REAL ESTATE OPPORTUNITIES LIMITED                       

                           ("REO" OR THE "COMPANY")                            

At launch in 2001 REO drew down a loan of Euro188m to finance part of its income
portfolio. The interest rate on this loan was fixed at 5.18% through an
interest rate swap contract. As disclosed in previous announcements, the loan
has been substantially repaid and, as at 16 January 2004, Euro15 million of bank
debt remained outstanding. The interest rate swap, however, was kept in place.

The swap contract has been broken today, resulting in break costs of 
Euro15,354,884. The loan balance of Euro15m has also been repaid with no additional
costs incurred. The break costs and debt repayment have been funded from sales
of substantially all the Company's bond investments. The portfolio of split
capital investment companies has been retained. Outstanding cash balances in
the income portfolio will be invested in authorised funds investing primarily
in high yielding fixed interest securities.

19th January 2004



END