London & Associated Properties Regulatory News (LAS)

28 Apr 2011 07:05

FOR IMMEDIATE RELEASE

28 April 2011 LONDON & ASSOCIATED PROPERTIES PLC: RESULTS FOR THE 12 MONTHS TO 31 DECEMBER 2010 HIGHLIGHTS

London & Associated Properties PLC is a well- established specialist shopping centre and retail investor and asset manager.

* Rental income increased 2.4% on like-for-like basis to £16.5m

* Property portfolio value grew 1% on like-for-like basis to £195mUnder EPRA

net assets stood at £72.0m EPRA net asset value per share now 87.5p * Management adjusted Operating profit up 14.1% to £11.1m * Maintaining cash element of dividend - final dividend of 0.4p per share recommended making total of 1.15p per share * Void levels very low at only 1.5% of portfolio by rental value * Antiquarius on King's Road sold for £17.8m * Asset management key feature of business: * + Rental values at Orchard Square grew by 5% + Redevelopment of units in King Edward Court achieved record rents + Re-branding of Brixton markets has led to 8% rental growth + Brixton Village fully let for the first time in 20 years

+ Since year end agreed terms to let Brixton markets in their entirety to

In Shops Ltd

"I remain confident that the quality of our assets and our ability to drive rental income through intensive management means we are well placed to make further progress through 2011," Michael Heller, Chairman.

"We have disposed of almost half our portfolio over the last five years and nowretain a core group of quality assets in which we have invested significantly.Our top five centres account for almost our entire portfolio by value and theseare mostly let on long leases. I therefore remain cautiously optimistic goingforward," John Heller, Chief Executive.

Contact:

London & Associated Properties 020 7415 5000

John Heller, Chief Executive

Robert Corry, Finance Director

Baron Phillips Associates 020 7920 3161

Baron Phillips

Chairman's statement

I am pleased to report on another period of satisfactory progress for LAPagainst a difficult economic backdrop. The quality of our portfolio of shoppingcentres reflects the high level of investment and strategic management which weapply to all of our assets. This has protected us from the worst of theproperty recession. As at 31 December 2010, our directly owned portfolio ofshopping centres and other retail property was independently valued at £195million compared to £214 million the previous year. This follows a number ofdisposals of properties and on a like for like basis the valuation of ourportfolio grew by 1%.Rental income in 2010 was £16.5 million compared to £17.1 million in theprevious year. However, again on a like for like basis, rental income grew by2.4%. We have achieved this increase in sustainable income in spite of sellingproperties which had a combined annualised rental income of £1.3 million perannum. This is a commendable achievement considering that tenant demand iswidely regarded as being weak and IPD reports that rental levels across theretail sector have dropped significantly.Void levels remain low at just 1.5% of our portfolio by rental value. This hasenabled us to drive our rental values forward, which in turn has supported ourvaluations. We have also been decisive in disposing of those properties fromwhich we could see no further opportunities for growth. During 2010, we soldAntiquarius in King's Road, Chelsea for £17.8 million. We acquired thisproperty as part of the London Portfolio in 2006 and, in 2009, we weresuccessful in achieving a listed building consent in the face of considerableopposition to our plans. We pre-let the retail space to Anthropologie, theAmerican fashion retailer, and carried out a significant refurbishment of theproperty. We believe that we had achieved maximum value of this asset, andconsequently saw little point in holding it at a time when prime London retailproperty was commanding premium values.Asset management continues to be a key feature of our business. At King EdwardCourt, Windsor, which now accounts for almost half the value of our portfolio,we undertook a redevelopment of three poorly configured units to provide threemodern shops. These had been pre-let to Fat Face, Robert Gatward Jewellers andMystique Lingerie. The new units achieved record rents per square footreinforcing the rental levels at the centre and demonstrating the continuingstrong demand from retailers for shops at King Edward Court.Orchard Square, Sheffield, has remained fully let during the year and we havebeen able to achieve growth at rent review. This led to rental values growingby 5% at this centre on an annualised basis. This centre plus King Edward Courtat Windsor account for rental income approaching £11 million per annum and thecombined annualised rents grew by 3% over the last year.Our two markets in Brixton have been strong performers in terms of rentalgrowth. These assets were also acquired as part of the London Portfolio. Since2009, we have spent considerable time and effort in re-branding the markets asmore exciting places to shop, with a particular emphasis on quality food andrestaurants as well as cutting edge fashion. The net result of this input isthat rents have grown by some 8% and Brixton Village, one of the markets, isfully let for the first time in some 20 years. As detailed in the ChiefExecutive's report, we have plans to work with a leading market operator toensure the next phase of this asset's growth.Under International Financial Reporting Standards (IFRS), the net assets of theGroup were £55.8 million. This compares to £59.1 million the previous year.However, this figure reflects the carrying cost of our interest rate swapswhich has been marked to market as a negative £13.6 million, a liability some £7.3 million greater than at the end of 2009. Had the swaps been valued attoday's date, the £7.3 million additional charge would be £ 1.7 million.We have stated previously that these swaps were contracted to ensure that wehad certainty over our interest payments which are our most significant item ofexpense. We do not trade these swaps. It is important to note that under thestandards of the European Real Estate Association (EPRA), as used by mostproperty companies, our net assets stood at £72.1 million in December 2010compared to £72.8 million as at December 2009. Under EPRA net asset per shareis now 87.5p compared to 91.5p a year ago. This largely reflects the issue ofadditional shares as part of last year's dividend.Operating profit, on a management adjusted basis, grew to £11.1 millioncompared with £9.7 million in 2009, as shown in the table in the FinanceDirector's report on page 17. This excludes marking to market the carryingvalues of our properties and financial instruments. The growth in operatingprofit is partly a result of lower property expenses and other overheadsincurred during the year. Our loss before tax over the same period hasincreased to £4.2 million from £2.5 million although this is after deducting a£3.5 million expense incurred in breaking swaps with a nominal value of £19.6million. The annual cash saving from breaking these swaps is £0.8 million.We remain over-hedged by a nominal £10.4 million. This has an annualisednegative effect on cash flow of £0.5 million. The cost of breaking theover-hedge has fluctuated significantly over the year. We continue to monitorthis situation closely and will break the hedge when it is most appropriate todo so.It has been widely reported that bank lending remains subdued for real estatetransactions. Against this backdrop, we have explored alternative sources offinance from property funds looking for joint venture partners. While it is tooearly to report any specific deals, we are currently examining a potentialacquisition with one such partner and I hope to be able to report that thistransaction has successfully concluded in the near future. We are looking toco-invest with suitable partners and we continue to hold an unencumbered cashreserve of some £5 million to take advantage of opportunities as they arise.During the year we were appointed by Grant Thornton, a firm of charteredaccountants, to take on the asset management of a portfolio of shopping centreswhere they had been appointed as Administrators. Following the disposal of theproperties this project has now been completed. We understand that the bankclient of Grant Thornton regards the result as a great success. LAP received afee for advising on the management of the centres and overseeing the disposalin 2011.

Total Group assets, including those of Bisichi Mining PLC, our associate company, and Dragon Retail Properties, our joint venture with Bisichi, now stand at £289 million compared to £306 million the previous year.

Bisichi Mining PLC, our associate company, had a difficult year and our shareof their loss after taxation was £0.5 million. This was as a result of lowercoal prices combined with a strong South African Rand against the US dollar anda shortage of railway trucks to transport the coal. Measures have been taken toaddress these issues and it is expected that they will return to acceptableprofitability in the second half of 2011.We believe that LAP has performed well against a testing economy, although weremain mindful of the reduced bank lending currently available, and thenegative forces facing consumers following last year's budget. As a result, theBoard has taken the decision this year to maintain the cash element of thedividend at the level paid in 2010. There will be a final dividend of 0.4ppayable on 1 July 2011 to shareholders on the register as at 10 June 2011,making a total dividend for the year of 1.15p. However, the Board has decidedagainst the capitalisation issue of new shares as in previous years as this isfelt to be too dilutive at the current price.Michael Stevens will be retiring this year after 25 years as a director andCompany Secretary of LAP. I would like to take this opportunity to thank himfor all of his hard work over this time, and wish him well in his retirement.We have promoted Heather Curtis, who joined the company in 2002,to GroupCompany Secretary.

The economy in 2011 shows little sign of being an improvement over 2010. I remain confident that the quality of our assets and our ability to drive rental income through intensive management means that we are well placed to make further progress through 2011.

Finally I would like to thank all of the directors, staff and advisors who have contributed to our progress this year.

Michael HellerChairman15 April 2011Chief Executive's Report2010 was another difficult year for the UK economy with bank lending remainingsubdued. This lack of funding has contributed to a polarisation in investordemand with cash buyers being predominant. These investors look for well-letproperty where tenant demand remains high and rental growth is stillachievable.Our portfolio of retail property comes into this category. We havesignificantly re-profiled our portfolio in the last 5 years and disposed of £178 million of mature property where we felt we would be unable to deliverfurther growth. Initially we disposed of secondary shopping centres at a timewhen net initial yields were lower than deposit rates, yet investor demand forthis type of asset remained high. More recently, we have been selling assetswith long leases and excellent covenants, again to meet investor demand. Overthis period we have also been investing heavily into our asset base. KingEdward Court, Windsor and Orchard Square, Sheffield account for 72% of ourproperty portfolio, and we have spent a combined £46 million on them over thelast 5 years. This capital expenditure has produced better configured units tomeet modern retailer demand. These units were pre-let to quality tenants onlong leases.During 2010, we spent £0.5 million on developing and improving our properties.This produced an incremental annualised income of £0.16 million. We currentlyhave no substantial development work underway, although we are constantlylooking to improve our assets and grow rents.Our property portfolio is now valued at £194.9 million, and our top fiveproperties by value account for over 90% of this total. All of these propertiesare well-let and all of them have either delivered rental income growth overthe last year or confirmed their growth potential. Across the portfolio, ouraverage weighted unexpired lease term is 7.2 years. Over 63% of our leases byrental value run for more than 5 years and 31% for more than 10 years. We havevoids of just 1.5%. All of this combines to provide resilience during thisproperty recession.Group rental income on a like for like annualised basis grew by 2.4% to £15.6million compared with £15.2 million in 2009. This has been achieved against awidely reported reduction in rental levels across most parts of the country.Our top 50 tenants account for 74% of our gross rents. 93% of all rents werecollected within two weeks of the December quarter day.We disposed of Antiquarius in King's Road Chelsea during the year for £17.82million compared to a book value of £17.0 million as at year end 2009. Thisfollowed the completion of the lease in 2009 to Anthropologie at £1.15 millionper annum and represented a net initial yield of 5.74%. We paid down ourrevolving credit facility by £12.75 million from the cash proceeds.During 2010, we were appointed by Grant Thornton as asset manager on aportfolio of three shopping centres in Burnley, Cardiff and Harlow. The fundthat owned these shopping centres had been placed into administration and thecentres had suffered from under investment and lack of direction as a result.

LAP conducted a strategic review and identified a number of areas where the centres could be improved. We carried out a number of strategic lettings, including redeveloping shops where necessary, and applied our rigorous management controls to reduce irrecoverable costs.

At the time of our appointment, the centres were independently valued at £120million. We marketed the centres through leading investment agents and sincethe year end the disposal completed at £145 million. LAP received fees fromGrant Thornton for the work undertaken and we are in discussion to take onfurther similar appointments.Following the financial crisis there is still much stress in the UK bankingsystem and lack of credit at acceptable terms. As a result, we have enteredinto talks with a number of property funds with a view to establishing jointventures. One of these is at an advanced stage of making an acquisitionalthough contracts have not yet been exchanged. I am, however, confident thatthe transaction will conclude in the near future and we will make anappropriate announcement to shareholders in due course.

I will now report on some of our major centres.

King Edward Court, Windsor

King Edward Court remained fully let throughout 2010 with the exception of asmall office suite. Since the year end we have been able to negotiate thesurrender of leases on two shops where we had less vibrant retailers. The firstof these was originally let to a musical instrument retailer at £72,000 perannum. This unit has now been re-let to Prªt Manger for a new caf© concept at£85,000 per annum. This not only brings a more exciting retailer to the centre,but also a rental level equating to a Zone A level of £116 per sq.ft., a recordfor this part of the centre.The second unit had previously been let to a discount book retailer. The unitis now under offer to an established, upmarket gift retailer at an increasedrent. The new lease should complete soon.In September 2010, Boots the Chemist vacated its 14,000 sq. ft. Shop, havingtaken a lease on the much larger, former Woolworths store outside ourownership. The lease on our shop continued until 2015. We have, since the yearend, accepted a surrender of this lease in exchange for a payment of £1.025million, equivalent to over two and a half year's rent. We intend to dividethis unit into three smaller units and incorporate the vacant first flooroffices.We have seen a high level of retailer interest in these units and already haveoffers on all of them from exciting retailers. I look forward to announcing thelettings in due course. We have made a planning application to change the shopfronts on these units and, subject to obtaining this consent, anticipate thatthe development will be let and completed during 2011.

Sheffield

Orchard Square has remained fully let throughout 2010. As a result, we havebeen able to grow the rents by some 5% over the previous year as the rentallevels established by our successful lettings in previous years filter throughto other shops in the centre. Orchard Square is anchored by reputedly one ofthe most successful TK Maxx stores in the country, and most of the shops arelet at rents of between £80 and £90 Zone A. We believe this to be anundemanding level for a major city centre.

Brixton

Since late 2009, we have invested considerable time and effort in establishingour two Brixton markets as cutting edge retail and leisure locations. Initiallywe worked with a specialist marketing company to offer pop-up shops to enticenew retailers into a location that had suffered over the years from highvacancies and low investment. The vast majority of these early retailersconverted into full leases at market rents at the end of their trial periods.Once we had established a critical mass of new exciting retailers, word ofmouth and positive press articles created sufficient interest to ensure thatthese markets are now fully let for the first time in approximately 20 years.While this project has been a success throughout 2010, we do not feel LAP hasthe resources to develop the Brixton Markets further. Consequently, since theyear end we have agreed terms to let the two markets to In Shops Ltd, asubsidiary of Groupe Geraud, Europe's largest private market operator. Theleases are at a base rent of £817,500 per annum with a profit share on the netrent above that amount. This increases to a 50:50 profit share on any net rentabove £1,017,500. There will be a saving of direct staff costs and othercentral overheads and therefore we expect this deal to be cash neutral at theoutset.We are confident that In Shops shares our belief that Brixton will become oneof the most successful market areas in London. In Shops has the resources,energy and experience to enable this to take place, and we expect to benefitfrom its success through the profit share in the medium term.

King's Square, West Bromwich

We invested heavily during 2010 in re-gearing the leases of our anchor tenantsat this shopping centre. These accounted for 29% of the centre's gross rentalincome. The centre's age meant that a number of the original leases there hadless than 12 months until expiry. As a result of the re-gearing, the centre'sfuture is much more stable and we will be able to concentrate on driving rentsforward in the future.Other Properties

As shareholders will be aware, we have deliberately sought to position the restof our portfolio at the value end of retailing. We believe that this offers ussignificant defensive qualities in the current economic environment as ourtenants are less dependent on discretionary spending. Last year, tenantfailures across the whole portfolio were limited to an aggregate rental incomeof £127,000 per annum. These units have now been re-let at broadly the samerent.OutlookWe remain concerned that the outlook for UK consumers will continue to impactupon retail property in general. However, we believe that the property marketwill experience differing levels of success dependent on location,affordability of rents and attractiveness of the individual centres. We havesold almost half our portfolio over the last five years and now retain a coreof quality assets in which we have invested significantly. Our top five centresaccount for almost our entire portfolio by value and these are mostly fully leton long leases. I therefore remain cautiously optimistic going forward.John HellerChief Executive15 April 2011FINANCE DIRECTOR'S REPORTIn 2010, we again concentrated our efforts on managing cash flow. We have alsoreviewed our unutilised banking facilities and reduced them wherever possible.As a result we have achieved a net annualised cash saving of £0.3 million.As a result of the continuing crisis in the UK banking sector and, as mentionedin the Chief Executive's review, we have commenced negotiations with a numberof property funds to provide alternative sources of finance.

Cash flow

Net cash increased over the year from £1.44 million to £4.72 million. This wasafter the repayment of £11.58 million of debt. Term debt reduced from £148.38million to £136.80 million. This compares favourably with a peak level of £163.70 million at the end of 2007. Antiquarius, our property in Chelsea,London, was sold in August for £17.8 million and the sale of the Foxtons unitin Islington completed in January 2010.

The utilisation of the cash over the year is shown in the graph below:

Our Revolving Credit Facility with the Royal Bank of Scotland was extendedduring the year and will now expire in September 2012. We also reduced thetotal facility to £60 million from £90 million. This facility has been reducedfurther to £47 million since the year end because we considered it unlikelythat we would borrow further against the facility before expiry.

Income statement

The Group's loss before tax as reported under IFRS was £10.69 million comparedto a profit of £21.4 million in 2009. This volatility in our results reflects anumber of changes in value which are taken directly to our Income Statement.Firstly, there have been considerable swings in the interest rates which haveaffected the fair value of our derivatives and this has led to a loss of £7.28million (2009: £13.27 million profit). Secondly, the revaluation of ourproperty portfolio has shown an increase of £1.57 million (2009: £9.42million). The table below shows the underlying performance of the Group on amanagement adjusted basis. 2010 2009 Cash Non-cash Per income Cash Non-cash Per items items statement items items income statement £'000 £'000 £'000 £'000 £'000 £'000 Net rental income 10,366 10,366 9,517 9,517 Income and gains on 43 43 148 148investments held for trading Profit on sale of 637 637 14 14investment properties Net change on 1,569 1,569 9,422 9,422revaluation of investment properties Net change in value 89 89 178 178of investments held for trading Operating profit 11,046 1,658 12,704 9,679 9,600 19,279 Share of joint 174 (912) (738) 131 1,078 1,209ventures and associates Interest rate - (7,280) (7,280) - 13,269 13,269derivative Net interest (11,858) (11,858) (12,350) (12,350) (Loss) / profit (638) (6,534) (7,172) (2,540) 23,947 21,407before taxation and exceptional items

Exceptional item -- (3,515) (3,515) - - -interest derivative break cost (Loss) / profit (4,153) (6,534) (10,687) (2,540) 23,947 21,407before taxation

The interest charge, excluding the change in fair value of derivatives andone-off costs incurred on the termination of interest rate swaps, was cut inthe year to £11.9 million (2009: £12.4 million). This is due to the reductionin the level of debt and the reduced swap contracts.During the year we reduced our long term hedging to be more in line with thetotal debt outstanding. The total value of our swaps was £125.4 million againsta long term debt of £115.1 million. This was reduced in the year from £145.0million and the £3.5 million cost of breaking the swaps has been shown as anexpense in the income statement. This strategy of hedging our interest paymentsmeans that we are protected against future interest fluctuations. We do nottrade our swaps and we try to align them to the debt levels we have in theGroup at any given time.Rental income during the year reduced to £16.5 million (2009: £17.1 million).On a like for like basis the group's rental income, excluding joint ventures,increased by 2.4% to £15.6 million (2009: £15.2 million), as shown in the

tablebelow. 2010 2009 £'000 £'000 Annual rental income from properties still 15,550 15,187held Income from properties sold 435 1,361 Revenue as per income statement 15,985

16,548

Overheads were down 22.4% to £3.8 million (2009: £4.9 million). This partlyreflects increased fees received from managing third party assets, as well aslower direct costs.

