Terrace Hill Group PLC

1
Terrace Hill Group PLC

• Final Results
• For the year ended 31 October 2007

2
Overview

• Terrace Hill Group PLC (THG) is a regionally
  based UK property development and investment
  group listed on AIM.
• The group has offices in London, the North East,
  the South West and Scotland, offering national
  presence with local knowledge.
• THG aims to provide shareholders with above
  average returns through its property skills and
  expertise and rigorous management of risk.
• THG manages a total commercial development and
  investment programme with a completed value of
  1.34 billion, a residential investment portfolio
  of 302.6 million and a housebuilding landbank in
  Scotland with potential for over 1,400 units.

3
Financial Highlightsfor the year ended 31
October 2007

• 7.6
• Increased ADNAV to 96.3p per share (Oct 06
  89.5p)
• 13.8
• Increased TNAV to 83.7p per share (Oct 06 73.6p)
• 16.1
• Underlying TNAV growth (adding back dividend
  payments during the year)
• 16.7
• Total dividend for the year to 2.10p (Oct 06
  1.8p)
• 26m
• Cash position 37.7m undrawn debt facilities
• Commercial
• Fall in projected value of commercial
  developments offset by lettings, planning gains
  and sales
• Residential
• Values on average static over the period

4
Operational HighlightsFor the year ended 31
October 2007

• 1.3bn
• End value of development programme, including
  joint ventures
• 39
• Schemes currently on site pre-let or pre-sold
• 57.9m
• Value of residential investments sold 19.8
  profit on cost
• 250 units
• Projected annualised turnover within
  housebuilding division from December 2009
• 2.3m
• Generated in development management fees

• 30.75m
• Contracted sale of Hammersmith site in December
  2007 - purchased for 17m
• Joint Ventures
• Two significant joint ventures established in
  Bracknell and Victoria
• Progress
• Successful letting and occupier sales in London,
  Redditch, Bristol, Tyneside and Farnborough
• Acquisitions
• New sites acquired in Bristol, Southampton,
  Ashington and Middlesbrough

5
Results
6
Risk Management

• Core strength lies in ability to manage risk
• structuring finance to ensure all properties are
  funded to optimise the balance of risk and reward
  to the group
• portfolio diversity by sector and geography,
  focusing on areas where we perceive the potential
  for exceptional returns
• stock selection using expert knowledge of local
  markets and thorough due diligence prior to any
  acquisition
• managing construction through an internal project
  management team controlling cost, delivery and
  design risk

Our results during the period and progress since
is testament to the fact that we can perform well
in difficult times and continue to deliver above
average risk weighted returns for our
shareholders. Philip Leech, Chief Executive
7
Commercial DivisionDevelopment Programme
Total end value by region
Total end value by sector
8
Commercial Division New Joint Venture
Developments

• Maxis, Bracknell
• 7.9 acre site with planning for three buildings
  totalling 260,000 sq ft. Phase 1 - 190,000 sq
  ft in two buildings
• End value estimated at c. 125m
• Improved layout and building configuration
  through new planning consent October 2007
• JV with Hypo Real Estate International THG max
  equity commitment of 5m (total costs 105m) in
  return for 65 projected profit and 1.5m project
  management fees
• Low supply of competing schemes at completion in
  2009/10

9
Commercial Division New Joint Venture
Developments

• Howick Place, Victoria SW1, London
• Acquired House of Frasers office HQ in joint
  venture with Doughty Hanson
• Plan to redevelop site into mixed use scheme of
  office and quality residential
• End value of c. 180m
• House of Fraser took lease back until July 2008,
  when THG expects to receive detailed planning
  consent
• Historic low vacancy rates and rapid rental
  growth in Victoria office market

10
Commercial DivisionAcquisitions

• Bristol Bridge House, Bristol
• Office refurbishment and extension overlooking
  the floating harbour in central location
• Potential for 55,300 sq ft Grade A offices
  original building size 39,600 sq ft
• Planning application being submitted Spring 2008

