A summary of the more significant matters that have progressed since 31 March 2011 follows.

Trading and Development Portfolio

Office Development

200 Aldersgate, London EC1
Helical has an asset and development management agreement with the owners of the building under which we have refurbished the building, creating a ‘vertical village’ for office users. Marketing of the building commenced in January 2011 and since then we have let 92,000 sq ft to office tenants and 35,000 sq ft in the basement to Virgin Active for their flagship UK gym, with a further 20,000 sq ft under offer, of a total space of 370,000 sq ft. There is an encouraging level of interest in the remaining space.

Mitre Square, London EC3
Planning consent for a new building comprising 273,000 sq ft NIA of offices and 3,000 sq ft of retail/restaurant use was granted in June 2011. We are planning to commence demolition early next year. Construction of the new building will commence once a pre-let or forward funding is obtained.

Barts Square, London EC1
We acquired this investment asset, let to the Barts and NHS Trust until 2014/2016, in February 2011 in joint venture with Baupost Group LLC. Good progress has been made towards submitting a detailed planning application for a major mixed use development comprising over 450,000 sq ft of offices, residential and retail. We expect to submit this planning application in early 2012 with a redevelopment of the site planned for 2014/2016.

Mixed-use developments

White City, London W12
At Wood Lane, White City, we have transferred our interest in Stadium House, an office property adjacent to our development site to Aviva, our development partner. Eric Parry Architects is leading the overall master planning exercise on our site with a view to submitting an application during Q2 2012. This application is expected to be for a circa 1.5 million sq ft residential-led mixed use scheme.

Fulham Wharf, London SW6
At Fulham Wharf, London SW6, we have secured planning consent for a 100,000 sq ft supermarket and 463 residential units on behalf of Sainsbury’s and are now in the process of assessing, with Sainsbury’s, bids for the site. We have received our initial £1.5m fee for obtaining planning permission and hope to receive a further fee once the site is sold.

Retail developments

Parkgate, Shirley, West Midlands
At Parkgate, Shirley we have secured, with our 50:50 partners, Coltham Developments, an amended planning consent for a 85,000 sq ft Asda Supermarket, 72,000 sq ft of retail and circa 120 residential apartments and townhouses. We anticipate commencing building work in early 2012.

Tyseley, Birmingham
At Tyseley, Birmingham, our joint venture with Oswin Developments has exchanged conditional contracts to purchase a 13 acre site with plans to develop a 71,600 sq ft Asda supermarket and a 70,000 sq ft retail park.

Poland

Europa Centralna, Gliwice
At Europa Centralna, Gliwice, we signed, following the period end, an agreement with institutional clients of Standard Life to jointly develop a 66,000 sq m retail park and shopping centre. Construction of the retail development has already commenced with completion due in October 2012. The development is currently 51% let (60% in area) to Tesco, Castorama, H&M and others with heads of terms agreed on a further 12%. The development will be funded by a combination of a €72m development loan and €40m of cash from the joint venture partners. The deal will return the majority of Helical’s current equity invested (circa £16m) whilst leaving €4m in the venture, retaining a 37.5% equity stake in the joint venture. Standard Life Investment’s client will acquire Helical’s remaining equity stake two years after completion of building works for a sum reflecting its share of the value of the development.

Park Handlowy Myln, Wroclaw
This 9,600 sq m out of town retail development is under offer to an institutional investor and the sale is expected to complete by the end of 2011.

Retirement Villages

Bramshott Place, Liphook, Hampshire
We have now completed or exchanged on 79 units. 13 sales, for £6m, have completed since 31 March 2011. We have reservations on a further 25 units out of a total scheme of 151 units. The third and final phase of construction is due to complete by summer 2012 and we hope to sell the remaining units by the end of 2012.

Durrants Village, Faygate, Horsham
We are putting everything in place so that we are in a position to start construction of this site in the first quarter of next year and have commenced marketing to potential buyers.

Ely Road, Milton, Cambridge
We received planning consent for 89 open market housing units on this site in September and have marketed it for sale. We are currently considering a number of offers received and expect to complete a sale of the whole of the site by early 2012.

