldnothavemateriallyaffectedMarketValue;

(f) inrespectofleasessubjecttoimpendingoroutstandingrentreviewsandleaserenewals,wehaveassumedthatallnoticeshadbeenservedvalidlyandwithinappropriatetimelimits;and

(g) vacantpossessioncouldbegivenofallaccommodationwhichwasun-let.

5.0 Town Planning5.1 WehavenotmadeformalsearchesinrespectoftheProperties,butgenerallyrelieduponverbalenquiriesandany

informalinformationreceivedfromtheLocalPlanningAuthority,togetherwithinformationsuppliedbytheCompany.Wehavenotseenplanningconsentsand,exceptwhereadvisedtothecontrary,haveassumedthatthePropertieshavebeenconstructed,orarebeingconstructedandareoccupiedandusedinaccordancewiththeappropriateconsentsandthattherearenooutstandingstatutorynotices,consentorotherstatutoryregulations,savetotheextentdisclosedtous.Weassumethatthepremisescomplywithallrelevantstatutoryrequirementsincludingfireandbuilding.

6.0 Structure and Condition6.1 Wehaveneithercarriedoutabuilding,structuralandgroundconditionsurveyofanyoftheProperties,nortestedany

services,plantormachinery.Wewerenotthereforeabletogiveanyopinionontheconditionofthestructureandservices.However,ourvaluationtookintoaccountanyinformationsuppliedtousandanydefectsnotedduringourinspections.Otherwise,ourvaluationwasonthebasisthattherewerenodefects,itemsofdisrepairorothermattersthatwouldmateriallyaffectourvaluation.

6.2 Forthepurposesofthevaluationweassumedthat,whereappropriate,suitableactionhadbeentakentoensurecompliancewiththeDisabilityDiscriminationAct1995inrespectoftheProperties.

6.3 OurvaluationassumesthatallPropertieswould,inallrespects,beinsurableagainstusualrisksincludingterrorism,floodingandrisingwatertableatnormal,commerciallyacceptablepremiums.


AppendixVII:ValuationreportsKnightFrank

7.0 Site Condition and Environmental Matters7.1 Wehavenotinvestigatedgroundconditions.Unlessadvisedtothecontrary,ourvaluationwasonthebasisthatthereare

nounidentifiedadversegroundorsoilconditionsandthattheloadbearingqualitiesofthesitesofeachpropertyaresufficienttosupportthebuildingconstructedthereonandthatallbuildingshadbeenconstructedhavingappropriateregardtoexistinggroundconditions.

7.2 WehavenotcarriedoutanyscientificinvestigationsorteststoestablishtheexistenceorotherwiseofanyenvironmentalcontaminationinrelationtotheProperties,nordoweundertakesearchesofpublicarchivestoseekevidenceofpastactivitieswhichmightidentifypotentialforcontamination.AnyenvironmentalreviewswhichhavebeencarriedoutbyoronbehalfoftheCompanyorthePartnershiphavenot,weunderstand,ledtheDirectorstobelievethatthereareanysignificantpotentialenvironmentalproblemsaffectingtheProperties.SaveasdisclosedbyanyenvironmentalreportsprovidedtousorotherwisedisclosedbytheCompany,wehaveassumedthatthePropertiesareunaffectedbyanyenvironmentalproblems.

8.0 Inspections8.1 WehavepreviouslyinspectedthePropertiesregularlyforquarterlyvaluationpurposes,andmostrecently,forthe

purposesofthisvaluation,inOctober2010.

9.0 Information9.1 Ourvaluationswerebasedupontheinformation(includinginrelationtotenantsandtenancies,tenureandfloorareasand

costsremaininginrespectofcompleteddevelopmentandrefurbishmentworks)withwhichwehadbeensuppliedbythePartnershiporwhichwehadobtainedfromourenquiries.Werelieduponthisasbeingcompleteandcorrectandontherebeingnoundisclosedmatterswhichwouldaffectourvaluation.

9.2 InrespectoftheStDavid’s2developmentandtherefurbishmentworksundertakentotheStDavid’sshoppingcentre,wehaveforthepurposesofourvaluationbeensuppliedbythePartnershipwithdetailsoftheestimatedoutstandingcostsasat30November2010totallingsome£48,300,000inrespectofallconstruction,operatingandmarketingcostsincludingcommittedandbudgetedcapitalleasingcostsandourvaluationmakesallowanceforthis,togetherwithadditionalcapitalitems.

