THIS GUIDE AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser, who is authorised under the Financial Services and Markets Act 2000 if you are in the United Kingdom, or, if not, from another appropriately authorised independent financial adviser.

If you have sold or otherwise transferred all of your Ordinary Shares, please forward this Guide and all accompanying documents to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected.

Hammerson

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

21 MARCH 2011

2 GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

Important Information

Section 1 of this Guide, on pages 3 to 10, contains the terms and conditions of the Hammerson Scrip Dividend Scheme, including information for UK Shareholders. If you are an Overseas Shareholder, your attention is drawn to Section 2, pages 11 and 12, which sets out the availability of the Scheme to such Shareholders. A summary of how UK Shareholders and Shareholders resident in France are likely to be treated for tax purposes if they elect to receive New Shares instead of a cash dividend is set out in Section 3 on pages 13 to 21. Definitions of terms used in this Guide can be found in the Glossary on pages 22 and 23.

The Hammerson Scrip Dividend Scheme will apply to any interim and final dividends in respect of which the Directors offer a Scrip Dividend Alternative. An expected timetable of events in relation to the application of the Scrip Dividend Scheme to a particular Scheme Dividend will be made available on the Company's website at, or around, the same time that dividend is announced by the Company.

The Hammerson Scrip Dividend Scheme enables the Directors to offer Shareholders New Shares instead of cash in respect of a dividend. There is, however, no guarantee that the Directors will apply the Scheme to any particular future interim or final dividend. The Directors also have the power to amend, suspend or withdraw the Scheme at any time. The applicability of the Hammerson Scrip Dividend Scheme for any dividend is also conditional on the Directors having the authority from Shareholders to offer Scrip Dividend Alternatives. At the Company's Annual General Meeting on 30 April 2009, Shareholders granted the Directors such authority for a period of five years.

Application will be made for the New Shares to be admitted to the Official List of the UK Listing Authority and to the London Stock Exchange's market for listed securities.

Shareholders who do not wish to participate in the Hammerson Scrip Dividend Scheme will receive dividends in cash and do not need to take any further action. Similarly, where the Scheme does not apply to a particular dividend, all Shareholders will instead receive a cash dividend in the usual way (save for those Shareholders who participate in the DRIP who will receive Ordinary Shares in accordance with the terms of the DRIP). The payment of cash dividends or a Scrip Dividend Alternative may be subject to withholding tax when such distributions are paid as Property Income Distributions ('PIDs').

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

SECTION 1

TERMS AND CONDITIONS OF THE HAMMERSON SCRIP DIVIDEND SCHEME

The following explains how the Scheme operates and sets out further details and terms of the Scheme.

1. What is the Hammerson Scrip Dividend Scheme?

The Hammerson Scrip Dividend Scheme has been established by the Directors in accordance with the Company's Articles of Association and pursuant to the authority given to the Directors at the Company's Annual General Meeting on 30 April 2009.

Scrip dividends enable Shareholders to increase their holding in the Company in a simple manner, without incurring any dealing costs or stamp duty. Scrip dividend shares which are issued in exchange for depository receipts or directly to a clearance service may attract a charge to stamp duty reserve tax at 1.5% of the price of the securities when issued (i.e. the cash dividend forgone). However this charge should not generally apply where shares are issued to a depository receipt issue service located within the European Union. Scrip dividends also enable the Company to retain more cash in its business, which would otherwise be paid as cash dividends. Participating Shareholders will receive new Ordinary Shares in the Company ('New Shares'), credited as fully paid, instead of cash in respect of any interim or final dividend to which the Directors elect that the Scheme shall apply (a 'Scheme Dividend').

Participating Shareholders will receive New Shares instead of cash for any future Scheme Dividends, except for Shareholders holding in CREST who will need to elect to receive New Shares for each dividend for which a Scrip Dividend Alternative is offered (please see the response to Question 9 below for details). Shareholders who do not wish to participate in the Hammerson Scrip Dividend Scheme will receive dividends in cash and do not need to take any further action. Similarly, where the Scheme does not apply to a particular dividend, all Shareholders will receive cash for that dividend (save for those Shareholders who participate in the DRIP who will receive Ordinary Shares in accordance with the terms of the DRIP). Shareholders can join and may leave the Scheme at any time by cancelling their Mandate instructions and reverting to receiving dividends in the form of cash.

A Scrip Dividend Alternative can be treated as a PID (and withholding tax may therefore be payable). The Company will advise whether or not any particular Scrip Dividend Alternative will be treated as a PID when the decision to offer a Scrip Dividend Alternative is announced.

Each Shareholder's decision to join the Hammerson Scrip Dividend Scheme depends on their individual circumstances and Shareholders should consider the rest of this Guide and in particular the taxation summary set out in Section 3 on pages 13 to 21.

2. Which dividends will the Hammerson Scrip Dividend Scheme apply to?

The Scrip Dividend Scheme will apply to any dividend for which the Directors elect to offer a Scrip Dividend Alternative.

Shareholders should note that whilst the introduction of the Hammerson Scrip Dividend Scheme enables the Directors to offer Shareholders a Scrip Dividend Alternative there is no guarantee that the Directors will elect to apply the Scheme to any particular future interim or final dividend.

The Directors also have the power to amend, suspend or withdraw the Scheme at any time. The applicability of the Hammerson Scrip Dividend Scheme for any dividend is also conditional on the Directors having the authority from Shareholders to offer Scrip Dividend Alternatives. At the Company's Annual General Meeting on 30 April 2009, Shareholders granted the Directors such authority for a period of five years.

Due to its status as a REIT, the Company is obliged to pay a certain level of distributions as PIDs. As explained in the tax summary in Section 3 of this Guide, a scrip dividend may be treated as a PID or a Non-PID. The Directors may, at their discretion, designate a scrip dividend as a PID or a Non-PID to ensure that the Company meets the required level of PID.

When dividends are announced the Company will advise whether the Scrip Dividend Scheme applies and whether any Scrip Dividend Alternative is to be treated as a PID or a Non-PID.

3. Who can join the Scheme?

All UK Shareholders can join the Hammerson Scrip Dividend Scheme. Most Overseas Shareholders should be eligible to join the Scheme. Further details regarding Overseas Shareholders can be found in the response to Question 15 below and in Section 2, pages 11 and 12 of this Guide.

4. How do I join the Scheme?

Shareholders can join the Scheme by completing and returning a Mandate Form. The Mandate Form may be amended from time to time and so Shareholders should obtain the latest version of the Mandate Form from Capita Registrars (whose contact details are included in the response to Question 22 below).

4 GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

Shareholders who wish to join the Scheme should complete and sign the Mandate Form in accordance with the instructions thereon and return it in the envelope provided. Please note that no acknowledgement of receipt of Mandate Forms will be issued.

Shareholders who hold their Ordinary Shares in CREST can only elect to receive Scrip Dividend Alternatives in the form of New Shares by use of the CREST Dividend Election Input Message (any Mandate Forms or other forms of instruction received from CREST holders will not be accepted and will be ignored). For further details see the response to Question 5 below.

The expected timetable of events in relation to the application of the Scheme to a particular Scheme Dividend will be made available on the Company's website at, or around, the same time that dividend is announced by the Company. Unless otherwise directed by the Company, duly signed and completed Mandate Forms must be received by Capita Registrars at least 15 business days before the relevant Dividend Payment Date to be eligible for the Scrip Dividend Alternative for that dividend. Valid Mandate Forms received after the relevant election deadline will be applied to the next dividend to which the Scheme applies.

Upon the execution of a Mandate Form, either personally or on behalf of the relevant Shareholder, that Shareholder is deemed (in respect of themselves, their heirs, successors and assigns): (a) to agree to participate in the Hammerson Scrip Dividend Scheme pursuant to its terms (as may be amended from time to time by the Directors); and (b) to authorise the Company or its agent to send to the Shareholder, at the Shareholder's registered address and at the Shareholder's risk, any definitive share certificate in respect of New Shares allotted.

A Shareholder's Mandate will remain in force in respect of their entire holding of Ordinary Shares for all future Scheme Dividends until cancelled by them in writing. For further details of how to cancel a Mandate see the response to Question 18 below.

5. I hold my Ordinary Shares in CREST, how do I join the Scheme?

If a Shareholder's holding is in uncertificated form in CREST (and was in uncertificated form as at the relevant Record Date), that Shareholder can only elect to receive their dividend in the form of New Shares by means of the CREST procedure to effect such an election. No other method of election will be permitted under the Scheme and will be rejected. If a Shareholder is a CREST sponsored member, they should consult their CREST sponsor, who will be able to take appropriate action on their behalf.

All elections made via the CREST system should be submitted using the CREST Dividend Election Input Message in accordance with the procedures as stated in the CREST Reference Manual. CREST Personal Members and other CREST Sponsored Members are recommended to consult their CREST sponsor who will be able to take the appropriate action on their behalf. The CREST Dividend Election Input Message submitted must contain the number of Ordinary Shares on which the election is being made. If the relevant field is left blank or completed with zero the election will be rejected. If the Shareholder enters a number of Ordinary Shares greater than the holding in CREST on the relevant Record Date, the election will be applied to his total holding held as at the relevant Record Date for the dividend. 'Evergreen' elections by Shareholders holding in CREST will not be permitted in respect of the Scrip Dividend Scheme. If such Shareholders wish to receive New Shares instead of cash in respect of future Scheme Dividends, they must complete a CREST Dividend Election Input Message on each occasion otherwise they will receive the dividend in cash.

