NEW ACTIVITY FOR THE COMPANY WAS FOCUSED ON EXPANDING OUR DEVELOPMENT PROGRAM IN BOTH NEW AND VALUE-ADDED OPPORTUNITIES.

Our American offices in San Francisco and Washington D.C. delivered strong performances during 2000 with high occupancy levels and good rental growth throughout the portfolio. As a result, our combined income and capital growth was the highest for many years. In Canada, our portfolio delivered a less spectacular but solid performance that reflected its weighting in British Columbia which was slower to recover than the rest of the country. However, towards the end of the year, British Columbia saw a steadily improving economy and our retail centers experienced good sales growth.

There are concerns about the U.S. economy in 2001 and its ramifications worldwide. The property markets in North America show little sign of overbuilding and, while we anticipate a significant slowing, it is not expected to be comparable to the decline of a decade ago. Probably the most exposed market is San Francisco where office rents have doubled over the last 18 months. This is one of the main centers in the U.S. for e-commerce and as the dot.com fallout has already been significant we expect a decline in rental levels and capital values in the office sector. However, our urban retail properties in San Francisco are unlikely to be significantly affected.

New activity for the company was focused on expanding our development program in both new and value-added opportunities. Due to its management intensive nature our development activity is centered on those cities in which the company has operating offices.

On the U.S. East Coast, our Washington D.C. office continued its development at WesTech Business Park with the completion and leasing of Tec Hill I and the planning of Phase II (a further 75,000 sq. ft. office building) which already has strong tenant interest. We have land with entitlements for a further 700,000 sq. ft at WesTech, to develop as demand dictates. We also completed our development agreement with the University of Maryland for a high-tech research park within their campus grounds and our first building of 63,000 sq. ft. was leased to a single occupier prior to the start of construction.

In Tampa, the expansion of WestShore Plaza, now 1.03 million sq. ft, was completed and substantially leased by November of 2000 with strong sales being reported throughout the Center. Plans for expansion of Beaumont Business Park were approved and construction will begin early in 2001.

In the San Francisco Bay Area, development activity was centered on the Peninsula and Silicon Valley, both of which have experienced very rapid rental growth. Based on sustainable rental levels, we are expanding 600 Clipper Drive, Belmont for our existing tenant and continued with our program of upgrade and releasing at our 317,000 sq. ft. campus at Results Way, Cupertino.

Development activity also increased in British Columbia and Alberta. In Vancouver, we continued development at Annacis Business Park with a further 215,000 sq. ft. of warehouse distribution space and Phase I of our 226,000 sq. ft. South Surrey Shopping Center (South Point Exchange) was successfully completed, leased and opened. Phases II and III should be completed during 2001.

In Edmonton, Alberta, we entered into an agreement with Cameron Corporation to develop the country's largest retail power center, South Edmonton Common. A total of 725,000 sq. ft. of retail space has already been developed with a further 76,000 sq. ft. underway. The total size is projected to be 2.3 million sq. ft.

As part of our strategy to concentrate on fewer markets, we decided to sell our 50% remaining interest in Grosvenor Center in Honolulu, Hawaii. This is one of the major office complexes in downtown Hawaii that the Company developed approximately 20 years ago. The funds raised will be reinvested in markets closer to our established offices.

Top: US Bank Plaza, Sacramento, California, a 25 storey building with 427,000 sq ft of offices and retail space with adjoining car parking.

From left:
600 Clipper Drive, Belmont, California, where expansion is underway for an existing tenant.

Altius Centre, Calgary, Canada, a 304,583 sq ft office building on 31 floors with car parking.

Results Way Corporate Park, Cupertino, California, a 317,000 sq ft research and development campus.

Citibank Center, Los Angeles, California, a 48 floor, 879,000 sq ft office building with car parking.

Beaumont Business Center, a 229,642 sq ft office park, undergoing expansion.

Two North Lake, Pasadena, an eleven storey, 228,000 sq ft office building with an adjoining eight storey split level car park.

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