Warner Estate and Morley form £254m regional office fund

Article date: 8 June 2005

Warner Estate Holdings plc and Morley Fund Management haveannounced the formation of the Apia Regional Office Fund. The Fundwill invest in large office properties in major regional citiesthroughout the UK and will be open to institutional investment viacash or by contributing suitable property assets.

The fund’s portfolio will initially comprise fourproperties owned by Morley on behalf of its life fund clients andnine properties owned by Warner Estate, of which eight werepreviously in the Skipper Regional Office Fund, a joint venturebetween Warner Estate and The Royal Bank of Scotland. The portfoliohas a current rent roll of £17.3 million and the total space undermanagement will be 1.1 million sq ft.

The aim of the Fund will be to produce consistent highinvestment returns from the ownership and active management of theproperty portfolio, with the emphasis on income generation. WarnerEstate will act as asset manager, responsible for sourcing suitableassets and for the active management of the properties and Morleywill act as fund manager, responsible for attracting clients,funding and overall fund strategy.

Philip Warner, chairman of Warner Estate, said: "This is animportant step in our stated strategy to increase both theinstitutional investor base of our funds and the quantum ofproperty assets under management. We are very pleased that MorleyFund Management has recognised the ability of our specialist assetmanagement team to add value and to deliver an impressiveperformance. Our objective is to expand the Fund as we targetfurther properties and Morley attracts further clients."

Richard Jones, head of life property funds at Morley, said:"Warner Estate has a track record of delivering outstandingperformance from its stable of property funds. We have beenimpressed by the quality of its property team and with theinnovative approach it has to adding value to all of the propertiesthat it manages.

"This joint venture fits with our successful property businessmodel, where we seek to team up with property partners who arespecialists in their chosen sectors. Morley brings extensive fundmanagement expertise to these partnerships, whilst drawing on theasset knowledge of the partner.

"The Apia Regional Office Fund will not only be an excellentvehicle for investors looking to gain exposure to the UK officesector, but also for those who are looking to diversify their riskand benefit from Warner Estate’s specialist skills byinjecting their own properties into the Fund."

Johnny Cameron, chief executive, The Royal Bank of Scotland,Corporate Banking and Financial Markets, said: "Our relationshipwith Warner Estate has been excellent. We are delighted to belenders to the expanded fund and we remain impressed with thequality of the Warner Estate team."

Following the launch of the fund, Warner Estate will haveapproximately £1.9 billion of property under management. This fundlaunch follows the announcement of Warner Estate’srecommended offer for fellow quoted property investment companyAshtenne Holdings plc being declared wholly unconditional.

DTZ Debenham Tie Leung is acting as advisor to Warner Estate andMorley Fund Management.

The Apia Regional Office Fund has the following assets, valuedat £254 million:

Apex 123 in Edinburgh (94,683 sq ft)
Bath Street, Glasgow (88,084 sq ft)
St Ann's Wharf, Newcastle (58,272 sq ft)
Yorkshire House, Leeds (81,293 sq ft)
Norfolk House, Manchester (54,358 sq ft)
81 Fountain Street, Manchester (40,100 sq ft)
120 Edmund Street, Birmingham (137,384 sq ft)
Sapphire Court, Solihull (86,553 sq ft)
Ashton and Norfolk House, Milton Keynes (140,000 sq ft)
Westgate House, Colston Avenue, Bristol (90,924 sq ft)
Oakleigh House, Cardiff (41,038 sq ft)
Lever & Surrey House, Kingston upon Thames (159,661 sqft)
St Georges East, Wimbledon (44,000 sq ft)

Total (1,114,528 sq ft)

-ends-

For further information contact:

Morley Fund Management
Richard Jones, Head of Life Property Funds
Tel: 020-7809-6000

Warner Estate Holdings plc
Philip Warner, Chairman
Richard Moore, Property Director
Peter Collins, Finance Director
Tel: 020-7907-5100
Web: www.warnerestate.co.uk

DTZ Debenham Tie Leung
Mike Cutteridge, Director
Tel: 020-7643-6350

The Royal Bank of Scotland
Shaun Gamble, Media Relations Manager
Tel: 020-7672-1921

City Profile
Simon Courtenay
Tel: 020-7448-3244

About Morley Fund Management

Morley Fund Management (‘Morley’) is a London based,asset management business with over £128 billion* under management.The property team manages in excess of £15 billion* of UK andEuropean property assets, making Morley the largest property fundmanager in Europe. Winners of the high profile Property Week FundManager of the Year Award 2004 and the UK Pensions Awards PropertyFund Manager of the Year 2005, the team consists of 60 investmentprofessionals and manages a range of funds on behalf ofinstitutional, pension and retail clients. Morley has been at theforefront of innovation in property fund management and haslaunched twelve specialist sector based funds with partners,including the Jersey-based Unit Trusts: Igloo Regeneration Fund,Quercus Healthcare Property, The Junction and The Mall.

Visit www.morleyproperty.com

*Not including mortgage assets, as at 31/03/05

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