Company Presentation at Sberbank Conference. April, 2013

Transcription

1 Company Presentation at Sberbank Conference April, 2013

2 Contents Strategy and corporate overview 3 Market overview 10 Asset portfolio overview Achievements & acquisitions and divestments Initiatives 27 Debt & Liquidity 30 Financial performance Historical 32 Financial performance Projections 34 Our equity story 37 Appendix: yielding assets 42 2

3 Strategy & Corporate Overview 3

4 Management Team Dmitriy Mints Alexander Ostrovskiy Michael Stanton Tomasz Zamiara Pavel Barbashev Chairman of the Board Since 2006 actively involved in the real estate and private equity investment projects of OTKRITIE FINANCE CORPORATION ( OFC ) Completed transactions exceeding $3Bn in value Graduated from Moscow State Institute of International Relations Chief Executive Officer Previously Managing Director at OFC, which he joined in 2007 Degree in Law from The Russian Customs Academy of Federal Customs Service Chief Investment Officer Joined OFC in 2006 to create its Real Estate Fund for Vivaldi Plaza 25 years of finance experience MBA from the University of Michigan Chief Financial Officer CFO of Horus Group from 2006 until years experience in Accounting and Real Estate MBA from London Business School Head of Asset Management and Leasing Over 5 years with Horus Capital and 6 years with Hines Management of the assets that are now part of the O1 portfolio Over 15 years experience in Real Estate Graduated from TOURO College of New-York (Moscow Branch) 4

5 The Idea 100% Office 100% Moscow ~ 80/20 Yielding/ Development ~ 50/50 Leverage 5

6 A Moscow Office Pure-Play Fully Integrated Office Real Estate Platform O1 - Company Snapshot Investment in high quality office properties located in Moscow Class A and Class B+/B properties Top-tier tenants, principally multinationals corporations and leading Russian companies Existing yielding real estate portfolio comprised of 10 properties with total NRA of 426,793 sq. m. of as of 01 February 2013 (2) Development portfolio includes 50% stake in 1 project Independent portfolio valuation of US$ 3.7Bn Yielding: US$ 3.67Bn Developments: US$0.03Bn (3) (not consolidated) Portfolio Structure (1) 1% Total value = US$3.7 Bn Yielding assets = US$3.67 Bn Development (not consolidated) = US$0.03 Bn Sourcing / Business Development Acquisitions Asset Management and Leasing Internally Managed Business Continuous in-depth analysis of development and acquisition opportunities in Moscow Highly visible presence in the market (investors, landlords, developers, occupiers, investment managers, finance providers ) Excellent track record in the acquisition of attractive assets and development projects Approval of all material investments and disposals at the Board of Directors level Top-class franchise of leasing capabilities including strong relationships with tenant brokers In-house experience with strong focus on tenant relationships Add value to standing assets through specific asset improvements Close involvement of O1 professionals ensures optimal management of the centres and their client relationships Full control of asset performance (tenant performance, etc.) Yielding Assets 99% Development Projects Development Supervision Established relationships with Moscow planning authorities and other relevant government authorities Experienced in-house team for supervision of development Regular interaction with local authorities helps ensure local needs (for both the O1 and the local authorities) can be aligned within re-development activities Notes 1. Cushman & Wakefield valuation report as of 31 December 2012; assets ownership as of 01 February NRA including only yielding assets; except development projects (incl. White Square but excl. Olympia park ) 3. O1 stake in development project is 50% 6

7 Asset Quality: Diversified Portfolio Across Moscow Yielding Assets make up 99% of Portfolio Value Sheremetyevo Airport 100% Moscow Office Current Portfolio (1) Yielding Assets White Square Krugozor Feb 2013 Sheremetyevskaya Avion $29 MM $107 MM White Square Lesnaya Plaza Le Fort $261 MM $1 002 MM $280 MM Silver City Ducat III $361 MM Stanislavsky Factory $380 MM Kremlin $256 MM Lighthouse $237 MM Vivaldi Plaza $423 MM Ducat III Lesnaya Plaza Lighthouse Stanislavsky Le Fort Silver City Value (US$ Bn.) 3.7 NRA (sq. m) 426,793 Occupancy 98% LOI s 0,2% Annualized 2013 NOI ($ MM) (2) Weighted Average ERV (US$) Krugozor $359 MM Vivaldi Plaza Avion Vnukovo Airport MKAD Ring Road Development Projects Sheremetyevskaya Yielding Asset Development Project Value: NRA: $0.03 Bn sq m 5 km Domodedovo Airport Completion: 2016 Notes 1. Olympia park was sold in Feb 2013, all data are given without Olympia park 2. Annualized full occupancy NOI as of Feb 2013 incl. parking 3. O1 owns a 50% interest in Sheremetyevskaya 7

