PADDINGTON DEVELOPMENT CORPORATION LIMITED STATEMENT

22 March 2006

The Paddington Development Corporation Limited (PDCL) would like to clarify any misunderstanding in relation to the proposed Paddington Health Campus (PHC) and the Reuben brothers that may have arisen due to the remarks made by Mr Ken Livingstone, London Mayor, yesterday (Tuesday 21 March 2006).

The Reubens hold a minority interest in PDCL, via their stake in Chelsfield, and were not meaningfully involved in the negotiations between PDCL, the NHS Trusts and the Department of Health (DoH) over the Campus project.

The decision by PDCL to withdraw from the proposed deal was made when it became clear that the scheme was no longer supported by the DoH and for no other reason.

The base land price in the original transaction was agreed between respective independent valuers and the total land package was sanctioned by the PHC team, their accountants and the NHS District Valuer.

Howard Wright, project director at PDCL, commented: “On reflection we would question whether the DoH ever had any intention of progressing the PHC, a project on which so much public time and money was wasted. PDCL itself had abortive costs in the region of £1.5 million plus the very considerable cost of placing our normal business on hold for the best part of a year. PDCL’s termination fees still remain unpaid.”

“In all our dealings with the Reuben brothers, we have found them to be fair and reasonable businessmen. They are fully supportive of PDCL’s management team and this includes the programme for delivery of our new Merchant Square project which is located on land previously earmarked for the Health Campus”