• Mayflower Plaza, Southampton
• Acquired prime 1.7 acre development site opposite
  railway station in city centre for 7.4m
• Mixed use scheme planned for 110,000 sq ft
  offices, 150 bed hotel and 180 residential units
• Residential element sold, conditional on
  planning, to Crest Nicholson
• Total end value c. 70m

11
Commercial DivisionAcquisitions

• Gateway, Middlehaven, Teesside
• 16.8 acre site acquired for mixed use, non food
  retail warehouses, car showrooms, leisure and
  restaurants
• Site value to be enhanced by revised planning to
  increase development density
• Projected end value 35m

• Canningford House, Bristol
• Income producing property with medium term
  development potential on Victoria Street
• Comprises 20,456 sq ft multi-let offices with
  potential to redevelop and substantially increase
  area to over 40,000 sq ft

12
Commercial DivisionOther Progress

• 100 George Street, Croydon
• Planning consent granted for 204,000 sq ft office
  development May 2007
• Submitted application to increase the size of the
  building to 240,000 sq ft
• Acquired neighbouring rights to light in December
  2007
• Considerable pre-letting interest
• Potential end value 100m

13
Commercial DivisionOther Progress

• Kean House, Covent Garden
• 25,200 sq ft office refurbishment completed in
  August 2007
• Four floors pre-let to Adecco at 42.50 psf
• Five more floors let at rents up to 57.50 psf
• Letting rents up 35 in past 12 months
• Remaining retail unit fronting Kingsway let to
  Costa Coffee

• REDD 42, Redditch
• 232,600 sq ft distribution warehouse development
• Held within the THDP
• Let to iForce Ltd at an initial rent of 5.75 psf
• iForce will use unit as national e-fulfilment
  centre for John Lewis Direct

14
Commercial DivisionSales

• Baltic Business Quarter, Tyneside
• Prestigious 50 acres business park
• Forward sold 19,400 sq ft office development to
  Open University for 5.25m
• 180,000 sq ft development for Gateshead College
  completed and handed over on schedule

• Edmonton, Greater London
• Sold 4.5 acre industrial site north of London to
  an owner/occupier realising a 3.2m profit

15
Commercial DivisionSales

• Queens Wharf, Hammersmith
• Riverside site adjacent to Hammersmith Bridge and
  Riverside Studios
• Completed site acquisition 17m November 2007
  following an option granted in October 2006
• Contracted to sell site for 30.75m December 2007
  (completing March 2008)

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Residential Investment

• 49 interest in at.home Nationwide portfolio
• Since purchase in July 2006, increased rental
  levels by 3.5
• Improved occupancy rates by 4.5
• Substantially reduced management costs
• Good demand from tenants
• Continued rationalisation of portfolio through
  selected sales
• By year end properties sold or under contract for
  sale totalled 57.9m realising profit on cost of
  19.8
• Overall value of residential investments remained
  static over the year
• Some valuation weakness in the north of England
  and Midlands balanced by London, the South East
  and Scotland proving resilient
• Well located and low value properties to
  withstand pressures of housing market weakness

Total residential portfolio value by sector
17
Housebuilding DivisionClansman Homes

• Good progress with strong demand Scottish
  market holding up well
• New sites acquired for development at Fenwick,
  south of Glasgow and Carnwath, near Lanark
• Capacity of landbank over 1,400 units
• Projected annualised turnover of 250 units per
  annum from December 2009 target to increase to
  500 units per annum
• On site in four different locations

• Planning consent obtained for 168 units at Shotts
  in north Lankarkshire first homes to be
  delivered Spring 2008
• Focus on affordable suburban homes with no
  exposure to high cost city centre dwellings
• Intention to demerge Clansman Homes from the
  Group when viable

The Spey - typical house type
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Housebuilding DivisionClansman Homes
? Location of sites
? Glasgow
? Edinburgh
ARMADALE ?
? SHOTTS
? FENWICK
? CARLUKE
? KILMARNOCK
? CARNWATH
? AYR
? CUMNOCK
? PATNA
Patna show home
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Summary