9.3 Whenconsideringthecovenantstrengthofindividualtenantswedidnotreceiveanyformalreportonthefinancialstatusofanytenantanddidnotcarryoutdetailedinvestigationsastothefinancialstandingofthetenants,buthaveliaisedwiththePartnershipandreflectedinourvaluationsourgeneralunderstandingofpurchasers’likelyperceptionsoftenants’financialstatus.

9.4 Wehaveassumed,exceptwhereotherwiseinformedbytheCompany,thatinallcasestherearenosignificantarrearsofpaymentandthatthetenantsarecapableofmeetingtheirobligationsunderthetermsofleasesandagreements.

10.0 Taxation and Costs10.1 Inaccordancewithmarketpractice,wehavedeductedusualpurchaser’scostsinarrivingatouropinionsofMarketValue,

includingfullliabilityforUKstampdutylandtaxasapplicableatthevaluationdate.Noallowancesweremadeforvendor’sexpensesofrealisationorforanytaxationliabilityarisingfromthesaleofanyProperty.OurvaluationswereexclusiveofanyVATthatmaybecomechargeable.ThePropertieswerevalueddisregardinganymortgagesorothercharges.

11.0 Valuation of the Properties as at 31 December 201011.1 HavingregardtotheforegoingweareoftheopinionthattheaggregateoftheMarketValuesoftheInvestmentProperties

andRealisableValueoftheTradingPropertiesheldbythePartnership,asat31December2010,totalled£513,000,000 (Five Hundred and Thirteen Million Pounds).

11.2 ThetotalofcurrentNetAnnualRentreceivableisestimatedat£19,745,000 (Nineteen Million, Seven Hundred and Forty Five Thousand Pounds)perannumat31December2010.


NetAnnualRentisdefinedwithintheFSA’shandbookas:

“Thecurrentincomeorincomeestimatedbythevaluer:

a) ignoringanyspecialreceiptsordeductionsarisingfromtheproperty;

b) excludingValueAddedTaxandbeforetaxation(includingtaxonprofitsandanyallowancesforinterestoncapitalorloans);and

c) aftermakingdeductionsforsuperiorrents(butnotforamortisation)andanydisbursementsincluding,ifappropriate,expensesofmanagingthepropertyandallowancestomaintainitinaconditiontocommanditsrent.”

11.3 InouropiniontherehasbeennomaterialchangetothevaluesofthePropertiessince31December2010.

12.0 The Properties – Tenure and Categorisation12.1 ThevaluationofthePropertiesallocatedbyTenureisshowninthetablebelow.WherethePartnership’sholdingis

comprisedofmixedtenure,thevaluationhasbeenapportionedbetweentherespectivecategoriesoftenurehavingregardtotheinterestsheld.

12.2 ThePropertiesarecategorisedbytheCompanyasInvestmentPropertiesandTradingPropertiesinthecaseoftheTheHayesresidentialapartments.

St David’s Limited Partnership Freehold Leasehold Total

£ £ £

Properties Held as Investments: Market Value at 31 December 2010

StDavid’sShoppingCentre 12,500,000 473,000,000 485,500,000

(IncludingStDavid’s2,TheHayes,TownWallSouthand50-54QueenStreet)Cardiff

Properties held as Trading Properties: Realisable Value at 31 December 2010

TheHayesApartments,TheHayes,Cardiff

– 27,500,000 27,500,000

Total £12,500,000 £500,500,000 £513,000,000

Note:ValuationsareoftheentiretyoftheinterestinthePropertiesheldbythePartnershipanddonotthereforerepresentavaluationoftheCompany’ssharesorstakeinsuchproperties.

13.0 Confidentiality and Disclosure13.1 WeconfirmthatKnightFrankLLPisappointedbytheStDavidsLimitedPartnershipasExternalValuer,asdefinedin

theRICSValuationStandards.KnightFrankLLPhascontinuouslyfulfilledthisrolesincethePartnershipwasformed,beginningwithavaluationinDecember2006.PriortothatKnightFrankLLPhadpreviouslyundertakenvaluationsandprovidedadvicetoLandSecuritiesPlcinrespectofsomeholdingsnowincludedwithinthePartnership’sassets.Wefurtherconfirmthat,inrelationtoKnightFrankLLP’sprecedingfinancialyear,theproportionofthetotalfeespaidbytheCompanytothetotalfeeincomeofKnightFrankLLPwaslessthan5%.WerecogniseandsupporttheRICSRulesofConductandhaveestablishedproceduresforidentifyingconflictsofinterest.