The expected timetable of events in relation to the application of the Scheme to a particular Scheme Dividend will be made available on the Company's website at, or around, the same time that dividend is announced by the Company. Unless otherwise directed by the Company, elections via CREST should be received by CREST no later than 5:00pm on such date that is at least 15 business days before the Dividend Payment Date for the relevant dividend in respect of which they wish to make an election. CREST Dividend Election Input Messages received after the relevant election deadline will be rejected by Capita Registrars.

Once an election is made using the CREST Dividend Election Input Message it cannot be amended. Therefore, if a Shareholder holding their Ordinary Shares in CREST wishes to change their election, the election would have to be cancelled and re-submitted accordingly.

Upon the submission of the CREST Dividend Election Input Message, either personally or on behalf of the relevant Shareholder, that Shareholder is deemed (in respect of themselves, their heirs, successors and assigns): (a) to agree to participate in the Hammerson Scrip Dividend Scheme pursuant to its terms (as may be amended from time to time by the Directors); and (b) to authorise the Company or its agent to credit the New Shares allotted to the participant's CREST account on the date that dealings in the New Shares commence.

If a Shareholder holds Ordinary Shares partly in certificated form and partly in uncertificated form, such shareholdings will be treated as if they were separate holdings. As set out in the response to Question 4 above, a Mandate Form will be required for the Ordinary Shares held in certificated form and a CREST Dividend Election Input

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

Message will be required for the Ordinary Shares held in uncertificated form.

Shareholders holding their Ordinary Shares in CREST who have made an 'evergreen' CREST Dividend Election Input Message in respect of the DRIP are referred to the response to Question 20 below which contains further details of how they can elect to join the Scrip Dividend Scheme.

6. How many New Shares will I receive?

In accordance with the Company's Articles of Association, a Shareholder's entitlement to New Shares for Scheme Dividends will be calculated by taking the amount of cash dividend to which they are entitled (or 80% of that amount where the Scrip Dividend Alternative is paid as a PID and withholding applies), i.e. the number of Ordinary Shares held by that Shareholder at the Record Date (or 80% of that number, as the case may be) multiplied by the cash value in pounds sterling of the Scheme Dividend per share, plus any residual Cash Balance held in respect of that Shareholder resulting from a previous Scheme Dividend and dividing it by the Scrip Reference Share Price.

The Scrip Reference Share Price shall be the average of the middle market quotations for the Ordinary Shares on the London Stock Exchange as derived from the Daily Official List, for the day on which the Ordinary Shares are first quoted 'ex' the relevant dividend and the four subsequent dealing days. The results of this calculation will be announced by the Company shortly after the last dealing day and will be available on the Company's website: www.hammerson.com, on the 'Investors' page.

The formula which will be used (assuming no withholding applies) is set out below:

$$
\frac{\text{(Number of Ordinary Shares held at the Scheme Dividend's Record Date}}{\text{x cash value of the Scheme Dividend per share)}} + \text{any Cash Balance}
$$

Scrip Reference Share Price

Fractions of Ordinary Shares will not be allotted and any resulting Cash Balances in respect of Shareholders who hold their Ordinary Shares in certificated form will be carried forward, without interest, and included in the calculation of the next Scheme Dividend payment. For further detail in relation to the treatment of Cash Balances, see the response to Question 7 below.

If the amount of cash dividend to which a Participating Shareholder is entitled in respect of any Scheme Dividend, together with any Cash Balance held on behalf of that Shareholder, are not sufficient for that Shareholder to be allotted at least one New Share pursuant to the Scheme, that Shareholder will not be issued with any New Shares pursuant to the Scheme for that Scheme Dividend. Instead, in respect of Shareholders who hold their Ordinary Shares in certificated form, that Shareholder's cash dividend entitlement will be added to their Cash Balance and carried forward to the next Scheme Dividend. In that situation, that Shareholder will, however, still receive a Scheme Statement showing that no New Shares have been issued in respect of the Scheme Dividend and noting the amount of Cash Balance held by the Company in respect of that Shareholder. See the response to Question 8 below for further information on Scheme Statements.

Worked example of a Scheme Dividend (for illustrative purposes only):

Assuming the following:

a Scheme Dividend with a cash value of 8.8p per Ordinary Share;
a Participating Shareholder who holds 1,000 Ordinary Shares and who elects for the Scheme for the 2010 Final Dividend;
a Cash Balance of 250p (i.e., residual cash left over from previous applications of the Scheme. (See the response to Question 8 below for further information on Cash Balances); and
a Scrip Reference Share Price of 447.8p; and
no withholding tax applies.

The Participating Shareholder would be entitled to a total amount of cash dividend of £88.00 (i.e. 1,000 Ordinary Shares multiplied by the 8.8p cash value of the Scheme Dividend). Together with the existing Cash Balance, the total cash value to be applied towards New Shares for that Participating Shareholder would be £90.50.

6 GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

The number of New Shares that the Shareholder would receive pursuant to the Scheme would be calculated as follows:

$$
\frac{(1,000 \times 8.8p) + 250p}{447.8p} = 20.21
$$

The Shareholder would be entitled to 20 New Shares (i.e. 20.21 rounded down to the nearest whole number) with a total value of £89.56 based on a Scrip Reference Share Price of 447.8p. A residual Cash Balance of 94p, being the total value of the 20 New Shares at the Scrip Reference Share Price subtracted from the £90.50 total cash value available, would then either be carried forward and applied to the next Scheme Dividend in respect of Shareholders who hold their Ordinary Shares in certificated form, or paid in cash in respect of Shareholders holding in CREST.

7. How are fractional entitlements to be dealt with and what will happen with any Cash Balance?

For Shareholders who hold their Ordinary Shares in certificated form, the position is as follows:

As it is possible that a Shareholder's entitlement to New Shares may not give an exact number of New Shares, a Shareholder's entitlement to the cash value of these fractions, the Cash Balance, will be retained by the Company (without interest) for the benefit of that Shareholder. This residual Cash Balance will be carried forward to be included in the calculation of the next Scheme dividend. Residual Cash Balances arising from a Scheme Dividend can only be applied to future Scheme Dividends and cannot be applied to the acquisition of Ordinary Shares pursuant to the DRIP (see the response to Question 20 below for information on the application of the DRIP).

If:

(i) the Mandate of a Shareholder ceases to remain in force;
(ii) a Shareholder disposes of their entire holding of Ordinary Shares;
(iii) the Company terminates the Scheme; or
(iv) a Shareholder dies, becomes bankrupt, goes into liquidation or suffers from mental incapacity,

any Cash Balance held by the Company on behalf of that Shareholder will be paid (without interest) to the Shareholder or their estate or trustee entitled thereto as applicable. Such Cash Balances will be paid in the same way as the cash dividends were paid at the last Scheme Dividend before the occurrence of the relevant exit event listed above, whether as a PID or a Non-PID and will be taxed accordingly (please see the taxation summary for cash dividends set out on in Section 3 of this Guide). For example, if cash dividends paid in respect of the last Scheme Dividend before the occurrence of the relevant exit event were paid as a PID, accordingly, any such Cash Balance to be paid out on the exit event will also be paid out as a PID.

For Shareholders holding in CREST, the position is as follows:

As 'evergreen' elections by Shareholders holding in CREST are not permitted under the Scheme, Cash Balances will not be retained by the Company for such Shareholders. Accordingly, any Cash Balance arising for any such Shareholder will be paid to that Shareholder in cash on the applicable Dividend Payment Date. Such Cash Balances will be paid in the same way as the cash dividends are paid for that Scheme Dividend, whether as a PID or a Non-PID and will be taxed accordingly (please see the taxation summary for cash dividends set out in Section 3 of this Guide). For example, if cash dividends paid in respect of a particular Scheme Dividend are paid as a PID, accordingly, Cash Balances paid to Shareholders holding in CREST for that Scheme Dividend will also be paid as a PID.

8. How will I know how many New Shares I have received pursuant to the Scheme?

Once New Shares are allotted in respect of a Scheme Dividend, Participating Shareholders will each receive a Scheme Statement in respect of that Scheme Dividend showing the number of Ordinary Shares registered in that Shareholder's name as at the applicable Record Date; the number of Ordinary Shares for which a valid Mandate was given; the number of Ordinary Shares for which no valid Mandate was given; the number of New Shares allotted to that Shareholder pursuant to the Scheme; the applicable Scrip Reference Share Price; the amount of any Cash Balance carried forward to the next Scheme Dividend for that Shareholder; and the total cash equivalent of the New Shares allotted to that Shareholder (which Shareholders may require for tax purposes).

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

Will I have to apply again for the Scrip Dividend Alternative for the next Scheme Dividend?

