Interim Management Statement

6 NOVEMBER 2012

CAPITAL SHOPPING CENTRES GROUP PLC

INTERIM MANAGEMENT STATEMENT FOR THE PERIOD FROM 1 JULY TO 6 NOVEMBER 2012

Highlights of the period

·; Operational indicators outperforming national benchmarks:

o Second consecutive quarter of improving year-on-year footfall trend

o Occupancy broadly steady at 96 per cent (30 June 2012 - 95 per cent)

·; Tenant mix improvements driving retailer investment and footfall:

o New brands brought to CSC centres include Apple at The Harlequin, Watford and The Glades, Bromley; Vivienne Westwood, A|X and Hamley's at St David's, Cardiff; and Schuh Kids at Lakeside and Braehead

o 45 new long term leases signed, CSC's share in aggregate £12 million of annual rent, around 6 per cent above previous passing rent and in line with valuation assumptions

·; Progress with major projects:

o Continued programme of value-enhancing active management initiatives with "MetrOasis" restaurant development opening in September

o Lakeside - planning consent secured for 325,000 sq. ft. retail extension

o Watford - terms agreed with local council for redevelopment of adjoining Charter Place to create a combined 1.4 million sq. ft. regional destination

o Nottingham - close to agreement with local authority on the redevelopment of Broadmarsh and its surroundings

·; Strengthening the financial position:

o Issued £300 million 2.5 per cent 2018 convertible bonds which completed in October and augmented the group's cash and available facilities of £289 million at 30 September

David Fischel, Chief Executive of Capital Shopping Centres Group PLC, commented:

"Our prime UK shopping centres have recorded positive momentum with steady footfall figures and the opening of 60 new stores and restaurants in the period. We continue to make good progress on our pipeline of active management projects and extensions which will ensure that our centres continue to provide attractive destinations to consumers and retailers for the long term."

ENQUIRIES:

Conference call

A conference call for analysts and investors will be held today at 9.00 GMT.

A copy of this announcement is available for download from our website at

www.capital-shopping-centres.co.uk

Introduction

The third quarter has been characterised by positive momentum in our centres, with some 60 new stores opening and stable occupancy. The on-going financial effects in the form of vacancy and void costs of retailer failures at the end of 2011 and to date in 2012 will, however, take some time to clear.

At the same time we have made considerable progress on our major development opportunities. At Lakeside we have obtained a favourable planning decision for a long-awaited retail extension. At Watford we now have agreement with the local authority over objectives for an improved town centre retail and leisure offer. At Nottingham our discussions with local stakeholders have progressed well.

We have also taken the opportunity of an improved corporate borrowing environment to increase the group's financial flexibility and broaden its sources of funding through a significant convertible bond issue.

Operational indicators

CSC continues to benefit from shoppers' and retailers' focus on the UK's stronger retail destinations:

·; We have achieved a second consecutive quarter of improved footfall trends in our centres, with particularly encouraging increases in Manchester, Cardiff and Watford. For the year to date, CSC's footfall is now one per cent below that at the same point of 2011. By comparison, benchmark UK national retail footfall for the year to date as measured by Experian is three per cent below that of 2011

·; Occupancy across CSC's centres is steady at 96 per cent (30 June 2012 - 95 per cent, 31 December 2011 - 97 per cent). By contrast, UK town centre shop vacancy remains around 15 per cent according to the Local Data Company. We have successfully relet the majority of the 131 units (6 per cent of rent) affected by tenant failures in the year to date. However, 48 units (2 per cent of rent) still remain closed and in the hands of administrators

·; We have made good progress in addressing 2012 lease expiries and in managing in advance those due in 2013. At the beginning of 2012 these amounted to 11 per cent and 10 per cent respectively of the Group's rent roll

Tenant mix improvements

Some 60 new stores have opened in our centres since June including 6 new brands opening in a CSC centre for the first time. In a significant demonstration of commitment, tenant investment in these and other stores across the portfolio amounts to over £50 million for the year to date.