13.2 ThisreporthasbeenpreparedforinclusioninashareholderlettertobeissuedbytheCompany.

13.3 ForthepurposesoftheCityCodeonTakeoversandMergers,weareresponsibleforthisValuationReportandwewillacceptresponsibilityfortheinformationinthisValuationReportandconfirmthattothebestofourknowledge(havingtakenallreasonablecaretoensurethatsuchisthecase),theinformationcontainedinthisValuationReportisinaccordancewiththefactsandcontainsnoomissionlikelytoaffectitsimport.ThisValuationReportcomplieswith,andispreparedinaccordancewith,andonthebasisof,theCityCodeonTakeoversandMergers.


AppendixVII:ValuationreportsKnightFrank

13.4 ThisreportcomplieswithRule5.6.5GoftheProspectusRulesandparagraphs128to130ofCESR’srecommendationsfortheconsistentimplementationoftheEuropeanCommission’sRegulationonProspectusesno.809/2004.

13.5 Ourreportandvaluationisfortheuseonlyofthepartytowhomitisaddressedandnoresponsibilityisacceptedtoanythirdpartyforthewholeoranypartofitscontents.Ifouropinionofvalueisdisclosedtopersonsotherthantheaddresseesofthisreport,thebasisofvaluationshouldbestated.Ifitisproposedtopublishthefigure,theformandcontextinwhichthefigureistoappearmustbeapprovedbyusbeforehand.

Yoursfaithfully

Peter P S Barnard BSc (Hons) FRICS Graham Spoor BSc (Hons) MRICSPartner,CommercialValuations Partner,CommercialValuationsForandonbehalfof ForandonbehalfofKnightFrankLLP KnightFrankLLP


Our existing shopping centres

Chapelfield,NorwichMetrocentre,Gateshead

TheHarlequin,Watford


TheArndale,Manchester

StDavid’s,Cardiff EldonSquare,Newcastle

Ourexistingshoppingcentres


VictoriaCentre,Nottingham

ThePotteries,Stoke-on-Trent TheChimes,Uxbridge

Lakeside,Thurrock


Braehead,Glasgow TheGlades,Bromley

TheMall,CribbsCauseway

Ourexistingshoppingcentres

The Trafford Centre5906.01.2011DraftCapital Shopping Centres Group PLC


Important information

Thisdocument(the“Circular”)hasbeenissuedbyCapitalShoppingCentresGroupPLC(the“Company”)andcompriseswrittenmaterialsconcerningtheproposedacquisitionofTheTraffordCentreGroupLimitedbytheCompany(the“Acquisition”)andtheapproachbySimonin relationtoapotentialtakeoverbidfortheCompany(the “SimonApproach”).

IfyousellorhavesoldorotherwisetransferredallofyourordinarysharesintheCompany,pleasesendthisdocumentassoonaspossibletothepurchaserortransfereeortothestockbroker,bankorotheragentthroughwhomthesaleortransferwaseffectedfordeliverytothepurchaserorthetransferee,exceptthatthisdocumentshouldnotbesenttoanyjurisdictionwheretodosomightconstituteaviolationof localsecuritieslawsorregulations,includingbutnotlimitedtotheUnitedStates.IfyousellorhavesoldorotherwisetransferredpartofyourholdingofordinarysharesintheCompany,youshouldretainthisdocumentandconsultthestockbroker,bankorotheragentthroughwhomthesale ortransferwaseffected.

ThisCirculardoesnotconstituteaprospectusorprospectusequivalentdocument.

Therelease,publicationordistributionofthisCircularincertainjurisdictionsmayberestrictedbylaw.PersonswhoarenotresidentintheUnitedKingdomorwhoaresubjectto otherjurisdictionsshouldinformthemselvesof,andobserve,anyapplicablerequirements.

TheDirectorsoftheCompanyacceptresponsibilityforthe informationcontainedinthisCircular.Tothebestofthe knowledgeandbeliefoftheDirectors(whohavetakenall reasonablecaretoensurethatsuchisthecase),theinformationcontainedinthisdocumentforwhichtheyareresponsibleisinaccordancewiththefactsanddoesnotomitanythinglikelytoaffecttheimportofthatinformation.

ThisCirculardoesnotconstituteorformpartofandshouldnotbeconstruedasanyofferorinvitationtosellorissue,oranysolicitationofanyoffertopurchaseorsubscribefor,anysharesintheCompany,norshallanypartofitnorthefactofitsdistributionformpartoforbereliedoninconnectionwithanycontractorinvestmentdecisionrelatingthereto,nordoesitconstitutearecommendationregardingthesecuritiesoftheCompany.ThisCircularissuppliedtoyousolelyforyourinformation.NothingcontainedinthisCircular,northefactof itsdistribution,shallformthebasisofanycontractor commitmentwhatsoever.