8 Strong Board Value-Add Board Members and Strong Corporate Governance Independent Non-Executive Directors Timothy Fenwick Former Head of Jones Lang LaSalle, Russia Joined in July 2011 Chairman of remuneration committee Richard Gregson Former Real Estate Leader of PWC, Russia Appointed to the Board in June 2012 Chairman of audit committee Executive Directors John Nacos Former Global Head of Real Estate, Deutsche Bank Joined in August 2011 Chairman of O1 Strategy and Development committees Dmitriy Mints Chairman of the Board and Chief Executive Officer Alexander Ostrovskiy Chief Operating Officer Michael Stanton Chief Investment Officer Tomasz Zamiara Chief Financial Officer Corporate Governance The composition of the Board of Directors is well balanced; 3 out of 7 Board members are independent non-executive directors, all are active industry participants with significant experience in real estate and real estate finance All three committees (audit, nomination and remuneration, strategy and development) are headed by independent directors Strong Alignment of Shareholder Interests Founding shareholder (Boris Mints) remains committed to the ongoing business strategy 8

9 Group structure chart (pro-forma) 85% 9

10 Market Overview 10

11 Key Highlights Market Position 1) Russian Economy demonstrating strong macroeconomic position 2) Within Russia, Moscow demonstrates position of economic concentration 3) Moscow market has particularly attractive characteristics for office real estate 4) Moscow Investment into Real Estate Rising 5) Leading Class A Office Player in Moscow Market 11

12 1) Macros: Lowest debt levels Source: The Economist (Global debt guide September 2012) 12

13 2) Moscow: Russia s Office Market Moscow Office Market 5 times larger than St Petersburg Moscow Office Stock & Vacancy Breakdown 1.20 MM sq m (11.4% of Class B) 2.14 MM sq m 0.42 MM sq m (16.6% of Class A) Class A Vacant class A 9.34 MM sq m Class B Vacant class B Total Stock (sq m): 13.1 MM Source: Cushman & Wakefield, as of Feb

14 3) Moscow Office Market: Low Levels Class A Stock New office Construction Attractive Yield Dynamics Million sq.m % 8 6 8,5 6,3 6,0 5,8 7,3 6, ,9 4,5 4,5 2,1 4,0 1, Class B (B+ and B-) Class A Source Cushman & Wakefield, as of Feb Moscow (Russia) Warsaw (Poland) Office yield Madrid (Spain) Budapest Government bonds yield Paris (France) London (UK) Low Relative Stock Per Capita Moscow s Stock & Vacancy Population (MM) 15.0 Moscow Paris 10.0 London New York Budapest Madrid Prague Milan Frankfurt Warsaw Source Cushman & Wakefield, as of June 2012 Total Office Stock (sq m MM) Source Cushman & Wakefield, as of Feb

15 4) Increasing Investments into Real Estate Foreign Participation Small But Rising Name Market YEAR Recent foreign investment transactions Rentable area, sq m Investor Estimated Value, US$ MM Metropolis Shopping Center Moscow ,000 Morgan Stanley (MSREF) $1 200 Galleriya St Pete ,000 Morgan Stanley (MSREF) $1 100 Actor Gallery Moscow ,000 SOFAZ $133 Metropolis Bldg B Moscow ,000 Heitman $250 Nagatino I-Land Moscow ,995 Raiffeisenbank $95 Bakhrushina House Moscow ,159 Sponda Plc $47 Mercury City Moscow ,000 Japan Tobacco International N/A Golden Babylon Moscow ,000 Immofinanz $250 Pushkino Logistics Moscow ,600 Raven Russia $220 G - 11 Moscow ,000 Hines $94 In 2007, Russian investors and foreign investors reach represented roughly half of the investment market In 2009, foreign investment was largely absent Foreign investors gradually returning to the market but market still driven by local market participants Source: Cushman & Wakefield as of Feb 2013, Jones Lang LaSalle Feb