A valid Mandate given by Shareholders who hold their Ordinary Shares in certificated form will apply for all future Scheme Dividends unless the Mandate is revoked. Accordingly such Shareholders will not need to re-apply for the Scrip Dividend Alternative on each Scheme Dividend. Please see the response to Question 4 above for details of how to join the Scheme through the completion of a Mandate Form and the response to Question 18 below for details of how to cancel a Mandate.

Shareholders holding their Ordinary Shares in CREST will, however, need to elect to take the Scrip Dividend Alternative for each Scheme Dividend via a CREST Dividend Election Input Message and will receive a cash dividend if they do not make such election for any Scheme Dividend. Please see the response to Question 5 above for details of how Shareholders holding in CREST can join the Scheme.

Would my New Shares be included in the next dividend?

Yes, all New Shares issued as scrip dividends will automatically increase a Shareholder's shareholding on which the next entitlement to a dividend (whether a Scrip Dividend or otherwise) will be calculated.

Would my New Shares under the Scheme have the same voting rights as my existing Ordinary Shares?

Yes, the New Shares will carry the same voting rights as existing Ordinary Shares. The New Shares will be issued subject to the Articles of Association of the Company and will rank equally with the existing Ordinary Shares in all respects.

When will I receive my New Shares?

Application will be made for the New Shares to be admitted to the Official List of the UK Listing Authority and to the London Stock Exchange's market for listed securities. Subject to both admissions, the New Shares will be issued and new share certificates and Scheme Statements will be posted to Shareholders, at their registered addresses and at each Shareholder's risk, on or about the same date as dividend warrants are posted to Shareholders who are taking the dividends in cash. The expected date in respect of each Scheme Dividend will be made available on the Company's website: www.hammerson.com, on the 'Investors' page. The expected timetable of events in relation to the application of the Scheme to a particular Scheme Dividend will be made available on the Company's website at, or around, the same time that dividend is announced by the Company. Dealings in the New Shares on the London Stock Exchange are expected to begin on the relevant Dividend Payment Date.

Participating Shareholders who hold their Ordinary Shares in CREST will have their CREST accounts credited directly with the New Shares, in accordance with their entitlement and the terms and conditions of the Scheme, and will be notified via CREST on the Dividend Payment Date. If the Company or Capita Registrars is unable to do this under the provisions of any applicable law or regulation (in particular the Uncertificated Securities Regulations 2001) or the facilities and requirements of CREST, the New Shares will be issued as certificated shares and share certificates will be posted to the Shareholder as above.

In the unlikely event that the New Shares are not admitted to listing on the Official List, the listing does not become effective, or the New Shares are not admitted to trading on the London Stock Exchange, that Scheme Dividend will instead be paid to Participating Shareholders in cash on or as soon as reasonably practicable after the relevant Dividend Payment Date and the Company will advise whether such cash dividend will be paid as a PID.

Does the Scheme apply to Ordinary Shares held in joint names?

Yes, the Scheme applies to Ordinary Shares held in joint names. In the case of Shareholders who hold their Ordinary Shares in certificated form, all joint Shareholders will need to sign the Mandate Form to exercise their right to receive New Shares instead of cash. In the case of Shareholders who hold their Ordinary Shares in CREST, all joint Shareholders will need to submit their elections using the CREST Dividend Election Input Message in accordance with the procedures as stated in the CREST Reference Manual.

Can I complete a Mandate for part of my Ordinary Shares?

In respect of Ordinary Shares held in certificated form, Mandates will only be accepted in relation to an entire holding of Ordinary Shares. A Mandate Form submitted in respect of less than the number of Ordinary Shares in a Shareholder's holding will be rejected.

However:

(i) as set out in the response to Question 5 above, if a Shareholder holds Ordinary Shares partly in certificated form and partly in uncertificated form, such holdings will be treated as if they were separate holdings and accordingly a Shareholder could make different elections in relation to those Ordinary Shares held in certificated form from those held in CREST;

(ii) the Company may, at its discretion, permit a Shareholder to grant a Mandate for a particular dividend in respect of a lesser number than their full holding where that Shareholder is acting as a nominee Shareholder holding its

8 GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

Ordinary Shares on behalf of more than one beneficial owner. Any such election in respect of part of a holding, where permitted by the Company, will apply only to that particular dividend and a cash dividend will be paid automatically on Ordinary Shares not specified in the Mandate; and

(iii) if a Shareholder's Ordinary Shares are registered in more than one holding (i.e. that Shareholder is treated as having separate holdings of Ordinary Shares) and they want to receive the Scrip Dividend Alternative in respect of each holding, they will need to complete a separate Mandate Form and/or make a separate CREST Dividend Election Input Message for each holding. The Shareholder may request that its holdings are combined, however, a sole shareholding cannot be combined with a joint shareholding.

Shareholders whose holdings are in uncertificated form in CREST may make elections in respect of part of their holdings. Please see the response to Question 5 above for details of how Shareholders holding in CREST can join the Scheme.

15. Can Overseas Shareholders join the Scheme?

Overseas Shareholders, being those who are not resident in the United Kingdom, should read Section 2 of this Guide, dealing specifically with issues relating to the participation in the Hammerson Scrip Dividend Scheme by Overseas Shareholders.

Generally, Overseas Shareholders may treat this as an invitation to receive New Shares unless such an invitation could not lawfully be made to them without any further obligation on the part of the Company or in compliance with any registration or other legal requirements. Consequently, Overseas Shareholders in any jurisdiction where such an offer for New Shares would require compliance by the Company with any governmental or regulatory procedures or similar formalities may not join the Scheme and may not treat this Guide as offering a right to receive New Shares.

It is the responsibility of any Overseas Shareholder wishing to elect to receive New Shares to be satisfied as to the full observance of the laws of the relevant territory, including obtaining any government or other consents which may be required and observing any other formalities in such territories. By completing and returning a Mandate Form or by submitting a CREST Dividend Election Input Message each Shareholder shall be deemed to confirm that he is not resident in any jurisdiction that would require the Company to comply with any governmental or regulatory procedure or requirements or any similar formalities arising of his election or holding any Ordinary Shares as nominee(s) or transferee(s) for any beneficial resident who is so resident.

An Overseas Shareholder or any nominee for such a Shareholder is advised to seek legal advice before completing and returning a Mandate Form, or submitting a CREST Dividend Election Input Message.

16. What happens if I sell some of my Ordinary Shares or buy additional Ordinary Shares after I complete a Mandate Form and/or submit a CREST Dividend Election Input Message?

Selling Ordinary Shares

If a Participating Shareholder disposes of some of their Ordinary Shares before the Record Date for a Scheme Dividend and such disposal has been registered prior to or on the Record Date, the Scheme will not apply to those sold Ordinary Shares though will apply for the remainder of their Ordinary Shares.

If a Participating Shareholder disposes of any of their Ordinary Shares prior to the first day that such shares are quoted 'ex-dividend' for any particular Scheme Dividend, that Shareholder may not be entitled to the dividend on those shares and is advised to contact the stockbroker or agent through whom the sale was effected as soon as possible as the purchaser may have a claim for the cash amount of the dividend.

Buying Additional Ordinary Shares

If a Participating Shareholder buys or otherwise receives any additional Ordinary Shares prior to the first day such shares are quoted as 'ex-dividend date' for any particular dividend, the Shareholder may be entitled to a dividend on those Ordinary Shares and is advised to contact their stockbroker or agent through whom the purchase was made as soon as possible so as to ensure that the shares are registered promptly in their name.

Any additional Ordinary Shares which a Participating Shareholder buys or otherwise receives, which are registered in their name prior to the Record Date for Scheme Dividend, will automatically be included within that Shareholder's Mandate and that Shareholder's entitlements to New Shares in accordance with the Scheme will be based on their entire shareholding, including the additional Ordinary Shares.

If a Shareholder buys or otherwise receives any additional Ordinary Shares after a Record Date for a Scheme Dividend, the additional Ordinary Shares will not be eligible to receive the cash or scrip dividend, but will be eligible for future dividends and, in the case of a Shareholder who holds Ordinary Shares in certificated form, without the need to complete a new Mandate Form.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

17. What are the tax consequences of the Scheme for Participating Shareholders?

The tax consequences of electing to receive New Shares pursuant to the Scheme in place of a cash dividend will depend on each Shareholder's individual circumstances. If a Shareholder is not sure how they will be affected from a tax perspective, they should consult their solicitor, accountant or other professional adviser before taking any action. UK resident trustees, corporate, pension funds and other Shareholders, including Overseas Shareholders, are advised to contact their professional advisers regarding their own tax circumstances in relation to the Scheme.

A summary of how UK Shareholders and Shareholders resident in France are likely to be treated for tax purposes if they elect to receive New Shares instead of a cash dividend is set out on in Section 3 of this Guide on pages 13 to 21.

18. Can I cancel my instructions?

Yes, a Shareholder may cancel their Mandate at any time; however, written notice of cancellation stating the Shareholder's name as it appears on their share certificate must be given in writing to Capita Registrars. Shareholders holding through the CREST system can only cancel their Mandate via the CREST system. Any such cancellation notice must be received at least 15 business days before the relevant Dividend Payment Date for it to be effective for that Scheme Dividend.