Operating profit, excluding property and other investment revaluations, increased to £11.0 million (2009: £9.7 million), a rise of 14.1%. Excluding exceptional items we improved the net result by £1.9 million in the year.

The tax charge in the year shows a credit of £7.2 million. This is made up of acurrent tax credit in relation to prior years of £0.9 million and deferred taxcredit of £6.3 million. This deferred tax charge has arisen due to a £2.0million movement in the derivatives, valuation of the properties, including theindexation, of £2.8 million, and other timing differences of £1.5 million.

Balance sheet

The underlying net assets of the Group on a management adjusted basis are shownin the table below. Per IFRS Deferred Mark-to-market Head EPRA balance tax of interest leases Adjusted sheet net assets 2010 £'000 £'000 £'000 £'000 £'000 Investment properties 223,610 (28,664) 194,946 Other fixed assets 2,558 2,558 Investments in 8,646 8,646associate and joint ventures Other assets 4,809 4,809 Other liabilities (52,377) 2,671 13,627 28,664 (7,415) Net debt (131,485) (131,485) Net assets 55,761 2,671 13,627 72,059 Adjusted NAV per share 87.5p 2009 Investment properties 243,109 (29,485) 213,624 Other fixed assets 2,621 2,621 Investments in 9,440 9,440associate and joint ventures Other assets 4,678 4,678 Other liabilities (54,395) 7,393 6,347 29,485 (11,170) Net debt (146,349) (146,349) Net assets 59,104 7,393 6,347 72,844 Adjusted NAV per share 91.5pGroup net assets under IFRS were £55.8 million at the year end. The moremeaningful EPRA figure shows net assets of £72.1 million, equivalent to 87.5pper share. The EPRA NNNAV reduced to 66.7p per share, predominately due to theincrease in the number of shares in issue as a result of paying a proportion oflast year's final dividend in shares.

Accounting Judgements and going concern

The most significant judgements made in preparing these accounts relate to thecarrying value of the properties, investments and hedges which are stated atopen market value. The Group uses external professional valuers to determinethe values of our properties. Interest rate hedges (as explained above) arestated at net present value of the extra costs arising to maturity compared tocurrent market rates.The Directors exercise their commercial judgements when reviewing the cash flowforecasts of Group and the underlying assumptions on which they are based. TheGroup's business activities, together with the factors likely to affect itsfuture development, are set out in the Chairman's Statement, the ChiefExecutive's Report and in this Report. In addition the directors considerednote 17 to the financial statements which include the company's objectives,policies and processes for managing its capital; its financial risk managementobjectives; details of its financial instruments and hedging activities; itsexposure to credit risk and liquidity risk.With a quality portfolio comprising a majority of long leases and suitablefinancial arrangements, the directors believe the company is well placed tomanage its business risks successfully despite the continuing uncertaineconomic climate. The directors therefore have a reasonable expectation thatthe company has adequate resources to continue in operational existence for theforeseeable future. Thus they continue to adopt the going concern basis ofaccounting in preparing the annual financial statements.

Dividends

The company is proposing a final dividend of 0.4p, payable on 1 July 2011 toshareholders on the register as at 10 June 2011. This makes a total dividendfor the year of 1.15p.The directors have decided against the capitalisationissue of new shares as in the previous two years, as this is felt to be toodilutive on the net asset per share of the company.

Our associated company Bisichi Mining PLC, in which we hold a 41.7% stake, had a difficult year and suffered losses after taxation of £1.3 million. This figure is after a revaluation surplus under IFRS of £0.1 million.

I feel confident that the continued policy of prudently managing the Group's cash resources will benefit us as we go through this period of uncertainty.

Robert Corry,Finance Director15 April 2011Directors & AdvisorsDIRECTORSEXECUTIVE DIRECTORS

*Michael A Heller MA FCA (Chairman)

John A Heller LLB MBA (Chief executive)

Robert J Corry BA FCA (Finance Director)

Michael C Stevens FCA

NON-EXECUTIVE DIRECTORS

†Howard D Goldring BSC (ECON) ACA

Howard Goldring has been a member of the board since July 1992 and is a globalasset allocation specialist. He is chairman of Delmore Asset Management Limitedwhich manages investment portfolios and provides global asset allocation adviceto private clients, family offices and pension funds. From 1997-2003 he wasconsultant director on global asset allocation to Liverpool Victoria AssetManagement Limited.

#†Clive A Parritt FCA CF FIIA

Clive A Parritt joined the board on 1 January 2006. He is a charteredaccountant with over 30 years experience of providing strategic, financial andcommercial advice to businesses. He is chairman of Barronsmead VCT 2 plc,DiGiCo Europe Limited, ASL Technology Holdings Limited and BG Consulting GroupLimited as well as being a director of F&C US Smaller Companies plc. He isDeputy President of the Institute of Chartered Accountants in England and Walesand will become President in June 2011. He is chairman of the audit committeeand as Senior Independent Director he chairs the Nomination and RemunerationCommittees.

* Member of the nomination committee

# Senior independent director

†Member of the audit, remuneration and nomination committees

Secretary & registered officeHeather A Curtis ACISCarlton House,22a St James's SquareLondon SW1Y 4JH Director of propertyMike J Dignan FRICS AuditorBaker Tilly UK Audit LLP Principal bankersHSBC Bank PLCLloyds Banking Group PLCNational Westminster Bank PLCRoyal Bank of Scotland PLC SolicitorsOlswang LLPPinsent Masons LLPStockbrokerOriel Securities Limited Registrars & transfer officeCapita RegistrarsShareholder ServicesThe Registry34 Beckenham RoadBeckenhamKentBR3 4TUTelephone 0871 664 0300

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Website: www.capitaregistrars.com

Email: ssd@capitaregistrars.com

Company registration number341829 (England and Wales) Websitewww.lap.co.uk E-mailadmin@lap.co.ukDIRECTORS' REPORT

The directors submit their report and the audited accounts, for the year ended 31 December 2010.

ActivitiesThe principal activities of the Group during the year were property investmentand development, as well as investment in joint ventures and an associatedcompany. The associated company is Bisichi Mining PLC in which the companyholds a 42 per cent interest. Bisichi Mining PLC is listed on the London StockExchange and operates in England and South Africa with subsidiaries which areinvolved in overseas mining and mining investment.Business ReviewReview of the group's development and performanceThe Chairman's Statement, Chief Executive's Report and Finance Director'sReport on the preceding pages 2 to 19 provide a comprehensive review andassessment of the Group's activities during the year as well as its position atthe year end and prospects for the forthcoming year.Property activitiesThe Group is a long-term investor in property. It acquires retail properties,actively manages those assets to improve rental income and thus enhance thevalue of its properties over time. In reviewing performance, the principalareas regularly monitored by the Group include:• Rental income - the aim of the Group is to maximise the maintainable incomefrom each property by careful tenant management supported by sympathetic andrevenue enhancing development. Income may be affected adversely by theinability of tenants to pay their rent. Rent collection and tenant quality aremonitored carefully. This risk is minimised as a result of the diversifiedtenant base, which should limit the impact of the failure of any individualtenant.

• Cash flow - allowing for voids, acquisitions, development expenditure, disposals and the impact of operating costs and interest charges, the Group aims to maintain a positive cash flow.

• Financing costs - the exposure of the Group to interest rate movements ismanaged by the use of swap arrangements (see note 17 on page 49 for fulldetails of the contracts in place). These swap arrangements are designed toensure that our interest costs are fixed and always covered by anticipatedrental income. Once put in place we intend that such swaps are generallyretained until maturity. Details of key estimates adopted are contained in theaccounting policies note on page 40.• Property valuations - market sentiment and economic conditions have a directeffect on property valuations, which therefore can vary significantly (upwardsor downwards) over time. Bearing in mind the long-term nature of the group'sbusiness, valuation changes have little direct effect on the ongoing activitiesor the income and expenditure of the Group. Tenants generally have long-termleases, so rents are unaffected by short-term valuation changes. Borrowings aresecured against property values and if those values fall very significantly,this could limit the ability of the group to develop the business usingexternal borrowings. The risk is minimised by trying to ensure that there isadequate cover to allow for fluctuations in value on a short-term basis.It continues to be the policy of the Group to realise property assets when thevaluation of those assets reaches a level at which the directors consider thatthe long-term rental yield has been reached. The Group also seeks to acquireadditional property investments on an opportunistic basis when the potentialrental yields offer scope for future growth.Investment activitiesThe investments in joint ventures and the associate are for the long term.

The Group is an investor in the associate and manages the UK property assets of the associate. However the principal activity of the associate is overseas mining investment (principally in South Africa). The investment is held to generate income and capital growth over the longer term. The other listed investments are held as current assets to provide the liquidity needed to support the property activities while generating income and capital growth.

Investments in property are made through joint ventures when the financing and spreading of risk make it desirable.

Corporate responsibilityEnvironmentThe Group's principal UK activity is property investment providing premiseswhich are rented to retail businesses. We seek to provide those tenants withgood quality premises from which they can operate in an efficient andenvironmentally friendly manner. Wherever possible, improvements, repairs andreplacements are made in an environmentally efficient manner and wastere-cycling arrangements are in place at all the company's locations.

Employment

The Group's policy is to attract staff and motivate employees by offering competitive terms of employment. The Group provides equal opportunities to all employees and prospective employees including those who are disabled.

Performance indicatorsOur success is principally measured in terms of net asset value per share andtrading cash flow (where we aim over a period of time to deliver a positivecash return) and net asset value per share after adjusting for valuationvolatility and excluding IFRS adjustments. The directors consider that the KeyPerformance Indicator of the Group is the Net Asset per Share value shown atthe foot of the Balance Sheet on page 37 and as discussed in the FinanceDirector's Report. Cash flow is shown on page 39.

Dividend Policy

An interim dividend for 2011 of 0.75p was paid on 22 January 2011 (2009:Interim dividend 0.75p paid on 22 January 2010). The directors recommendpayment of a final cash dividend for 2010 of 0.4p per ordinary share of 10pence each (the Final Dividend) and Ordinary Share respectively. It is notproposed to make a capitalisation issue with the final dividend in 2011 (2010:equivalent to 0.80p per Ordinary Share). In the current economic climate, theboard of directors feels that it is imperative that the Group maximises itsfinancial flexibility, including conserving cash wherever possible.

Subject to shareholder approval, the total dividend per Ordinary Share for 2010 will be 1.15p (2009: 1.15p).

The Final Dividend of 0.4p per Ordinary Share will be payable on 1 July 2011 to shareholders registered at the close of business on 10 June 2011.

The company's ordinary shares held in treasuryDuring 2010 the company issued 2,335,517 of its own shares from Treasury for anaverage price of 41.68p which increased the "issued share capital" by the samenumber of shares (see table below for details). At 31 December 2010 1,957,534(2009: 4,293,051) shares were held in Treasury with a market value of £822,164(2009:£1,856,745). At the Annual General Meeting (AGM) in June 2010 membersrenewed the authority for the company to purchase up to 10 per cent of itsissued ordinary shares. The company will be asking members to renew thisauthority at the next AGM in June 2011.Movements in Treasury Transaction Number ofshares during the year: price shares Treasury shares held at 1 January 2010

4,293,051

27 January 2010 - Issue of Treasury shares 42.00p (2,157,545) in lieu of directors and staff bonuses

1 October 2010 - Purchase by the Trustee of 37.00p (23,702) the SIP in

connection with the HMRC approved share

incentive plan 1 October 2010 - Shares issued for a 37.00p (19,097)non-executive directors' bonus

16 December 2010 - Issue of Treasury shares in 38.00p (135,173) connection with the HMRC approved share

incentive plan Treasury shares held at 31 December 2010

1,957,534

Treasury shares are not included in issued share capital for the purposes of calculating earnings per share and net assets per share, and they do not qualify for dividends payable.

Investment properties

The freehold and long leasehold properties of the company and its subsidiarieswere revalued as at 31 December 2010 by external professional firms ofchartered surveyors - Allsop LLP, London (49.6 per cent of the portfolio), KingSturge International LLP (48.2 per cent), and BNP Paribas, Leeds (2.2 percent). The valuations, which are reflected in the financial statements, amountto £194.9 million (2009: £213.6 million).Taking account of prevailing market conditions, the valuation of Groupproperties at 31 December 2010 resulted in an increase of £1.6 million (2009:increase of £9.4 million). This has been reflected in the income statement inaccordance with the requirements of IFRS. The impact of property revaluationson the company's joint ventures (Analytical Ventures Limited and Dragon RetailProperties Limited) and the associate company (Bisichi Mining PLC) was anincrease of £1.4 million (2009: reduction of £0.2 million). The proportion ofthis revaluation attributable to the Group (net of taxation) is reflected inthe income statement and the consolidated balance sheet.

Financial instruments

Note 17 to the financial statements sets out the risks in respect of financialinstruments. The board reviews and agrees overall treasury policies, delegatingappropriate authority for applying these policies to the Chief Executive andFinance Director. Financial instruments are used to manage the financial risksfacing the Group - speculative transactions are prohibited. Treasury operationsare reported at each board meeting and are subject to weekly internalreporting. Hedging arrangements have been put in place in the company,subsidiaries and joint ventures in order to limit the exposure to interest raterisk.

Directors

M A Heller, J A Heller, R J Corry, H D Goldring, C A Parritt and M C Stevens were directors of the company for the whole of 2010.

H D Goldring, is retiring by rotation at the Annual General Meeting in 2011 and offers himself for re-election.

Brief details of the director offering himself for re-election are as follows:

Howard Goldring has been a director since 1992 and has a contract of servicedeterminable at three months notice. He is a member of the audit, remunerationand nomination committees. Howard Goldring is a chartered accountant and globalasset allocation specialist. He is executive chairman of Delmore AssetManagement Limited which specialises in the management of investment portfoliosand the provision of asset allocation advice for private clients, familyoffices and pension funds. The board has considered the re-appointment ofHoward Goldring and recommends his re-election as a director. His specialisedeconomic knowledge and broad business experience are of significant benefit tothe business.Michael Stevens retires from his executive duties on 30 April 2011 after over25 years service with the group. He is not offering himself for re-election

atthe Annual General Meeting.Directors' interests

The interests of the directors in the ordinary shares of the company, including family and trustee holdings, where appropriate, were as follows:

Beneficial Non-beneficial interests interests 31 Dec 10 1 Jan 10 31 Dec 10 1 Jan 10 M A Heller 6,016,577 5,450,109 19,277,931 18,902,994 R J Corry 962,527 661,879 - - H D Goldring 19,819 11,309 - - J A Heller 1,923,320 1,310,652 †14,073,485 †13,779,769 C A Parritt 36,166 24,867 - - M C Stevens 922,326 756,747 +1,163,088 +988,140

†These non-beneficial holdings are duplicated with those of M A Heller.

+The non-beneficial interest of M C Stevens arises by reason of his being a director of London & Associated Securities Limited, a company which acts as a trustee.

No director had any material interest in any contract or agreement with the Group during the year other than as shown in this annual report. (Please see note 20 to the financial statements and the remuneration report).

Between 1 January 2011 and the date of this report the interests of a number ofdirectors in the ordinary shares of the company have increased to the followingtotals: Beneficial Non-beneficial

M A Heller 6,495,618 19,277,931

R J Corry 996,014 -

M C Stevens 962,853 1,239,487

No other changes in the directors' holdings took place between 1 January 2011 and the date of this report. However, the interests of M A Heller and his family company interests also increased in this period and are shown in the "Substantial shareholdings" paragraph below.

The beneficial holdings of directors shown above include their interests in the Share Incentive Plan.

Substantial shareholdingsAt 31 December 2010 M A Heller and his family had an interest in 47.4 millionshares of the company, representing 56.7 per cent of the issued share capitalnet of treasury shares (2009: 44.8 million shares representing 56.2 per cent).Cavendish Asset Management Limited has an interest in 5,186,065 sharesrepresenting 6.2 per cent of the issued share capital of the company (2009:4,810,873 shares representing 6.04 per cent).

Between 1 January 2011 and the date of this report the following changes occurred:

The interest of M A Heller and his family increased to 47.88 million shares in the company, representing 56.82 per cent of the issued share capital net of Treasury shares.

The company is not aware of any other holdings exceeding 3 per cent of the issued share capital and no relevant changes have occurred between 1 January 2011 and the date of this report.

Takeover Directive

The company has one class of share capital, namely ordinary shares. Eachordinary share carries one vote. All the ordinary shares rank pari passu. Thereare no securities issued in the company which carry special rights with regardto control of the company.

The identity of all significant direct or indirect holders of securities in the company and the size and nature of their holdings is shown in "Substantial shareholdings" above.

The rights of the ordinary shares to which HMRC approved Share Incentive Plan relate, are exercisable by the trustees on behalf of the employees.

There are no restrictions on voting rights or on the transfer of ordinaryshares in the company, save in respect of Treasury Shares. The rules governingthe appointment and replacement of directors, alteration of the articles ofassociation of the company and the powers of the company's directors accordwith usual English company law provisions. Each director is re-elected at leastevery three years. The company has requested authority from shareholders to buyback its own ordinary shares and there will be a resolution to renew theauthority at this year's AGM (Resolution 9).The company is not party to any significant agreements that take effect, alteror terminate upon a change of control of the company following a takeover bid.The company is not aware of any agreements between holders of its ordinaryshares that may result in restrictions on the transfer of its ordinary sharesor on voting rights.

There are no agreements between the company and its directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid.

Statement as to disclosure of information to the auditorThe directors in office on 31 December 2010 have confirmed that, as far as theyare aware, there is no relevant audit information of which the auditor isunaware. All of the directors have confirmed that they have taken allreasonable steps that they ought to have taken as directors in order to makethemselves aware of any relevant audit information and to establish that it hasbeen communicated to the auditor.Corporate governanceThe company has adopted the Guidance for Smaller Quoted Companies (SQC)published by the Quoted Companies Alliance. The Alliance provides guidance toSQC and their guidance covers the implementation of The UK Corporate GovernanceCode for SQC. The paragraphs below set out how the company has applied thisguidance during the year. The company has complied with the Quoted CompaniesAlliance guidance throughout the year, except insofar that non-executivedirectors are not appointed for fixed terms (section A.7.2).Principles of corporate governanceThe board promotes good corporate governance in the areas of risk managementand accountability as a positive contribution to business prosperity. The boardendeavours to apply corporate governance principles in a sensible and pragmaticfashion having regard to the circumstances of the business. The key objectiveis to enhance and protect shareholder value.

