Thg Regulatory News (THG)

5 April 2012

TERRACE HILL GROUP PLC

("Terrace Hill" or the "Company")

£35 million Forward Funding Secured for Development of Sainsbury's Foodstore in Sunderland

Terrace Hill Group plc (AIM: THG), a leading UK property development and investment group, announces the completion of the forward funding of a £35 million supermarket, pre-let to Sainsbury's on a 25 year lease.

The property will comprise a new, 97,729 sq ft Sainsbury's supermarket, with six pump petrol filling station and 517 parking spaces, located in Sunderland, Tyne and Wear. Construction is due to commence in April 2012 with store opening expected in March 2013.

The acquisition and development has been forward funded by Osprey Supermarket Income and Growth 1 LP, a private investor fund arranged by Osprey Equity Partners. The project is being funded through £15 million of equity provided by UK high net worth individuals (both directly and through personal pension funds) and £20 million of debt provided by HSBC Bank plc.

The project reflects Terrace Hill's strategic decision to focus further on the supermarket development sector and is one of a number of similar developments within the Terrace Hill pipeline. On completion of the forward funding, the Company received £2.5 million representing the recovery of its working capital and an initial profit payment.

Osprey Supermarket Income and Growth 1 LP is the first of a series of private investor funds launched by Osprey Equity Partners, designed to achieve attractive income and growth returns underpinned by secure, well let, direct commercial property assets.

Philip Leech, Chief Executive of Terrace Hill, commented:

"The securing of forward funding is a significant step for the project, and underlines Terrace Hill's ability to source financing for our developments, in spite of the challenging funding environment. We continue to see potential for further growth in the foodstore sector, and believe that our activities in this market will generate good returns on behalf of our shareholders as we progress this and our pipeline of opportunities."

Quote from John White, Director and Head of Property, Osprey Equity Partners:

"We are delighted to be working with Terrace Hill and HSBC on this project. The fund was oversubscribed and reflects the appeal of secure, income producing property assets amongst private investors and SIPPs, especially against a backdrop of continuing volatility in equity markets and with historically low returns on cash deposits."

- Ends -

For further information please visit www.terracehill.co.uk or contact:

Philip Leech/Jon Austen Tel. 020 7631 1666

Terrace Hill Group PLC

Gareth Price/Mark Young Tel: 020 7710 7600

Oriel Securities (Nominated Adviser)

Richard Sunderland/Olivia Goodall/Will Henderson Tel: 020 7831 3113

FTI Consulting 

terracehill@fticonsulting.com

Osprey Equity Partners - Contacts:

Tracy Benjamin (Director, Head of Sales) Tel: 020 7195 1472

tracy.benjamin@ospreyep.com 

John White (Director, Head of Property) Tel: 020 7195 1473

john.white@ospreyep.com

Simon Lee (Director, Head of Product Development and Structuring) Tel: 0207 195 1471

simon.lee@ospreyep.com

Notes to editors:

Terrace Hill Group

Terrace Hill Group PLC is a regionally based UK property development and investment group quoted on AIM. Formed in 1986, the Company has five offices located in London, Glasgow, Teesside, Bristol and Manchester.

Osprey Equity Partners

Osprey Equity Partners is a privately held investment company focused on providing its clients with real estate investment solutions.

Over the last 25 years, our team has capitalised and transacted over £2 billion of commercial property assets.

Osprey Equity Partners is backed by the LJ Group, an independent privately held merchant bank and multi-family office with more than US $5 billion of assets under supervision and which serves a client base that includes family offices, sovereign wealth funds and private equity groups.

For further information about Osprey Equity Partners, please visit www.ospreyequitypartners.com

For further information about the LJ Group, please visit www.ljinvestmentgroup.com