Where a Mandate is duly cancelled, Shareholders will receive cash for that dividend and subsequent dividends. A notice of cancellation will take effect once received and processed by Capita Registrars in respect of all dividends payable after the date of receipt of such notice.

A Shareholder's Mandate will be deemed to be cancelled if they sell or otherwise transfer any Ordinary Shares to another person but only with effect from the registration of the relevant transfer and only in respect of the Ordinary Shares that they have sold or otherwise transferred. A Shareholder's Mandate will also terminate immediately on receipt of notice of their death. If a joint Shareholder dies, the Mandate will continue in favour of the surviving joint Shareholders (unless and until cancelled by the surviving joint Shareholders). Once an election is made using the CREST Dividend Election Input Message it cannot be amended. Therefore, if a Shareholder holding their Ordinary Shares in CREST wishes to change their election, the election would have to be cancelled and re-submitted accordingly.

19. Can the Company change or cancel the Scheme?

Yes, the Scheme may be modified, suspended, terminated or cancelled at any time at the discretion of the Directors without notice to Shareholders individually. Any revised terms and conditions will be made available from the Company's website: www.hammerson.com, on the 'Investors' page. In the case of any modification, existing Mandates (unless otherwise specified by the Directors) will be deemed to remain valid under the modified arrangements unless and until Capita Registrars receive a cancellation in writing from Shareholders. The operation of the Scheme is always subject to the Directors' decision to offer a Scrip Dividend Alternative in respect of any particular dividend. The Directors also have the power, after such an election is made, to revoke the election generally at any time prior to the allotment of the New Shares under the Scheme. This may, in particular, be exercised if 20 business days prior to the relevant Dividend Payment Date, the price of an Ordinary Share has fallen 15% or more below the Scrip Reference Share Price used to calculate Shareholders' entitlements. However, it remains at the Directors' discretion as to whether or not to exercise such a right and there is no obligation on the Directors to do so even where such a fall in share price has occurred. If the Directors revoke an offer, Shareholders will receive their dividends in cash as with other non Scheme Dividends on or as soon as possible after the relevant Dividend Payment Date.

20. I am a participant in the DRIP scheme – will I automatically receive New Shares pursuant to the Scheme?

Participants in the DRIP will not be automatically deemed to have joined the Scrip Dividend Scheme and so, as with all other Shareholders, where a participant in the DRIP wishes to join the Scrip Dividend Scheme they will need to return a Mandate Form or CREST Dividend Election Input Message, as applicable, as detailed in the response to Questions 4 and 5 above. Accordingly, participants in the DRIP will receive cash dividends in respect of any Scheme Dividend unless they return a Mandate Form or CREST Dividend Election Input Message as applicable.

A Shareholder holding their Ordinary Shares in CREST who has submitted an 'evergreen' CREST Dividend Election Input Message in respect of the DRIP will need to cancel such election before they are able to input a CREST Dividend Election Input Message in respect of the Scrip Dividend Scheme. Shareholders should take care when submitting CREST Dividend Election Input Messages. If a Shareholder incorrectly inputs a CREST Dividend Election Input Message electing for the DRIP when intending to input a CREST Dividend Election Input Message electing for the Scrip Dividend Scheme, that Shareholder will not receive a Scrip Dividend Alternative for that dividend and will instead receive a cash dividend. Once an election is made using the CREST Dividend Election Input Message it cannot be amended. Therefore if a Shareholder holding their Ordinary Shares in CREST wishes to change their election, the election would have to be cancelled and re-submitted accordingly.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

Following the introduction of the Hammerson Scrip Dividend Scheme, the Directors have decided to suspend the Company's Dividend Reinvestment Plan for any dividend in respect of which a Scrip Dividend Alternative is offered. The DRIP will, however, be automatically reinstated for any future dividend, whether interim or final, in respect of which the Directors decide not to offer a Scrip Dividend Alternative. Accordingly elections made to participate in the DRIP will remain valid and in force for such dividends. Where reinstated, Shareholders who participate in the DRIP will automatically receive shares pursuant to the DRIP in the usual way and need not take any further action to re-join the DRIP. Shareholders may continue to opt-in and opt-out of the DRIP in the usual way, even at a time where the DRIP has been suspended.

Any residual cash balance held by the Company or Capita in accordance with the DRIP on behalf of a participant in the DRIP will, unless otherwise required by the terms and conditions of the DRIP, continue to be held on behalf of that participant and shall be applied to the next dividend to which the DRIP applies. Such residual cash balances held in accordance with the DRIP cannot be applied towards a Scheme Dividend.

21. Governing law and jurisdiction

The Hammerson Scrip Dividend Scheme is subject to the Company's Articles of Association and is governed by and its terms are to be construed in accordance with English law. By electing to receive New Shares pursuant to the Scheme, Participating Shareholders agree to submit to the exclusive jurisdiction of the English courts in relation to the Scheme.

22. What do I do if I have any questions?

If you have any questions about the procedure for election or about how to complete the Mandate Form, please contact Capita Registrars between 9:00am and 5:00pm (London time) Monday to Friday (except UK public holidays):

Telephone:
0871 664 0321 from within the UK (calls cost 10p per minute (including VAT) plus your service provider's network extras).
+44 20 8639 3399 if calling from outside the UK (calls to the helpline from outside the UK will be charged at applicable international rates).

Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Hammerson Scrip Dividend Scheme nor give any personal financial, legal or tax advice.

Address: Capita Registrars, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU
Email: [email protected]

Further information on the Scheme is also available from the Company's website: www.hammerson.com.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

SECTION 2

OVERSEAS SHAREHOLDERS

The ability of Overseas Shareholders to participate in the Scrip Dividend Scheme may be affected by the laws of the relevant jurisdiction. Those persons should consult their professional advisers as to whether they require any governmental or other consents or need to observe any applicable legal requirements or other formalities to enable them to participate in the Scrip Dividend Scheme and must satisfy themselves as to the full observance of the applicable laws of any relevant territory. The Scrip Dividend Alternative will not be available to any person in any jurisdiction outside the United Kingdom where the Scrip Dividend Alternative requires compliance by the Company with any governmental or regulatory procedures or any similar formalities. No person who receives this Guide or a Mandate Form in any country or jurisdiction outside the United Kingdom may treat it as offering a right to elect unless the offer could lawfully be made to that person without the Company being required to comply with any governmental or regulatory procedures or any similar formalities. It is the responsibility of an Overseas Shareholder wishing to receive the Scrip Dividend Alternative to ensure that an election can validly be made and compliance is made with the laws of the relevant jurisdiction, including the obtaining of any governmental or other consents or complying with all other formalities.

Specific current provisions relating to certain jurisdictions are set out below.

THE NETHERLANDS

In accordance with the Dutch Financial Supervision Act (Wet op het financieel toezicht), the offering of shares in the Netherlands pursuant to a scrip dividend scheme will require the Company to have a licence or to prepare a prospectus in relation to such offering unless the issuer is able to rely upon exemptions from both the licence and the prospectus requirements. One such exemption that the Company has been able to rely upon for previous applications of the Scheme is where shares are offered either (i) to less than 100 persons or entities in the Netherlands which are not 'qualified investors' and/or (ii) to 'qualified investors' only. If the Company cannot rely on a particular exemption in respect of an offering of New Shares pursuant to the Scheme to some or all of the investors in the Netherlands, that future offering may need to be restricted to such investors in the Netherlands, if any, to whom such offering can still be made under any available exemption. Accordingly, where for future offerings of New Shares pursuant to the Scheme, no exemption applies to allow New Shares to be offered to an investor in the Netherlands, that investor may not treat this Guide as offering a right to elect to take the New Shares offered.

CANADA

General

The offering of New Shares in Canada pursuant to the Scheme is being made in certain Canadian provinces and territories to Canadian Shareholders with registered and/or beneficial interests in the new shares and only to those persons where and to whom they may be lawfully offered for sale. The New Shares offered pursuant to the Scheme will be distributed under exemptions from the prospectus and registration requirements of the applicable securities laws in each of the applicable Canadian provinces and territories. The Guide is not, and under no circumstances is to be construed as a prospectus, an advertisement or a public offering or a general solicitation from the public of offers to subscribe or purchase the New Shares in any Canadian province or territory. Any certificates representing the New Shares offered pursuant to the Scheme may bear legends required or desirable under applicable securities laws or policies of the applicable Canadian provinces and territories.

Any discussion of taxation and related matters contained within this Guide does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to acquire the New Shares and, in particular, does not address Canadian tax considerations. Canadian investors should consult with their own legal and tax advisers with respect to the tax consequences of an investment in the New Shares in their particular circumstances and with respect to the eligibility of the New Shares for investment by such investor under relevant Canadian legislation and regulations.

