McArthurGlen announces further european growth as joint venture with BAA is dissloved

Wien/London (OTS) - Europe's leading outlet operator McArthurGlen
and BAA plc have agreed to dissolve their joint venture BAA
McArthurGlen (BMG), with effect from 30 August 2002.

McArthurGlen will concentrate on expanding and adding to its
portfolio of five European centres with new development partners
after a successful eight-year partnership with BAA - the world's
largest commercial operator of airports. The dissolution of the joint
venture is part of BAA’s strategy of focusing on its core airport
business.

The BMG joint venture was established in 1993 to develop and
operate outlet centres in the UK and Europe. To date the venture has
developed 12 centres with nearly 3.0 million sq ft of retail space,
including the largest and most successful outlet centres in Europe.

McArthurGlen's strategy going forward will be to build upon its
36 per cent share of the European outlet market, with additional
development at existing centres in the UK, France, Austria, Italy and
Holland, as well as the construction of new outlet centres.
McArthurGlen's principal partner in future developments is
Midlands-based Richardson Developments.

McArthurGlen Europe will own stakes in all but three of the
original twelve centres. As part of the dissolution, BAA will retain
three centres in the UK: York, Livingston and Mansfield. All 12
centres - seven in the UK and five in continental Europe - will
continue to be managed by McArthurGlen and will operate under the
McArthurGlen banner.

Through the terms of the agreement, BAA will retain an interest in
five of the UK centres, which will be overseen by BAA Lynton, its
commercial property division. The interests in the centres retained
by BAA are York (100%), Livingston (50%) which is held in a joint
venture with Land Securities PLC, and Mansfield (75%), which is held
in a joint venture with Richardson Developments. In addition, BAA
will continue to own minority interests in the centres at Ashford
(25%) and Swindon (11%), as well as a small number of undeveloped
parcels of land at some of the existing UK centres. BAA's total
interest in these centres is valued at approximately Pounds 200m and
it will take on an equivalent amount of debt from the joint venture.

McArthurGlen Chairman J W Kaempfer said : "For McArthurGlen, this
represents the end of one very successful partnership and the
beginning of another, as we cement our position as the leading
developer owner and operator of designer outlets in the UK and
Europe. We will continue to own interests in 9 existing centres (four
in the UK, two in France, one each in Holland, Austria and Italy) and
have three additional sites which we expect to build over the next
two years."

Andrew Jurenko, chairman, BAA Lynton, commented: "The BAA
McArthurGlen joint venture has achieved tremendous success and the
'outlet shopping' concept has gone on to shape the shopping habits of
today’s consumers.

"By dissolving the joint venture arrangements at this time, BAA
Lynton will be able to manage the orderly disposal of the UK assets,
whilst allowing Joey Kaempfer and his partners to continue to grow
the business across Europe.

"We look forward to continuing our relationship with McArthurGlen
as managers of our centres."

Notes to editors:

McArthurGlen Europe

Joint Ventures

McArthurGlen has formed a number of joint venture relationships
with first-class development partners in the UK and Europe and will
continue to form new relationships as it enters new national markets.
Partners include: Richardson Developments, Land Securities plc
(Livingston), The Gruppo Fingen (Italy), Kramar Sixt und Partner
(Austria).

The Outlet Market

McArthurGlen has a 36% share of a European designer outlet market
developed by ten principal operators. Eight of Europe's largest
designer outlets are operated by McArthurGlen. 34 designer outlet
centres/villages currently operate in the UK, with a further 18
schemes in the planning pipeline.

Investors

Financial institutions have confirmed the potential of the
McArthurGlen outlets and their investment opportunities. McArthurGlen
has attracted five of Britain's leading financial institutions - BP
Pension Fund, CIS, Henderson Investors Ltd, Morley (formerly CG
Norwich Union), and Equitable Life Assurance - to invest in four of
its centres (Ashford, Cheshire Oaks, Great Western and Wales).
Recently, a sixth investor, The Staffordshire County Council, has
joined these institutions with an investment at Ashford.

The Sites

McArthurGlen opened its first outlet in 1995 at Cheshire Oaks near
Chester. This centre is currently Europe's largest designer outlet.
The company has since added a further six centres to its UK portfolio
- Great Western in Swindon, Bridgend in Wales, Mansfield in the East
Midlands, York, Ashford in Kent and Livingston - Scotland's largest
designer outlet. McArthurGlen has also been credited with introducing
the first designer outlets to Austria at Parndorf, and Italy at
Serravalle. Two centres operate in France, at Troyes and Roubaix and
one at Roermond on the Dutch German border.

The Centres

McArthurGlen Designer Outlets provide full-time work for over
5,000 people in the UK and 2,000 in continental Europe. McArthurGlen
also creates thousands of additional jobs, both directly and
indirectly, through construction of new centres and additional
phases.

McArthurGlen has worked with world-renowned architects to develop
centres which push the boundaries of traditional shopping centre
design. Lord Rogers, architect of the Millennium Dome, was
commissioned to design McArthurGlen's centre in Ashford.
McArthurGlen’s centre in Swindon is the largest covered designer
outlet in Europe. It is also one of the best examples of retail
regeneration in the UK, with 40 million pounds spent on developing
the centre in keeping with the heritage of its site - the former
Great Western Railway Works.

The Brands

Some of the world's best known retailers have stores at one or
more McArthurGlen outlets, including Polo Ralph Lauren, Nike, Gap,
Armani, Burberry, Calvin Klein and Versace. Many brands such as
Marks & Spencer, Bose, Revlon and Black and Decker have chosen
McArthurGlen centres to trial outlet retailing for the first time.
600 brands are represented at McArthurGlen centres across Europe.
Recent additions to the portfolio include Hugo Boss, Oasis, Prada and
Liberty of London.

BAA Lynton

BAA Lynton is the commercial property division of BAA plc , the
world's leading airport company.

Ends.

Rückfragehinweis:
Paul Smith
Citypress PR
0161 6060 269
Linsey Wooldridge
McArthurGlen
020 7 535 2350

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