16 5) O1 is The Leading Player in Moscow Office Market O1 Investment Portfolio Increase O1 has 426,793 sq. meters of completed and yielding Class A and B+ Office Space with an additional 100,000 sq meters under development We estimate 4 5 million of total office stock would be classified as Class A or B+, with the remainder being lower quality Class B Our potential market share in Class A / B+ segment is probably in the range of 10% - 12% Thous. sq. m MM USD HY Q Q Q NRA, thous. sq. m GAV, MM USD Source: Company data 16

17 Asset portfolio overview 17

18 High Quality Cash-Generating Asset Portfolio Strong Rent-Generating Assets and Selected Development Exposure Properties (1) Portfolio Description (1) Yielding Assets (99% of GAV) White Square Vivaldi Plaza All Properties Class A and Class B+ (except for LeFort which is Class B) Ducat III Valuation: $ MM NRA: 76,542 sq m WAULT: 6.2 years Occupancy: 99,4% Krugozor Valuation: $422.5 MM Total NRA: 48,051 sq m WAULT: 6.9 years Occupancy: 100% Completion Date: 4Q 2011 Top-tier tenants, principally multinationals corporations and leading Russian companies Existing yielding real estate portfolio comprised of 10 properties with 426,793 sq. m. NRA as of Feb 2013 Independent yielding portfolio valuation of US$ 3.7Bn Valuation: $380.1 MM NRA: 33,333 sq m WAULT: 2.8 years Occupancy: 98% Valuation: $358.9 MM Total NRA: 50,951 sq m WAULT: 3.6 years Occupancy: 100% Silver City Lesnaya Plaza Lease Expiration Profile, % of NRA Valuation: $360.8 MM NRA: 41,766 sq m WAULT: 3.0 years Occupancy: 98% Valuation: $280.3 MM NRA: 39,710 sq m WAULT: 4.5 years Occupancy: 91% 25,00% 20,02% ,00% 17,66% Stanislavsky Factory Valuation: $255.5 MM NRA: 34,345 sq m WAULT: 3.0 years Occupancy: 100.0% Lighthouse Valuation: $237.1 MM NRA: 27,405 sq m WAULT: 6.9 years Occupancy: 93% Completion Date: 1Q ,00% 10,00% 9,88% 8,40% 13,22% ,67% ,84% 7,48% Avion Valuation: $106.7 MM NRA: 18,429 sq m WAULT: 0.9 years Occupancy: 100% Le Fort Valuation: $261.4 MM NRA: 56,169 sq m WAULT: 3.4 years Occupancy: 100% 5,00% 0,00% ,48% 1,93% Total Expired NRA from total signed tenants m² Total Expired NRA from total signed tenants % Notes Asset portfolio excludes Olympia park since it was sold in Feb Valuation based on Cushman & Wakefield valuation report as of 31 Dec WAULT weighted average unexpired lease term as of Feb Company information as of Feb

19 Well Diversified Yielding Portfolio Low Asset Concentration underpins Stable Cash Flows As of 30 Sep 2012 As of April-2013 Olympia Park 12% Silver City 14% Avion 4% Krugozor 14% Le Fort 10% + White Square + Ducat III - Olympia Park White Square Bld.2 15% White Square Bld.1 (PWC headquarter) 12% Avion 3% Krugozor 10% Le Fort 7% Stanislavsky Factory 7% Vivaldi Plaza 16% Lighthouse 9% Lesnaya Plaza 11% Stanislavsky Factory 10% Ducat III 10% Silver City 10% Vivaldi Plaza 12% Lighthouse 6% Lesnaya Plaza 8% Total Value: $2.6 Bn Total Value: $3.7 Bn Notes 1. Property valuation as of 31 Dec 2012 by Cushman & Wakefield 2. White Square Project legally consists of two separate buildings, each of them is located on its own land plot. The FY2012 Cushman&Wakefield valuation is divided between the buildings proportionally based on NRA. 19

