INVESTOR PRESENTATION. September 2011

Transcription

1 INVESTOR PRESENTATION September 2011

2 Disclaimer This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of AFI Development Plc (the "Company") or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the document. This communication is only being distributed to and is only directed at (1) qualified institutional buyers (within the meaning of Rule 144A of the United States Securities Act of 1933, as amended (the "Securities Act") or (2) accredited investors (as defined in Rule 501(a) of Regulation D adopted pursuant to the Securities Act). Any person who is not a "qualified institutional buyer" or "accredited investor" should not act or rely on this document or any of its contents. This document contains "forward-looking statements", which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. Neither the Company, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document. The information contained in this document is provided as at the date of this document and is subject to change without notice. 2

3 Russia Portugal Ireland Greece Spain Italy Germany UK US Macroeconomic update Real GDP growth 3.7% in Q2 2011, TY 2011 estimation 4% Sovereign debt to GDP ratio is the lowest among its peers Oil price (Brent) is volatile but still over U$100 per barrel Unemployment is 6.4% in May. Labor market is steadily improving Inflation is estimated at % for TY 2011 Ruble exchange rate is fluctuating around 30 RUB for 1 US$ % Real GDP (Year 2003 = 100) - left axis YoY growth, % - right axis 110% 105% 100% 95% 90% 85% 80% 200% 150% Sovereign Debt (% of GDP) 114% 112% 100% 50% 0% 110% 108% 108.8% 106% Russian CPI, % Source: EIU, Federal statistics service, JLL 3

4 Million sqm Million sqm Market update Retail Key indicators Prime rates* Base rents Units 4,000 psqm pa 1,350 psqm pa Prime yield 9.0% 9.5% Vacancy <1% (prime) 7% (Moscow aver.) *Prime rates: 100 sqm shops on 1 st floors in quality shopping centers Retail supply and vacancy % 5% 4% 3% 2% 1% 0% H total area vacancy source: JLL, C&W Retail rental rates, US$ psqm pa 3,000 3,500 4,500 4,800 3,700 1,300 1,500 1,700 2,000 1,200 4,000 4,000 4,000 1,350 1,350 1, Q1 Q Prime rents Base rents source: JLL, C&W Office Key indicators Units CBD prime rates Class A Yields 9% US$1,100 - US$1,200 psqm pa US$700 - US$800 psqm pa Vacancy prime 2% - 4% Class A office supply and vacancy Class A rental rates, US$ psqm pa % 2,000 20% 1,500 15% 1,150 1,000 1, % 1,000 5% % H H total supply 2011 vacancy Class A Average Class A vacancy Class A CBD source: JLL, C&W Class A CBD Prime source: JLL, C&W Source: JLL, C&W 4

5 AFI Development at glance Full cycle real estate developer Focus on unique large scale commercial and residential projects Primary market: Moscow, Russia Portfolio market value US$ 2.4 bn (JLL valuation as of June 30, 2011) Market Cap - Sep 09, 2011 US$ 0.65 bn NAV - Jun 30, 2011 US$ 1.8 bn Average share price - Sep 09, 2011 US$ 0.63 NAV per share - Jun 30, 2011 US$ 1.74 Total equity Jun 30, 2011 US$ 1.83 bn Cash & Cash equiv. Jun 30, 2011 US$ 96 mn Project level bank loans Jun 30, 2011 US$ 489 mn Land bank 27% AFIMall City 35% Moscow 94% Pipeline 14% Projects under development 10% Completed and unsold projects 14% Portfolio market value by project type Other 3% Portfolio MV by geography Kislovodsk 3% 5

6 Key projects 1 AFIMALL City Shopping mall CITY OF MOSCOW 8 Ozerkovskaya III Mixed-use 2 Four Winds A -class office 13 9 Kosinskaya B -class office 3 Aquamarine hotel 4* hotel Paveletskaya II Residential 2 4 Ozerkovskaya II Residentaial Otradnoye Residentail Berezhkovskaya B -class office Pochtovaya Mixed-use 6 H2O B -class office 13 Serebryakova Residential 7 Paveletskaya I B -class office 14 Tverskaya Zastava Mixed-use Existing projects Projects under development Pipeline projects 6