St Loye’s College, Exeter
We received planning consent for 69 open market housing units on part of this site in August. We have marketed this part of the site and received a number of offers which we are considering, with a view to completing a sale in the first quarter of 2012.

Industrial developments

We have continued our programme of disposals with the sale of all our remaining units at Southall (four since 30 September 2011) for £3.25m. At Stockport we have completed enabling works and Section 278 works and 2.5 acres have been sold subject to planning, leaving six acres where a 13,000 sq ft pre-let has been agreed. The remaining units are being marketed ahead of construction.

Investment Portfolio

There was a valuation increase of 0.3% in the six months to September including capex, sales and purchases which compares to the IPD monthly index of 0.6% over the same period. On a like-for-like basis the increase was 0.9%.

Acquisitions
Since March, we have completed on the acquisition of £146m of assets, although it should be noted that both Barts and East Kilbride exchanged prior to 31 March 2011 and both Corby and Chiswick have completed after 30 September 2011. The acquisitions include:

Asset	Price	Net Initial Yield		Category
	£m
Barts	55.0	6.6%		Office with major redevelopment planned
Basildon	11.1	8.1%		Retail
East Kilbride	5.9	9.9%		Industrial
Corby Town Centre	69.9	8.0%		Retail
The Powerhouse, Chiswick	3.7	10.0%		Office
Total	145.6

All of these assets are income producing, with significant redevelopment or asset management potential.

Sales
Since March, we have sold £66.0m of assets of which £49.5m were from the investment portfolio. In aggregate, these sales were 1.9% above the 31 March 2011 book values.

• 67,000 sq ft of offices at 61 Southwark Street to a private property company for £19.5m. Helical acquired this asset for £3.35m in 1998.
• Stadium House, Wood Lane to Aviva, Helical’s joint venture partners in our White City development. This property was acquired by Helical to facilitate the development of the site and has now been incorporated into the existing JV as originally planned.
• A retail unit in East Grinstead let to Sainsbury’s.
• An industrial portfolio (the Union Portfolio), including properties in Motherwell, Blackwood, Fleet and Hailsham.
• An industrial estate in Woolwich which was acquired under CPO powers for the implementation of Crossrail.
• A single let industrial estate in Aldridge, sold to a private investor.
• 13 units at our retirement village development in Liphook with a value of £6m.
• All remaining units at our industrial development in Southall for a total of £3.25m (four of which exchanged contracts after 30 September).

Future acquisitions
We continue to see the three tier market that we have described in the past, as follows;

• Prime/trophy ‘institutional’ assets enjoying reasonable demand from buyers, especially foreign investors seeking a ‘safe haven’, with limited opportunities to add value. Helical develops and sells into this market.
• Well located, good quality assets but in need of active management and/or capex. Often off the institutional radar screen and hard to finance without a strong balance sheet. Our preferred area of buying.
• Weak secondary/tertiary assets with a severe danger of falling rents and increasing voids. Avoid.

We will continue to concentrate on the middle tier, which could be described as ‘good secondary’, but the key driver in all acquisitions is tenant demand. Properties are likely to be multi-let to give a spread of tenant risk and opportunities for active management and yielding 7.5-10% (lower in London) as, in a ‘no growth’ economic environment, we expect the majority of returns to come from income. We expect to be able to achieve day one cash on cash returns of 10-15% pa after gearing.

The principal assets we will buy will be: London offices with low rents (£20’s & £30’s per sq ft) in ‘villages’ such as Southwark, Camden & Hammersmith, often with vacancies and in need of capex; trading portfolios, mainly in the industrial and retail sectors, where there is increasing pressure from banks to sell; and multi-let industrial estates, principally for surplus cash flow in a low growth environment.

Asset Management

We completed 43 new lettings, increasing our contracted income by £1,130,000, and have completed 23 lease renewals, securing a further £1,020,000 of annual rent (an increase of £20,300 pa). Excluding 200 Great Dover Street, where we fully anticipated the tenant leaving to allow a 47,000 sq ft refurbishment scheme, this was offset by the loss of 34 tenants during the six months due to lease expiries, breaks or tenants falling into administration, resulting in a reduction of £1,740,000 to our annualised income. The loss solely attributable from administrations totalled £134,000.