Board structure During the year the board comprised four executive directors, being the chairman, chief executive, finance director and company secretary, and two non-executive directors. Their details appear on page 21. The board is responsible to shareholders for the proper management of the Group.

The directors' responsibility statement in respect of the accounts is set outon page 34. The non-executive directors have a particular responsibility toensure that the strategies proposed by the executive directors are fullyconsidered. To enable the board to discharge its duties, all directors havefull and timely access to all relevant information and there is a procedure forall directors, in furtherance of their duties, to take independent professionaladvice, if necessary, at the expense of the Group. The board has a formalschedule of matters reserved to it and normally has eleven regular meetingsscheduled each year. Additional meetings are held for special business whenrequired.

The board is responsible for overall Group strategy, approval of major capital expenditure and consideration of significant financial and operational matters.

The board committees, which have written terms of reference, deal with specific aspects of the Group's affairs:

• The nomination committee is chaired by C A Parritt and comprises the non-executive directors and the executive chairman. The committee is responsible for proposing candidates for appointment to the board, having regard to the balance and structure of the board. In appropriate cases recruitment consultants are used to assist the process. All directors are subject to re-election at a maximum of every three years.

• The remuneration committee is responsible for making recommendations to theboard on the company's framework of executive remuneration and its cost. Thecommittee determines the contract terms, remuneration and other benefits foreach of the executive directors, including performance related bonus schemes,pension rights and compensation payments. The board itself determines theremuneration of the non-executive directors. The committee comprises thenon-executive directors and it is chaired by C A Parritt. The executivechairman of the board is normally invited to attend. The directors'remuneration report is set out on pages 29 to 31.

• The audit committee comprises the non-executive directors and is chaired by C A Parritt. The audit committee report is set out on page 32.

Board and board committee meetings held in 2010

The number of regular meetings during the year and attendance was as follows: Meetings Meetings held attended R J Corry Board 10 10 Audit committee 2 2 H D Goldring Board 10 10 Audit committee 2 2 Nomination committee 1 1 Remuneration committee 2 2 M A Heller Board 10 10 Nomination committee 1 1 Remuneration committee 2 2 J A Heller Board 10 10 Audit committee 2 2 C A Parritt Board 10 10 Audit committee 2 2 Nomination committee 1 1 Remuneration committee 2 2 M C Stevens Board 10 9 Audit committee 2 2 Nomination committee 1 1

Performance evaluation - board, board committees and directors

The performance of the board as a whole and of its committees and thenon-executive directors is assessed by the chairman and the chief executive andis discussed with the senior independent director. Their recommendations arediscussed at the nomination committee prior to proposals for re-election beingrecommended to the board. The performance of executive directors is discussedand assessed by the remuneration committee. The senior independent directormeets regularly with the chairman, executive and non-executive directorsindividually outside of formal meetings. The directors will take outside advicein reviewing performance but have not found this to be necessary to date.Independent directorsThe senior independent non-executive director is C A Parritt. The otherindependent non-executive director is H D Goldring. Delmore Asset ManagementLimited (Delmore) is a company in which H D Goldring is a majority shareholderand director. Delmore provides consultancy services to the company on a feepaying basis. H D Goldring's association with Delmore and the length of hisservice on the board mean that the criteria for independence set out in theCombined Code of Corporate Governance are not met.

However, the board considers that the independence of H D Goldring is not impaired either because he has served on the board for more than nine years or because of his association with Delmore. The board therefore regards H D Goldring as being independent.

The independent directors regularly meet prior to and after board meetings to discuss corporate governance and other issues concerning the group.

Directors and officers liability insurance The Group maintains directors and officers insurance, which is reviewed annually and is considered to be adequate by the company and its insurance advisers.

Internal controlThe directors are responsible for the Group's system of internal control andfor reviewing its effectiveness at least annually, and for the preparation andreview of its financial statements. The board has designed the Group's system of internal control in order to provide the directors with reasonable assurance that assets are safeguarded, that transactions are authorised and properly recorded andthat material errors and irregularities are either prevented or would be detectedwithin a timely period. However, no system of internal control can eliminate the risk of failure to achieve business objectives or provide absolute assurance against material misstatementor loss. The key elements of the control system in operation are:• The board meets regularly with a formal schedule of matters reserved for itsdecision and has put in place an organisational structure with clearly definedlines of responsibility and with appropriate delegation of authority;

• There are established procedures for planning, approval and monitoring of capital expenditure and information systems for monitoring the Group's financial performance against approved budgets and forecasts;

• The departmental heads are required annually to undertake a full assessmentprocess to identify and quantify the risks that face their departments andfunctions, and assess the adequacy of the prevention, monitoring andmodification practices in place for those risks. In addition, regular reportsabout significant risks and associated control and monitoring procedures aremade to the executive directors. The process adopted by the group accords withthe guidance contained in the document "Internal Control Guidance for Directorson the Combined Code" issued by the Institute of Chartered Accountants inEngland and Wales. The audit committee receives reports from external auditorsand from executive directors of the group. During the period, the auditcommittee has reviewed the effectiveness of the system of internal control asdescribed above. The board receives periodic reports from all committees.

• There are established procedures for the presentation and review of the financial statements and the Group has in place an organisational structure with clearly defined lines of responsibility and with appropriate delegation of authority.

There are no internal control issues to report in the annual report andfinancial statements for the year ended 31 December 2010 and up to the date ofapproval of this report and the financial statements the board has not beenrequired to deal with any related material internal control issues. Thedirectors confirm that the board has reviewed the effectiveness of the systemof internal control as described during the period.

Risk assessment

The audit committee has assessed the key risks to the group as follows:

Description of Risk Description of Impact Mitigation Asset Management Tenant failure Financial loss Initial and subsequent assessment of tenant covenant strength combined with an active credit control function. Leases not renewed Financial loss Lease expiries regularly reviewed. Experienced in house teams with strong tenant and market knowledge who manage appropriate tenant mix.

Asset illiquidity (size Assets may be illiquid and Regular reporting of and affect current and geographical location) flexing of balance sheet projected position to the Board with efficient treasury management. People: Retention and Unable to retain and Nomination Committee and recruitment of attract the senior staff best people for the key staff review skills gaps roles. and Loss of knowledge and key succession planning. skills. Training and development offered. Retention and Unable to retain and Nomination Committee and recruitment of attract the senior staff best people for the key staff review skills gaps roles. and Loss of knowledge and key succession planning. skills. Training and development offered. Reputation: Business interruption Loss in revenue. Documented Recovery Plan in Impact on footfall. place. Adverse publicity. General and terrorism Potential for criminal/ insurance civil policies in place and risks proceedings. monitored by trained security staff. Health and Safety policies in place. CCTV in centres. Financing:

Fluctuation in property Impact on covenants and Secure income flows.

values other loan Regular monitoring of LTV and other loan agreement and IC obligations. covenants and other obligations. Focus on quality assets.

Reduced availability of Insufficient funds to meet Efficient treasury

borrowing facilities existing management. debts/interest payments Loan facilities extended and where operational payments. possible. Regular reporting of current and projected position to the Board. Loss of cash and Financial loss Only use a spread of banks deposits and financial institutions which have a strong credit rating. Fluctuation of interest Uncertainty of interest Manage derivative contractsrates rate costs to achieve a balance between hedging interest rate exposure and minimising potential cash calls. Communication with shareholdersPrompt communication with shareholders is given high priority. Extensiveinformation about the Group and its activities is provided in the AnnualReport. In addition, a half-year report and two interim reports are producedfor each financial year and published on the company's website. The company'swebsite www.lap.co.uk is promptly updated with announcements and Annual Reportsupon publication. Copies from previous years are also available on the website.The company's share price is published daily in the Financial Times. The shareprice history and market information can be found at http://www.londonstockexchange.com/prices-and-markets/markets/prices.htm. Our code isLAS.

There is a regular dialogue with the company's stockbrokers and institutional investors. Enquiries from individuals on matters relating to their shareholdings and the business of the group are dealt with promptly and informatively.

The company's website is under continuous development to enable better communication with both existing and potential new shareholders.

Payments to suppliersThe company and the Group agree the terms of contracts when orders are placed.It is Group policy that payments to suppliers are made in accordance with thoseterms, provided that suppliers also comply with all relevant terms andconditions. Trade creditors outstanding at the year-end represent 5.4 daysannual trade purchases (2009: 17.8 days).

Donations

No political donations were made during the year (2009: £Nil). Donations for charitable purposes amounted to £250 (2009: £1,525).

Going concernThe Group's business activities, together with the factors likely to affect itsfuture development are set out in the Chairman's Statement on the precedingpages 2 and 3 and the Chief Executive's Report on pages 6 to 15. The FinanceDirector's Report on pages 17 to 19 sets out the financial position of thecompany, its cash flows, liquidity position and borrowing facilities. Inaddition Note 17 to the financial statements gives details of the group'sfinancial instruments and interest rate risk, and maturity and hedging profile.The Group has considerable financial resources together with long term leaseswith the majority of the tenants of its property portfolio. As a consequence,the directors believe that the company is well placed to manage its businessrisks successfully despite the current uncertain economic outlook.The directors have a reasonable expectation that the company has adequateresources to continue in operational existence for the foreseeable future. Thusthey continue to adopt the going concern basis of accounting in preparing theannual financial statements.Annual General MeetingThe Annual General Meeting will be held at the RAC Club, 89 Pall Mall, LondonSW1Y 5HS on Monday 6 June 2011 at 10.30 a.m. Items 1 to 7 will be proposed asordinary resolutions. More than 50 per cent of shareholders' votes must be infavour for these resolutions to be passed. Items 8 to 11 will be proposed asspecial resolutions. At least 75 per cent of shareholders' votes must be infavour for these resolutions to be passed. The directors consider that all ofthe resolutions to be put to the meeting are in the best interests of thecompany and its shareholders as a whole and accordingly the board unanimouslyrecommends that shareholders vote in favour of all of the resolutions, as thedirectors intend to do in respect of their own beneficial holdings of ordinaryshares. Please note that the following paragraphs are only summaries of certainof the resolutions to be proposed at the Annual General Meeting and not thefull text of the resolutions. You should therefore read this section inconjunction with the full text of the resolutions contained in the notice ofAnnual General Meeting.Ordinary Resolutions

1. Resolution 7- Directors' authority to allot securities

Paragraph 7.1.1 of Resolution 7 would give the directors the authority to allotshares in the company and grant rights to subscribe for or convert any securityinto shares in the company up to an aggregate nominal value of £2,805,864. Thisrepresents approximately 33.3 per cent of the ordinary share capital of thecompany in issue (excluding treasury shares) at 14 April 2011 (being the lastpracticable date prior to the publication of this Directors' Report).In line with guidance issued by the Association of British Insurers ('ABI')paragraph 7.1.2 of Resolution 7 would give the directors the authority to allotshares in the company and grant rights to subscribe for or convert any securityinto shares in the company up to a further aggregate nominal value of £2,805,864, in connection with a rights issue. This amount representsapproximately 33.3 per cent of the ordinary share capital of the company inissue (excluding treasury shares) at 14 April 2011 (being the last practicabledate prior to the publication of this Directors' Report).The directors' authority will expire at the conclusion of the next AnnualGeneral Meeting. The directors have no present intention to make use of thisauthority. However, if they do exercise the authority, the directors intend tofollow emerging best practice as regards its use (including as regards thedirectors standing for re-election in certain cases), as recommended by theABI.

Special Resolutions The following special resolutions will be proposed at the Annual General Meeting:

1. Resolution 8- disapplication of pre-emption rights

Under company law, when new shares are allotted or treasury shares are sold forcash (otherwise than pursuant to an employee share scheme) they must first beoffered to existing shareholders in proportion to their existing shareholdings.This special resolution gives the directors authority, for the period ending onthe date of the next Annual General Meeting to be held in 2012, to: (a) allotshares of the company and sell treasury shares for cash in connection with arights issue or other pre-emptive offer; and (b) otherwise allot shares of thecompany, or sell treasury shares, for cash up to an aggregate nominal value of£421,300 representing in accordance with institutional investor guidelines,approximately 5 per cent of the total ordinary share capital in issue as at 14April 2011 (being the last practicable date prior to the publication of thisDirectors' Report)) in each case as if the pre-emption rights in company lawdid not apply.Save in respect of issues of shares in respect of employee share schemes andshare dividend alternatives, the directors have no present intention to makeuse of these authorities. The board intends to adhere to the provisions in thePre-emption Group's Statement of Principles not to allot shares for cash on anon-pre-emptive basis in excess of an amount equal to 7.5% of the company'sordinary share capital within a rolling three-year period without priorconsultation with shareholders.

Resolution 9- purchase of own Ordinary Shares

The effect of Resolution 9 would be to renew the directors' current authorityto make limited market purchases of the company's ordinary shares of 10 penceeach. The power is limited to a maximum aggregate number of 8,554,271 ordinaryshares (representing approximately 10 per cent of the company's issued sharecapital as at 14 April 2011 (being the latest practicable date prior topublication of this Directors' Report)). The minimum price (exclusive ofexpenses) which the company would be authorised to pay for each ordinary sharewould be 10 pence (the nominal value of each ordinary share). The maximum price(again exclusive of expenses) which the company would be authorised to pay foran ordinary share is an amount equal to the higher of (i) 105% of the averagemarket price for an ordinary share for the five business days preceding anysuch purchase and (ii) the higher of the last independent trade for an ordinaryshare and the highest current independent bid for an ordinary share as derivedfrom the trading venue where the purchase is carried out. The authorityconferred by Resolution 9 will expire at the conclusion of the company's nextAnnual General Meeting to be held in 2012 or 15 months from the passing of theresolution, whichever is the earlier. Any purchases of ordinary shares would bemade by means of market purchase through the London Stock Exchange.If granted, the authority would only be exercised if, in the opinion of thedirectors, to do so would result in an increase in earnings per share or assetvalues per share and would be in the best interests of shareholders generally.In exercising the authority to purchase ordinary shares, the directors maytreat the shares that have been bought back as either cancelled or held astreasury shares (shares held by the company itself). No dividends may be paidon shares which are held as treasury shares and no voting rights are attachedto them.

As at 14 April 2011 (being the last practicable date prior to the publication of this Directors' Report) the total number of options to subscribe for new ordinary shares in the company as at 31 December 2010 was 70,000 shares representing 0.08% of the company's issued share capital as at 31 December 2010. Such number of options to subscribe for new ordinary shares would represent approximately 0.09% of the reduced issued share capital of the company assuming full use of the authority to make market purchases sought under Resolution 9.

3 Resolution 10 - New Articles of Association

We are also asking shareholders to approve a number of amendments to ourArticles of Association primarily to reflect the implementation of theremaining provisions of the Companies Act 2006 in October 2009. An explanationof the main changes between the proposed and existing Articles of Associationis set out on page 70 of this document.Other mattersBaker Tilly UK Audit LLP has expressed its willingness to continue in office asauditor. A proposal will be made at the Annual General Meeting forreappointment.By order of the boardHeather CurtisSecretary15 April 2011Carlton House22 St James's SquareLondon SW1Y 4JHRemuneration Report

The remuneration committee is pleased to present its report for the year ended 31 December 2010.

The remuneration committee is a formally constituted committee of the board and is comprised entirely of independent non-executive directors. The members of the committee are C A Parritt (chairman) and H D Goldring.

Remuneration policy for executive directors and non-executive directors

The principal function of the remuneration committee is to determine, on behalfof the board, the remuneration and other benefits of the executive directorsand senior executives, including pensions, share options and service contracts.The company's policy is designed to attract, retain and motivate individuals ofa calibre who will ensure the successful leadership and management of thecompany. Remuneration packages are designed to reward the executive directorsand senior executives fairly for their contributions whilst remaining withinthe range of benefits offered by similar companies in the sector. Theemoluments of each executive director comprise basic salary, a bonus at thediscretion of the remuneration committee, provision of a car, premiums paid inrespect of individual defined-contribution pension arrangements, healthinsurance premium and share options. The remuneration of non-executivedirectors is determined by the board, and takes into account additionalremuneration for services outside the scope of the ordinary duties ofnon-executive directors. No pension costs are incurred on behalf ofnon-executive directors and they do not participate in the share optionschemes.

The board's policy is to grant share incentives to executive directors, managers and staff at appropriate times to provide them with an interest in the longer term development of the Group.

The remuneration committee receives updates on pay and employment conditions applying to other group employees. These are taken

into consideration when setting executive directors' remuneration consistent with the group's general aim of seeking to reward all employees

fairly according to the nature of their role, their performance and market forces."

Service and employment contracts

All executive directors have full-time contracts of employment with thecompany. Non-executive directors have contracts of service. No director has acontract of employment or contract of service with the company, its jointventure or associated companies with a fixed term which exceeds twelve months.All directors' contracts, as amended from time to time, have run from the dateof appointment. Details of the directors standing for re-election are providedunder `Directors' in the Directors' report.

It is the policy of the committee to issue employment contracts to executive directors with normal commercial terms and without extended terms of notice which could give rise to extraordinary termination payments.

Summary of directors' terms

Date of contract Unexpired term Notice period Executive directors M A Heller 01-Jan-71 Continuous 6 months J A Heller 01-May-03 Continuous 12 months R J Corry 01-Sep-92 Continuous 6 months M C Stevens 14-Oct-85 Continuous 6 months Non-executive directors H D Goldring 01-Jul-92 Continuous 3 months C A Parritt 01-Jan-06 Continuous 3 months

The following information has been audited

Directors' Remuneration for the year ended 31 December 2010

2010 total 2009 total before before Salary Bonus Bonus pension Pension pension Pension And in in Other contrib- contrib- Total contrib- contrib- Total fees cash shares benefits utions utions 2010 utions utions 2009 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Executive directors M A Heller* 7 - 200 44 251 - 251 357 - 357 J A Heller 300 200 3 44 547 30 577 952 30 982 R J Corry 197 12 28 23 260 33 293 261 146 407 M C Stevens 90 - 6 20 116 23 139 115 65 180 594 212 237 131 1,174 86 1,260 1,685

241 1,926 Non-executive directors

H D Goldring* 42 - 5 4 51 - 51 44 - 44

C A Parritt * 32 - 5 - 37 - 37 30 - 30 74 - 10 4 88 - 88 74 - 74 Totalremunerationfor directors'serviceduring year 668 212 247 135 1,262 86 1,348 1,759

241 2,000

* See "Directors" below and Note 20 "Related party transactions".

