Page 1 Interim Results for the Six Months ended 31st March June 2004

Page 2 Contents Corporate Introduction Highlights Financial –Summary Profit and Loss Account –Market Value Balance Sheet –NAV Movements –Diluted NAV –Cashflow –Debt Cost –Debt Maturity Tenanted Residential –Commentary –Key Features –Key Performance Facts –Portfolio Analyses Development and trading –Commentary –Commentary on sites with end development value >£20m Opportunities Appendices

Page 3 Corporate Introduction Grainger is the UK’s largest quoted residential property investor and trader. Grainger specialises in regulated and life tenancies and owns a residential portfolio of circa 11,600 units. Total value of property owned is £1.2 billion. Grainger has two further divisions:- –Residential/mixed use development –Fund and property management

Page 4 Financial Highlights Profit before tax and exceptional items£35.1m+57% Earnings per share pre exceptional items 85.8p+61% Dividend per share 4.04p+15% Tenanted residential sales of £74m exceeded VP values by 8.9% Portfolio comprises 11,613 units –Investment value of £1,124m –VP value of £1,596m Development and trading division rationalised+180% –£17m operating profits

Page 5 Summary Profit and Loss Account

Page 6 Market Value Balance Sheet

Page 7 NAV Movements

Page 8 Diluted NAV

Page 9 Cashflow

Page 10 Debt Cost Variable/Under One YearHedgedFixed over one yearFixed to termination Gross Debt£736m£761m Hedging Level80% Blended Interest Rate5.9% Gearing Level121%125% LTV52.5%52.9% £231m 5.4% £150m 5.0% £292m 6.4% £63m 7.2% £235m 4.8% £150m 4.9% £298m 6.6% £78m 8.1% 31 March September 2003

Page 11 Debt Maturity Over year or lessBetween 1 and 2 yearsBetween 2 and 5 yearsBetween 5 and 10 years £48m 5.1% £150m 4.9% Over 10 years £359m 48.8% £101m 13.7% £96m 13.1% £65m 8.8% £115m 15.6% £359m 47.2% £76m 10.0% £47m 6.2% £69m 9.1% £210m 27.5% Gross Debt£736m£761m Cash£93m£82m Net Debt£643m£679m Average maturity5.7 years5.9 years 31 March September 2003

Page 12 Divisional Highlights Tenanted Residential- Strong sales - Limited acquisitions Trading & Development- Kennel Farm sales - Disposal of Commercial - New divisional structure Fund Management- Integration - Systems and reporting - PIF consultation

Page 13 Tenanted Residential - Highlights Total sales 7% higher at £74m from 14% fewer units sold Average sales price of £109K Average increase over Sept VP values of 8.9% (normal sales) High sales margin of 38% Current portfolio stands at VP value of approximately £1.6 billion Life tenancies - regulation

Page 14 Tenanted Residential - Key Performance Facts (GT + 50% BPT)

Page 15 Tenanted Residential - Commentary Good sales performance, September VP’s exceed by 8.9% Acquisitions analysis Total reversionary surplus on residential portfolio £472m No £mVP £mas %VP Regulated Life Tenancies AST, others

Page 16 Tenanted Residential - Portfolio Analysis by Investment Value Regulated £842m 72.3% APT £87m 7.5% £134m 11.5% Vacant £51m 4.4% Other £23m 2.0% £27m 2.3% Total units11,613 Total VP Investment value£1,124m Reversionary surplus£472m £1,596m Reversionary surplus per share£19.03 Regulated £820m 73.0% APT £41m 3.6% £68m 6.0% £138m 12.3% Vacant £40m 3.6% Other £17m 1.5% 12,030 £1,164m £484m £19.55 £1,648m 31 March September 2003 Life Tenancies/ Reversions Life Tenancies/ Reversions Assured

Page 17 Tenanted Residential - Portfolio Analysis by VP value Total VP = £1,618m (other interests of £30m omitted) £0-£50K £63m 3.9% £241m 14.9% £241m 14.9% £613m 37.9% £613m 37.9% £246m 15.2% £246m 15.2% £500K + £32m 2.0% £423m 26.1% £423m 26.1% £0-£50K £59m 3.7% £234m 14.9% £234m 14.9% £594m 37.7% £594m 37.7% £241m 15.3% £241m 15.3% £500K + £32m 2.0% £415m 26.4% £415m 26.4% Total VP = £1,575m (other interests of £21m omitted) £250- £500K £50- £100K £100K- £175K £175- £250K £175- £250 £250- £500K £50- £100K 31 March September 2003

