Mitsubishi Estate Co., Ltd., through one of its overseas affiliate companies (Paternoster Associates), is progressing smoothly with the Paternoster Square Redevelopment Project in London's financial district. The Company announced today that the decision has been made to sell one of the buildings currently under construction.

Paternoster Square is located adjacent to St. Paul's Cathedral on the north side. Paternoster Associates is developing four buildings (one administrative building) and a common-use area. The key tenants in the three main towers are Goldman Sachs International in Building 1, the London Stock Exchange in Building 2 and CB Hillier Parker in Building 3. An agreement has been made to sell Building 3 to Legal and General Assurance Society Limited following its completion.

Mitsubishi Estate became involved in the Paternoster Square Redevelopment Project for the purpose of establishing a base in London and pursuing development profits as a developer. Long-term cash flow has been secured through the completion of long-term contracts (20-25 years) with the key tenants of each building before building construction commenced. With the current favorable conditions in the real estate investment market, the Company believes that now is a good time to sell. The forward commitment method, in which the sales contract is completed before construction is finished, was utilized for this transaction.

The Company will collect funds immediately following the sale of the building and appropriate them towards investments in new development operations and to pay down interest debt. A portion of the capital will be retained for the base of its building lease business in London.

In addition to its involvement in the Paternoster project, the Mitsubishi Estate Group, in a joint project with Lehman Brothers Inc., completed the construction of a building in midtown New York Manhattan in August. The Company's tri-polar city development activities are progressing well in Tokyo, New York and London.

The total land area is approximately 17,000m² Upon completion there will be a six-building complex housing offices and stores (total floor area: approximately 99,000m²). Paternoster Associates is developing four of the six buildings and a common-use area. CGI, a German fund, is developing the other two buildings (buildings 4 and 5) independently.

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Building 1 (Warwick Court)

8 floors above ground, 2 floors underground
Total floor area: Approx. 28,000m²
Construction period: Started in January 2002 - To be completed in August 2003

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Building 2 (King Edward Court)

8 floors above ground, 2 floors underground
Total floor area: Approx. 33,000m²
Construction period: Started in October 2001 - To be completed in May 2003

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Building 3 (St. Martins Court)

7 floors above ground, 2 floors underground
Total floor area: Approx. 17,000m²
Construction period: Started in August 2001 - To be completed in May 2003

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Building 4

6 floors above ground, 2 floors underground
Total floor area: Approx. 11,000 m²

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Building 5

5 floors above ground, 2 floors underground
Total floor area: Approx. 4,000m²

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Common-use Area (including Paternoster Lodge (Building 6))

Total floor area: Approx. 6,000m²

*Note: Names of the buildings are tentative.

1993

Approval for development obtained

1995

Purchased shares of Graycourt Corporation (British developer) and Park Tower Corporation (American developer), both of whom were business partners
(Mitsubishi Estate Group controls 100% of the project)

1996

Started review of the development plan

1997

Submitted New Master Plan to authorities for development approval

1999

Obtained development approval
Began building demolition

2000

Began construction of common-use area