THG Thg Plc

RNS Number:5908E
Terrace Hill Group PLC
29 October 2004

For embargoed release at 7am                             29 October 2004



             Terrace Hill Group plc ("Terrace Hill" or "the Group")

                                 Trading Update



Overview:


*   Good progress being achieved in both commercial and residential divisions

*   Busy last quarter of financial year ending today

*   Concluding with profitable sale of Westminster, Teesside

*   Work started at major developments at Bristol, Gateshead and Teesside

*   Planning consent received for substantial office development in the
    centre of Newcastle and a further two sites totalling 13 acres purchased in 
    the North East with retail potential

*   A number of significant development projects secured or started in London
    and the South East of England

*   Some #6 million of scattered English residential units sold at auction at
    reasonable prices

*   Acquired 11 acres at Kilmarnock, Ayrshire, and work started on site at
    Terrace Hill's development in Glasgow



Terrace Hill Chairman Robert Adair said: "This has been a busy period for the
Group with us acquiring some attractive development sites.  Both divisions of
Terrace Hill are performing well and we are particularly pleased with the sale
of the Westminster property which will contribute significantly to profit for
the year just ending.  We have continued the process of further focussing our
residential portfolio towards Scotland and in particular Glasgow.  We now have a
well spread development programme with an end value approaching #600 million
(including developments in joint venture) focused on areas that we believe have
good growth prospects. I believe our approach will deliver significant returns
to our shareholders over the next few years."



Commercial Division



North East


Contracts have been exchanged for the sale of Westminster, a 24,400 sq. ft.
office development at Teesdale Business Park, Stockton.  The sale price of
#5.575m reflects the current strength of the commercial property investment
market and the quality of the development.



In Newcastle Terrace Hill has received detailed planning consent for an office
development of 82,000 sq. ft. at Gallowgate in the heart of the City Centre to
be developed in joint venture with Gallowgate Properties.



Across the River Tyne, work has started on infrastructure for the first phases
of Baltic Business Park, a 50 acre site with planning consent for 1.5 million
sq. ft. of business space expected to be developed out in joint venture with
Gateshead Council over the next 10 years.  Advanced discussions are in progress
with prospective occupiers in relation to the first two buildings.



Terrace Hill has also started work on the first 30,000 sq. ft. office building
of phase one of Middlehaven Docks redevelopment at Middlesbrough in joint
venture with Helmsley Group.  The joint venture has obtained planning consent
for further phases up to a total of 170,000 sq. ft.



Two sites have been purchased by Terrace Hill in the North East, an 8 acre
industrial site at Bishop Auckland and a 5 acre industrial site at Blyth, both
with retail redevelopment potential.



London and South East



Good progress in being made in letting Terrace Hill's prime joint venture office
developments of 17,600 sq. ft. at No. 11, and of 34,000 sq. ft. at No. 16, both
Berkeley Street, Mayfair.  In each building, only two floors remain to be let.
Terrace Hill recently announced the sale for #9.2 million by an 83% subsidiary
of the office element of 10,500 sq. ft. of a development at 22 King Street,
Mayfair in joint venture with Canada Life, leaving the joint venture with only
4,000 sq. ft. of retail space of which approximately half has been let.



In this encouraging market, Terrace Hill announced on 21 September that it had
contracted to purchase Davis House, adjacent to Victoria Station, London, at a
price of #16.1 million with plans to develop the site as a 130,000 sq. ft. mixed
use scheme having an estimated fully developed value over #50 million.



Terrace Hill has also contracted to purchase, for redevelopment as a new low
density office business park, a 20 acre site, being the former offices and R&D
facility of Hewlett Packard, at Pinewoods, Wokingham, Surrey.



At Queen Elizabeth Park, Guildford, the number of freehold office units in phase
one of Terrace Hill's development which has been sold has increased to 6, and an
early start is anticipated on phase two.



Work has also started on site of phase 1 of the Decimus Business Park, Tunbridge
Wells; this phase will in total comprise some 59,500 sq ft of industrial units.
Good interest is being shown from end users, with 32,500 sq. ft. now in
solicitors hands for freehold sales.



South West



Work has started on site for a 90,000 sq. ft. office development at Temple
Circus, Bristol, to provide 7 stories of air conditioned offices; this is being
developed in a joint venture with Northridge Capital.  This is Terrace Hill's
third development in Bristol, following South Bristol Trade Park and Colston 33
offices.



Terrace Hill also exchanged contracts in respect of a development of 40,000 sq.
ft. of high quality offices to be undertaken at Swansea Waterfront jointly with
the Welsh Development Agency.



Residential Division



Taking advantage of recent price increases Terrace Hill has continued to reduce
its residential investment holdings, particularly in England.  At 30 April 2002
this portfolio comprised 1,222 units, now reduced to under 400 units.  It has
recently sold at auction at reasonable prices some #6 million of scattered
English residential units, further concentrating the portfolio on core
properties in Scotland, especially Glasgow, and to a lesser extent in the North
of England, particularly Manchester and Newcastle.



The Scottish residential holdings are of 260 flats in Glasgow and surroundings,
and 38 flats held on the East Coast at Dundee and Penicuik.  The average unit
value, revalued this month, in Scotland is just under #85,000.  The primary
Manchester and Newcastle holdings are blocks of, respectively, 36 and 28 flats,
average value being around #140,000.



Terrace Hill has acquired two adjoining sites comprising 11 acres at Kilmarnock,
Ayrshire, (one from its joint venture with Lithgows) for prospective future
residential development and development work has started in Glasgow, all
targeted at the affordable mid range of the housing market.



Press Contacts:

Ross Macdonald        Terrace Hill Group Plc            Tel: 0141 332 2014
Robert Adair          Terrace Hill Group Plc            Tel: 01845 537037
Alasdair Robinson     Noble & Company Limited           Tel: 0131 225 9677
Hugo de Salis         St Brides Media & Finance Ltd     Tel: 020 7242 4477



Notes to Editors:

Terrace Hill Group Plc is an AIM traded Property Group.  It has two divisions
(1) Commercial Development, where the current development programme, including
projects in joint venture, is approaching #600 million, with approaching #200
million underway and #400 million projected and (2) Residential Investment and
Development in Scotland and the North of England.  Terrace Hill reported net
assets of #65.5 million as at 30 April 2004. In April Terrace Hill placed #8.128
million (net) of shares with institutional shareholders.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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