NothinginthisCircularisintendedtobeaprofitforecastandnostatementinthisCircularshouldbeinterpretedtomeanthattheearningsperordinaryshareintheCompanyforthecurrentorfuturefinancialperiodswillnecessarilymatchorbegreaterthanthosefortherelevantprecedingfinancialperiod.

MerrillLynchInternationalisactingexclusivelyfortheCompanyinconnectionwiththeAcquisitionandtheSimonApproachandnooneelseandwillnotberesponsibletoanyoneotherthantheCompanyforprovidingtheprotectionsaffordedtotherespectiveclientsofMerrillLynchInternationalorforprovidingadviceinrelationtotheAcquisition,theSimonApproachoranytransactionorarrangementreferredtointhisCircular.

UBSLimitedisactingexclusivelyfortheCompanyinconnectionwiththeAcquisitionandtheSimonApproachandnooneelseandwillnotberesponsibletoanyoneotherthantheCompanyforprovidingtheprotectionsaffordedtotherespectiveclientsofUBSLimitedorforprovidingadviceinrelationtotheAcquisition,theSimonApproachoranytransactionorarrangementreferredtointhisCircular.

ThisCircularisnotforpublicationorreleaseandneitherthis Circularnoranycopyofitmaybetakenortransmittedintoanyjurisdictionwheretodosowouldbeinbreachofthe securitieslawsoftherelevantjurisdiction.PersonsintowhosepossessionthisCircularcomesshouldinformthemselvesabout,andobserve,anysuchrestrictions.Any failuretocomplywithsuchrestrictionsmayconstitutea violationofthelawsofsuchjurisdiction.ByacceptingthisCircularyouagreetobeboundbytheserestrictions.

ThisCircularincludesstatementsthatare,ormaybedeemedtobe,“forward-lookingstatements”.Allstatements

otherthanstatementsofhistoricalfactincludedinthisCircularmaybe“forward-lookingstatements”.Theseforward-lookingstatementsmaybeidentifiedbytheuseofadateinthefutureorforward-lookingterminology,including,butnotlimitedto,theterms“may”,“believes”,“estimates”,“plans”,“aims”,“targets”,“projects”,“anticipates”,“expects”,“intends”,“may”,“will”,“could”or“should”or,ineachcase,theirnegativeor othervariationsorcomparableterminology.Theseforward-lookingstatementsincludemattersthatarenothistoricalfactsandincludestatementsregardingtheCompany’sintentions,beliefsorcurrentexpectations,includingbutnotlimitedtostatementsrelatingtothefollowing:(i)futurecapitalexpenditures,expenses,revenues,earnings,synergies,economicperformance,indebtedness,financialcondition,dividendpolicy,lossesandfutureprospects;(ii)businessandmanagementstrategiesandtheexpansionandgrowthoftheCompany’soperations;and(iii) theeffectsofgovernmentregulationontheCompany’sbusiness.Bytheirnature,forward-lookingstatementsinvolveriskanduncertaintybecausetheyrelatetofutureeventsand circumstances.Anumberoffactorscouldcauseactualresultsanddevelopmentstodiffermateriallyfromthoseexpressedorimpliedbytheforward-lookingstatements.Any forward-lookingstatementsinthisCircularreflecttheCompany’sviewwithrespecttofutureeventsasatthedate ofthisCircularandaresubjecttorisksrelatingtofutureeventsandotherrisks,uncertaintiesandassumptionsrelatingtotheCompany’soperations,resultsofoperations,financialcondition,growth,strategy,liquidityandtheindustryinwhichtheCompanyoperates.Noassurancescanbegiventhattheforward-lookingstatementsinthisCircularwillberealised.TheCompany(andMerrillLynchInternationalandUBSLimited)undertakenoobligationanddonotintendtoreviseorupdateanyforward-lookingstatementsinthisCirculartoreflecteventsorcircumstancesafterthedateof thisCircular.

DTZDebenhamTieLeungLimitedof48WarwickStreet,LondonW1B5NLhasgivenandhasnotwithdrawnitswrittenconsenttotheinclusionofitsopinionletteranditsValuationReportandnameandreferencetoitintheformandcontextinwhichtheyappearandhasauthorisedthecontentofitsreportforthepurposesofRule29.5(b)ofCityCodeonTakeoversandMergers.