7 Key Yielding Assets

8 thousand visitors per day AFIMALL City Key advantages Central location Largest mall in the city center High quality construction and fit-out Highlights GLA/# of shops 107K /c.400 Occupancy 81% 2013 NOI (100%) US$ mn (JLL) Revenue 2011 US$60 mn JLL appraisal value* US$1,093 mn *(100% project as at Jun 30, 2011) Additional matters The 25% city share acquisition in Sep 2011 The Company aims to have the finance in place by the end of Sep 2011 The Company continues its negotiations with the City in respect of the parking Favorable finance terms have been reached in respect of the existing loan March April May June July August Average daily footfall 8

9 Four Winds office Key advantages Prime location in CBD AAA long-term tenants Well-known brand in Moscow Highlights Ownership 50% GBA/GLA 28K /22K Occupancy 100% NOI US$29 mn Rental rate US$1,350 psqm pa JLL appraisal value* US$271 mn *(100% project as at Jun 30, 2011) 9

10 Aquamarine Hotel Key advantages Central location Part of the residential / office complex with a total area of 160K sqm Professional development concept Highlights GBA/# of keys 11K /159 keys Occupancy (H1 2011) 60% 2011 NOP US$2.1 mn (JLL) Stabilized NOP US$4 mn (JLL) ADR US$195 JLL appraisal value* US$47 mn *(100% project as at Jun 30, 2011) 10

11 Plaza Spa Key advantages Recognized recreational area Solid reputation for the top quality service in Kislovodsk town Established client base Highlights Ownership 50% GBA/# of keys 25K /275 keys Occupancy (H1 2011) 73% 2011 NOP (100%) US$8.1mn (JLL) JLL appraisal value* US$62mn *(100% project as at Dec 31, 2010) 11

12 Active Development

13 Ozerkovskaya III Key advantages Prime location in CBD 3rd phase of the residential / office complex with a total area of 160K sqm High quality construction and fit-out Highlights Ownership 50% GBA/GLA 79K /46K Completion Q Stabilized future NOI Average rate Management targets US$38 million (JLL) US$800 (JLL) Development completion in Q The Company is exploring several disposal possibilities of completed office buildings, in whole or in part 13

14 Kalinina Spa Key advantages Recognized recreational area Second Spa project in the region after Plaza Spa success Attractive price-quality Highlights GBA/# of keys 13K /175 keys Operation start Q Stabilized future NOI Management targets Start operation in Q US$3 million (JLL) Occupancy stabilization by 2012 end 14

15 Pipeline next for development

16 Tverskaya Zastava Key advantages Prime business location Close proximity to public transport Moscow top rental rates /prices in the neighborhood Highlights (based on JLL) GBA Over 300K Delivery Current status The Company is still in negotiations with the Moscow authorities on the matter of Tverskaya Zastava 16

17 Otradnoye (Odintsovo) Key advantages Green zone in 7 km from Moscow Prestigious direction & top prices in Moscow Region All amenities for comfort living in place Highlights GBA/# of apartments Revenue Development costs 665K /c.7.5k US$1,370 mn* US$860 mn* Management targets Renewal of construction permit and construction start and/or cooperation with co-investor (clarity in 2012) * The information is based on valuation report conducted by JLL as at Jun 30, 2011 for the purpose of the Company financial statements for the 6 months

18 Paveletskaya Phase II Key advantages Central location 5 km from the Kremlin Embankment of the Moscow River Undersupply of quality residential space in Moscow Highlights GBA Revenue Development costs 106K US$390 mn* US$174 mn* Management targets Design and approval works proceeding to secure construction permit (clarity in 2012) * The information is based on valuation report conducted by JLL as at Jun 30, 2011 for the purpose of the Company financial statements for the 6 months

19 Pochtovaya Key advantages Central administrative district of Moscow Embankment of the Yauza River Undersupply of quality residential space in Moscow Highlights GBA Revenue Development costs 424K US$1,497 mn* US$616 mn* Management targets Design and approval works proceeding to secure construction permit (clarity in 2012) * The information is based on valuation report conducted by JLL as at Jun 30, 2011 for the purpose of the Company financial statements for the 6 months

20 Financial position

21 Financial position Stable cash position of US$ 96 mn Total assets (TA) US$ 2.57 bn Total equity (TE) 1.83 bn, TE/TA 0.71 Net debt (ND) US$ 393 mn, ND/TA 0.15 Real estate properties Current & other assets Total assets = US$2,566 mn = Sources of finance 2, , Equity Long-term loans Short-term loans Other Balance sheet structure (June 30, 2011), US$ mn 21