Acacia Real Estate Limited and JLL Corporate Finance co promote UK property development venture

This transaction represents Acacia's first foray in the U.K. property development sector.

Mr. Iqbal Mamdani, CEO and Vice Chairman of TAIB Bank, the Bahrain-based private bank and the Principal Founding Shareholder of Acacia, commented: "We are proud to be able to offer our clients an opportunity to invest in the U.K. property development market. The strong returns generated by the U.K. property sector in recent years, coupled with continuing yield compression and rental growth, offer a significant new opportunity in the form of property development. By undertaking development of diversified classes of property, the risks will be mitigated to a large extent, thus enabling DevCap to provide investors with superior risk adjusted returns over the anticipated investment holding period."

DevCap will have a paid up capital of £35 million comprising a placing of new ordinary shares and loan notes. Both Acacia and JLL are co-investing a total of £5 million, while the remaining £30 million will be placed with a select group of co-investors by invitation only. The deal is structured in the most efficient way to generate a post-tax/post-fee IRR of over 15% P.A. over the anticipated investment horizon.

As part of this landmark deal, DevCap has already entered into contractual arrangements to acquire limited partnership rights into two development properties with a development value of approximately £80 million, requiring capital contribution of £8.25 million. A range of additional joint venture opportunities to invest in development projects through limited partnerships or limited liability partnerships are under active discussion.

The two development projects contracted by DevCap are Vanwall Business Park, Maidenhead ("Vanwall)" and Berkshire Business Park, Aldermaston. ("Berkshire"). Vanwall is a prime office development site of 3.7 acres within two miles of the M4 motorway and 30 miles of London. Nearby occupiers include Siemens, Wyeth and Associated British Foods. The site to be developed, in partnership with Terrace Hill, a highly experienced developer that is listed on LSE, will provide 120,000 sq. ft. of high-grade offices in two buildings with associated car parking. Berkshire, an industrial development site of 7.5 acres within seven miles of junction 12 of the M4 motorway and close to Reading, Basingstoke and Newbury, is to be developed to provide 139,000 sq. ft. of industrial accommodation in 12 units in four terraces.

Asset management of DevCap will be undertaken by JLLCF, a subsidiary of Jones Lang LaSalle,. one of the world's largest real estate advisors with approximately 22,000 employees covering 100 markets worldwide. It follows a unique research-led investment strategy with dedicated research professionals, and has approximately US$ 25 billion of real estate under management as at 31 December 2005. Its client base includes major life assurance, pension providers and public and private companies.

Acacia is a newly formed investment company derived from TAIB Bank's real estate investment division with authorised share capital of US$ 500 million. Acacia invests in residential, retail, commercial, industrial and hotel properties globally, relying on its extensive network of strategic partnerships built over the last 20 years. These partners have significant experience in dealing with large real estate transactions across diversified real estate asset classes. Acacia's focus is on both income-generating and development-oriented real estate investment. It has acquired the income- generating real estate business of TAIB, including its real estate team and existing relationships with strategic partners. It presently invests in the U.S. and Europe, and is now pursuing opportunities in India, China, Turkey and other emerging markets.

When DevCap achieves a successful trading record in about two to three years, it will either sell its shares in an IPO on the London Stock Exchange, or opt for a trade sale of the business to strategic investors.

TAIB Bank B.S.C. (c), the Bahrain-based private bank that focuses on seizing regional investment opportunities for institutions and private clients, is listed on the Bahrain Stock Exchange and conducts business in the GCC, Europe, India, Kazakhstan, Turkey, the U.K. and the U.S.