CLS Holdings plc - Offices Sale - London SE1, 200 Great Dover Street

Date: 09 Oct 2001

The Board of CLS Holdings plc is pleased to announce the acquisition of this long leasehold office property located to the South of London Bridge Station, close to the proposed Southwark Tower Development in which it has a 33% interest.

The new acquisition occupies a prominent site at the junction of Great Dover Street and Borough High Street, directly opposite the entrance to Borough Underground Station.

The property is arranged over lower ground, ground and four upper floors and totals 3,376 sq m (36,345 sq ft) and has 24 car parking spaces. The property occupies a large site and we believe that potential exists to redevelop the site with a building of up to 7,430 sq m (80,000 sq ft).

The entire property is let to Conoco Limited for 32 years from 24 June 1979 expiring in June 2011, with a rent review in June 2004. The current rent passing is £725,000 per annum, which equates to approximately £214.72 per sq m (£19.95 per sq ft).

The property is held on a long lease for a term of 99 years from June 1962 on a ground rent of £7,300 per annum exclusive. The net income is therefore £717,700 per annum exclusive.

The property is being financed with a £5.9 million loan and consequently the return on equity is 24% per annum.

Executive Chairman, Sten Mörtstedt, said:

"This acquisition marks our return to buying in the UK after 3 busy years expanding in Europe. The property at 200 Great Dover Street represents a well let building in a rapidly improving area, where we are able to secure a high initial yield with the added attraction of future development opportunity. Decreasing interest rates have made the UK market more attractive and with available cash resources of £80 million and excellent banking contacts we are now actively looking for further acquisitions within Greater London".

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