20 Secure Cash Flows Due to High Quality Tenants Mostly : Multinational Tenants or Russian RTS/LSE Listed Key Tenants (as of 01 Feb 2013, including White Square, Ducat III and excl. Olympia Park) # Tenant NRA, m² NRA, % 1 PwC ,93% 2 EurAsEC ,71% 3 Deloitte ,81% 4 Nomos Bank ,54% 5 SUEK ,41% 6 Citibank ,32% 7 Volkswagen Group ,26% 8 General Electric ,94% 9 Slavneft ,89% 10 McKinsey & Company ,85% 11 LG Electronics ,49% 12 Mail.ru ,49% 13 Weatherford ,36% 14 Arguments&Facts ,33% Nokia Siemens 15 Networks ,28% 16 ABB ,23% 17 Alacatel ,16% 18 Rolf Import ,14% 19 Regus ,10% 20 CHTPZ Group ,05% 21 Toyota Bank ,05% 22 Europa Media Group ,03% 23 McDonalds ,95% 24 Roche Diagnistics ,92% 25 Orgenergogaz ,90% # Tenant NRA, m² NRA, % 26 Swedbank ,89% 27 Clifford Chance ,88% 28 FESCO Transportation Group ,86% 29 TimService ,83% 30 IBM ,82% 31 Nike ,81% 32 Sistematika ,81% 33 BNPP ,78% 34 Goldman Sachs ,76% 35 Kvartal stroy ,75% 36 Bacardi ,74% 37 Agropromkredit ,74% 38 REPUBLIKA ,72% 39 Cordiant ,72% 40 Canon ,72% 41 Jones Lang LaSalle ,68% 42 John Deere ,66% 43 Olympus ,66% 44 Syngenta ,64% 45 Marsh Insuarance ,62% 46 Boston Consulting Group ,59% 47 Sovcomflot ,59% 48 Cushman & Wakefield ,59% 59 ConocoPhillips Russia, Inc ,57% 50 VNIIR ,57% 1. The list excl. O1 Properties rented space of sq. m 20

21 2012 : Achievements, Acquisitions & Divestitures 21

22 Mln USD 2012 Achievements 1) UK Listing: Approved by UKLA for meeting LSE Listing Eligibility requirements and issued Prospectus (though IPO was later deferred) 2) Acquisitions : Acquired Ducat III, Silver City and White Square 3) Leasing: Leased over 120,000 sq meters and finished the year 98% leased 4) Disposals: Olympia Park was sold to end-user (Kaspersky Lab) 5) Hedging : Locked in Low Interest rates on Ducat, Silver City and White Square Acquisitions 6) Financing : Extended maturities of key debt (Aareal loan matures 2017) 7) Capital Base: Supplemented Capital base by issuing $170 mln of Pref Stock to our Parent Company Gross Asset Value growth June 2012 CAPEX & Valuation changes Silver City acquisition 30 September 2012 CAPEX & Valuation changes Ducat III acquisition 31 December 2012 Olympia Park disposal White Square acquisition 30 March

23 2012 Acquisition 1 Latest Acquisition of Standing Assets (Recent Independent Appraisal $360.8MM) Silver City: Value-add Opportunity in Core Asset Class: A ERV 2013: $700 NRA: 41,766 sq m (1) Parking slots: 446 Occupancy: 98% WAULT: 3.0 years Valuation: $360.8 MM ( by Cushman&Wakefield) Rationale of the acquisition: Prestigious location inside the Garden Ring Newly build class A office property with major international and Russian tenants Short WAULT to be managed by the asset management department Source Company data as of Feb

24 2012 Acquisition 2 Trophy Class A Property (Recent Independent Appraisal $380.1MM) Ducat III: Core Asset Class: A ERV 2013: $1,100 - $1,300 NRA: 33,333 sq m Parking slots: 474 Occupancy: 98% WAULT: 2.8 years Valuation: $380.1 MM Rationale of the acquisition: Trophy class A office property in Moscow: top international companies as tenants, superior location and building quality. Currently under-rented as initially leased were signed during construction phase in Rent ramp-up due to coming lease expirations would create significant additional value Source Company data as of Feb