Enforcement of Legal Rights

The Company is incorporated under the laws of England and Wales. All or substantially all of the Directors and officers of the Company may be located outside Canada and, as a result, it may not be possible for Canadian investors to effect service of process within Canada upon the Company or such persons. All or a substantial portion of the assets of the Company and such other persons may be located outside Canada and, as a result, it may not be possible for Canadian investors to satisfy or collect a judgement in Canada against the Company, its Directors and officers or such persons or to enforce a judgement obtained in Canadian courts against the Company or such persons outside Canada.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

Resale Restrictions

The Scheme is being made on a private placement basis only and is exempt from the requirement that the Company prepares and files a prospectus with the relevant Canadian securities regulatory authorities. Accordingly, any resale of the New Shares must be made in accordance with applicable Canadian securities laws, which may require resales to be made in accordance with prospectus and dealer registration requirements or exemptions from the prospectus and dealer registration requirements. These resale restrictions may, in some circumstances, apply to resales of the New Shares outside of Canada. Canadian Shareholders are advised to seek legal advice prior to any resale of the New Shares.

The Company is not a 'reporting issuer', as such term is defined under applicable Canadian securities laws, in any province or territory of Canada in which the New Shares will be offered. Canadian investors are advised that the Company is not required to file a prospectus or similar document with any securities regulatory authority in Canada qualifying the resale of the New Shares to the public in any province or territory of Canada. Canadian investors are further advised that the Company currently does not intend to file a prospectus or similar document with any securities regulatory authority in Canada qualifying the resale of the New Shares to the public in any province or territory of Canada in connection with the Scheme.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

SECTION 3

TAXATION GUIDELINES

SECTION 3.1 – UNITED KINGDOM TAXATION GUIDELINES

A) GENERAL

The following paragraphs are intended as a general guide and are based on current law and HM Revenue and Customs practice. They are not comprehensive and, in particular, do not consider the laws or practices of countries other than the United Kingdom. They summarise the UK tax position of Shareholders who hold their Ordinary Shares as an investment. They do not consider the position of certain types of Shareholder, such as dealers in securities, persons acquiring (or deemed to acquire) their New Shares in connection with an office or employment, insurance companies and collective investment schemes, who may be taxed differently. Nor do they consider the position of corporate Shareholders who are beneficially entitled, directly or indirectly, to 10% or more of the dividends paid by the Company or the Company's share capital, or which control, directly or indirectly, 10% or more of the voting rights in the Company. Any such Shareholder should inform the Company of their existence immediately.

The effect on a Shareholder's tax position of electing to receive New Shares instead of a cash dividend will depend upon the personal circumstances of that Shareholder. If you are in any doubt as to your tax position or you are subject to tax in a jurisdiction outside the UK, you should consult an appropriate professional adviser before taking any action.

B) INTRODUCTION

As a Real Estate Investment Trust (a 'REIT'), provided that certain conditions are satisfied, UK resident REIT group members and non-UK resident REIT group members with a qualifying UK property rental business do not pay UK direct taxes on income and capital gains from their qualifying property rental business (the 'Tax Exempt Business'). Instead, as discussed further below, dividends paid by the Company which relate to profits or gains of the Tax Exempt Business are treated for UK tax purposes as the profits of a UK property business in the hands of Shareholders. Such dividends are referred to in this Guide as PIDs ('Property Income Distributions').

However, UK corporation tax will still be payable by the group in the normal way in respect of income and capital gains relating to that part of the group's business which is not included in the Tax Exempt Business. Dividends relating to this part of the business are treated for UK tax purposes as normal dividends and referred to in this Guide as Non-PIDs.

Both cash dividends and New Shares received instead of a cash dividend under the Scrip Dividend Alternative may be paid as PIDs, Non-PIDs, or a mixture of both. Where a Scheme Dividend is to be paid as a PID it will be paid net of 20% withholding tax unless one of the exceptions set out below applies. The Company will advise whether a cash dividend and/or any Scrip Dividend Alternative will be paid as a PID, Non-PID or mixture of both when the dividend is announced.

C) NON-PID SCRIP DIVIDEND

Where the Company has offered shareholders a Non-PID scrip dividend alternative and a shareholder has elected to receive this, the tax consequences for that shareholder will be as follows:

i) United Kingdom Resident Individual Shareholders

An individual Shareholder who is UK resident and chooses to take New Shares instead of the cash dividend will be treated as receiving gross income of an amount which, when reduced by income tax at 10%, is equal to the 'cash equivalent' of the New Shares. The cash equivalent will generally be the amount of the cash dividend which he would have received had he not elected to take New Shares. For example, if an individual elects to receive New Shares in lieu of a cash dividend of £80 he or she will be treated as having received gross income of £88.89 and as having paid income tax of £8.89 on that gross amount of income.

The market value of the New Shares on the first day of dealing on the London Stock Exchange will be substituted as the cash equivalent if that market value differs by 15% or more from the amount of the cash dividend.

Income Tax

Individual Shareholders who are liable to income tax at the basic rate will have no further income tax to pay if they elect to take New Shares as their tax liability will be fully discharged by the income tax treated as paid.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

Individuals who are subject to higher or additional rates of income tax will be liable to pay further tax on the gross income they are treated as receiving; the rates of income tax are either 32.5% on taxable income up to £150,000 or 42.5% thereafter, less the notional 10% tax credit.

A higher rate taxpayer who elects to receive New Shares will therefore have a tax liability of £28.89 (being £88.89 @ 32.5%) less the income tax treated as paid (£8.89), giving further net tax to pay of £20. For shareholders whose taxable income exceeds £150,000, the tax liability will be £37.78 (being £88.89 @ 42.5%) less the £8.89 income tax treated as paid giving further tax to pay of £28.89.

Individual Shareholders who are not liable to tax, including those who hold their Ordinary Shares in an Individual Savings Account (ISA), cannot recover the income tax treated as paid in respect of scrip dividends.

Capital Gains Tax

An individual Shareholder should not be charged to capital gains tax on receipt of New Shares.

For the purpose of computing capital gains tax liability on a future disposal of new shares, an individual will be treated as acquiring the new shares on the day that they were issued for a consideration equal to the cash dividend forgone (or market value if substituted as above). The current rate of capital gains tax is 18%, or 28% if the individual pays income tax at the higher or additional rate.

ii) United Kingdom Resident Trustees – Discretionary Trusts

Income Tax

UK resident trustees of discretionary trusts (who are generally liable to tax on the trust's income at the rate of 50%) and who elect to receive New Shares will be treated as having received gross income equal to an amount which, when reduced by income tax at 10%, is equal to the 'cash equivalent'. The cash equivalent is normally the amount of the cash dividend forgone – see 'United Kingdom Resident Individual Shareholders – Scrip Dividends'. The trustees will be liable to income tax at the rate of 42.5% on the gross income treated as received with credit for 10% tax treated as paid.

Capital Gains Tax

For capital gains tax purposes, the position of UK resident discretionary trustees is much the same as that outlined in 'United Kingdom Resident Individual Shareholders – Capital Gains Tax' above.

iii) United Kingdom Resident Corporate Shareholders

A company which is subject to UK corporation tax will not be charged to corporation tax on receipt of the New Shares.

For the purposes of corporation tax on chargeable gains, the New Shares will be added to a corporate Shareholder's existing holding of Ordinary Shares and no consideration will be treated as having been given for the New Shares. As a result, a corporate Shareholder will not obtain any additional base cost in its (enlarged) holding of Ordinary Shares, and the base cost in its original holding will effectively be 'spread' across the enlarged holding. Corporate Shareholders may be subject to corporation tax on chargeable gains on a gain arising on a subsequent disposal of New Shares.

iv) United Kingdom Resident Pension Funds and Charities

Generally, a registered pension scheme or charity electing to receive New Shares will not be subject to tax on receipt of the New Shares nor will they be entitled to a tax credit in relation to such Ordinary Shares. Consequently no payment in respect of a tax credit can be claimed from HM Revenue and Customs. Registered pension schemes and charities will not, in general, be subject to UK tax on any chargeable gain arising on a subsequent disposal of New Shares.

v) Non-UK Residents

Shareholders who are not resident (or, where appropriate, not ordinarily resident) in the UK will generally have no further UK tax to pay if they elect to receive New Shares. No entitlement to a tax credit will arise where a non-UK resident Shareholder elects to receive New Shares.

Non resident Shareholders will generally not be subject to UK tax on chargeable gains on a disposal of New Shares. However, individual Shareholders who are temporarily non-UK resident may, in certain circumstances, be subject to UK tax in respect of gains realised whilst they are not resident in the UK.

The tax treatment of non-UK resident Shareholders will also depend on the tax law of the country in which such Shareholders are resident and/or any other country in which they are subject to tax and on any applicable double tax treaty.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

vi) Withholding

The Company is not required to withhold tax at source from a Non-PID Scrip Dividend.

vii) Stamp Duty/Stamp Duty Reserve Tax

No stamp duty or stamp duty reserve tax will normally be payable on the issue, registration or receipt of New Shares pursuant to the Scrip Dividend Alternative, although a charge of 1.5% of the issue price may arise if the New Shares will be held through clearance services or depositary receipt arrangements located outside the European Union.

D) SCRIP DIVIDEND OR CASH DIVIDEND PAID AS A PID

Where the Company has declared a dividend as a PID and either:

The Company has not offered shareholders a scrip dividend alternative (or it has but a Shareholder has not elected to receive it) such that the dividend is to be paid only as a cash PID dividend; or
The Company has offered shareholders a PID scrip dividend alternative, and a UK shareholder elects to receive this,

the tax consequences for that shareholder will be as follows:

i) United Kingdom Resident Individual Shareholders

Subject to certain exceptions summarised below, the Company is required to withhold tax at source currently at the rate of 20% from its PIDs. The Company will provide Shareholders with a certificate setting out the gross amount of the PID, the amount of tax withheld, and the net amount of the PID.