Other benefits include the provision of car, health and other insurance and subscriptions.

Pension schemes and incentives

Three (2009: three) directors have benefits under money purchase pensionschemes. Contributions in 2010 were £86,000 (2009: £241,000) as set out in thetable above. Directors are not entitled to benefits under any bonus orincentive schemes apart from the share option and share incentive plan, detailsof which are set out below. Bonuses are awarded by the remuneration committeewhen merited. In assessing the performance of the executive team and, inparticular to determine whether bonuses are merited the remuneration committeetakes account of the overall performance of the business. Specific areasaddressed include: enhancement of the asset base by effective development;changes in rental income generated; quality and risk profile of the tenantbase; voids; timely acquisitions and disposals; security of fundingarrangements; and overall teamwork. Bonuses were awarded by the remunerationcommittee to four executive directors during 2010 (2009: four) and twonon-executive directors (2009: nil).

Directors

Although M A Heller receives reduced remuneration in respect of his services tothe group, the group does supply office premises, property management, generalmanagement accounting and administration services for a number of companies inwhich M A Heller has an interest. The board estimates that the value of theseservices, if supplied to a third party, would have been £275,000 (2009: £275,000) for the year. Further details of these services are set out in Note 20"Related party transactions" to the financial statements.

H D Goldring's company, Delmore Asset Management Limited provides consultancy services to the Group. This is dealt with in Note 20 to the financial statements.

C A Parritt provides consultancy services to the group. This is dealt with in Note 20 to the financial statements.

Share option scheme

The company has an HMRC approved scheme (Approved Scheme) was set up in 1986 inaccordance with HMRC rules to gain HMRC approved status which gave the memberscertain tax advantages. No director has any options outstanding under theApproved Scheme.

There are no performance criteria for the exercise of options under the Approved Scheme, as this was set up before such requirements were considered to be necessary.

A share option scheme known as the "Non-approved Executive Share Option Scheme"(Unapproved Scheme) which does not have HMRC approval was set up during 2000.At 31 December 2010 there were no options to subscribe for ordinary sharesoutstanding. The exercise of options under the Unapproved scheme is subject tothe satisfaction of objective performance conditions specified by theremuneration committee which conforms to institutional shareholder guidelinesand best practice provisions. No options under the Unapproved scheme wereexercised, granted or lapsed during the year to 31 December 2010. Furtherdetails of this scheme is set out in Note 19 "Share Capital" to the financialstatements.The bid market price of London & Associated Properties PLC ordinary shares at31 December 2010 was 42.0p (2009: 43.3p). During the year the share mid-marketprice ranged between 36.5p and 47.5p.

Share incentive plan

Following a recommendation of the remuneration committee the directors set upan HMRC approved share incentive plan (SIP) in May 2006. The purpose of theplan, which is open to all eligible LAP head office based executive directorsand staff is to enable them to acquire shares in the company to give them acontinuing stake in the group. The SIP comprises four types of share - (1) freeshares under which the company may award shares up to the value of £3,000 eachyear, (2) partnership shares, under which members may save up to £1,500 perannum to acquire shares, (3) matching shares through which the company mayaward up to two shares for each share acquired as a partnership share, and (4)dividend shares acquired from dividends paid on shares within the SIP.

1. Free shares: No free shares were awarded in 2010 (2009: 93,723 shares awarded at 43.00p per share)

Free shares awarded: Number of members Number of shares Value of shares 2010 2009 2010 2009 2010 2009 £ £ Directors: R J Corry 0 1 0 6,977 0 3,000 J A Heller 0 1 0 6,977 0 3,000 M C Stevens 0 1 0 6,977 0 3,000 Staff 0 17 0 72,792 0 31,300 Total at 31 December 0 20 0 93,723 0 40,300

2. Partnership shares: On 17 November 2009 directors and staff were invited to complete partnership share agreements and commence saving for partnership shares over the period November 2009 to October 2010.

Partnership shares issued:

Number of members Number of shares Value of shares 2010 2009 2010 2009 2010 2009 £ £Directors: R J Corry 1 1 3,947 3,488 1,500 1,500 J A Heller 1 1 3,947 3,488 1,500 1,500 M C Stevens 1 1 3,947 3,488 1,500 1,500 Staff 9 7 35,523 24,416 13,500 10,500 Total at 31 December 12 10 47,364 34,880 18,000 15,000 3. Matching shares: The partnership share agreements for the year to 31 October2010 provide for two matching shares to be awarded free of charge for eachpartnership share acquired in December 2010. On 16 December 2010 87,809matching shares were allocated (2009: 69,770). Matching shares will usually beforfeited if a member leaves employment in the group within 5 years of theirgrant.Matching shares granted: Number of members Number of shares Value of shares 2010 2009 2010 2009 2010 2009 £ £Directors: R J Corry 1 1 7,894 6,977 3,000 3,000 J A Heller 1 1 7,894 6,977 3,000 3,000 M C Stevens 1 1 7,894 6,977 3,000 3,000 Staff 9 7 64,127 48,839 27,000 21,000 Total at 31 December 12 10 87,809 69,770 36,000 30,0004. Dividend shares: Dividends on shares acquired under the SIP will be utilisedto acquire additional shares. Accumulated dividends received on shares in theSIP to 31 December 2010 amounted to £6,088 (2009: £6,547).Dividend shares issued: Number of members Number of shares Value of shares 2010 2009 2010 2009 2010 2009 £ £Directors: R J Corry 1 1 1,783 1,573 660 464 J A Heller 1 1 1,783 1,573 660 464 M C Stevens 1 1 1,783 1,573 660 464 Staff 17 17 18,353 17,061 6,790 5,033 Total at 31 December 20 20 23,702 21,780 8,770 6,425

The SIP is set up as an employee benefit trust - The trustee is London & Associated Securities Limited, a wholly owned subsidiary of LAP, and all shares and dividends acquired under the SIP will be held by the trustee until transferred to members in accordance with the rules of the SIP.

The following information is unauditedThe graph illustrates the company's performance as compared with a broad equitymarket index over a five year period. Performance is measured by totalshareholder return. The directors have chosen the FTSE All Share - Total ReturnIndex as a suitable index for this comparison as it gives an indication ofperformance against a large spread of quoted companies.C A ParrittChairman - Remuneration Committee15 April 2011Audit Committee Report

The committee's terms of reference have been approved by the board and follow published guidelines, which are available on request from the company secretary.

At the year end the audit committee comprised the two non-executive directors - H D Goldring and C A Parritt, both of whom are Chartered Accountants.

The audit committee's prime tasks are to:

• review the scope of external audit, to receive regular reports from BakerTilly UK Audit LLP and to review the half-yearly and annual accounts beforethey are presented to the board, focusing in particular on accounting policiesand areas of management judgement and estimation;

• monitor the controls which are in force to ensure the integrity of the information reported to the shareholders;

• act as a forum for discussion of internal control issues and contribute to the board's review of the effectiveness of the Group's internal control and risk management systems and processes;

• to review the risk assessments made by management, consider key risks withaction taken to mitigate these and to act as a forum for discussion of riskissues and contribute to the board's review of the effectiveness of the Group'srisk management control and processes

• consider once a year the need for an internal audit function;

• advise the board on the appointment of the external auditor, the rotation ofthe audit partner every five years and on their remuneration for both audit andnon-audit work; discuss the nature and scope of their audit work and undertakea formal assessment of the auditor's independence each year, which includes:

i) a review of non-audit services provided to the Group and related fees;

ii) discussion with the auditor of their written report detailing all relationships with the company and any other parties that could affect independence or the perception of independence;

iii) a review of the auditor's own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and

iv) obtaining a written confirmation from the auditor that, in their professional judgement, they are independent.

Meetings

The committee meets at least twice prior to the publication of the annual results and discusses and considers the half year results prior to their approval by the board. The audit committee meetings are attended by the external audit partner, chief executive, finance director and company secretary. Prior to monthly board meetings the members of the committee meet on an informal basis to discuss any relevant matters which may have arisen. Additional formal meetings may be held as necessary.

During the past year the committee:

• met with the external auditor, and discussed their reports to the audit committee.

• approved the publication of annual and half year financial results.

• considered and approved the annual review of internal controls.

• decided that there was no current need for an internal audit function.

• agreed the independence of the auditor and approved their fees for both audit and non-audit services as set out in note 2 to the financial statements.

• in accordance with the rules for rotation of audit partners, reviewed and approved the proposals from the external auditor to introduce a new senior audit partner to lead the audit.

• the chairman of the audit committee has also had separate meetings with the external audit partner.

External AuditorBaker Tilly UK Audit LLP held office throughout the period under review. In theUnited Kingdom London & Associated Properties PLC provides extensiveadministration and accounting services to Bisichi Mining PLC, which has its ownaudit committee and employs PKF (UK) LLP, a separate and independent firm ofregistered auditors.C A ParrittChairman - Audit Committee15 April 2011

DIRECTORS' RESPONSIBILITY STATEMENT

The directors are responsible for preparing the Directors' Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare Group and company financial statements for each financial year. The directors are required under the Listing Rules of the Financial Services Authority to prepare Group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and have elected under company law to prepare the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

The Group financial statements are required by law and IFRS adopted by the EUto present fairly the financial position and performance of the Group; theCompanies Act 2006 provides in relation to such financial statements thatreferences in the relevant part of that Act to financial statements giving atrue and fair view are references to their achieving a fair presentation.Under company law the directors must not approve the financial statementsunless they are satisfied that they give a true and fair view of the state ofaffairs of the Group and the company and of the profit or loss of the Group forthat period.

In preparing each of the Group and company financial statements, the directors are required to:

a. select suitable accounting policies and then apply them consistently;

b. make judgements and accounting estimates that are reasonable and prudent;

c. for the group financial statements, state whether they have been prepared

in accordance with IFRSs adopted by the EU and for the company financial

statements state whether applicable UK accounting standards have been

followed, subject to any material departures disclosed and explained in the

company financial statements;

d. prepare the financial statements on the going concern basis unless it is

inappropriate to presume that the group and the company will continue in

business.

The directors are responsible for keeping adequate accounting records that aresufficient to show and explain the Group's and the company's transactions anddisclose with reasonable accuracy at any time the financial position of thegroup and the company and enable them to ensure that the financial statementsand the Directors' Remuneration Reportcomply with the Companies Act 2006 and,as regards the Group financial statements, Article 4 of the IAS Regulations. They are also responsible for safeguarding the assets of the Group and thecompany and hence for taking reasonable steps for the prevention and detectionof fraud and other irregularities.

Directors' statement pursuant to the Disclosure and Transparency Rules

Each of the directors, whose names and functions are listed on page 21 confirm that, to the best of each person's knowledge:

a. the financial statements, prepared in accordance with the applicable set of

accounting standards, give a true and fair view of the assets, liabilities,

financial position and loss of the company and the undertakings included in

the consolidation taken as a whole; and

b. the management reportcontained in the Annual Report includes a fair review

of the development and performance of the business and the position of the

company and the undertakings included in the consolidation taken as a

whole, together with a description of the principal risks and uncertainties

that they face.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the London & Associated Properties PLC website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

VALUERS' CERTIFICATESTo the Directors of London & Associated Properties PLC

In accordance with your instructions we have carried out a valuation of the freehold and leasehold property interests held as at 31 December 2010 by the company as detailed in our Valuation Report dated 12 January 2011.

Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2010 of these interests was:

£'000 Freehold 73,727 Leasehold 23,023 96,750

27 Soho Square, London W1D 3AY Allsop LLP

12 January 2011 Regulated by Royal Institution of Chartered Surveyors

To the Directors of London & Associated Properties PLC

In accordance with your instructions we have carried out a valuation of the leasehold property interests held as at 31 December 2010 by the company as detailed in our Valuation Report as at 31 December 2010.

Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2010 of these interests was:

£'000Freehold 5,050 Leasehold 88,950 94,000 30 Warwick Street King Sturge LLP London W1B 5NH 31 December 2010 Regulated by Royal Institution of Chartered Surveyors

To the Directors of London & Associated Properties PLC

In accordance with your instructions we have carried out a valuation of the freehold property interests held as at 31 December 2010 by the company as detailed in our Valuation Report dated 26 January 2011.

Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2010 of these interests was:

£'000 4,196 Freehold

Capitol House, Russell Street, BNP Paribas Real Estate

Leeds LS1 5SP Advisory and Property Management UK Limited 26 January 2011 Regulated by Royal Institution of Chartered Surveyors INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF London & Associated PropertiesPLC We have audited the Group and parent company financial statements ("thefinancial statements") on pages36 to 65. The financial reporting framework thathas been applied in the preparation of the group financial statements isapplicable law and International Financial Reporting Standards (IFRSs) asadopted by the European Union. The financial reporting framework that has beenapplied in the preparation of the parent company financial statements isapplicable law and United Kingdom Accounting Standards (United KingdomGenerally Accepted Accounting Practice).This report is made solely to the company's members, as a body, in accordancewith Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has beenundertaken so that we might state to the company's members those matters we arerequired to state to them in an auditor's report and for no other purpose. Tothe fullest extent permitted by law, we do not accept or assume responsibilityto anyone other than the company and the company's members as a body, for ouraudit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As more fully explained in the Directors' Responsibilities Statement set out onpage 34, the directors are responsible for the preparation of the financialstatements and for being satisfied that they give a true and fair view. Ourresponsibility is to audit and express an opinion on the financial statementsin accordance with applicable law and International Standards on Auditing (UKand Ireland). Those standards require us to comply with the Auditing PracticesBoard's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm

Opinion on financial statements

In our opinion

* the financial statements give a true and fair view of the state of the G

roup's and of the parent company's affairs as at 31 December 2010 and ofthe

Group's loss for the year then ended;

* the Group financial statements have been properly prepared in accordance

with IFRSs as adopted by the European Union;

* the parent company financial statements have been properly prepared in

accordance with United Kingdom Generally Accepted Accounting Practice; and

* the financial statements have been prepared in accordance with the

requirements of the Companies Act 2006 and, as regards the Group financial

statements, Article 4 of the IAS Regulation.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

* the part of the Directors' Remuneration Report to be audited has been

properly prepared in accordance with the Companies Act 2006;

* the information given in the Directors' Report for the financial year for

which the financial statements are prepared is consistent with the

financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

* adequate accounting records have not been kept by the parent company, or

returns adequate for our audit have not been received from branches not visited by us; or * the parent company financial statements and the part of the Directors'

Remuneration Report to be audited are not in agreement with the accounting

records and returns; or * certain disclosures of directors' remuneration specified by law are not made; or

* we have not received all the information and explanations we require for

our audit.

Under the Listing Rules we are required to review:

* the directors' statement, set out on page 27, in relation to going concern;

* the part of the Corporate Governance Statement relating to the company's

compliance with the nine provisions of the June 2008 Combined Code

specified for our review; and

* certain elements of the report to shareholders by the Board on directors'

remuneration.

Euan Banks (Senior Statutory Auditor)

For and on behalf of BAKER TILLY UK AUDIT LLP, Statutory Auditor

Chartered Accountants25 Farringdon Street,London, EC4A 4AB18 April 2011Consolidated income statementfor the year ended 31 December 2010 2010 2009 Notes £'000 £'000 Gross rental income Group and share of joint ventures 16,503

17,067

Less: joint ventures - share of rental (518)

(519)income Revenue 1 15,985 16,548 Direct property expenses (1,839) (2,166) Overheads (3,780) (4,865) Property overheads 1 (5,619) (7,031) Net rental income 1 10,366 9,517

Listed investments held for trading 3 43

148

Profit on sale of investment properties 637

14

Net increase on revaluation of 1,569 9,422investment properties

Net increase in value of investments 89

178held for trading Operating profit 1 12,704 19,279

Share of loss of joint ventures after 10 (233)

(276)tax Share of (loss)/profit of associate 11 (505) 1,485after tax Profit before interest and taxation 11,966 20,488 Interest rate derivatives 17 (7,280) 13,269

Interest rate derivatives break costs 17 (3,515)

- Finance income 5 64 90 Finance expenses 5 (11,922) (12,440) (Loss)/profit before taxation (10,687) 21,407 Income tax 6 7,192 (2,355) (Loss)/profitfor the yearattributable to (3,495) 19,052the owners of the parent Basic (loss)/profit per share 8 (4.24)p 24.32p Diluted (loss)/profit per share 8 (4.24)p

24.32p

The revenue and operating result for the year is derived from continuing operations in the United Kingdom.

consolidated balance sheetat 31 December 2010 2010 2009 Notes £'000 £'000 Non-current assets Market value of properties attributable to 194,946 213,624Group Present value of head leases 28,664 29,485 Property 9 223,610 243,109 Plant and equipment 9 612 816 Investments in joint ventures 10 1,163 1,396 Investments in associated company 11 7,483 8,044 Held to maturity investments 12 1,946 1,805 234,814 255,170 Current assets Trade and other receivables 13 4,092 3,976

Financial assets-investments held for 14 717

702trading Cash and cash equivalents 8,584 8,655 13,393 13,333 Total assets 248,207 268,503 Current liabilities Trade and other payables 15 (10,022) (11,427) Financial liabilities - borrowings 16 (3,863) (7,216) Current tax liabilities - (741) (13,885) (19,384) Non-current liabilities Financial liabilities-borrowings 16 (136,206) (147,788) Interest rate derivatives 17 (13,627) (6,347) Present value of head leases on properties (28,664) (29,485) Deferred tax 18 (64) (6,395) (178,561) (190,015) Total liabilities (192,446) (209,399) Net assets 55,761 59,104

Equity attributable to the owners of the

parent Share capital 19 8,554 8,392 Share premium account 4,866 5,042 Translation reserve in associate 30 (284) Capital redemption reserve 47 47 Retained earnings (excluding treasury 44,342 50,465shares) Treasury shares 19 (2,078) (4,558) Retained earnings 42,264 45,907 Total shareholders' equity 55,761 59,104 Net assets per share 8 66.71p 74.22p Diluted net assets per share 8 66.69p 74.19p

These financial statements were approved by the board of directors and authorised for issue on 15 April 2011 and signed on its behalf by:

M A Heller R J Corry

Director Director

Company Registration No. 341829

Consolidated statement of changes in shareholders' equity

for the year ended 31 December 2010

Retained Earnings Translation Capital Treasury Retained Total Share Share reserves in redemption shares Earnings equity capital premium associate reserves shares excluding treasury shares £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 8,232 5,236 (504) 47 (6,237) 33,532 40,3062009 Profit for year - - - - - 19,052 19,052 Other comprehensive income: Currency translation - - 220 - - - 220in associate Total other - - 220 - - - 220comprehensive income Total comprehensive - - 220 - - 19,052 19,272income Transactions with owners: Equity share options - - - - - (76) (76)in associate Issue of own shares 160 (194) - - - - (34)and expenses Disposal of own - - - - 521 - 521 shares Loss on transfer of - - - - 1,158 (1,158) -own shares Dividends paid - - - - - (885) (885) Transactions with 160 (194) - - 1,679 (2,119) (474)owners Balance at 31 8,392 5,042 (284) 47 (4,558) 50,465 59,104December 2009 Loss for year - - - - - (3,495) (3,495) Other comprehensive income: Currency translation - - 314 - - - 314in associate Total other - - 314 - - - 314comprehensive income Total comprehensive - - 314 - - (3,495) (3,181)income Transaction with owners: Equity share options - - - - - 2 2in associate Minority interest on - - - - - (199) (199)share disposal in associate Issue of own shares 162 (176) - - - - (14)and expenses Disposal of own - - - - 973 - 973shares Loss on transfer of - - - - 1,507 (1,507) -own shares Dividends paid - - - - - (924) (924) Transactions with 162 (176) - - 2,480 (2,628) (162)owners Balance at 31 8,554 4,866 30 47 (2,078) 44,342 55,761December 2010

All the above are attributable to the owners of the parent.