Page 18 Tenanted Residential - Portfolio Analysis By Number of Units £250-£500K % £500K % Total units = 12,030 3, % 3, % 4, % 4, % 2, % 2, % 1, % 3, % 3, % 4, % 4, % £250-£500K % 2, % 2, % 1, % £500K % Total units = 11,613 £0-£50K £50-£100K £100K-£175K £175-£250K £0-£50K 31 March September 2003

Page 19 Tenanted Residential – Regional Analysis 6.8% of our properties are valued above £350K (vacant possession) 40.3% of our properties are valued below £150K (vacant possession) NumberIVVP of units£m % 01Central London % 01Inner London1, % 01Outer London1, % 02South East1, % 03South West % 04East % 05East Midlands % 06West Midlands1, % 07Wales % 08Yorkshire % 09North West1, % 10North East % 11Scotland % 11,6131,1241, % % 10.7% 15.7% 14.8% 19.1% 6.3% 7.6% 3.3% 9.4% 0.5% 3.2% 7.7% 1.1% 0.6% 100.0%

Page 20 Development and Trading - Commentary Operating profit up to £17.0m from £6.1m 12.4 acres of land at Kennel Farm sold for £14.2m £19.0m of commercial investment property sold at £2.8m above 30 September 2003 values Focus on residential and mixed use developments -Land & Regeneration -Housebuilding -Urban and Mixed Use

Page 21 Commentary on Sites with End Development £20m+ PropertyDescriptionStatus SloughMixed use development Hotel sold to Travelodge (office element 69,000 sq. ft)Leisure unit let to LA Fitness Retail units under offer Office available to let Pimlico SW179 unit residential schemePractical completion due end June 2004 Contracts Exchanged on sale of 66 units, 5 units reserved, 8 available Former South 77 residential units above a newConstruction commenced London HospitalTesco foodstore Completion June 2006 Clapham, SW4 Macaulay Road,110,000 sq. ft. mixed use schemeApplication submitted Clapham. SW4Anticipate decision late 2004 Hornsey RoadPublic/private partnership mixed useAnticipate exchange of Bath & Barnsburyscheme, 350 residential units, 43,000contracts on purchase with Complex, Islingtonsq. ft. Council office and community useLondon Borough of Islington in July 2004

Page 22 Opportunities Focus on core regulated tenancy market Expand life tenancy business – to be regulated in due course Ensure maximum advantage taken of any PIF structure Look at opportunities in Europe – controlled risk approach Development and trading business focus on residential or mixed use

Page 23 Appendices Summary of tenancy types Detailed Profit and Loss Account Tenanted Residential - Stock Analysis Tenanted Residential - Return by Region

Page 24 Summary of Tenancy Types Regulated by Security of tenure Other characteristics Regulated Assured Periodic Assured Life Tenancies Rent Act 1977 Yes - with succession rights Since 1988 no new regulated therefore declining stock Housing Act 1988 Yes Housing Act 1988 Yes - Tenants transfer ownership in return for rent-free occupation and lump sum Assured Shorthold Housing Act 1988 No Rent Market rent Usually no rent Tenancy arises as a result of succession from regulated Tenant has the right to renew tenancy Landlord may get possession if appropriate notice is served Set by rent officer every two years. Increases capped at RPI + 2.5% per annum.

Page 25 Detailed Profit and Loss Account

Page 26 Tenanted Residential - Stock Analysis Vacant Possession Invest- No. ofMarketmentCurrent ResidentialCostValue Gross Units£m % ageRent Regulated7, , Assured periodic Assured shorthold Life tenancies/reversions2, Vacant , ,1071, Other interests , ,1241, September , ,1641,

Page 27 Tenanted Residential - Return By Region Net RentsTradingTotal P & L £m 01Central London Inner London Outer London South East South West East East Midlands West Midlands Wales Yorkshire North West North East Scotland

Page 28 Interim Results for the Six Months ended 31st March June 2004