25 2012 Acquisition 3 Trophy Class A Property (Total Value $ MM) White Square: Core Asset Class: A ERV 2013: $1,000 NRA: 76,542 sq m Parking slots: 802 Occupancy: 99,4% WAULT: 6.2 years Valuation: $ MM Rationale of the acquisition: Trophy Class A Property considered by some to be the finest office building in Moscow. The property is fully occupied, high quality multinational tenants, long term secured lease agreements Winner of the Commercial Real Estate Moscow Awards 2010 for best Class A Business Center Excellent transport accessibility to the city centre of Moscow as well as to the Garden Ring (GR), Third Transport Ring (TTR) and Moscow Ring Road (MKAD), proximity to the next metro station Belorusskaya metro station is next to the property; The construction and fit-out of the subject property complies with high quality standards which will ensure a maintaining long-term value of the property; Modern buildings capital expenses are not required Source Company data as of Feb

26 Location Description Olympia Park divestment Class A office complex Consists of 3 buildings, 5 stories each Buildings are located on the bank of Khimkinskoe lake New development completed in late 2011 (1) Olympia Park North Administrative District Close to Vodny Stadion metro station (5 minute walk) Close to Leningradsky Prospect which is a principal route from Moscow city centre to Sheremetyevo airport MKAD Ring Road Olympia Park is a Class A office building located in Leningradsky corridor, half way from the Kremlin to Sheremetyevo airport. O1 acquired the property in a semi-developed state in December 2010 for $96.1 MM. Since the acquisition, O1 invested a further $105 MM into the property and the construction was substantially completed by December Another $42 MM have been required to finalize works (approx. $17 MM for fit-out) and buy out the City of Moscow s interest (approx. $25 MM). During the construction phase, O1 was able to successfully lease up the property to four major tenants, including Kaspersky and BMW, that together take up 96% of the NRA. As at 31 December 2012 Cushman & Wakefield valued the property at $318.3 MM with $17 MM remaining to be spent. In December 2012 we signed SPA with Kaspersky Lab for the sale of Olympia Park. The sale price of $345 mln was almost 10% higher than 31 Dec 2012 independent valuation. 26

27 Initiatives for

28 Bolshevik Development Underway O1 has an Option to acquire a Low risk and highly profitable refurbishment project Bolshevik Factory Redevelopment project: Bolshevik Factory asset is 19 th century industrial building and used to be a Kraft Foods factory Redevelopment will perfectly utilize the capabilities of the former Horus employees that are now part of the O1 team (Horus used to be specialized in the redevelopment of industrial assets into quality office space) The asset is located between the Garden Ring and the Third Transport Ring and is expected to be re-developed into a class A-/B+ office asset The development will take place in two phases of equal size, with expected completion in Q and Q respectively Class A-/B+ ERV, US$/sq m/year 600 Valuation, USD$MM 88.5 O1 share Option to acquire 100% NRA, sq m Circa 75,000 Completed (phases I and II) 2013 and 2015 GAV, $MM (100% share) 88.5 Total outstanding development cost, $MM (Phase I) 50.0 Notes: Company estimates as of 30 September 2012 (based o Cushman & Wakefield valuation report as of 30 June 2012) 28

29 Sheremetyevskaya: Starting 2H 2013 Development Project Development project: Sheremetyevskaya O1 has been closely following the status of the project since three years ago when it was already offered to O1 by the previous owner Sheremetyevskaya will become a class B+ office in the northeast administrative district of Moscow O1 has acquired a 50% JV stake in the development for $9.6MM in June 2011 and increased its stake to 85% in March Management anticipates significant increases in office demand in the respective area and expects the property to generate a very high yield on the acquisition/ development costs Class B+ ERV, US$/sq m/year 500 Valuation, USD$MM 29.3 O1 share 50% NRA, sq m 31,000 Completed 2015/16 GAV, $MM (100% share) 29.3 GAV, $MM (O1 share) Total outstanding development cost, $MM Total outstanding development cost, $MM (O1 share) Notes: Company estimates as of 30 Feb (based on Cushman & Wakefield valuation report as of )

30 Debt and Liquidity 30

31 Debt Maturity Profile Outstanding Debt (incl. White Square, excl. Olympia as of Feb 2013) $ MM Total debt: US $2,4 Bln (incl. White Square) Principal Ammortization Vivaldi debt was refinanced with a loan from Sberbank to mature in Avion Alfa Bank loan maturity Note: debt repayment in 2017 in total sum of $877 MM includes Aareal bank loan - $441MM (Krugozor, Stanislavsky, Lefort), VTB loans - $139MM (Lesnaya Plaza); $110MM (Lighthouse) and Bank of Moscow (VTB Group) $187MM (Silver City) 31