45 new long term leases have been agreed, in aggregate £14 million of annual rent (CSC's share £12 million). Overall the new terms represent a 6 per cent increase from previous passing rent for those units and are in line with valuation assumptions. These include significant new UK and international brands and established retailers up- and down-sizing to create their optimal format, for example:

·; Victoria's Secret - to open at The Trafford Centre in mid 2013, their first UK store outside London

·; Next at The Trafford Centre, Ernest Jones at Lakeside and H&M at The Chimes, Uxbridge - all upsizing and part of a continuing trend of unit consolidation to meet strong tenant demand for larger format stores

·; L'Occitane - now open in Eldon Square, their first store in Newcastle city centre and Office, opening their largest store in the North

·; Thomas Sabo - open at Victoria Centre, Nottingham, and coming soon to Chapelfield, Norwich

Active management and organic growth opportunities

CSC's business model starts with a focus on the consumer with the objective of providing compelling destinations. We estimate that we attract some 30 million individual visitors per annum who are increasingly knowledgeable about the range of channels available to them and look to our centres for the ideal combination of product, experience and service.

Our active management projects and major extension plans are focused on providing the right mix of global and top UK retail brands alongside the best places to eat and socialise.

·; Active management projects include the following:

o At Braehead we have completed our refreshment of the upper mall, introducing retailer-branded double-height panels, new lighting and better sight lines. The fresh feel will be reinforced by new catering concepts opening before Christmas

o At The Trafford Centre, work has started in Barton Square to create a Sealife Aquarium attraction near to the LegoLand Discovery Centre and planning consent has been granted for 93,000 sq. ft. of additional retail space on the upper level

o At Metrocentre, we are creating a new "Platinum" mall, bringing a more aspirational feel to the brands on offer and the dining experience. The 360 Champagne Bar and Mamas & Papas have opened, with more new names to come before Christmas. Recent lettings have demonstrated good growth in restaurant rental levels

·; At Lakeside, having secured planning consent we are reviewing options for compelling new attractions in the retailer mix. Subject to signing up an appropriate level of pre-lets, we could be on site in 2014. We are also working on plans for a new leisure destination at Lakeside comprising new cafes, restaurants, bars and various leisure uses

·; At Watford, the adjoining Charter Place offers us the opportunity to develop over 320,000 sq. ft. to meet unsatisfied demand in the town centre for larger format units appropriate for flagship stores and to rectify the limited catering and leisure offer in the town. We expect to make a planning application in early 2013 and the new destination could be open when the Metropolitan underground line extension completes in 2015

·; At Nottingham, the City has potential to offer one of the UK's finest shopping experiences.Discussions between CSC and Nottingham City Council have progressed well and are now focused on achieving heads of terms for a development agreement which will enable a core scheme to be progressed at Broadmarsh. At Victoria Centre, refurbishment options for the interiors are being developed with architects and the planning application for the Northern Extension remains with the Council.

·; We have acquired for £2.8 million a 17 acre property adjacent to Metrocentre with potential for future development

Financing

On 20 September the group announced the issue of £300 million 2.5 per cent convertible bonds due 2018. Settlement took place in October. We regard the convertible bond as a positive component of the group's overall capital structure.

At 30 September 2012 net external debt had increased marginally to £3.5 billion and the net debt to assets ratio based on 30 June 2012 valuations was 49.5 per cent. On a pro forma basis, were the convertible bonds to convert into equity, the net debt to assets ratio would reduce to 45 per cent.

Property valuations

We continue to see a good level of interest from investors for the highest quality retail assets which is keeping yields firm and underpinning valuations. By contrast, demand continues to weaken for non-prime properties, with capital values according to the IPD monthly index relating to all retail falling by 1.3 per cent for the third quarter, 4.2 per cent for the year to date (CSC six months to 30 June 2012 - no change).

The next independent valuation of CSC's assets will be undertaken on 31 December 2012 and published with the results for 2012 on 27 February 2013.

NOTES TO EDITORS:

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