Consolidated statement of comprehensive income

for the year ended 31 December 2010

2010 2009 £'000 £'000 (Loss)/profitfor the year (3,495) 19,052 Other comprehensive income:

Currency translation in associate 314

220

Other comprehensive income for the year net of tax 314

220

Total comprehensive income for the period (3,181)

19,272

attributable to owners of the parent

Consolidated cash flow statement

for the year ended 31 December 2010

2010 2009 £'000 £'000 Operating activities Profit before interest and taxation 11,966 20,488 Depreciation 197 210

Profit on disposal of non-current assets (3)

(3)

Profit on sale of investment properties (637)

(14)

Net increase on revaluation of investment properties (1,569) (9,422)

Share of loss/(profit) of joint ventures and associate 738 (1,209)after tax Net increase in value of investments held for trading (89)

(178)

(Increase)/decrease in net current assets (1,019)

2,303

Cash generated from operations 9,584 12,175 Income tax repaid/(paid) 111 (444) Cash inflows from operating activities 9,695 11,731 Investing activities

Investment in loan stock in joint ventures (141)

-

Property acquisitions and improvements (754) (3,763) Sale of properties 21,302 17,805 Purchase of office equipment and motor vehicles (78)

(133)

Sale of office equipment and motor vehicles 86

27 Interest received 64 90

Dividends received from associate and joint ventures 173

273

Cash inflows from investing activities 20,652 14,299 Financing activities Issue expenses (14) (34) Sale of treasury shares 973 521 Equity dividends paid (924) (885) Interest paid (15,525) (12,132) Repayment of short term loan from joint ventures -

(225)

Repayment of medium term bank loan (11,575)

(12,750)

Cash outflows from financing activities (27,065)

(25,505)

Net increase in cash and cash equivalents 3,282

525

Cash and cash equivalents at beginning of year 1,439

914

Cash and cash equivalents at end of year 4,721

1,439

Cash and cash equivalentsFor the purpose of the cash flow statement, cash and cash equivalents comprisethe following balance sheet amounts: 2010 2009 £'000 £'000 Cash and cash equivalents (before bank overdrafts) 8,584 8,655 Bank overdrafts (3,863) (7,216) Cash and cash equivalents at end of year 4,721

1,439

£0.6million of cash deposits at 31 December 2009 was charged as security to Axa Annuity Company. This was released in 2010.

Group accounting policies

The following are the principal group accounting policies:

Basis of accounting

The group financial statements for the year ended 31 December 2010 are preparedin accordance with International Financial Reporting Standards (IFRS), asadopted by the European Union and with those parts of the Companies Act 2006applicable to companies reporting under IFRS.The company has elected to prepare the parent company's financial statements inaccordance with UK GAAP, as applied in accordance with the provisions of theCompanies Act 2006 and these are presented in note 25. The financial statementsare prepared under the historical cost convention, except for the revaluationof freehold and leasehold properties and financial assets held for trading andfair value of interest derivatives. The group financial statements arepresented in Pounds Sterling and all values are rounded to the nearest thousandpounds (£'000) except when otherwise stated.

London & Associated Properties PLC is a public listed parent company, incorporated and domiciled in England and quoted on the London Stock Exchange. The Company registration number is 341829.

Going concern

The most significant judgements made in preparing these accounts relate to thecarrying value of the properties, investments and interest rate hedges whichare stated at open market value. The Group uses external professional valuersto determine the values of our properties.The Directors exercised their commercial judgements when reviewing the cashflow forecasts of the Group and the underlying assumptions on which they arebased. The Group's business activities, together with the factors likely toaffect its future development, are set out in the Chairman's Statement, theChief Executive's Report and Finance Director's Report. In addition theDirectors considered note 17 of the financial statements which includes thecompany's objectives, policies and processes for managing its capital; itsfinancial risk management objectives; details of its financial instruments andhedging activities; its exposure to credit risk and liquidity risk.With sound financial resources and long term leases in place with the tenants,the Directors believe that the company is well placed to manage its businessrisks despite the current uncertain economic outlook. The Directors thereforehave a reasonable expectation that the company has adequate resources tocontinue in operational existence for the foreseeable future. Thus theycontinue to adopt the going concern basis of accounting in preparing the annualfinancial statements.Key judgements and estimatesThe preparation of the financial statements requires management to makeassumptions and estimates that may affect the reported amounts of assets andliabilities and the reported income and expenses, further details of which areset out below. Although management believes that the assumptions and estimatesused are reasonable, the actual results may differ from those estimates.Further details of which are contained in the Directors' Report.

International Accounting Standards (IAS/IFRS)

At the date of approval of these financial statements, the following new Standards and interpretations which have been applied in these financial statements, were in issue:

IFRS 2 (amended) Group Cash Settled Share-based payment transactions

Improvements to IFRS: 2007-2009 annual improvements

Other than additional disclosure, there is no material impact on reported income or net assets.

The following standards and interpretations have been issued and adopted by theEU but are not effective for the year ended 31 December 2010 and have not beenadopted early:

IAS 24 (revised) Related Party Disclosures

IAS 32 (amended) Financial Instruments: Presentation

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

The adoption of the standards and interpretations in issue but not yet effective is not expected to have a material impact on the financial statements of the Group.

Basis of consolidationThe Group accounts incorporate the accounts of London & Associated PropertiesPLC and all of its subsidiary undertakings, together with the Group's share ofthe results and net assets of its joint ventures and associate.

Subsidiaries

Subsidiaries are those entities controlled by the Group. Control is assumedwhen the Group has the power to govern the financial and operating policies ofan entity or business and to economically benefit from its activities.Subsidiaries acquired during the year are consolidated using the acquisitionmethod. Their results are incorporated from the date that control passes.

All intra group transactions, balances, income and expenses are eliminated on consolidation. Details of Group trading subsidiary companies are set out in note 25.4.

Joint venturesInvestments in joint ventures, being those entities over whose activities theGroup has joint control, as established by contractual agreement, include theappropriate share of the results and net assets of those undertakings.

Associates

Undertakings in which the Group has a participating interest of not less than20% of the voting capital and over which it has the power to exert significantinfluence are defined as associated undertakings. The financial statementsinclude the appropriate share of the results and reserves of thoseundertakings.

Goodwill

Goodwill arising on acquisition is recognised as an intangible asset andinitially measured at cost, being the excess of the cost of the acquired entityover the Group's interest in the fair value of the assets and liabilitiesacquired. Goodwill is carried at cost less accumulated impairment losses.Goodwill arising from the difference in the calculation of deferred tax foraccounting purposes and fair value in negotiations is judged not to be an assetand is accordingly impaired on completion of the relevant acquisition.

Revenue

Rental incomeRental income arises from operating leases granted to tenants. An operatinglease is a lease other than a finance lease. A finance lease is one wherebysubstantially all the risks and rewards of ownership are passed to the lessee.Rental income is recognised in the group income statement on a straight-linebasis over the term of the lease. This includes the effect of lease incentivesto tenants, which are normally in the form of rent free periods. Contingentrents, being the difference between the rent currently receivable and theminimum lease payments, are recognised in property income in the periods inwhich they are receivable. Rent reviews are recognised when such reviews havebeen agreed with tenants.

Reverse surrender premiums Payments received from tenants to surrender their lease obligations are recognised immediately in the income statement.

Dilapidations

Dilapidations monies received from tenants in respect of their lease obligations are recognised immediately in the income statement.

Other revenueRevenue in respect of listed investments held for trading represents investmentdividends received and profit or loss recognised on realisation. Dividends arerecognised in the income statement whenthe dividend is received.Property operating expensesProperty operating expenses are expensed as incurred and any property operatingexpenditure not recovered from tenants through service charges is charged tothe income statement.

Group accounting policies continued

Employee benefits

Share based remunerationThe company operates a long-term incentive plan and two share option schemes.The fair value of the conditional awards on shares granted under the long- termincentive plan and the options granted under the share option scheme isdetermined at the date of grant. This fair value is then expensed on astraight-line basis over the vesting period, based on an estimate of the numberof shares that will eventually vest. At each reporting date, the fair value ofthe non-market based performance criteria of the long-term incentive plan isrecalculated and the expense is revised. In respect of the share option scheme,the fair value of options granted is calculated using a binomial method.

Pensions

The company operates a defined contribution pension scheme. The contributions payable to the scheme are expensed in the period to which they relate.

Financial instruments

Investments

Held to maturity investments are stated at amortised cost using the effective interest rate method.

Investments held for trading are included in current assets at fair value. Forlisted investments, fair value is the bid market listed value at the balancesheet date. Realised and unrealised gains or losses arising from changes infair value are included in the income statement of the period in which theyarise.

Trade and other receivables Trade and other receivables are recognised initially at fair value. A provision for impairment of trade receivables is made when there is evidence that the Group will not be able to collect all amounts due.

Trade and other payables Trade and other payables are non interest bearing and are stated at their nominal value.

Bank loans and overdraftsBank loans and overdrafts are included as financial liabilities on the groupbalance sheet net of the unamortised discount and costs of issue. Interestpayable on those facilities is expensed as a finance cost in the period towhich it relates.Debenture loansThe debenture loans are included as a financial liability on the balance sheetnet of the unamortised costs on issue. The cost of issue is recognised in thegroup income statement over the life of the debenture. Interest payable todebenture holders is expensed in the period to which it relates.Finance lease liabilitiesFinance lease liabilities arise for those investment properties held under aleasehold interest and accounted for as investment property. The liability iscalculated as the present value of the minimum lease payments, reducing insubsequent reporting periods by the apportionment of payments to the lessor.Lease payments are allocated between the liability and finance charges so as toachieve a constant financing rate. Contingent rents payable, such as rentreviews or those related to rental income, are charged as an expense in theperiod in which they are incurred.Interest rate derivativesThe Group uses derivative financial instruments to hedge the interest rate riskassociated with the financing of the group's business. No trading in suchfinancial instruments is undertaken. At each reporting date, these interestrate derivatives are recognised at their fair value to the business, being theNet Present Value of the difference between the hedged rate of interest and themarket rate of interest for the remaining period of the hedge.Where a derivative is designated as a hedge of the variability of a highlyprobable forecast transaction i.e. an interest payment, the element of the gainor loss on the derivative that is an effective hedge is recognised directly inequity. When the forecast transaction subsequently results in the recognitionof a financial asset or a financial liability, the associated gains or lossesthat were recognised directly in equity are reclassified into the incomestatement in the same period or periods during which the asset acquired orliability assumed affects the income statement i.e. when interest income orexpense is recognised.The gain or loss arising from any adjustment to the fair value to the businesscalculation is recognised immediately in the group income statement when thecriteria set out in IAS 32 allowing the movements to be shown in equity havenot been met.Treasury sharesWhen the Group's own equity instruments are repurchased, consideration paid isdeducted from equity as treasury shares until they are cancelled. When suchshares are subsequently sold or reissued, any consideration received isincluded in equity.Investment propertiesValuation

Investment properties are those that are held either to earn rental income orfor capital appreciation or both, including those that are undergoingredevelopment. They are reported on the Group balance sheet at fair value,being the amount for which an investment property could be exchanged betweenknowledgeable and willing parties in an arm's length transaction. The valuationis undertaken by independent valuers who hold recognised and relevantprofessional qualifications and have recent experience in the locations andcategories of properties being valued. Surpluses or deficits resulting fromchanges in the fair value of investment property are reported in the Groupincome statement in the period in which they arise.Capital expenditureInvestment properties are measured initially at cost, including relatedtransaction costs. Additions to capital expenditure, being costs of a capitalnature, directly attributable to the redevelopment or refurbishment of aninvestment property, up to the point of it being completed for its intendeduse, are capitalised in the carrying value of that property. The redevelopmentof an existing investment property will remain an investment property measuredat fair value and is not reclassified. Capitalised interest is calculated withreference to the actual rate payable on borrowings for development purposes, orfor that part of the development costs financed out of borrowings thecapitalised interest is calculated on the basis of the average rate of interestpaid on the relevant debt outstanding.

Disposal

The disposal of investment properties is accounted for on completion of contract. On disposal, any gain or loss is calculated as the difference between the net disposal proceeds and the valuation at the last year end plus subsequent capitalised expenditure in the period.

Depreciation and amortisationIn applying the fair value model to the measurement of investment properties,depreciation and amortisation are not provided in respect of investmentproperties.Plant and equipmentOther non-current assets, comprising motor vehicles and office equipment, aredepreciated at a rate of between 10% and 33% per annum which is calculated towrite off the cost, less estimated residual value of the assets, on a straightline basis over their expected useful lives.Income taxesThe charge for current taxation is based on the results for the year asadjusted for disallowed or non-assessable items. Tax payable upon realisationof revaluation gains recognised in prior periods is recorded as a current taxcharge with a release of the associated deferred tax. Deferred tax is the taxexpected to be payable or recoverable on differences between the carryingamounts of assets and liabilities in the financial statements and thecorresponding tax bases used in the tax computations, and is accounted forusing the balance sheet liability method. Deferred tax liabilities aregenerally recognised for all taxable temporary differences and deferred taxassets are recognised to the extent that it is probable that taxable profitswill be available against which deductible temporary differences can beutilised. In respect of the deferred tax on the revaluation surplus, this iscalculated on the basis of the chargeable gains that would crystallise on thesale of the investment portfolio as at the reporting date. The calculationtakes account of indexation on the historic cost of properties and anyavailable capital losses. Deferred tax is calculated at the tax rates that areexpected to apply in the period when the liability is settled or the asset isrealised. Deferred tax is charged or credited in the group income statement,except when it relates to items charged or credited directly to equity, inwhich case it is also dealt with in equity.Cash and cash equivalentsCash comprises cash in hand and on demand deposits, net of bank overdrafts.Cash equivalents comprise short-term, highly liquid investments that arereadily convertible to known amounts of cash and which are subject to aninsignificant risk of changes in value and originalmaturities of three monthsor less.Ordinary SharesShares are classified as equity when there is no obligation to transfer cash orother assets. Incremental costs directly attributable to the issue of newshares are shown in equity as a deduction, net of tax, from the proceeds.Segmental ReportingFor management reporting purposes, the Group is organised into businesssegments distinguishable by economic activity. The Group's only businesssegments are investment properties and other investments. These businesssegments are subject to risks and returns that are different from those ofother business segments and are the primary basis on which the Group reportsits segment information. This is consistent with the way the Group is managedand with the format of the Group's internal financial reporting.Notes to the financial statementsfor the year ended 31 December 2010

1.Segmental analysis

Operating Segments are based on the internal reporting and operationalmanagement of the Group. The Group is organised into Property and otherinvestments.Business segments 2010 2009 Property Listed Total Property Listed investments investments Total £'000 £'000 £'000 £'000 £'000 £'000 Rental income 15,985 - 15,985 16,548 - 16,548 Property overheads (5,619) - (5,619) (7,031) - (7,031) Net rental income 10,366 - 10,366 9,517 - 9,517

Listed investment income - 43 43 -

148 148 Profit on sale of 637 - 637 14 - 14investment properties

Net increase/(decrease) 1,569 - 1,569 9,422

- 9,942on revaluation of investment properties Net increase/(decrease) - 89 89 - 178 178on revaluation of investments held for trading

Operating profit/(loss)* 12,572 132 12,704 18,953 326 19,279

Total assets (excluding 237,023 717 237,740 256,556 702 257,258investments in associate and joint ventures) Total liabilities (52,377) - (52,377) (53,654) - (53,654)(excluding borrowings and current tax) Borrowings (140,194) - (140,194) (155,004) - (155,004) Net assets 44,452 717 45,169 47,898 702 48,600 Current tax liabilities: - (741)non segmental Investments in joint 3,104 3,196ventures: non segmental (notes 10 and 12) Investments in 7,483 8,044associate: non segmental (note 11) Investments in unlisted 5 5companies Net assets as per 55,761 59,104balance sheet Other segment items: Finance income 64 - 64 90 - 90 Finance expenses 11,992 - 11,992 12,440 - 12,440 Depreciation 197 - 197 210 - 210 Capital expenditure 567 - 567 3,594 - 3,594Rental income Joint Ventures Group Analytical Dragon Group excl.joint Ventures Retail Share ventures Properties Total 2010 2009 £'000 £'000 £'000 £'000 £'000 £'000 Rental income 15,985 830 206 17,021 16,503 17,067 Direct property expenses (1,839) (58) (12) (1,909) (1,874) (2,201) Overheads (3,780) (226) (135) (4,141) (3,960) (5,011) 10,366 546 59 10,971 10,669 9,855 Less: attributable to joint (303) (338)ventures Net rental income 10,366 9,517

*Operating profit is defined as profit before tax and excludes the share of profit & losses of joint ventures and associate, finance income and expenses, and the movement of interest rate derivatives.

Geographical segments

At net rental income level, the Group operates in the United Kingdom only. The directors consider it to be the only geographical segment of the business.

Further information in respect of the property reportable segment is includedwithin the primary statements. No customer represents revenue in excess of 10per cent of total revenue (2009: none).

notes to the financial statements

for the year ended 31 December 2010

2. (Loss)/profit before taxation

2010 2009 £'000 £'000

(Loss)/profit before taxation is arrived at after charging/

(crediting): Staff costs (note 21) 2,631 3,361

Depreciation on tangible fixed assets - owned assets 197

210

Operating lease rentals - land and buildings 375

385

Profit on disposal of motor vehicles and office equipment (3)

(3)

Amounts payable to the auditor in respect of both audit and

non-audit services Audit services:

Statutory - company and consolidation 84

81 - subsidiaries 41 54 Further assurance services 6 10 Other services 9 8 140 153

Staff costs and depreciation of tangible fixed assets are included in overheads.

