Thg Regulatory News (THG)

8 February 2013

TERRACE HILL GROUP PLC

("Terrace Hill" or the "Group")

TERRACE HILL AGREES £70 MILLLION RESIDENTIAL PORTFOLIO SALE TO PLACES FOR PEOPLE

Terrace Hill Group PLC (AIM: THG), a leading UK property development and investment group, announces that it has exchanged contracts with Places for People, one of the largest property management, development and regeneration companies in the UK, for the sale of the majority of its remaining residential assets, comprising 925 units, for the sum of £70.0 million. The sale comprises 95% of the Group's wholly owned residential assets and 91% of the properties held within Terrace Hill Residential, its residential investment joint venture in which it owns a 49% interest.

The sale price reflects a discount of less than 1% of the book value of £70.66 million. On a pro forma basis worked from the Group's year end accounts to 30 September 2012, as adjusted for the effect of the completion of the Southampton forward funding announced earlier this week, the Group's on balance sheet net debt will reduce from £47.2 million to £20.2 million with a reduction in gearing from 78.2% to 34.6%. On a look through basis, including the Group's share of relevant associates' net debt, total net debt reduces from £85.7 million to £26.7 million with gearing reducing from 142.1% to 45.7%.

The sale is due to complete in February 2013. Terrace Hill has already commenced a programme of sales to owner occupiers for the remainder of the residential portfolio, which comprises 35 units located in Manchester and the South West that have a book value of £5.5 million.

Philip Leech, Chief Executive at Terrace Hill, commented: "This sale follows our previously stated commitment to exit the residential investment sector and concentrate on our core activity of commercial development. Having given ourselves a further 18 months to implement this strategy, I am delighted that we have completed the majority of the sales in a single portfolio transaction, well ahead of time. The few retained properties are currently being sold on a piecemeal basis to owner occupiers, most of which are expected to achieve prices at levels in excess of book value.

"The consequent reduction in net debt and gearing will have a very positive affect on the Group's balance sheet and will allow us to fully concentrate our financial and personnel resources on commercial development, particularly in the food store sector where we continue to see good opportunities and from which we expect to deliver strong shareholder returns."

David Cowans, Chief Executive at Places for People, commented:

"We're delighted to conclude this deal which is part of our long-term strategy to build a private rented portfolio as part of our housing offer to all of our customers."

-Ends-

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

Terrace Hill Tel: 020 7631 1666Philip Leech

Places for People

David Mills Tel: 020 7843 3840

FTI Consulting Tel: 020 7831 3113Richard Sunderland/Will Henderson /Faye Walters

terracehill@fticonsulting.com 

Oriel Securities (Nominated Adviser) Tel: 020 7710 7600

Gareth Price

Mark Young

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.

Places for People

Places for People is an award-winning property management and development group which focuses on creating aspirational homes in inspirational places - whether that means providing brand new communities or transforming existing neighbourhoods into vibrant, popular areas to live and work.

With assets in excess of £3bn Places for People has a strong track record of successful development, from multimillion-pound master planning projects to urban renewal and new-build developments in cities across the UK.