Chelsea Japan Expands Gotemba Premium Outlets; Center Is Japan's Largest Outlet Shopping Destination

ROSELAND, N.J.--()--July 8, 2003--Chelsea Property Group, Inc. (NYSE: CPG) announced today that its Tokyo-based joint venture, Chelsea Japan Co., Ltd., opened the second phase of Gotemba Premium Outlets. The 170,000 square-foot expansion brings Chelsea Japan's flagship property to a total of 390,000 square feet of gross leasable area, by far the largest outlet center in Japan.

Gotemba Premium Outlets is located approximately 60 miles west of Tokyo on the heavily traveled Tomei Expressway, midway between Mount Fuji and the Hakone resort area. Its trade area extends from west Tokyo and Yokohama to Shizuoka Prefecture, and includes approximately seven million people living within a 90-minute drive. Additionally, Mount Fuji and Hakone comprise Japan's top tourism region, receiving approximately 6.5 million visitors annually.

Gotemba Premium Outlets has been one of Japan's most successful new retail properties since its opening in July 2000. The original phase remains 100% leased to more than 90 international, domestic and restaurant tenants, including Bottega Veneta, Brooks Brothers, Coach, Cole Haan, Diesel, Escada, Ermenegildo Zegna, GAP, Kenzo, La Perla, Laura Ashley, Nike, Royal Copenhagen, Space (Prada, Miu Miu), Timberland and Versace. The expansion, also fully leased, adds five restaurants and 68 new retail stores, including Armani, Dolce & Gabbana, Dunhill, Gucci, Hugo Boss, Hunting World, Kate Spade, Loro Piana, Meleze (LVMH Group), Salvatore Ferragamo, Theory, Tod's, Tommy Hilfiger, TSE, Vivienne Westwood and YSL.

At pre-opening ceremonies yesterday, Leslie T. Chao, Chairman of Chelsea Japan, said, "Gotemba Premium Outlets is unsurpassed in Japan in its scale, selection and setting. With this expansion, we are delighted to welcome many additional brands that will make a day of shopping here even more exciting."

Formed in 1999, Chelsea Japan is a joint venture of Chelsea Property Group (40% interest), Mitsubishi Estate Co., Ltd. (30%) and Nissho Iwai Corporation (30%). The company currently owns and operates three Premium Outlet(R) centers - totaling approximately 820,000 square feet of gross leasable area including the Gotemba expansion - in the Tokyo and Osaka markets. New Premium Outlet projects are planned for other major Japanese markets including Fukuoka and Nagoya.

Mitsubishi Estate is one of Japan's largest and most respected real estate companies, with major office, retail, hotel and other property holdings in Tokyo's Marunouchi business district as well as across the country and abroad. Nissho Iwai, a unit of Nissho Iwai-Nichimen Holdings Corporation, is one of Japan's largest conglomerates, with interests in a wide range of businesses including real estate development.

Chelsea Property Group, Inc. is a fully integrated, self-administered and self-managed real estate investment trust (REIT) that wholly or partially owns 59 Premium Outlet(R) and other shopping centers - containing 15.1 million square feet of GLA - in 31 states and Japan. In the United States, Chelsea's leading properties include Woodbury Common Premium Outlets, near New York City; Orlando Premium Outlets, in Orlando, Florida; Desert Hills Premium Outlets, near Palm Springs, California; and Wrentham Village Premium Outlets, near Boston. See www.cpgi.com and www.premiumoutlets.co.jp for more information. Statements in this news release that are not strictly historical are "forward-looking" statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although Chelsea Property Group believes the expectations reflected in such statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Forward-looking statements involve known and unknown risks that may cause actual results to differ materially from expected results. Risk factors include, without limitation, the receipt of regulatory entitlements for and completion of development projects in the United States or abroad; construction risks; the availability and cost of capital and foreign currency; credit risk; the Company's ability to lease its properties; retail, real estate and economic conditions; risks inherent to being a partner in joint ventures; competition; and other risks detailed from time to time in Chelsea Property Group's reports to the Securities and Exchange Commission. The Company accepts no responsibility for updating forward-looking statements.

Contacts

Chelsea Property Group, Inc., Roseland
Bruce Zalaznick
or Karen Fluharty
973/228-6111

Contacts

Chelsea Property Group, Inc., Roseland
Bruce Zalaznick
or Karen Fluharty
973/228-6111