3. Listed investments held for trading

2010 2009 £'000 £'000 Investment sales 119 1,948 Dividends receivable 15 60 134 2,008 Cost of sales (86) (1,835) 48 173 Attributable overheads (5) (25)

Net income from listed investments 43

1484. Directors' emoluments 2010 2009 £'000 £'000 Emoluments 1,262 1,759

Defined contribution pension scheme contributions 86

241 1,348 2,000

Details of directors' emoluments and share options are set out in the remuneration report.

5. Finance income and expenses

2010 2009 £'000 £'000 Finance income 64 90 Finance expenses Interest on bank loans and overdrafts (2,164) (3,013) Other loans (2,134) (2,108) Interest on derivatives adjustment (5,575)

(5,338)

Interest on obligations under finance leases (2,049) (1,981) Total finance expenses (11,922) (12,440) (11,858) (12,350)

notes to the financial statements

for the year ended 31 December 2010

6. Income tax 2010 2009 £'000 £'000 Current tax

Corporation tax on (loss)/profit of the period -

-

Adjustments in respect of previous periods (861) (1,232) Total current tax (861) (1,232) Deferred tax Origination and reversal of timing differences (1,578)

(1,052)

Revaluation of investment properties (2,781)

658

Accelerated capital allowances 97

270

Fair value of interest derivatives (2,038)

3,715

Adjustments in respect of previous periods (31)

(4) Total deferred tax (note 18) (6,331) 3,587 Tax on (loss)/profit on ordinary activities (7,192)

2,355

Factors affecting tax charge for the year

The corporation tax assessed for the year is different from that at the standard rate of corporation tax in the United Kingdom of 28 per cent (2009: 28 per cent). The differences are explained below:

(Loss)/profit on ordinary activities before taxation (10,687) 21,407

Taxation on ordinary activities at 28 per cent (2009: (2,992) 5,994

28%) Effects of:

Expenses not deductible for tax purposes - 4

Other differences (3,265) (2,059) Joint ventures and associate (43) (348) Deferred tax rate adjustment - -

Adjustment in respect of prior years (892) (1,236) Tax (credit)/charge for the period (7,192) 2,355

The main component of other differences in the reconciliation relates to potential indexation for capital gains of £3.2 million (2009: indexation allowance £1.9 million).

Factors that may affect future tax charges:

Based on current capital expenditure plans, the Group expects to continue to beable to claim capital allowances in excess of depreciation in future years, butat a slightly lower level than in the current year.Deferred tax provision has been made for gains on revaluing investmentproperties. At present it is not envisaged that any tax will become payable inthe foreseeable future.7. Dividend 2010 2009 Per £'000 Per £'000 share share Dividends paid during the year relating to the 1.15p 924 1.15p 885prior period Dividends to be paid: Interim dividend for 2010 paid on 21 January 0.75p 627 0.75p 5972011

Proposed final dividend for 2010 0.40p 337 0.40p

327 1.15p 964 1.15p 924

The proposed final dividend will be payable on 1 July 2011 to shareholders registered at the close of business on 10 June 2011 subject to approval at Annual General Meeting.

notes to the financial statements

for the year ended 31 December 2010

8. (Loss)/profit per share and net assets per share

(Loss)/profit per share have been calculated as follows: 2010

2009

(Loss)/profitfor the year for the purposes of basic and diluted (3,495) 19,052 (loss)/profitper share (£'000)

Weighted average number of ordinary shares in issue for the 82,389 78,345 purpose of basic (loss)/profitper share ('000)

Basic (loss)/profit per share (4.24)p 24.32p

Weighted average number of ordinary shares in issue for the 82,389 78,345 purpose of diluted (loss)/profitper share ('000)

Fully diluted (loss)/profit per share (4.24)p

24.32p

Weighted average number of shares in issue is calculated after excluding treasury shares of 1,957,534 (2009:4,293,051).

There was no dilutive effect of the outstanding options in either year.

Net assets per share have been calculated as follows:

Net assets Shares in issue Net assets per share 2010 2009 2010 2009 2010 2009 £'000 £'000 `000 `000 Pence Pence Basic At 31 December 55,761 59,104 83,585 79,629 66.71 74.22 Dilution adjustments for shares subject to option agreements: Issue of outstanding share 28 28 70 70 options Diluted 55,789 59,132 83,655 79,699 66.69 74.19

9. Property and plant and equipment

Investment Properties Freehold Leasehold Leasehold Office Total over under equipment 50 years 50 years and motor vehicles £'000 £'000 £'000 £'000 £'000

Cost or valuation at 1 January 243,109 83,598 159,511 -

1,7342010 Reclassification - - (576) 576 - Additions 489 - 489 - 78 Disposals (20,736) (3,736) (17,000) - (226) Decrease in present value of (821) - (821) - -head leases Increase/(decrease) on 1,569 3,111 (1,472) (70) -revaluation Cost or valuation at 31 223,610 82,973 140,131 506 1,586December 2010

Representing assets stated at:

Valuation 194,946 82,973 111,473 500 - Present value of head leases 28,664 - 28,658 6 - Cost - - - - 1,586 223,610 82,973 140,131 506 1,586

Depreciation at 1 January 2010 - - - -

918 Charge for the year - - - - 197 Disposals - - - - (141) Depreciation at 31 December - - - - 9742010 Net book value at 1 January 243,109 83,598 159,511 - 8162010

Net book value at 31 December 223,610 82,973 140,131 506

612

2010

notes to the financial statements

for the year ended 31 December 2010

9. Property and plant and equipment continued

Investment Properties Freehold Leasehold Leasehold Office Total over under equipment 50 years 50 years and motor vehicles £'000 £'000 £'000 £'000 £'000

Cost or valuation at 1 January 245,770 95,272 150,498 -

1,6822009 Additions 3,461 1,450 2,011 - 133 Disposals (17,791) (17,791) - - (81) Increase in present value of 2,247 - 2,247 - -head leases Increase on revaluation 9,422 4,667 4,755 - - Cost or valuation at 31 243,109 83,598 159,511 - 1,734December 2009

Representing assets stated at:

Valuation: 213,624 83,598 130,026 - - Present value of head leases 29,485 - 29,485 - - Cost - - - - 1,734 243,109 83,598 159,511 - 1,734

Depreciation at 1 January 2009 - - - -

765 Charge for the year - - - - 210 Disposals - - - - (57) Depreciation at 31 December - - - - 9182009 Net book value at 1 January 245,770 95,272 150,498 - 9172009

Net book value at 31 December 243,109 83,598 159,511 -

816

2009

The leasehold and freehold properties, excluding the present value of head leases, were valued as at 31 December 2010 by external professional firms of chartered surveyors. The valuations were made at open market value.

2010 2009 £'000 £'000 Allsop LLP 96,750 205,865 BNP Paribas Real Estate 4,196 4,023 King Sturge LLP 94,000 - Directors' valuation - 3,736 194,946 213,624 Add: Present value of headleases 28,664 29,485 223,610 243,109

Upper Street, Islington, which was held at Directors' valuation at 31 December 2009, was sold in January 2010 for £3.8 million.

The historical cost of investment properties, including total capitalised interest of £6,051,000 (2009: £6,051,000) was as follows:

2010 2009 Freehold Leasehold Short Freehold Leasehold Short over 50 Leasehold over 50 Leasehold years years £'000 £'000 £'000 £'000 £'000 £'000 Cost at 1 January 80,608 133,462 - 96,308 131,451 - Reclassification - (785) 785 - - - Additions - 489 - 1,450 2,011 - Disposals (4,300) (11,700) - (17,150) - - Cost at 31 December 76,308 121,466 785 80,608 133,462 -

notes to the financial statements

for the year ended 31 December 2010

10. Investment in joint ventures

2010 2009 £'000 £'000 Group share of: Turnover 518 519 Loss before tax (226) (242) Taxation (7) (34) Loss after tax (233) (276) Non-current assets 6,333 6,565 Current assets 1,500 1,582 Current liabilities (3,712) (3,871) Non-current liabilities (2,958) (2,880) Net assets 1,163 1,396Analytical Ventures Limited (Analytical Ventures) - unlisted propertyinvestment company. The company owns 50 per cent of the issued share capitaland £1,940,860 of loan stock of Analytical Ventures. The remaining 50 per centof the issued share capital and £1,800,000 of loan stock is owned by UberiorVentures Limited. Analytical Ventures is incorporated and operates in Englandand Wales and has issued share capital of 7,558,000 ordinary shares (2009:7,558,000 ordinary shares of £1 each). Analytical Ventures is managed by aboard of directors with neither party having overall control.Dragon Retail Properties Limited (Dragon) - unlisted property trading andinvestment company. The company owns 50 per cent of the issued share capital.The remaining 50 per cent is owned by Bisichi Mining PLC. Dragon isincorporated and operates in England and Wales and has issued share capital of500,000 ordinary shares of £1 each (2009:500,000 ordinary shares of £1 each).Dragon is managed by a board of directors with neither party having overall

control.Shares in joint ventures: 2010 2009 £'000 £'000 At 1 January 1,396 1,793 Share of loss after tax (233) (276) Dividend received - (121) (233) (397) At 31 December 1,163 1,396

11. Investments in associated company

2010 2009 £'000 £'000

Bisichi Mining PLC - listed mining and

property investment company Group share of: Turnover 13,681 12,094 (Loss)/profit before tax (725) 2,039 Taxation 220 (554) (Loss)/profit after tax (505) 1,485 Non-current assets 10,718 9,971 Current assets 4,811 4,308 Current liabilities (4,162) (4,345) Non-current liabilities (3,720) (1,890) Minority interest (164) - Net assets 7,483 8,044

notes to the financial statements

for the year ended 31 December 2010 continued

11. Investments in associated company continued

2010 2009 £'000 £'000 Share in associate: At 1 January 8,044 6,567 Share of (loss)/profit after tax (505) 1,485 Equity share options 2 (76) Currency translation 314 220 Dividend received (173) (152) Minority interest (199) - (561) 1,477 At 31 December 7,483 8,044The company owns 42 per cent (2009: 42 per cent) of the issued share capital ofBisichi Mining PLC (Bisichi), a company registered in England and Wales.Bisichi has an issued share capital of 10,451,506 ordinary shares of 10p each,and its principal countries of operation are the United Kingdom (propertyinvestment) and South Africa (coal mining). Bisichi is an associatedundertaking because London & Associated Properties PLC has a participatinginterest. Bisichi has an independent board of directors which controls itsoperating and financial policies.

The market (bid) value of this investment at 31 December 2010 was £8,700,000 (2009: £7,611,000).

12. Held to maturity investments

2010 Unlisted Loan 2009 Unlisted Loan Total Shares stock Total Shares Stock in joint ventures £'000 £'000 £'000 £'000 £'000 £'000 Cost At 1 January 1,805 5 1,800 1,805 5 1,800 Loan stock issue 180 - 180 - - - Repayments (39) - (39) - - - At 31 December 1,946 5 1,941 1,805 5 1,800

13. Trade and other receivables

2010 2009 £'000 £'000 Trade receivables 1,089 736

Amounts due from associate and joint ventures 328

196 Other receivables 206 437 Prepayments and accrued income 2,469 2,607 4,092 3,976

The directors consider that the carrying amount of trade and other receivables approximates to their fair value.

14. Investments held for trading

2010 2009 £'000 £'000

Market bid value of the listed investment 717

702portfolio Unrealised deficit of market value over cost (395)

(467)

Listed investment portfolio at cost 1,112

1,169

All investments are listed on the London Stock Exchange.

15. Trade and other payables

2010 2009 £'000 £'000 Trade payables 256 691 Amounts owed to joint ventures 1,133

1,165

Other taxation and social security costs 981

825 Other payables 801 789 Accruals and deferred income 6,851 7,957 10,022 11,427

The directors consider that the carrying amount of trade and other payables approximates to their fair value.

notes to the financial statements

for the year ended 31 December 2010 continued

16. Borrowings

Current borrowings - amounts falling due within one year

2010 2009 £'000 £'000 Bank overdrafts (unsecured) 3,863 7,216

Non-current borrowings - amounts falling due after more

than one year Term borrowings Debenture stocks: £5 million First Mortgage Debenture Stock 2013 at 11.3 per 5,000 5,000cent £1.7 million First Mortgage Debenture Stock 2016 at 8.67 1,700 1,700per cent £5 million First Mortgage Debenture Stock 2018 at 11.6 per 5,000 5,000cent £10 million First Mortgage Debenture Stock 2022 at 8.109 9,804 9,787per cent* 21,504 21,487 Term bank loans:

£60 million revolving credit facility repayable in 2012*+ 44,855 56,494

£70 million term bank loan repayable in 2014* 69,847 69,807 114,702 126,301 136,206 147,788

\* The £10 million debenture and bank loans are shown after deduction of outstanding amortised issue costs.

+The £60 million facility was reduced from £90 million and the term extended by a year to September 2012.

Interest payable on the term bank loans is variable being based upon the London inter-bank offered rate (LIBOR) plus margin.

First Mortgage Debenture Stocks 2013, 2016, 2018 and 2022, the long term £60million bank revolving credit facility repayable in September 2012 and the longterm £70 million term bank loan repayable in November 2014 are secured onspecific freehold and leasehold properties which are included in the financialstatements at a value of £192.1 million.

The bank loans and debentures are secured by way of a first charge over the investment properties in the UK.

The Group's objectives when managing capital are:

- To safeguard the Group's ability to continue as a going concern, so that it may provide returns for shareholders and benefits for other stakeholders; and

- To provide adequate returns to shareholders by ensuring returns are commensurate with the risk.

17. Financial instrumentsTreasury policyThe Group enters into derivative transactions such as interest rate swaps andforward exchange contracts in order to help manage the financial risks arisingfrom the Group's activities. The main risks arising from the Group's financingstructure are interest rate risk, liquidity risk and market price risk. Thepolicies for managing each of these risks and the principal effects of thesepolicies on the results are summarised below.

Interest rate risk

Treasury activities take place under procedures and policies approved andmonitored by the Board to minimise the financial risk faced by the Group. Thebank loans are secured by way of a first charge on certain fixed assets. Therates of interest vary based on LIBOR in the UK.

Sensitivity analysis

As all term debt has been covered by hedged derivatives it is not considered that there is any material sensitivity for the Group to changes in interest rates.

Liquidity risk

The Group's policy is to minimise refinancing risk by balancing its exposure tointerest risk and to refinancing risk. In effect the Group seeks to borrow foras long as possible at the lowest acceptable cost. Efficient treasurymanagement and strict credit control minimise the costs and risks associatedwith this policy which ensures that funds are available to meet commitments asthey fall due. Cash and cash equivalents earn interest at rates based on LIBORin the UK. These facilities are considered adequate to meet the Group'santicipated cash flow requirements for the foreseeable future.

notes to the financial statements

for the year ended 31 December 2010 continued

17. Financial instruments continued

The table below analyses the Group's financial liabilities into maturityGroupings and also provides details of the liabilities that bear interest at fixed, floating andnon-interest bearing rates. Less 2-5 Over 5 2010 than years years Total 1 year £'000 £'000 £'000 £'000 Bank overdrafts (floating) 3,863 - - 3,863 Debentures (fixed) - 5,000 16,700 21,700 Bank loans (floating)* - 115,104 - 115,104 Trade and other payables 10,022 - - 10,022(non-interest) 13,885 120,104 16,700 150,689 Less 2-5 Over 5 2009 than 1 years years Total year £'000 £'000 £'000 £'000 Bank overdrafts (floating) 7,216 - - 7,216 Debentures (fixed) - 5,000 16,700 21,700 Bank loans (floating)* - 126,679 - 126,679 Trade and other payables 11,427 - - 11,427(non-interest) 18,643 131,679 16,700 167,022

The Group would normally expect that sufficient cash is generated in the operating cycle to meet the contractual cash flows as disclosed above through effective cash management.

*All the bank loans are fully hedged with appropriate interest derivatives. Details of all hedges are shown below.

Market price risk

The Group is exposed to market price risk through interest rate and currency fluctuations.

Credit riskAt the balance sheet date there were no significant concentrations of creditrisk. The maximum exposure to credit risk is represented by the carrying amountof each financial asset in the balance sheet. The Group only deposits surpluscash with well-established financial institutions of high quality creditstanding.

Borrowing facilities

At 31 December 2010 London & Associated Properties PLC was within its bankborrowing facilities and was not in breach of any of the covenants. Overdraftsare renewable annually. Term loan repayments are as set out below. Details ofother financial liabilities are shown in notes 15 and 16.The Group has undrawn facilities of £16,033,000 (2009: £35,105,000) as follows: 2010 2009 £'000 £'000 Overdrafts 1,137 1,784 Term facilities expiring in two to five years 14,896 33,321 16,033 35,105Hedge profilea) There is a hedge to cover part of the £60 million revolving credit facility,which currently covers the full £45 million drawn. It consists of a 20 yearswap for £15.4 million (2009: £35 million) with a 7 year call option in favourof the bank, taken out in November 2007, at 4.76 per cent and a 20 year swapfor £40 million with a 7 year call option in favour of the bank, taken out inDecember 2007, at 4.685 per cent.b) There is a hedge to cover the £70 million term bank loan drawn. It consistsof a 20 year swap for £70 million with a 7 year call option in favour of thebank, taken out in November 2007, at 4.76 per cent.At the year end the amount recognised was £9,811,000 deficit (2009: £4,570,000deficit) being the estimated financial effect of the fair value to the businessof these hedging instruments less the deferred tax thereon.

During the year the Company broke £19.6 million of the 4.76 per cent swap at a cost of £3.515 million.

The Directors have estimated the financial effect of the fair value to thebusiness of these hedging instruments. This has been calculated as the NetPresent Value of the difference between the 17 year interest rate, which was3.85 per cent at 31 December 2010 against the rate payable under the specifichedge. This has given a liability at 31 December 2010 of £13,627,000 (2009: £6,347,000) as shown in the balance sheet and this value changes byapproximately £1,600,000 for each 0.1% change in interest rate. The banks owninitial quotation at 31 December 2010 to close each of the hedges was £16,236,000 (2009: £9,918,000). It is not the company's intention to crystallisethe derivatives.Under IAS 39 the hedges are not deemed to be eligible for hedge accounting andany movement in the value of the hedges is therefore charged directly to theconsolidated income statement. The banks have an option to cancel the hedges inNovember 2014 and January 2015. The cost to the Group to exit the instrumentsbefore November 2014 and January 2015 has been attributed a cost by the bank of£5,679,000 (2009:£8,466,000). It is not the intention of the Directors to exitthe instruments and this cost has not been recognised.