Income Tax

PIDs will generally be treated in the hands of individual Shareholders as the profits of a UK property business (a separate business from any other UK property business carried on by that Shareholder).

Individual Shareholders who are liable to income tax at the basic rate will have no further income tax to pay if withholding is applied to the PID as the tax withheld will fully discharge their liability to income tax. If they receive the PID gross, income tax at 20% will apply.

Individuals who are subject to higher or additional rates of income tax will be liable to pay further tax on the gross income they are treated as receiving; the rate of income tax applying to the PID is 40% on taxable income up to £150,000 or 50% thereafter, with credit for the 20% tax withheld at source (unless one of the exemptions from withholding applies).

Under the above example, a higher (or additional) rate taxpayer paid a gross PID of £80 will receive £64 (net of withholding tax) but will be treated for tax purposes as receiving gross income of £80. He or she will be taxed at 40% (or 50%) on the gross income, giving a tax liability of £32 (or £40) less a credit for the tax withheld of £16. Thus a higher rate taxpayer who receives the PID would have a further net tax liability of £16 (or £24).

Where tax has been withheld at source, individual Shareholders who are not liable to tax, including those who hold their Ordinary Shares in an Individual Savings Account (ISA), may be entitled to claim repayment of some or all of the tax withheld on their PID.

Capital Gains Tax

An individual Shareholder should not be charged to capital gains tax on receipt of the PID.

For the purpose of computing capital gains tax liabilities on a future disposal of New Shares, an individual will be treated as acquiring the New Shares on the day that they were issued for a consideration equal to the cash dividend forgone (or market value if substituted in the circumstances described under Non-PID Scrip Dividends). The current rate of capital gains tax is 18%, or 28% if the individual pays income tax at the higher or additional rate.

ii) United Kingdom Resident Trustees – Discretionary Trusts

Income Tax

Trustees who receive the PID will be liable to income tax at the rate of 50% on the gross income amount (with credit for any tax withheld at source). See the example calculations for higher and additional rate taxpayers under 'UK Resident Individual Shareholders – Income Tax' above.

Capital Gains Tax

For capital gains tax purposes, the position of UK resident discretionary trustees is much the same as that outlined in 'United Kingdom Resident Individual Shareholders – Capital Gains Tax' above.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

iii) United Kingdom Resident Corporate Shareholders

A PID will generally be treated in the hands of Shareholders who are within the charge to corporation tax as profits of a UK property business (a separate business from any other UK property business carried on by the relevant Shareholder).

Corporate Shareholders will be generally liable to pay corporation tax on their PID. If income tax is withheld at source, the tax withheld can be set against the Shareholder's liability to corporation tax. Corporate Shareholders may receive a PID without withholding tax (see 'Exceptions to requirement to withhold Income Tax' below).

For the purposes of computing any gain on a future disposal of the New Shares, the Shareholder will be treated as acquiring the New Shares on the day that they were issued for a consideration equal to the cash dividend forgone (or market value if substituted in the circumstances described for individuals under Non-PID Scrip Dividends).

iv) United Kingdom Resident Pension Funds and Charities

A registered pension scheme or charity will generally have no liability to tax in respect of the PID, which may be paid without withholding tax provided that the Shareholder completes and submits either a completed 'Beneficial Owner Declaration of Eligibility for Gross PID Payments from Hammerson plc' form or a completed 'Intermediary Declaration of Eligibility for Gross PID Payments from Hammerson plc' form (copies of which may be obtained from the Company's website: www.hammerson.com, on the 'Investors' page), please see section 'D) vi) Withholding' below.

v) Non-UK Residents

Where a Shareholder who is resident for tax purposes outside the UK receives a PID, the PID will generally be chargeable to UK income tax as a profit of a UK property business and this tax will generally be collected by way of a withholding. It is not possible for a Shareholder to make a claim under a double taxation treaty for a PID to be paid by the Company gross or at a reduced rate. The right of the Shareholder to claim repayment of any part of the tax withheld from a PID will depend on the existence and terms of any double tax convention between the UK and the country in which the Shareholder is resident. Shareholders who are not resident in the UK for tax purposes should obtain their own tax advice concerning tax liabilities on PIDs received from the Company.

vi) Withholding

Exceptions to requirement to withhold Income Tax

Shareholders should note that in certain circumstances the Company must not withhold income tax at source from a PID. These include where the Company reasonably believes that the person beneficially entitled to the PID is a:

(i) company resident for tax purposes in the UK;
(ii) charity; or
(iii) company resident for tax purposes outside the UK which is trading through a permanent establishment in the UK and is required to bring the PID into account in computing its UK taxable profits.

They also include where the Company reasonably believes that the PID is paid to the scheme administrator of a registered pension scheme, the sub-scheme administrator of certain pension sub-schemes, the account manager of an Individual Savings Account (ISA), or the account provider for a child trust fund, in each case, provided the Company reasonably believes that the PID will be applied for the purposes of the relevant fund, scheme or account.

In order to pay a PID without withholding tax the Company will need to be satisfied that the Shareholder concerned is entitled to that treatment. For that purpose the Company will require such Shareholders to submit either a completed 'Beneficial Owner Declaration of Eligibility for Gross PID Payments from Hammerson plc' form or a completed 'Intermediary Declaration of Eligibility for Gross PID Payments from Hammerson plc' form (copies of which may be obtained from the Company's website: www.hammerson.com, on the 'Investors' page). Shareholders should note that the Company may seek recovery from Shareholders if the statements made in their claim form are incorrect and the Company suffers tax as a result. The Company will, in some circumstances, suffer tax if its reasonable belief as to the status of the Shareholder turns out to have been mistaken.

vii) Stamp Duty/Stamp Duty Reserve Tax

No stamp duty or stamp duty reserve tax will be payable on the receipt of a cash dividend PID. No stamp duty or stamp duty reserve tax will normally be payable on the issue, registration, or receipt of New Shares paid as a PID,

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

although a charge of 1.5% of the issue price may arise if the New Shares will be held through clearance services or depository receipt arrangements located outside the European Union

E) NON-PID CASH DIVIDEND

Where the Company has declared as a Non-PID cash dividend and no scrip dividend alternative is offered, the tax consequences for a shareholder receiving that dividend will be as follows:

i) United Kingdom Resident Individual Shareholders

The income tax position should be similar to that described above for receipt of the scrip dividend described in section 'C) NON-PID SCRIP DIVIDEND' above, replacing references to the cash equivalent with references to the cash dividend paid by the Company. No capital gains tax should arise on receipt of a Non-PID cash dividend.

ii) United Kingdom Resident Trustees – Discretionary Trusts

Trustees of discretionary trusts should be in a similar position to that for receipt of the scrip dividend described in section 'C) NON-PID SCRIP DIVIDEND' above, replacing references to the cash equivalent with references to the cash dividend paid by the Company.

iii) United Kingdom Resident Corporate Shareholders

The blanket exemption from corporation tax on dividends received by one UK resident company from another which previously existed no longer applies. However, in the case of recipients that are small companies, Non-PID cash dividends paid by the Company should normally be exempt from corporation tax. For other (non-small) companies, exemptions from corporation tax will generally be available for (i) dividends in respect of ordinary shares and (ii) dividends paid to persons holding less than 10% of the issued shares in the company, either or both of which should apply to Non-PID cash dividends paid by the Company on its Ordinary Shares.

iv) United Kingdom Resident Pension Funds and Charities

The position should be similar to that on receipt of the scrip dividend described in section 'C) NON-PID SCRIP DIVIDEND' above.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

SECTION 3.2 – FRANCE TAXATION GUIDELINES

A) GENERAL

The following paragraphs are intended as a general guide and are based on current law and French tax authorities practice. They are not comprehensive and, in particular, do not consider the laws or practices of countries other than France. They summarise the French tax position of Shareholders who hold their Shares as an investment. They do not consider the position of certain types of Shareholder, such as dealers in securities, persons acquiring (or deemed to acquire) their New Shares in connection with an office or employment, insurance companies and collective investment schemes, who may be taxed differently. Nor do they consider the position of corporate Shareholders who are beneficially entitled, directly or indirectly, to 10% or more of the dividends paid by the Company or the Company's share capital, or who control, directly or indirectly, 10% or more of the voting rights in the Company. Any such Shareholder should inform the Company of their existence immediately.

The effect on a Shareholder's tax position of electing to receive New Shares instead of a cash dividend will depend upon the personal circumstances of that Shareholder. If you are in any doubt as to your tax position or you are subject to tax in a jurisdiction outside France, you should consult an appropriate professional adviser before taking any action.

The description below is based on French legal provisions and on the provisions of the French-UK double taxation agreement in force dated 19 June 2008 (the 'DTA').

B) INTRODUCTION

The dividends that can be paid by a UK REIT are set out in Part B of Section 3.1 of this Guide and the French tax treatments of scrip dividends, PID dividends and normal dividends are explained below.

