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Gregory Property Group
2 The Embankment, Sovereign Street
Leeds, LS1 4GP

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GREGORY PROPERTY GROUP LIMITED

STRATEGIC REPORT

FOR THE FIVE MONTH PERIOD ENDED 30 JUNE 2016

Fair review of the business

Group has changed its year end to 30 June meaning the latest accounts are for the five month period ended 30 June but the Report embraces the year to 31 January 2016.

This period has been very busy with two corporate sales and an upsurge in development activity.

An important disposal was the sale of Gregory Projects (Halifax) Limited to Palace Capital PLC in March this year which closely followed the refinancing of Broad Street Plaza with Barclays reported in the 31 January 2015 Accounts The Barclays debt was included in the sale and Group's indebtedness to CDP/Marshall Group was erased as part of the deal. Although Group has lost a significant, income-producing asset it has also seen an end to a large bank loan and equity funding on the project.

A second corporate sale was of Horsforth Office Park Limited in June this year where the asset was a dilapidated, Listed mill in North Leeds which had recently benefitted from planning consent for residential development. It was felt that to sell Corn Mill Fold at an opportune time was the best way forward having experienced a troublesome ten year period deciding its future.

Allowing for the discontinued operations in the five months we incurred a loss on ordinary activities before tax of (£50,430); with an increase in Shareholders' Funds to £2,234,754 .

With regard to Great Eastern Way, Rotherham only recently has a letting of the last unit taken place although practical completion of the whole scheme was achieved in the Autumn of last year. Conclusion of the Forward Funding Agreement will occur following a lease being entered into on the final unit.

In December 2015 full planning permission for the Regent Street scheme was belatedly obtained leading to finalisation of forward-funding discussions with Riverside Capital. Building work has progressed very well with practical completion expected in December 2016.

The Ossett development was practically completed last month with the benefit of a pre-sale of Unit 1 to Simpson Packaging. The other two units are spoken for but with a delay in the completion of Unit 2.

The small, Menston (Bradford) project had achieved practical completion following which the Sainsbury investment was sold to a Yorkshire-based Trust. The four flats over have recently been put in the market to let with an investment loan under negotiation.

At Brighouse a second and final letting to Pets at Home was secured before building works got underway. Practical completion has been secured and the forward investment sale concluded.

Work on the central Darlington Listed building had just been completed with the upper floors sold to a residential developer and the ground and basement levels let on lease to a bar operator who hopes to commence trade in November.

Terms have been agreed to purchase an industrial site adjoining Pontefract Racecourse close to Junction 32 on the M62. The site is suitable for approx. 145,000 sq ft of sheds for which a planning application will be submitted before Christmas.

On the residential front our development at Pudsey, Leeds has just got underway with demolition. The development will comprise twelve townhouses in two blocks for which full equity finance has been secured.

We have just completed the purchase of a site in Monk Fyston and obtained full planning permission for nine dwellings. Development Finance is being negotiated although land finance has been secured.

A proposed joint venture at Eccleshill, Bradford has been slow to mature although full planning permission has now been granted. The scheme comprising twenty-nine houses should get underway before Christmas with development finance being negotiated. Our JV partner and Group will fund the land purchase together.

In addition to Park Road, Pontefract we are pursuing two other sites in Leeds and Harrogate.

John P McGhee was appointed a Group Board Director on 16 February 2016. It was felt that his long, banking career would be of considerable assistance to Group in the changing financial times we are travelling through.

Finally, future commercial activity will be undertaken in Gregory Projects (Commercial) Ltd and residential activity in Gregory Projects (Residential) Limited each being a subsidiary of Gregory Projects Limited.

G BARRY GREGORY

CHAIRMAN

17 October 2016

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