Individual properties:

Clydebank Shopping Centre
We continue to make good letting progress at this centre. Current net rental income is £6.2m compared with £5.85m at acquisition in January 2010 with a further £500,000 of rent due upon expiry of rent free periods, the most significant of which are JD Sports, Bank and Costa Coffee which between them have rent frees of £250,000 expiring in 2012. These rents are all net of head rents. Significant recent transactions include the completion of leases to JD Sports and Bank with a simultaneous surrender of HMV to facilitate this letting securing £250,000 of rent, a new letting to Costa Coffee as well as eight further renewals or new lettings. Mall income is predicted to be c. £250,000 in 2011, compared with £131,000 in 2010 and £0 at acquisition.

Basildon
Located on the prime pitch in Basildon, we acquired this retail asset with offices in the upper parts for £11.12m, at an 8.1% net initial yield. Since acquisition, we have agreed lease renewals with three of the retail tenants (all currently in solicitors’ hands) and a number of the office occupiers where we also hope to upsize some of their space. Significant costs have been taken out of the service charge which will be accretive to net operating income.

Silverthorne Road, Battersea
We have let a further 11,997 sq ft producing £237,000pa of rent during the last six months. The original Battersea Studios building (56,000 sq ft) is now fully let and we have 39,900 sq ft available in the newly built Battersea 2. We have strong interest, or are under offer, on almost 11,000 sq ft of this.

East Kilbride
This industrial estate was acquired for £5.9m, a 9.9% net initial yield. Since acquisition we have re-geared one lease, although we have lost a small tenant due to insolvency. We continue to pursue lettings of the vacant units.

Ashford, Middlesex
Our tenant, Focus DIY, went into administration in May and we have re-let the unit on a 25 year lease to 2036 at £530,000pa, with the cost of the rent free period covered by a previous tenant who was still liable for part of the premises.

Corby
We acquired the freehold interest in land and buildings in Corby Town Centre for a total consideration of approximately £70m, reflecting an initial yield, net of all void costs, of circa 8%. We believe that the 25 acre freehold interest, which shares many attributes with our Clydebank asset, provides good long and short term opportunities for Helical to use its bottom up approach to asset management to extract further value for the Company. The holding comprises the following elements:

• Willow Place, a new 175,000 sq ft shopping centre completed in 2007 and anchored by Primark and TK Maxx;
• Corporation Street and surrounding areas, the 290,000 sq ft original Corby shopping centre with Iceland, Poundland, Peacocks and Wilkinsons as principal tenants;
• Oasis Retail Park, 35,000 sq ft let to Argos, Dreams, Farmfoods and Home Bargains;
• A number of ancillary buildings and development land.

Key asset management initiatives include:

• the continued leasing of vacant space (currently at 7.5% by ERV) where seven new leases have been agreed in the last three months;
• the conversion of a block to A3 use to create a leisure hub (this block already has A3 consent and is opposite the new civic centre of the town, where planning applications are lodged for a new cinema and hotel); the extension of the Willow Place mall upon securing a pre-let; and
• conversion of vacant upper parts to residential (subject to planning).

Morgan Quarter, Cardiff
We have completed nine lettings in the listed arcades, adding £192,000pa to the annual rent. A further two lettings producing £42,000pa are in solicitors hands. Evidence from the opposite side of the Hayes and from within our holding shows that rental values have continued to rise from £155 Zone A to £160 Zone A during the last six months. Rents in March 2010 were £135 Zone A.

Chiswick
We have completed, since the period end, this off-market sale and leaseback to Metropolis Music Group for £3.7m, a 10% yield. This transaction involved acquiring three separate long leaseholds from Metropolis and the freehold from a third party whilst Metropolis concluded a management buy-out and the leaseback agreement. We now hold the freehold of an attractive and iconic west London building with the benefit of a 25 year leaseback with RPI uplifts.

Helical Bar plc
24 November 2011