C) SCRIP DIVIDEND

i) Withholding Tax

Pursuant to UK domestic law, non-PID dividends paid to French resident Shareholders are exempt from withholding tax. As a result the provisions of the DTA in connection with withholding tax on dividends are not relevant.

ii) French Resident Individual Shareholders

Income tax

Dividends paid by a UK resident company to a French individual Shareholder are subject to French income tax as follows:

The dividend distributed by the Company will be subject, for the year in which the dividend is collected, to:

French income tax on a progressive scale (top marginal rate is currently 41%);
The General Social Contribution tax ('CSG') at a rate of 8.2%, 5.8% of which being deductible from the basis of assessment to income tax;
The contribution to the Social Security deficit ('CRDS') at a rate of 0.5%, non-deductible from the basis of assessment to income tax;
The 2.2% 'prélèvement social' (social withholding tax), non-deductible from the basis of assessment to income tax;
An additional 0.3% contribution to the 2.2% prélèvement social established pursuant to article 11-2 of the 30 June 2004 law on autonomy for elderly and disabled persons; and
An additional 1.1% contribution to the 2.2% prélèvement social established pursuant to article 3 of the 1 December 2008 law introducing the active solidarity revenue.

For the purpose of assessing French income tax, the taxable dividend is reduced by:

A 40% tax relief; and
An annual relief of €1,525 for single, widowed or divorced people and €3,050 for jointly assessed couples.

Since 1 January 2008, the dividends and assimilated distributions can be subject, if opted for by the taxpayer, to a final withholding of 19% plus social contributions (CSG, CRDS, social direct contribution of 2.2% and its additional contributions of 0.3% and 1.1%), i.e. an actual taxation rate of 31.3%.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

PEA (equity savings plans)

New Shares may be held as part of an equity savings plan (a ‘PEA’)

Subject to certain conditions, a PEA entitles the holder (i) to a tax exemption on income tax and social contributions for dividends generated by investments made under the PEA, for the duration thereof, and (ii) an income tax exemption for the dividends received since the plan was opened upon closure (if closed at least five years after opening the plan) of the PEA; such dividends remain nevertheless subject to the CSG, CRDS, the 2.2% prélèvement social and additional 0.3% and 1.1% contributions to the 2.2% prélèvement social. It is specified, however, that the effective rate for such contributions varies based on the date the dividends in question were earned or recorded.

Capital gains tax

Subject to certain exceptions, capital gains realised by a French resident Shareholder upon the sale of shares in a UK resident company are taxable only in France, provided that such shares are not attached to a permanent establishment or a fixed place of business that the French resident may own in the UK.

Capital gains of one euro or more on shares sold by the above-mentioned individuals (i.e. gains equal to the difference between the sale price and the fiscal value of the Company’s shares which are disposed of) are subject to income tax at a rate of 19%.

Capital gains are also subject to the following contributions:

The General social contribution (‘CSG’) at a rate of 8.2%, non-deductible from the basis of assessment to income tax;
The contribution to the Social Security deficit (‘CRDS’) at a rate of 0.5%, non-deductible from the basis of assessment to income tax;
The 2.2% ‘prélèvement social’ (social withholding tax), non-deductible from the basis of assessment to income tax;
An additional 0.3% contribution to the 2.2% prélèvement social established pursuant to article 11-2 of the 30 June 2004 law on autonomy for elderly and disabled persons; and
An additional 1.1% contribution to the 2.2% prélèvement social established pursuant to article 3 of the 1 December 2008 law introducing the active solidarity revenue.

The overall tax rate is therefore 31.3% for disposals made in 2011.

Capital losses on share disposals may be offset against capital gains of the same type made during the year of sale or the ten following years if such capital losses arise from taxable transactions.

PEA (equity savings plans)

Subject to certain conditions, a PEA entitles the holder (i) to a tax exemption on income tax and social contributions for proceeds and capital gains generated by investments made under the PEA, for the duration thereof, and (ii) an income tax exemption for the net capital gains made since the plan was opened upon closure (if closed at least five years after opening the plan) of the PEA; such gains remain nevertheless subject to the CSG, CRDS, the 2.2% prélèvement social and additional 0.3% and 1.1% contributions to the 2.2% prélèvement social. It is specified, however, that the effective rate for such contributions varies based on the date the gains in question were earned or recorded.

In principle, capital losses incurred in a PEA can only be offset against capital gains made within the same framework. However, in cases of (i) early closure of the PEA before five years have passed or (ii) subject to certain conditions, PEA closure after expiry of the fifth year, where its liquid value is less than the amounts paid in since the plan was opened, losses that may be recorded can be offset against gains of the same type made during the same year or ten following years.

iii) French Resident Corporate Shareholders Subject to Corporation Tax

Corporation tax

Dividends paid by a UK resident company to a French corporate Shareholder are subject to French corporation tax as follows:

Corporate Shareholders subject to corporation tax in France and holding less than 5% of the share capital of the Company.

The dividend distributed by the Company will be included for the year in which the dividend is collected, in the

20 GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

beneficiary's taxable profits subject to French corporation tax at the standard rate of 33⅓% plus, where applicable, the 3.3% social surtax.

Corporate Shareholders subject to corporation tax in France and holding more than 5% of the share capital of the Company, but less than 10%.

The dividends distributed by the Company out of profits which are not eligible for the SIIC regime (or its UK equivalent) may benefit from a French corporation tax exemption. A 5% dividend service charge must be added back to the taxable profits of the beneficiary, calculated on the amount of the dividend received and subject to French corporation tax at the standard rate of 33⅓%, plus where applicable, the 3.3% social surtax.

The applicability of this exemption depends on whether or not the dividends are paid up out of profits that are actually subject to UK corporation tax. If they are, it can reasonably be assumed that the Shareholder might benefit from the French tax exemption. If, however, they are exempt under the UK equivalent of the SIIC regime, the exemption should not apply and the dividends would be subject to French corporation tax at the rate of 33⅓% as described below.

In the current situation, the New Shares issued are paid up out of share premium reserves and can, as such, not be viewed as being subject to UK corporation tax. As a result, the dividends will be included, for the year in which they are collected, in the beneficiary's taxable profits subject to French corporation tax at the standard rate of 33⅓%, plus the 3.3% social surtax if applicable.

Capital gains tax

Capital gains or losses realised upon the sale of the Ordinary Shares are in principle included in the Shareholder's taxable profits subject to French corporation tax at the standard rate of 33⅓% plus, where applicable, the 3.3% social surtax.

Capital gains realised upon the sale of shares in a SIIC or a company subject to a similar tax regime are subject to a reduced corporation tax rate of 19% (plus the social surtax of 3.3%, if applicable), subject to certain conditions being met. In particular, the shares which are disposed of must be booked as investment shares (titres de participation) from an accounting point of view and must have been held for at least 2 years at the time of the disposal.

iv) French Resident Corporate Shareholders Benefiting from the SIIC Regime Holding More Than 5% of the Company's Share Capital

Corporation tax

If the non-PID dividends are paid up out of profits that are not subject to UK corporation tax, they will be subject to French corporation tax as described above for ordinary corporate Shareholders.

If the non-PID dividends are paid up out of profits that are exempt from UK corporation tax under the UK equivalent of the SIIC regime, and if the SIIC owns more than 5% of the Company's share capital, they will qualify for the SIIC corporation tax exemption provided they are entirely distributed during the financial year following the one they are earned.

In the current situation, the New Shares issued are paid up out of share premium reserves and can, as such, not be viewed as being subject to UK corporation tax. As a result, they should qualify for the SIIC regime exemption in France.

Capital gains tax

Capital gains or losses realised upon the sale of the Ordinary Shares are included in the Shareholder's taxable profits subject to French corporation tax in the same way as for other corporate Shareholders.

The proceeds of the disposal of shares in a subsidiary having elected for the SIIC regime by a SIIC are exempt from French corporation tax under the SIIC regime. However, the law doesn't explicitly extend this exemption to the disposal of shares in a foreign corporation with an equivalent regime such as the Company.

v) Stamp Duty

The purchase or sale of the Ordinary Shares will not attract any stamp duty in France unless the sale or purchase is carried out through a deed of transfer executed in France.

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

D) CASH DIVIDEND (PID)

i) Withholding Tax

Dividends paid as a PID will be subject to withholding tax, currently at the rate of 20% when paid by the Company, but a French resident shareholder may apply to H M Customs & Excise for the refund of 5% of tax so that the net withholding tax is limited to the 15% maximum rate specified by the DTA.

The UK withholding tax will give rise to a tax credit in France.

ii) French Resident Individual Shareholders

PID dividends paid to French resident individual Shareholders will be subject to income tax as described above for non-PID dividends.

iii) French Resident Corporate Shareholders Subject to Corporation Tax

PID dividends paid to a French resident corporate Shareholder will be subject to corporation tax at the standard rate of 33⅓%, plus the 3.3% social surtax if applicable.

iv) French Resident Corporate Shareholders Benefiting from the SIIC Regime and Holding More Than 5% of the Company's Share Capital

PID dividends distributed to a SIIC which owns more than 5% of the share capital of the Company qualifies for the SIIC corporation tax exemption provided they are entirely distributed during the financial year following the one they are earned.

v) Stamp Duty

No stamp duty will be payable on the receipt of the PID.