• Continue to provide good returns
• Excellent track record of managing risk in
  difficult markets
• Robust funding arrangements and structured
  finance fundamental to maximise returns and
  mitigate risk
• Emphasis on managing construction risk
• Diverse portfolio across property sectors and
  locations
• Strong cash position 26m 37.7m undrawn debt
  and good relationships with lenders
• Opportunities to buy attractive assets from
  distressed or forced sellers
• Progressive dividend policy
• Confident of delivering enhanced returns to
  shareholders average annualised growth of 20

We are confident that we can grow the business
in the UK, leveraging our skills through our
existing strong relationships and increasingly
strong brand and a talented team Robert Adair,
Chairman
20
Key Information
Share Structure (approx)

• Share price Mid 52p (18.02.08)
• Market AIM
• Ticker THG
• Market cap. c. 110.2m
• Ord. Shares in issue 211,971,299
• Nomad/Broker Oriel Securities
• House analyst Mark Young

Including Caledonia MajedieGartmoreRREEFFirs
t StateMorleySouth Yorks P.F.Thames
RiverKaupthing
21
Board Directors

• From left to right Kelvin Hudson, Robert Dyson,
  Will Wyatt, Non-executive Directors,
• Robert Adair, Executive Chairman, Philip Leech
  Chief Executive, Tom Walsh, Finance Director

22
Board Directors

• Robert F M Adair ma, aca, cta, fgs (51),
  Executive Chairman
• Robert founded Terrace Hill in 1986. He is
  executive chairman of Melrose Resources plc, a
  listed oil and gas company and non-executive
  chairman of Plexus Holdings plc, a company
  producing innovative wellheads for the oil
  industry also quoted on AIM. Robert is also a
  non-executive director of Chameleon Trust Plc, a
  quoted investment trust.
• Philip Leech (44), Chief Executive
• Philip, a chartered surveyor, worked for Strutt
  Parkers investment agency team before joining
  Terrace Hill in 1993. He established and ran the
  North East office from 1994 before being
  appointed Chief Executive in 2005.
• Tom Walsh (46), Group Finance Director
• Tom is a qualified chartered accountant who has
  worked in the property sector since 1988. He
  joined Terrace Hill in 1996 and is Group Finance
  Director. Previously Tom worked with Rush
  Tomkins and Vestey Estates.
• Robert Dyson (59), Non-executive director
• Bob is chairman for the North West region of
  property advisers, Jones Lang LaSalle, having
  previously been executive chairman of Dunlop
  Haywards.
• Kelvin Hudson (46), Non-executive Director
• A chartered accountant and managing director of
  Saffery Champness Guernsey. Kelvin has worked in
  the fiduciary sector in Guernsey since 1995 and
  prior to that spent six years as finance director
  of Network Security (Holdings) Limited, a London
  group specialising in the detection and
  prevention of fraud.
• Will Wyatt (39), Non-executive director
• A director of Caledonia Investments plc, Will is
  also a non-executive director of Avanti
  Screenmedia Group, a specialist media and
  satellite company, Cobepa, a Belgian-based
  investment company, Melrose Resources plc and
  Chairman of the Advisory Board of TGE Holdings
  GmbH, a specialist gas engineering business.

23
Contacts

• Management
• Robert Adair, Chairman
• Tel [phone]
• Mobile [phone]
• Email robert.adair_at_btconnect.com
• Philip Leech, Chief Executive
• Tel [phone]
• Mobile [phone]
• Email philip.leech_at_terracehill.co.uk

• Offices
• 1 Portland Place, London W1B 1PN
• Tel [phone]
• Westminster, St Marks Court, Teesdale,
• Stockton on Tees TS17 6QP
• Tel [phone]
• James Sellars House, 144 West George Street,
  Glasgow, G2 2HG
• Tel [phone]
• 16 Queen Street, Bristol BS1 4NT
• Tel [phone]
• Email info_at_terracehill.co.uk
• Website www.terracehill.co.uk