32 Financial Performance - Historical 32

33 Equity & Capital Structure $ MM % 53% 58% 60% + Silver City + Ducat III + White square - Olympia Park 63% 62% 63% % 60% % % % 20% 10% 0 0% 31 Dec Jun Dec Jun Sep Dec 2012 (est) 31 March 2013 (pro forma) Investment Property Other Non-current Assets Current Assets Equity Other liabilities Debt Net debt /GAV Note: Equity of 1,078 as of year end 2012 includes issuance of preferred stock of $171mln (for Ducat acq.) Equity as of 31 March 2013 includes $202 MM preferred stock for White Square 33

34 Financial Performance - Projections 34

35 Key Credit Metrics Secured rental income underpins material improvement in credit metrics 64% 62% 60% 58% 56% 54% 52% 50% 48% 46% 62% Loan to Value (Net debt to GAV) 61% 58% 56% Note: Net debt at the end of the year / GAV at the end of the year 52% ,00x 8,00x 6,00x 4,00x 2,00x 0,00x Net Debt / EBITDA (x) 8,63x 7,28x 7,53x 6,58x Note: Net debt at the end of the year / EBITDA for the year 2,50x 2,00x 1,50x 1,00x 1,67x Interest Coverage Ratio (ICR) (x) 1,84x 1,87x 1,96x 1,30x 1,37x 1,40x 1,46x 0,50x 0,00x ICR DSCR excl. PIK Note: 1) EBITDA for the year / Interest expenses (and amortisation) paid for the year 2) Assumes acquisition of 100% of Bolshevik project in 2015 for $361 million (less assumed debt) 35

36 Our Equity Story 36

37 IPO Timing May 2012 Market Conditions Awful Russia ETF down 20% over 90 day period coinciding IPO Roadshow / Bookbuilding Sunday May 6, 2012 French & Greek elections Go / No Go Decision EEM : Global Emerging Markets ETF RSX: RTS Index ETF Source: NYSE Data Decision to defer IPO 37

38 Valuation: Cash Flow & NAV Growth drive Valn. Price / NAV driven by NAV growth X 2012 O1 NAV: 18% yoy growth 2012 IPO Roadshow 1. GAV Gross Asset Value, LTV Loan to Value 38

39 Property Stocks Recover 2013 / 2014 Time to IPO? X X 1. Source Morgan Stanley : November 2012 Monthly Chartbook 39

40 Company Highlights Strong and Resilient Cash flows High quality assets Active management of estate Tight risk management policy Long lease expiry profile Demonstrated access to capital Strong Liquidity Strong market and low competition Low tenant concentration Majority of tenants are multinationals or Russian companies with high quality credit standing Resilient assets: evidenced by the resilient rental income and high occupancy rates through the 2008 crisis No receivables collection delays As of March 2013, O1 assets are 98% leased Modern assets: most of the portfolio is brand new or refurbished within the last 5 years Prime locations: on transport arteries or walking distance to metro station as demonstrated by the low vacancy rates compared to the market Strong track record of asset management as evidenced by consistently strong portfolio metrics (occupancy ratios, WAULT, retention) Asset management team is a multinational team with local language, local knowledge and local expertise Minimal exposure to developments (currently 1%, maximum 20% of GAV) Strong emphasis on high standards of corporate governance Debt Service Coverage Ratios above 1.1 X even under crisis scenario analysis Portfolio WAULT of approximately 4.3 years (as of March 2013), which compares well to industry peers High Retention Rate Meaningful relationship with key international and domestics banks Demonstrated willingness and ability to use equity capital to reduce financial leverage Strong and positive FFO generation (after interest and dividend payments) and long debt maturities and low Capex. Exceptionally strong market for high quality buildings and within 3 rd ring (Moscow s central business district) with limited stock of prime quality office properties as reflected by rising rents since the 2008 crisis GAV $3,7 Billion (incl. White Square, excl. Olympia Park) Total of ca. 240 tenants as of March 2013 PwC, Eurasian Economic Community (EEC) and Deloitte are the only tenants accounting for more than 3% of Total NRA 40