During the year the company broke £19.6 million of the 4.76 per cent swap at a cost of £3.515 million.

notes to the financial statements

for the year ended 31 December 2010 continued

17. Financial instruments continued

Fair value of financial instruments

Fair value estimation

Effective 1 January 2009, the Group adopted amendment to IFRS 7 for financialinstruments that are measured in the balance sheet at fair value, this requiresdisclosure of fair value measurements by level of the following fair valuehierarchy:

* Quoted prices (unadjusted) in active markets for identical assets or

liabilities (level 1).

* Inputs other than quoted prices included within level 1 that are observable

for the asset or liability, either directly (that is, as prices) or

indirectly (that is, derived from prices) (level 2).

* Inputs for the asset or liability that are not based on observable market

data (that is unobservable inputs) (level 3). 2010 Level 1 Level 2 Level 3 Total Gain/ (loss) to income statement £'000 £'000 £'000 £'000 £'000 Financial assets

Other financial assets held for

trading Quoted equities 717 - - 717 15 Financial liabilities

Derivative financial instruments

Interest rate swaps - - 13,627 13,627 (7,280) 2009 Level 1 Level 2 Level 3 Total Gain/ (loss) to income statement £'000 £'000 £'000 £'000 £'000 Financial assets

Other financial assets held for

trading Quoted equities 702 - - 702 178 Financial liabilities

Derivative financial instruments

Interest rate swaps - - 6,347 6,347 13,269Capital structure

The Group sets the amount of capital in proportion to risk. It ensures that thecapital structure is commensurate to the economic conditions and riskcharacteristics to the underlying assets. In order to maintain or adjust thecapital structure, the Group may adjust the capital structure, vary the amountof dividends paid to shareholders, return capital to shareholders, issue newshares or sell assets to reduce debt.

The Group considers its capital to include share capital, share premium, capital redemption reserve, translation reserve and retained earnings, but excluding the interest rate derivatives.

Consistent with others in the industry, the Group monitors its capital by itsdebt to equity ratio (gearing levels). This is calculated as the net debt(loans less cash and cash equivalents) as a percentage of the equity. During2010 this decreased to 189.8 per cent (2009: 223.6 per cent) which wascalculated as follows: 2010 2009 £'000 £'000 Total debt 140,069 155,004 Less cash and cash equivalents (8,584) (8,655) Net debt 131,485 146,349 Total equity 69,388 65,451 189.5% 223.6%

The gearing reduced primarily due to the reduction in the debt in the year. Allthe debt, apart from the overdrafts, is at fixed rates of interest as shown innotes 16 and 17. The Group does not have any externally imposed capitalrequirements.

Financial assets

Financial assets are disclosed in notes 12, 13 and 14 and above.

The Group's principal financial assets are bank balances and cash, trade andother receivables and investments. The Group has no significant concentrationof credit risk as exposure is spread over a large number of counterparties andcustomers. The credit risk in liquid funds and derivative financial instrumentsis limited because the counterparties are banks with high credit ratingsassigned by international credit-rating agencies. The Group's credit risk isprimarily attributable to its trade receivables. The amounts presented in thebalance sheet are net of allowances for doubtful receivables, estimated by theGroup's management based on prior experience and the current economicenvironment.

notes to the financial statements

for the year ended 31 December 2010 continued

17. Financial instruments continued

Financial assets maturity

Cash and cash equivalents all have a maturity of less than three months.

2010 2009 £'000 £'000 Cash at bank and in hand 8,584 8,655

These funds are primarily invested in short term bank deposits maturing within one year bearing interest at the bank's variable rates. £Nil (2009: £0.6 million) of the cash is secured against the 2022 First Mortgage Debenture.

Financial liabilities maturity

Repayment of borrowings 2010 2009 £'000 £'000 Bank loans and overdrafts: Repayable on demand or within one year 3,863

7,216

Repayable between two and five years 114,702 126,301 118,565 133,517 Debentures: Repayable between two and five years 5,000

5,000

Repayable in more than five years 16,504 16,487 140,069 155,004

Certain borrowing agreements contain financial and other conditions that if contravened by the Group, could alter the repayment profile.

Group undrawn banking facilities

which expire within one year 1,137 1,784 which expire in two to five years 14,896 33,321 16,033 35,105

Interest rate risk and hedge profile

2010 2009 £'000 £'000 Fixed rate borrowings 21,700 21,700 Floating rate borrowings - Subject to interest rate swap 125,400 145,000 - Excess hedge (10,296) (11,105) 136,804 155,595 Average fixed interest rate 9.69% 9.69% Weighted average swapped interest rate 5.57%

5.58%

Weighted average cost of debt on overdrafts, bank loans 6.12% 5.97%and debentures Average period for which borrowing rate is fixed 8.5 years 9.5

years

Average period for which borrowing rate is swapped 16.9 years 17.9 years

The swapped interest rate have calls by the bank 3.9 years 4.9

years

The Group's floating rate debt bears interest based on LIBOR for the term bank loans and Bank base rate for the overdrafts.

notes to the financial statements

for the year ended 31 December 2010 continued

17. Financial instruments continued

Total financial assets and liabilities

The Group's financial assets and liabilities and their fair values are asfollows: 2010 2009 Fair Carrying Fair Carrying value value value value £'000 £'000 £'000 £'000 Cash and cash equivalents 8,584 8,584 8,655 8,655 Financial assets - 717 717 702 702

investments held for trading

Other assets 4,092 4,092 3,976 3,976 Derivative liabilities (13,627) (13,627) (6,347) (6,347) Bank overdrafts (3,863) (3,863) (7,216) (7,216) Bank loans (115,104) (114,702) (126,679) (126,301) Present value of head leases (28,664) (28,664) (29,485) (29,485)on properties Other liabilities (10,022) (10,022) (12,168) (12,168) Before debentures (157,887) (157,485) (168,562) (168,184)

Fair value of debenture stocks

Fair value of the Group's debenture Book Fair 2010 2009 liabilities: value value Fair value Fair Value adjustment adjustment £'000 £'000 £'000 £'000 Debenture stocks 21,700 26,589 (4,889) (7,483)Tax at 28 per cent (2009: 28 1,369 2,095 per cent) Post tax fair value (3,520) (5,388) adjustment Post tax fair value (4.21)p (9.40)p adjustment - basic pence per share

There is no material difference in respect of other financial liabilities or any financial assets.

The fair values were calculated by the directors as at 31 December 2010 and reflect the replacement value of the financial instruments used to manage the Group's exposure to adverse rate movements.

The fair values of the debentures are based on the net present value at the relevant gilt interest rate of the future payments of interest on the debentures. The bank loans and overdrafts are at variable rates and there is no material difference between book values and fair values.

notes to the financial statements

for the year ended 31 December 2010 continued

18. Deferred tax 2010 2009 £'000 £'000 Balance at 1 January 6,395 2,808 Transfer to profit and loss account (6,331) 3,587 Balance at 31 December 64 6,395

The deferred tax balance comprises the

following: Revaluation of investment properties 2,953

5,733

Accelerated capital allowances 2,213

2,116

Fair value of interest derivatives (3,815) (1,777) Short-term timing differences 1,320 1,321 2,671 7,393 Loss relief (2,607) (998) Provision at end of period 64 6,395

The directors consider the temporary differences arising in connection with theinterests in associate and joint ventures are insignificant. There is no timelimit in respect of the Group tax loss relief.19. Share capital Number of Number of 2010 2009 ordinary ordinary 10p shares 10p shares 2010 2009 £'000 £'000

Authorised: Ordinary shares of 110,000,000 110,000,000 11,000

11,00010p each

Allotted, issued and fully paid 83,922,029 82,316,972 8,392

8,232

Ordinary shares of 10p - issued 1,620,682 1,605,057 162

160during the year Share capital 85,542,711 83,922,029 8,554 8,392 Less: held in Treasury (see (1,957,534) (4,293,051) (196) (429)below) "Issued share capital" for 83,585,177 79,628,978 8,358 7,963reporting purposes

The company has one class of ordinary shares which carry no right to fixed income.

The company issued a further 1,620,682 new ordinary shares of 10p each on 2July 2010, from the amount standing to the credit of the Company's sharepremium account and less costs incurred of £14,000. The existing shareholdersas at 4 June 2010 were entitled to the new Capitalisation Issue ordinary sharesas authorised at the Annual General Meeting on 7 June 2010.Treasury shares Number of ordinary 10p shares Cost/issue value 2010 2009 2010 2009 Date Price £'000 £'000 excl. costs Shares held in Treasury at 1 4,293,051 5,873,865 4,558 6,237January Issued to meet directors Jan-10 106.18p (2,069,524) (1,214,400) (2,198) (1,290)bonuses(Feb 09 -106.18p)

Issued to meet share options - - (50,000)

- (53)exercised(Feb 09 -106.18p) Issued for new share - - (21,780) - (23)incentive plan (Mar 09 -106.18p) Issued to meet staff bonuses Jan-10 106.18p (88,021) (96,261) (93) (102)(May 09 -106.18p) Issued to meet directors' Oct-10 106.18p (19,097) - (20) -bonuses Issued for new share Oct-10 106.18p (23,702) - (25) -incentive plan

Issued for new share Dec-10 106.18p (135,173) (198,373) (144) (211) incentive plan (Dec 09

-106.18p) Shares held in Treasury at 31 1,957,534 4,293,051 2,078 4,558December

notes to the financial statements

for the year ended 31 December 2009 continued

19. Share capital continued

Share Option Schemes

Employees' share option scheme (Approved scheme)

At 31 December 2010 the following options to subscribe for ordinary shares were outstanding, issued under the terms of the Employees' Share Option Scheme:

Number of shares Date of grant Option Price Normal Exercise Date 70,000 14 October 2003 39.5p 14 October 2006 to 13 October 2013

This share option scheme was approved by members in 1986, and has been approved by Her Majesty's Revenue and Customs (HMRC).

There are no performance criteria for the exercise of options under the Approved scheme, as this was set up before such requirements were considered to be necessary.

A summary of the shares allocated and options issued under the scheme up to 31December 2010 is as follows: Changes during the year At 1 Options Options Options At January lapsed 2010 Exercised granted 31 December 2010 Shares issued to date 2,367,604 - - - 2,367,604 Options granted which have not been 70,000 - - - 70,000exercised Shares allocated over which options 1,549,955 - - - 1,549,955have not been granted

Total shares allocated for issue to 3,987,559 - - - 3,987,559 employees under the scheme

Non-approved Executive Share Option Scheme (Unapproved scheme)

A share option scheme known as the "Non-approved Executive Share Option Scheme"which does not have HMRC approval was set up during 2000. At 31 December 2010there were no options to subscribe for ordinary shares outstanding.

The exercise of options under the Unapproved scheme is subject to the satisfaction of objective performance conditions specified by the remuneration committee which conforms to institutional shareholder guidelines and best practice provisions.

A summary of the shares allocated and options issued under the scheme up to 31December 2010 is as follows:Changes during year Changes during the year At 1 Options Options Options At January lapsed 2010 Exercised granted 31 December 2010 Shares issued to date 450,000 - - - 450,000

Options granted which have not been - - - -

-exercised Shares allocated over which options 550,000 - - - 550,000have not yet been granted

Total shares allocated for issue to 1,000,000 - - - 1,000,000 employees under the scheme

notes to the financial statements

for the year ended 31 December 2010 continued

20. Related party transactions

Cost Amounts Owed Cash advanced recharged to (to) by to (by) (by) related related party related party party £'000 £'000 £'000 Related party: Analytical Ventures Limited Current Account 42 4 - Dragon Retail Properties Limited Current account 72 72 - Loan account - (1,205) - Bisichi Mining PLC Current account 359 (i) 326 - Directors and key management M A Heller and J A Heller 10 (ii) - - H D Goldring (Delmore Asset (25) (iii) - -Management Limited) C A Parritt (25) (iv) - - Totals at 31 December 2010 433 (803) - Totals at 31 December 2009 406 (1,021) 225

Nature of costs recharged - (i) Management fees (ii) Property management fees (iii) Portfolio management fees (iv) Consultancy fees.

The related party companies above are the associate and joint ventures and are treated as non current asset investments - details are shown in Note 10 and 11.

Analytical Ventures Limited (joint venture)Analytical Ventures Limited (Analytical Ventures) is owned 50 per cent by thecompany and 50 per cent by the Bank of Scotland.Dragon Retail Properties Limited (joint venture)Dragon Retail Properties Limited (Dragon) is owned 50 per cent by the company,and 50 per cent by Bisichi Mining PLC.Dragon had surplus cash which was deposited equally with London & AssociatedProperties PLC and Bisichi Mining PLC.The company provides office premises, property management, general management,accounting and administration services for both joint ventures.Bisichi Mining PLC (associate)The company provides office premises, property management, general management,accounting and administration services for Bisichi Mining PLC and itssubsidiaries.

Directors

London & Associated Properties PLC provides office premises, propertymanagement, general management, accounting and administration services for anumber of private property companies in which M A Heller and J A Heller have aninterest. Under an agreement with M A Heller no charge is made for theseservices on the basis that he reduces by an equivalent amount the charge forhis services to London & Associated Properties PLC. The board estimates thatthe value of these services, if supplied to a third party, would have been £275,000 for the year (2009: £275,000).The companies for which services are provided are: Barmik Properties Limited,Cawgate Limited, Clerewell Limited, Cloathgate Limited, Ken-Crav InvestmentsLimited, London & South Yorkshire Securities Limited, Metroc Limited, PenrithRetail Limited, Shop.com Limited, South Yorkshire Property Trust Limited,Wasdon Investments Limited, Wasdon (Dover) Limited, and Wasdon (Leeds) Limited.

In addition the company received management fees of £40,000 (2009: £40,000) for work done for two charitable foundations,

the Michael & Morven Heller Charitable Foundation and the Simon Heller Charitable Trust.

Delmore Asset Management Limited (Delmore) is a company in which H D Goldringis a majority shareholder and director. Delmore provides consultancy servicesto the company on an invoiced fee basis.

M A Heller is a director of Bisichi Mining PLC, the associated company and received a salary of £75,000 (2009: £75,000) for services.

The directors are considered to be the only key management personnel and theirremunerations including employers national insurance for the year were £1,504,000 (2009: £2,192,000). All other disclosures required including interestin share options in respect of those directors are included within theremuneration report.

21. Employees

The average number of employees, including directors, of the Group during the year involved in management and administration was 36 (2009: 37).

2010 2009 £'000 £'000

Staff costs during the year were as follows:

Salaries and other costs 1,873 2,575 Social security costs 386 325 Pension costs 372 461 2,631 3,361

notes to the financial statements

for the year ended 31 December 2010 continued

22. Capital Commitments 2010 2009 £'000 £'000

Commitments to capital expenditure contracted for at -

500

the year end

The Group's share of capital commitments of joint ventures at the year end amounted to £Nil (2009: £Nil).

23. Commitments under operating and finance leases

Operating leases on land and buildings

At 31 December 2010 the Group has total future minimum commitments under non-cancellable operating leases on land and buildings as follows:

2010 2009 £'000 £'000 Within one year 399 390 In the second to fifth years inclusive 1,197 1,495 After five years - - 1,596 1,885

Operating lease payments represent rentals payable by the Group for its office premises.

The leases are for an average term of 5 years and rentals are fixed for an average of one year.

Present value of head leases on properties

Minimum lease Present value of minimum payments lease payments 2010 2009 2010 2009 £'000 £'000 £'000 £'000

Amounts payable under finance

leases: Within one year 1,821 1,874 1,821 1,874 In the second to fifth years 7,285 7,497 6,970 6,967inclusive After five years 229,114 234,145 20,073 20,644 238,220 243,516 28,864 29,485 Future finance charges on (209,556) (214,031) - -finance leases Present value of finance 28,664 29,485 28,864 29,485lease liabilities Finance lease liabilities are in respect of leased investment property. Manyleases provide for contingent rent in addition to the rents above, usually aproportion of rental income.

Finance lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

Future aggregate minimum rentals receivable

The Group leases out its investment properties to tenants under operating leases. The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:

2010 2009 £'000 £'000 Within one year 11,811 13,156 In the second to fifth years inclusive 40,537 48,079 After five years 41,273 67,808 93,621 129,04324. Contingent Liabilities

There were no contingent liabilities at 31 December 2010 (2009: £Nil), except as disclosed in Note 17.

notes to the financial statements

for the year ended 31 December 2010 continued

25. Company financial statements

Company balance sheet at 31 December 2010

Notes 2010 2009 £'000 £'000 Fixed assets Tangible assets 25.3 86,758 87,333 Other investments: Associated company 25.4 358 358 Subsidiaries and others 25.4 46,431 46,290 25.4 46,789 46,648 133,547 133,981 Current assets Debtors 25.5 22,553 19,638 Investments 25.6 717 702 Bank balances 5,966 6,653 29,236 26,993 Creditors Amounts falling due within one year 25.7 (42,416)

(25,171)

Net current (liabilities)/assets (13,180)

1,822

Total assets less current liabilities 120,367 135,803 Creditors Amounts falling due after more than 25.8 (72,146) (81,063)one year Net assets 48,221 54,740 Capital and reserves Share capital 25.10 8,554 8,392 Share premium account 25.11 4,866 5,042 Capital redemption reserve 25.11 47 47 Revaluation reserve 25.11 13,407 13,779 Treasury shares 25.10 (2,078) (4,558) Retained earnings 25.11 23,425 32,038 Shareholders' funds 48,221 54,740

These financial statements were approved by the board of directors and authorised for issue on 15 April 2011 and signed on its behalf by:

M A Heller R J Corry

DirectorDirector

Company Registration No. 341829 notes to the financial statements

for the year ended 31 December 2010 continued

25.1. Company

accounting policies

The following are the main accounting policies of the company:

Basis of accountingThe financial statements have been prepared under the historical costconvention as modified to include the revaluation of freehold and leaseholdproperties and fair value adjustments in respect of current asset investmentsand interest rate hedges and in accordance with applicable accountingstandards. All accounting policies applied are consistent with those of priorperiods.Investment properties are accounted for in accordance with SSAP 19, "Accountingfor Investment Properties", which provides that these should not be subject toperiodic depreciation charges, but should be shown at open market value. Thisis contrary to the Companies Act 2006 which states that, subject to anyprovision for depreciation or diminution in value, fixed assets are normally tobe stated at purchase price or production cost. Current cost accounting or therevaluation of specific assets to market value, as determined at the date oftheir last valuation, is also permitted.The treatment of investment properties under the Companies Act 2006 does notgive a true and fair view as these assets are not held for consumption in thebusiness but as investments, the disposal of which would not materially affectany manufacturing or trading activities of the enterprise. In such a case it isthe current value of these investments, and changes in that current value,which are of prime importance. Consequently, for the proper appreciation of thefinancial position, the accounting treatment required by SSAP 19 is consideredappropriate for investment properties. Details of the current value andhistorical cost information for investment properties are set out in note25.3.Depreciation or amortisation is only one of the many factors reflected inthe annual revaluation and the amount that might otherwise have been showncannot be separately identified or quantified.