E) CASH DIVIDEND (NOT PAID AS A PID)

i) Withholding tax

Pursuant to UK domestic law non-PID dividends are exempt from withholding tax.

ii) French Resident Individual Shareholders

Non-PID cash dividends paid to French resident individual Shareholders will be subject to French income tax in the same way as Scrip Dividends.

A cash dividend will not give rise to any capital gains taxation.

iii) French Resident Corporate Shareholders

Non-PID cash dividends paid to French resident corporate Shareholders will be subject to French corporation tax under the same conditions as Scrip Dividends. However they will be viewed as paid up out of profits that are subject to UK corporation tax. As a result, French resident corporate Shareholders holding more than 5% of the Company's share capital may be exempt from corporation tax as described above.

A cash dividend will not give rise to any capital gains taxation.

iv) French Resident Corporate Shareholders Benefiting from the SIIC Regime and Holding More Than 5% of the Company's Share Capital

Non-PID cash dividends will be viewed as paid out of profits that are subject to UK corporation tax. As a result, they will not be exempt from corporation tax under the SIIC regime.

However, they may be exempt from corporation tax in the same conditions as other corporate Shareholders.

A cash dividend will not give rise to any capital gains taxation.

v) Stamp Duty

No stamp duty will be payable on the receipt of a non-PID cash dividend.

22 GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

GLOSSARY

Business day	a day, other than a Saturday, Sunday or English public holiday, in which banks are open for general business in London
Capita or Capita Registrars	Capita Registrars Limited of The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU
Cash Balance	any residual cash balance held by the Company or Capita Registrars on behalf of a Shareholder being the cash value of any fractions of New Shares which were not issued to that Shareholder pursuant to the Scheme (for the avoidance of doubt, excluding any residual balances held pursuant to the Company's DRIP)
Company	Hammerson plc
CREST	the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI/3755)) in respect of which Euroclear UK & Ireland Limited is the operator
CREST Dividend Election Input Message	the procedure, as stated in the CREST Reference Manual, by which Shareholders who hold their Ordinary Shares in CREST can elect to take a Scrip Dividend Alternative for a Scheme Dividend
Directors	the directors of the Company from time to time
Dividend Payment Date	the date on which a dividend is expected to be paid as announced by the Company
DRIP	the Company's Dividend Reinvestment Plan
DTA	the French-UK double taxation agreement in force dated 19 June 2008, as amended
Hammerson Scrip Dividend Scheme or the Scrip Dividend Scheme or the Scheme	the Company's scrip dividend scheme as comprised under and subject to the terms and conditions contained in this Guide as amended from time to time
London Stock Exchange	the London Stock Exchange plc
Mandate	the authorisation and instructions of a Shareholder to the Company to allot New Shares under the terms of the Hammerson Scrip Dividend Scheme instead of cash in respect of any Scheme Dividend (whether by way of a Mandate Form, a CREST Dividend Election Input Message, as applicable)
Mandate Form	the form, provided by Capita, by which a Shareholder holding Ordinary Shares in certificated form can give a Mandate to the Company to join the Hammerson Scrip Dividend Scheme
New Shares	the new Ordinary Shares issued pursuant to the Scheme
Ordinary Shares	ordinary shares of 25 pence each in the capital of the Company
Overseas Shareholder	a Shareholder not resident in the United Kingdom
Participating Shareholder	a Shareholder that is participating in the Hammerson Scrip Dividend Scheme in respect of a Scheme Dividend, being a Shareholder eligible for the Scheme that has returned a duly completed Mandate Form (where such Shareholder holds its Ordinary Shares in certificated form) or has submitted a Dividend Election Input Message in respect of that Scheme Dividend (where such Shareholder holds its Ordinary Shares in CREST)
PID or Property Income Distribution	a distribution, generally subject to withholding tax, paid by the Company in respect of profits of the Tax Exempt Business of the Company
Record Date	the date on which Ordinary Shares must be held in order for a Shareholder to be eligible to receive a declared dividend
REIT or Real Estate Investment Trust	a listed property company which qualifies for and has elected into a tax regime, which exempts qualifying UK property rental income and gains on investment property disposals from corporation tax
Scheme Dividend	a dividend, whether interim or final, in respect of which the Directors have elected that the Hammerson Scrip Dividend Scheme shall apply

GUIDE TO THE HAMMERSON SCRIP DIVIDEND SCHEME

Scheme Statement
a statement to be sent to each Participating Shareholder in respect of each Scheme Dividend setting out details of the New Shares issued to that Shareholder pursuant to the Scheme and any resulting Cash Balance held by the Company on behalf of that Shareholder

Scrip Dividend Alternative
a right for Shareholders to receive New Shares instead of cash in respect of a Scheme Dividend

Scrip Reference Share Price
the average of the middle market quotations for the Ordinary Shares on the London Stock Exchange as derived from the Daily Official List, for the day on which the ordinary shares are first quoted ‘ex’ the relevant dividend and the four subsequent dealing days, used to calculate the number of Ordinary Shares that a Participating Shareholder will receive for each Scheme Dividend

Shareholder
a holder of Ordinary Shares in the Company from time to time as shown on the Company’s register of members

Tax Exempt Business
a REIT’s qualifying property rental business in respect of which it does not pay UK direct taxes on income and capital gains

UK or United Kingdom
the United Kingdom of Great Britain and Northern Ireland and its dependent territories

UK Shareholder
a Shareholder resident in the United Kingdom

AI assistant

Hammerson PLC — Share Issue/Capital Change 2011

5245_rns_2011-03-21_c93c086f-d055-439c-95ba-56525073d765.pdf

Hammerson

Important Information

SECTION 1

TERMS AND CONDITIONS OF THE HAMMERSON SCRIP DIVIDEND SCHEME

1. What is the Hammerson Scrip Dividend Scheme?

2. Which dividends will the Hammerson Scrip Dividend Scheme apply to?

3. Who can join the Scheme?

4. How do I join the Scheme?

5. I hold my Ordinary Shares in CREST, how do I join the Scheme?

6. How many New Shares will I receive?

7. How are fractional entitlements to be dealt with and what will happen with any Cash Balance?

8. How will I know how many New Shares I have received pursuant to the Scheme?

15. Can Overseas Shareholders join the Scheme?

16. What happens if I sell some of my Ordinary Shares or buy additional Ordinary Shares after I complete a Mandate Form and/or submit a CREST Dividend Election Input Message?

Selling Ordinary Shares

Buying Additional Ordinary Shares

17. What are the tax consequences of the Scheme for Participating Shareholders?

18. Can I cancel my instructions?

19. Can the Company change or cancel the Scheme?

20. I am a participant in the DRIP scheme – will I automatically receive New Shares pursuant to the Scheme?

21. Governing law and jurisdiction

22. What do I do if I have any questions?

SECTION 2

OVERSEAS SHAREHOLDERS

THE NETHERLANDS

CANADA

General

Enforcement of Legal Rights

Resale Restrictions

SECTION 3

TAXATION GUIDELINES

SECTION 3.1 – UNITED KINGDOM TAXATION GUIDELINES

A) GENERAL

B) INTRODUCTION

C) NON-PID SCRIP DIVIDEND

i) United Kingdom Resident Individual Shareholders

Income Tax

Capital Gains Tax

ii) United Kingdom Resident Trustees – Discretionary Trusts

Income Tax

Capital Gains Tax

iii) United Kingdom Resident Corporate Shareholders

iv) United Kingdom Resident Pension Funds and Charities

v) Non-UK Residents

iii) United Kingdom Resident Corporate Shareholders

iv) United Kingdom Resident Pension Funds and Charities

v) Non-UK Residents

vi) Withholding

Exceptions to requirement to withhold Income Tax

vii) Stamp Duty/Stamp Duty Reserve Tax

E) NON-PID CASH DIVIDEND

i) United Kingdom Resident Individual Shareholders

ii) United Kingdom Resident Trustees – Discretionary Trusts

iii) United Kingdom Resident Corporate Shareholders

iv) United Kingdom Resident Pension Funds and Charities

SECTION 3.2 – FRANCE TAXATION GUIDELINES

A) GENERAL

B) INTRODUCTION

C) SCRIP DIVIDEND

i) Withholding Tax

ii) French Resident Individual Shareholders

PEA (equity savings plans)

Capital gains tax

PEA (equity savings plans)

iii) French Resident Corporate Shareholders Subject to Corporation Tax

Corporation tax

Capital gains tax

iv) French Resident Corporate Shareholders Benefiting from the SIIC Regime Holding More Than 5% of the Company's Share Capital

Corporation tax

Capital gains tax

v) Stamp Duty

D) CASH DIVIDEND (PID)

i) Withholding Tax

ii) French Resident Individual Shareholders

iii) French Resident Corporate Shareholders Subject to Corporation Tax

iv) French Resident Corporate Shareholders Benefiting from the SIIC Regime and Holding More Than 5% of the Company's Share Capital

v) Stamp Duty

Hammerson PLC Share Issue/Capital Change 2011