41 Appendix: Yielding Assets 41

42 Tenants Location Description White Square Class A+ office centre Modern, high-class building completed in 2009 Winner of the Commercial Real Estate Moscow Awards 2010 for best Class A Business Center Northern Administrative District between the Garden Ring and Third Transport Ring Belongs to Belorusskaya area which is one of the most prestigious business districts in Moscow (prime office sub-market) Right next to the Belorusskaya Metro Station (1 minute walk) and Belorusskaya Railway Station (express trains to Sheremetyevo airport) Valuation $ MM GBA sq m 96,704 NRA sq m 76,542 Parking # 802 WAULT Years 6.2 Occupancy % 99,4% ERV $/sq m 1000 Indexation %/year 2.4% Land plot sq m 3,500 Land lease agreement Year 2050 Top-5 tenants occupy 85% of total NRA Lease Expiration Profile 70% 60% LG Electronics 50% 66% 42 White square 40% 30% 20% 10% 0% 13% 6% 0% 3% 5% 5% 0% 1% 1% 0% MKAD Ring Road Note: 1. Cushman & Wakefield valuation report as of

43 Tenants Location Description Krugozor Class A office centre Consists of 2 buildings of different heights connected together Reconstructed buildings of former toy factory South West administrative district Krugozor is close to Kaluzhskaya Metro Station (5 minutes walk) Valuation (1) $ MM GBA sq m 62,072 NRA sq m 50,951 Parking # 703 WAULT Years 3.6 Occupancy % 100% ERV $/sq m 655 Indexation %/year 3.74% Land plot sq m 27,078 Land lease agreement Year 2045 Top-5 tenants occupy 55% of total NRA 40% 30% 20% 10% 0% Lease Expiration Profile 29% 20% 20% 15% 9% 3% 3% 0% 0% 0% Krugozor MKAD Ring Road Note: 1. Cushman & Wakefield valuation report as of

44 Tenants Location Description Lesnaya Plaza Class A office centre Modern, high-class building completed in 2005 Northern Administrative District between the Garden Ring and Third Transport Ring Belongs to Belorusskaya area which is one of the most prestigious business districts in Moscow (prime office sub-market) Right next to the Belorusskaya Metro Station (1 minute walk) and Belorusskaya Railway Station (express trains to Sheremetyevo airport) (1) Valuation $ MM GBA sq m 49,520 NRA sq m 39,710 Parking # 318 WAULT Years 4.5 Occupancy % 91% ERV $/sq m 600 Indexation %/year 3.7% Land plot sq m 3,500 Land lease agreement Year 2050 Top-5 tenants occupy 78% of total NRA Lease Expiration Profile 30% 24% 25% 20% LG Electronics 20% 19% 15% 12% 12% 10% 5% 1% 0% 2% 1% 0% 0% Lesnaya Plaza MKAD Ring Road Note: 1. Cushman & Wakefield valuation report as of

45 Tenants Location Description Le Fort Class B office centre Consists of 10 rentable buildings of different heights Reconstructed buildings of former silk factory (early 20 th Century buildings) East Administrative District Well developed industrial area with more than 300 of the largest industrial companies located there Close to Preobrazhenskaya Ploschad Metro Station (7 minutes walk) (1) Valuation $ MM GBA sq m 59,781 NRA sq m 56,169 Parking # 714 WAULT Years 3.5 Occupancy % 99.7% ERV $/sq m 450 Indexation %/year 3% Land plot sq m 43,424 Land lease agreement Year 2052 Top-5 tenants occupy 58% of total NRA Le Fort Lease Expiration Profile 30% 20% 18% 24% 21% 25% 10% 0% 3% 2% 1% 0% 0% 0% MKAD Ring Road Note: 1. Cushman & Wakefield valuation report as of

46 Tenants Location Description Stanislavsky Factory Class A- office centre Consists of 6 buildings Reconstructed buildings of former factory Central Administrative district (some of the most prestigious offices are located within district) Close to Taganskaya and Marksistskaya metro station (7 and 9 minutes walk respectively) (1) Valuation $ MM GBA sq m 43,251 NRA sq m 34,345 Parking # 335 WAULT Years 2.9 Occupancy % 100.0% ERV $/sq m 650 Indexation %/year 3.16% Land plot sq m 19,632 Land lease agreement Year 2051 Top-5 tenants occupy 50% of total NRA Stanislavsky Factory 40% 30% 20% 10% 0% Lease Expiration Profile 30% 19% 21% 19% 10% 0% MKAD Ring Road Note: 1. Cushman & Wakefield valuation report as of