The financial statements have been prepared on a going concern basis. Further details of which are contained in the Directors' report.

Revenue

Revenue comprises rental income, listed investment sales, dividends and other income. The profit or loss on disposal of properties is recognised on completion of sale.

Dividends receivable Dividends are credited to the profit and loss account when the dividend is received.

Tangible fixed assetsa) Investment propertiesAn external professional valuation of investment properties is carried outevery year. Properties professionally valued by Chartered Surveyors are on anexisting use open market value basis, in accordance with the PracticeStatements contained within the RICS valuation standards 2010 prepared by theRoyal Institution of Chartered Surveyors.

The cost of improvements includes attributable interest.

b) Other tangible fixed assetsOther tangible fixed assets are stated at historical cost. Depreciation isprovided on all other tangible fixed assets at rates calculated to write eachasset down to its estimated residual value evenly over its expected usefullife. The rates generally used are - office equipment - 10 to 33 per cent perannum, and motor vehicles - 20 per cent per annum, on a straight line basis.

Investments

Long term investments are described as participating interests and are classified as fixed assets. Short term investments are classified as current assets.

a) Investments held as fixed assetsThese comprise investments in subsidiaries and investments in AnalyticalVentures Limited and Dragon Retail Properties Limited (unlisted jointventures), Bisichi Mining PLC (listed associate), and in unlisted companieswhich are all held for the long term. Provision is made for any impairment inthe value of fixed asset investments.b) Investments held as current assetsInvestments held for trading are included in current assets and are revalued tofair value. For listed investments, fair value is the bid market listed valueat the balance sheet date. Realised and unrealised gains or losses arising fromchanges in fair value are included in the income statement of the period inwhich they arise.Financial InstrumentsBank loans and overdraftsBank loans and overdrafts are included in creditors on the company balancesheet at the amounts drawn on the particular facilities. Interest payable onthose facilities is expensed as a finance cost in the period to which itrelates.Interest rate derivativesThe company uses derivative financial instruments to hedge the interest raterisk associated with the financing of the company's business. No trading insuch financial instruments is undertaken. At each reporting date, theseinterest rate derivatives are recognised at their fair value to the business,being the Net Present Values of the difference between the hedged rate ofinterest and the rate of interest for the remaining period of the hedge.Where a derivative is designated as a hedge of the variability of a highlyprobable forecast transaction i.e. an interest payment, the element of the gainor loss on the derivative that is an effective hedge is recognised directly inequity. When the forecast transaction subsequently results in the recognitionof a financial asset or a financial liability, the associated gains or lossesthat were recognised directly in equity are reclassified into the incomestatement in the same period or periods during which the asset acquired orliability assumed affects the income statement i.e. when interest income orexpense is recognised.

The gain or loss arising from any adjustment to the fair value to the business is recognised in the income statement.

Debtors

Debtors do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated recoverable amounts.

Creditors

Creditors are not interest bearing and are stated at their nominal value.

Joint venturesInvestments in joint ventures, being those entities over whose activities theGroup has joint control as established by contractual agreement, are includedat cost.Deferred taxationDeferred tax is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents that result in an obligation to pay more tax in the future or a right topay less tax in the future have occurred at the balance sheet date. Timingdifferences are differences between the company's taxable profits and itsresults as stated in the financial statements. Deferred tax is measured at theaverage tax rates which are expected to apply in the periods in which timingdifferences are expected to reverse, based on tax rates and laws that have beenenacted or substantially enacted by the balance sheet date. Deferred tax ismeasured on a non-discounted basis.Leased assets and obligationsAll leases are "Operating Leases" and the annual rentals are charged to theprofit and loss account on a straight line basis over the lease term. Rent freeperiods or other incentives received for entering into a lease are accountedfor over the period of the lease so as to spread the benefit received over thelease term.Retirement benefitsFor defined contribution schemes the amount charged to the profit and lossaccount in respect of pension costs and other post retirement benefits is thecontributions payable for the year. Differences between contributions payablein the year and contributions actually paid are shown as either prepayments oraccruals at the balance sheet date.

notes to the financial statements

for the year ended 31 December 2010 continued

25.2. (Loss)/profit for the financial year

The company's loss for the year was £6,182,000 (profit 2009: £1,613,000). In accordance with the exemption conferred by Section 408 of the Companies Act 2006, the company has not presented its own profit and loss account.

25.3. Tangible assets Investment Properties Total Freehold Long Short Office leasehold leasehold Equipment and motor vehicles £'000 £'000 £'000 £'000 £'000 Cost or valuation at 1 88,294 62,678 23,840 - 1,776January 2010 Reclassification - - (570) 570 - Additions 78 - - - 78 Disposals (222) - - - (222) Increase/(decrease) on (372) 445 (747) (70) -revaluation Cost or valuation at 31 87,778 63,123 22,523 500 1,632December 2010 Representing assets stated at: Valuation 86,146 63,123 22,523 500 - Cost 1,632 - - - 1,632 87,778 63,123 22,523 500 1,632 Depreciation at 1 961 - - - 961January 2010 Charge for the year 196 - - - 196 Disposals (137) - - - (137) Depreciation at 31 1,020 - - - 1,020December 2010 Net book value at 1 87,333 62,678 23,840 - 815January 2010 Net book value at 31 86,758 63,123 22,523 500 612December 2010

The freehold and leasehold properties were valued as at 31 December 2010 byexternal professional firms of chartered surveyors. The valuations were made atopen market value on the basis of existing use. The increase in book value wastransferred to revaluation reserve. 2010 2009 £'000 £'000 Allsop LLP 81,950 82,495 BNP Paribas Real Estate 4,196 4,023 86,146 86,518

The historical cost of investment properties, including total capitalised interest of £1,222,000 (2009: £1,222,000) was as follows:

Freehold Long Short Leasehold Leasehold £'000 £'000 £'000 Cost at 1 January 2010 54,620 18,078 - Reclassification - (785) 785 Additions - - - Disposals - - - Cost at 31 December 2010 54,620 17,293 785

Long leasehold properties are held on leases with an unexpired term of more than fifty years at the balance sheet date.

notes to the financial statements

for the year ended 31 December 2010 continued

25.4. Other investments

Shares in Loan stock Shares Loan Shares in Unlisted Total in in stock subsidiary subsidiary in joint associate shares joint companies companies ventures ventures Cost £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 January 2010 46,648 40,663 3,658 164 1,800 358 5 Loan stock issued 180 - - - 180 - - Repayments (39) - - - (39) - - At 31 December 46,789 40,663 3,658 164 1,941 358 52010 Subsidiary companiesThe company owns 100 per cent of the ordinary share capital of the followingcompanies that are trading, all of which are registered in England and Wales: Activity % Held by % Held by company Group

LAP Ocean Holdings Limited Property investment 100 100

Antiquarius Limited Property investment - 100 Brixton Village Limited Property investment - 100 Market Row Limited Property investment - 100 Ski Investments Limited Property investment - 100 Analytical Properties Property investment 100 100 Holdings Limited

Analytical Properties Limited Property investment - 100

Analytical Properties (St Property investment - 100 Helens) Limited London & Associated Property Management 100 100 Management Services Limited Services

In the opinion of the directors the value of the investment in subsidiaries is not less than the amount shown in these financial statements.

Details of the associate and joint ventures are set out in notes 10 and 11.

25.5. Debtors 2010 2009 £'000 £'000 Trade debtors 639 382 Amounts due from subsidiary companies 17,525

17,601

Amounts due from associate and joint ventures 328

196

Deferred tax asset (note 25.9) 2,657

267 Other debtors 41 25 Prepayments and accrued income 1,363 1,167 22,553 19,63825.6. Investments 2010 2009 £'000 £'000

Market value of the listed investment 717

702portfolio Unrealised deficit of market value over cost (395)

(467)

Listed investment portfolio at cost 1,112

1,169

All investments are listed on the London Stock Exchange.

notes to the financial statements

for the year ended 31 December 2010 continued

25.7. Creditors: Amounts falling due within one year

2010 2009 £'000 £'000 Bank overdrafts (unsecured) 3,863 7,191 Amounts owed to subsidiary companies 31,659

9,729

Amounts owed to joint ventures 1,133 1,165 Corporation tax - 741

Other taxation and social security costs 649

576 Other creditors 328 360 Accruals and deferred income 4,784 5,409 42,416 25,171

25.8. Creditors: Amounts falling due after more than one year

2010 2009 £'000 £'000 Interest rate derivatives 5,787 3,082 Term Debenture stocks:

£5 million First Mortgage Debenture Stock 2013 5,000

5,000at 11.3 per cent

£1.7 million First Mortgage Debenture Stock 1,700

1,7002016 at 8.67 per cent

£5 million First Mortgage Debenture Stock 2018 5,000

5,000at 11.6 per cent

£10 million First Mortgage Debenture Stock 9,804

9,7872022 at 8.109 per cent* 21,504 21,487 Term bank loans: Repayable after more than two years*+ 44,855 56,494 72,146 81,063

\* The £10 million debenture and bank loans are shown after deduction of un-amortised issue costs.

+The £60 million facility was reduced from £90 million and the term extended by a year to September 2012.

Details of terms and security of overdrafts, loans and debentures are set outin note 16.Repayment of borrowings: Bank loans and overdrafts: Repayable within one year 3,863 7,191 Repayable between two and three years 44,855 56,494 48,718 63,685 Debentures: Repayable between three and five years 5,000

5,000

Repayable in more than five years 16,504 16,487 70,222 85,172Hedge profileThere is a hedge to cover part of the £60 million revolving credit facility,which currently covers the full £45 million drawn.It consists of a 20 year swap for £15.4 million (2009: £35 million) with a 7year call option in favour of the bank, taken out in November 2007, at 4.76 percent and a 20 year swap for £40 million with a 7 year call option in favour ofthe bank, taken out in December 2007, at 4.685 per cent.At the year end the amount recognised was £4,166,000 deficit (2009: £2,219,000deficit) being the estimated financial effect of the fair value to the businessof these hedging instruments less the deferred tax thereon.The Directors have estimated the financial effect of the fair value to thebusiness of these hedging instruments. This has been calculated as the NetPresent Value of the difference between the 17 year interest rate, which was3.85 per cent at 31 December 2010 against the rate payable under the specifichedge. This has given a liability at 31 December 2010 of £5,787,000 (2009: £3,082,000) as shown in the balance sheet. The banks own initial quotation at 31December 2010 to close each of the hedges was £7,180,000 (2009: £5,047,000).The hedges arenot deemed to be eligible for hedge accounting, as the banks havean option to cancel the hedge in January 2015, to which they separatelyattribute a cost of £2,511,000 (2009: £4,518,000), even though this is afterthe expiry of the term loans and the level of the hedges closely equate to theamount of the loans outstanding. Any movement in the value of the hedges hastherefore to be charged directly to the Income Statement. The cost to thecompany to exit the instruments before January 2015 has been attributed a costby the bank of £2,511,000 (2009:£4,518,000). It is not the intention of theDirectors to exit the instruments and this cost has not been recognised.

During the year the company broke £19.6 million of the 4.76 per cent swap at a cost of £3.515 million.

notes to the financial statements

for the year ended 31 December 2010 continued

25.8. Creditors: Amounts falling due after more than one year continued

Fair value of financial instruments

Fair value estimation

Effective 1 January 2009, the Group adopted amendment to FRS29 for financialinstruments that are measured in the balance sheet at fair value, this requiresdisclosure of fair value measurements by level of the following fair valuehierarchy:

* Quoted prices (unadjusted) in active markets for identical assets or

liabilities (level 1).

* Inputs other than quoted prices included within level 1 that are observable

for the asset or liability, either directly (that is, as prices) or

indirectly (that is, derived from prices) (level 2).

* Inputs for the asset or liability that are not based on observable market

data (that is unobservable inputs) (level 3). 2010 Level 1 Level 2 Level 3 Total Gain/ (loss) to £'000 £'000 £'000 £'000 income statement £'000 Financial assets Other financial assets held for trading Quoted equities 717 - - 717 15 Financial liabilities Derivative financial instruments Interest rate swaps - - 5,787 5,787 (2,705) 2009 Level 1 Level 2 Level 3 Total Gain/ (loss) to £'000 £'000 £'000 £'000 income statement £'000 Financial assets Other financial assets held for trading Quoted equities 702 - - 702 178 Financial liabilities Derivative financial instruments Interest rate swaps - - 3,082 3,082 6,844

notes to the financial statements

for the year ended 31 December 2010 continued

25.8. Creditors: Amounts falling due after more than one year continued

Liquidity

The table below analyses the company's financial liabilities into maturity Groupings and also provides details of the liabilities that bear interest at

Fixed, floating and non-interest bearing rates.

Less than Over20101 year2-5 years 5 years Total £'000 £'000 £'000 £'000 Bank overdrafts (floating) 3,863 - - 3,863 Debentures (fixed) - 5,000 16,700 21,700 Bank loans (floating)* - 45,104 - 45,104 Trade and other payables 38,553 - - 38,553(non-interest) 42,416 50,104 16,700 109,220 Less 2-5 Over 5 2009 than 1 years years year Total £'000 £'000 £'000 £'000 Bank overdrafts (floating) 7,191 - - 7,191 Debentures (fixed) - 5,000 16,700 21,700 Bank loans (floating)* - 56,679 - 56,679 Trade and other payables 17,980 - - 17,980(non-interest) 25,171 61,679 16,700 103,550

The company would normally expect that sufficient cash is generated in the operating cycle to meet the contractual cash flows as disclosed above through effective cash management.

\* The bank loans are fully hedged with appropriate interest derivatives. Details of the hedges are shown above.

Total financial assets and liabilities

The company's financial assets and liabilities and their fair values are asfollows: Fair 2010 Fair 2009 value Carrying value Carrying value value £'000 £'000 £'000 £'000 Cash and cash equivalents 5,966 5,966 6,653 6,653 Investments 717 717 702 702 Other assets 22,553 22,553 19,638 19,638 Bank overdrafts (3,863) (3,863) (7,191) (7,191) Bank loans (45,104) (44,855) (56,679) (56,494) Derivative liabilities (5,787) (5,787) (3,082) (3,082) Other liabilities (38,553) (38,553) (17,980) (17,980) Before debentures (64,071) (63,822) (57,939) (57,754)

Additional details of borrowings and financial instruments are set out in notes 16 and 17.

notes to the financial statements

for the year ended 31 December 2009 continued

25.9. Provisions for liabilities and charges

2010 2009 £'000 £'000 Deferred Taxation Balance at 1 January (267) (1,350) Transfer to profit and loss account (2,390) 1,083 Balance at 31 December (2,657) (267)

No provision has been made for the approximate taxation liability at 28 per cent (2009: 28 per cent) of £992,000 (2009: £649,000) which would arise if the investment properties were sold at the stated valuation.

The deferred tax balance comprises the following:Accelerated capital allowances 1,243 1,189 Fair value of interest derivatives (1,620) (863)

Short-term timing differences 153 233 Losses (2,433) (826) Provision at end of period (2,657) (267) 25.10. Share capitalDetails of share capital, treasury shares and share options are set out in note19.25.11. Reserves Share Capital Revaluation Retained Total Premium redemption reserve Account reserve Earnings £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2010 5,042 47 13,779 32,038 50,906 Decrease on valuation of - - (372) - (372)investment properties Retained loss for year - - - (6,182) (6,182) Dividends paid in year - - - (924) (924) Loss on disposal of Treasury - - - (1,507) (1,507)Shares Capitalisation issue of new (176) - - - (176)ordinary shares and expenses Balance at 31 December 2010 4,866 47 13,407 23,425 41,745

25.12. Related party transactions

Details of related party transactions are given in note 20.

As provided under Financial Reporting Standard 8: Related Party Disclosures,the company has taken advantage of the exemption from disclosing transactionswith other Group companies.25.13. Capital commitments 2010 2009 £'000 £'000

Commitments to capital expenditure contracted for at the - - year end

25.14. Commitments under operating leases

At 31 December 2010 the company had annual commitments under non-cancellable operating leases on land and buildings as follows:

2010 2009 £'000 £'000

Expiring in more than one year but less than 390 -five years Expiring in more than five years - 390

In addition, the company has an annual commitment to pay ground rents on its leasehold investment properties which amount to £344,000 (2009: £323,000).

25.15. Contingent liabilities

There were no contingent liabilities at 31 December 2010 (2009: £Nil), except as disclosed in Note 25.8.

Five year financial summary

2010 2009 2008 2007 2006 £m £m £m £m £m Portfolio size

Investment properties-Group^ 195 214 219 248 193

Investment properties-joint 13 13 13 3

91ventures Investment 12 12 12 15 17properties-associate 220 239 244 266 301 Portfolio activity £m £m £m £m £m Acquisitions - - 9.18 112.71 50.70 Disposals at book value (20.74) (17.79) (15.33) (41.37) (1.62) Capital Expenditure 0.49 3.46 9.73 9.15 5.13 (20.25) (14.33) 3.58 80.49 54.21

Consolidated income statement £m £m £m £m

£m Rental income - Group and 16.50 17.07 16.77 14.26 11.84share of joint ventures Less: attributable to joint (0.52) (0.52) (0.27) (1.23) (3.95)venture partners Group rental income 15.98 16.55 16.50 13.03 7.89 Profit/(loss) before interest 11.97 20.49 (24.91) (16.59) 21.76and tax (Loss)/profit before tax (10.69) 21.41 (57.27) (23.89) 18.32 Taxation (7.19) 2.36 (9.81) (11.38) 3.11 (Loss)/profit attributable to (3.49) 19.05 (47.45) (12.50) 15.22shareholders (Loss)/earnings per share - (4.24)p 24.32p (62.30)p (16.40)p 20.00pbasic (Loss)/earnings per share - (4.24)p 24.32p (62.30)p (16.40)p 19.97pfully diluted Dividend per share 1.15p 1.15p 1.15p 1.95p 1.85p

Consolidated balance sheet £m £m £m £m

£m Shareholders' funds 55.96 59.10 40.30 88.99 101.86 Net borrowings 130.77 145.65 157.17 147.54 86.12 Net gearing 238.68% 246.44% 390.01% 165.79% 84.55% Net assets per share - basic 66.95p 74.22p 52.73p 116.86p 133.62p - fully diluted 66.92p 74.19p 52.70p 116.73p 133.47p Consolidated cash flow £m £m £m £m £mstatement Net cash inflow from 9.58 12.18 12.02 3.97 3.44operating activities Capital investment and 20.42 13.94 (6.09) 9.84 (26.86)financial investment

Note: ^Excluding the present value of head leases

vendor