CBRichardEllisLimitedofKingsleyHouse,WimpoleStreet,LondonW1G0REhasgivenandhasnotwithdrawnitswrittenconsenttotheinclusionofitsValuationReportandnameandreferencetoitintheformandcontextinwhichtheyappearandhasauthorisedthecontentofitsreportforthepurposesofRule29.5(b)ofCityCodeonTakeoversand Mergers.

KnightFrankLLPof55BakerStreet,London,W1U8AN,has givenandhasnotwithdrawnitswrittenconsenttotheinclusionofitsValuationReportandnameandreferenceto it intheformandcontextinwhichtheyappearandhasauthorisedthecontentofitsreportforthepurposesofRule 29.5(b)ofCityCodeonTakeoversandMergers.

Disclosure requirements of the Takeover Code (the “Code”)

UnderRule8.3(a)oftheCode,anypersonwhoisinterestedin1%ormoreofanyclassofrelevantsecuritiesoftheCompanyorofanypaperofferor(beinganyofferorotherthananofferorinrespectofwhichithasbeenannouncedthatitsofferis,orislikelytobe,solelyincash)mustmakeanOpeningPositionDisclosurefollowingthecommencementof theofferperiodand,iflater,followingtheannouncementin whichanypaperofferorisfirstidentified.AnOpeningPositionDisclosuremustcontaindetailsoftheperson’sinterestsandshortpositionsin,andrightstosubscribefor,anyrelevantsecuritiesofeachof(i)theCompanyand(ii)anypaperofferor(s).AnOpeningPositionDisclosurebyapersontowhomRule8.3(a)appliesmustbemadebynolaterthan3.30pm(Londontime)onthe10thbusinessdayfollowingthecommencementoftheofferperiodand,ifappropriate,by nolaterthan3.30pm(Londontime)onthe10thbusinessdayfollowingtheannouncementinwhichanypaperofferoris firstidentified.RelevantpersonswhodealintherelevantsecuritiesoftheCompanyorofapaperofferorpriortothedeadlineformakinganOpeningPositionDisclosuremustinsteadmakeaDealingDisclosure.

UnderRule8.3(b)oftheCode,anypersonwhois,orbecomes,interestedin1%ormoreofanyclassofrelevantsecuritiesoftheCompanyorofanypaperofferormustmake aDealingDisclosureifthepersondealsinanyrelevantsecuritiesoftheCompanyorofanypaperofferor.ADealingDisclosuremustcontaindetailsofthedealingconcernedand oftheperson’sinterestsandshortpositionsin,andrightstosubscribefor,anyrelevantsecuritiesofeachof(i) the Companyand(ii)anypaperofferor,savetotheextentthatthesedetailshavepreviouslybeendisclosedunderRule 8.ADealingDisclosurebyapersontowhomRule8.3(b)appliesmustbemadebynolaterthan3.30pm(Londontime)onthebusinessdayfollowingthedateofthe relevantdealing.

Iftwoormorepersonsacttogetherpursuanttoanagreementorunderstanding,whetherformalorinformal,toacquireorcontrolaninterestinrelevantsecuritiesoftheCompanyora paperofferor,theywillbedeemedtobeasinglepersonfor thepurposeofRule8.3.

OpeningPositionDisclosuresmustalsobemadebytheCompanyandbyanyofferorandDealingDisclosuresmustalsobemadebytheCompany,byanyofferorandbyanypersonsactinginconcertwithanyofthem(seeRules8.1,8.2 and8.4).

DetailsoftheCompanyandanyofferorcompanyinrespectofwhoserelevantsecuritiesOpeningPositionDisclosuresandDealingDisclosuresmustbemadecanbefoundinthe DisclosureTableontheTakeoverPanel’swebsiteatwww.thetakeoverpanel.org.uk,includingdetailsofthenumberofrelevantsecuritiesinissue,whentheofferperiodcommencedandwhenanyofferorwasfirstidentified.IfyouareinanydoubtastowhetheryouarerequiredtomakeanOpeningPositionDisclosureoraDealingDisclosure,youshouldcontactthePanel’sMarketSurveillanceUniton+44 (0)2076380129.

General

AcopyofthisCircularisavailable,freeofcharge,atwww.capital-shoppingcentres.co.uk/investors/shareholder_info.YoumayrequestahardcopyofthisCircular,freeofcharge,bycontactingCapitaRegistrarsLimitedat34BeckenhamRoad,Beckenham,KentBR34TU.Youmayalsorequestthatallfuturedocuments,announcementsandinformationto besenttoyouinrelationtotheAcquisitionortheSimonApproachshouldbeinhardcopyform.

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