Leisure

The Group's leisure investments have been managed since August 2009 by X-Leisure Limited, a new joint venture between Capital & Regional and Hermes in partnership with X-Leisure Limited's management. It is responsible for management of the X-Leisure fund and the Group's investments in Great Northern, Hemel Hempstead and Braehead, and oversees the SNO!zone operating business.

What is the X-Leisure Fund?

The X-Leisure fund is the largest specialist fund investing in UK leisure property, owning 17 properties throughout the UK and as at 30 June 2010 had a total floor space of 3.3 million square feet. The Group held 19.4% of the fund but this fell to 11.9% in July 2009 when it chose not to take up its full allocation under the open offer. X-Leisure Limited carries out the asset and non-FSA regulated fund management activities for the X-Leisure fund. Hermes acts as Operator, responsible for FSA regulated fund management activities.

Investors hold units in a Jersey Property Unit trust (JPUT) which allows exposure to a diversified portfolio of properties without direct investment and the ability to transfer units without incurring Stamp Duty Land Tax.

The fund's investment criteria are as follows:

• 50% or more of rental income generated from leisure operators.
• Either is, or is able to be, anchored by a cinema.
• Either is the dominant scheme in a local catchment area or has the ability to become so.
• Asset management opportunities or latent potential to deliver required performance.