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.

Rückfragen & Kontakt:

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

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