47 Tenants Location Description Avion Class B+ office centre Consists of 2 buildings connected together Reconstructed in 2005 North Administrative District Close to Aeroport metro station The property resides along Leningradsky Prospekt, a principal route from the Moscow city centre to the Sheremetyevo airport Right next to Aeroport Metro Station Valuation (1) $ MM GBA sq m 19,147 NRA sq m 18,429 Parking # 63 WAULT Years 0.9 Occupancy % 99.5% ERV $/sq m 550 Indexation %/year 4.7% Land plot sq m 9,428 Land lease agreement Year 2054 Top-5 tenants occupy 68% of total NRA Avion 100% 80% 60% 77% Lease Expiration Profile 40% 20% 0% 8% 9% 0% 5% 0% MKAD Ring Road Note: 1. Cushman & Wakefield valuation report as of

48 Tenants Location Description Vivaldi Plaza Class A office complex Consists of 3 buildings, 11 stories each New development completed in late 2011 Central Administrative district (some of the most prestigious offices are located within district) Close to Paveletskaya metro station (2 minutes walk) One of the most well developed business districts in Moscow (1) Valuation $ MM GBA sq m 71,809 NRA sq m 48,051 Parking # 754 WAULT Years 6.9 Occupancy % 100% ERV $/sq m 700 Indexation %/year 4.3% Land plot sq m 16,322 Land lease agreement Year 2060 Top-5 tenants occupy 75% of total NRA 60% 50% 40% 30% 20% 10% 0% Lease Expiration Profile 56% 25% 9% 9% 0% 0% 0% 0% 0% 1% Vivaldi Plaza MKAD Ring Road Note: 1. Cushman & Wakefield valuation report as of

49 Tenants Location Description Lighthouse Class A office centre 14 floors building New development completed in early 2012 Garden Ring Central Administrative district (some of the most prestigious offices are located within district) Close to Dobrininskaya and Paveletskaya metro station (3 and 5 minutes walk, respectively) (1) Valuation $ MM GBA sq m 44,581 NRA sq m 27,405 Parking # 332 WAULT Years 7.1 Occupancy % 93% (1) ERV $/sq m 700 Indexation %/year 3.5% Land plot sq m 6,200 Land lease agreement Year NA Top-5 tenants occupy 64% of total NRA Lease Expiration Profile 35% 29% 30% 27% 25% 20% McDonalds 15% Fitch Ratings 10% Knight Frank 5% Fitness 0% 0% 0% 0% 0% 16% 12% 6% 0% Lighthouse MKAD Ring Road Note: 1. Cushman & Wakefield valuation report as of

50 Tenants Location Description Silver City Class A office centre Modern, high-class building completed in 2007 Central Administrative District within the Garden Ring Between Taganskaya and Paveletskaya metro stations. (1) Valuation $ MM GBA sq m 56,033 NRA sq m 41,766 Parking # 446 WAULT Years 3.0 Occupancy % 100% (1) ERV $/sq m 700 Indexation %/year 2.2% Land plot sq m 3,500 Land lease agreement Year 2050 Top-5 tenants occupy 58% of total NRA 50% Lease Expiration Profile Silver City 0% 31% 16% 17% 13% 10% 4% 6% 0% 0% 0% MKAD Ring Road Note: 1. Cushman & Wakefield valuation report as of

51 Tenants Location Description Ducat Place III Class A prime office centre Modern, high-class building completed in 2008 Central Administrative District, in the most prestigious business area in moscow Between Mayakovskaya and Belorusskaya metro stations. (1) Valuation $ MM GBA sq m 46,085 NRA sq m 33,079 Parking # 494 WAULT Years 2.8 Occupancy % 98% (1) ERV $/sq m 1,100-1,300 Indexation %/year 3.0% Land plot sq m N/A Land lease agreement Year N/A Top-5 tenants occupy 51% of total NRA Lease Expiration Profile Ducat III 50% 40% 30% 20% 10% 0% 40% 15% 15% 12% 7% 1% 3% 1% 2% 0% MKAD Ring Road Note: 1. Cushman & Wakefield valuation report as of

52 Thank you 52