ECONOMIC OVERVIEW INVESTMENT OVERVIEW OFFICE MARKET

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2 REAL ESTATE MARKET OVERVIEW MID-YEAR 2013 UKRAINE CONTENTS TABLE OF CONTENTS ECONOMIC OVERVIEW INVESTMENT OVERVIEW OFFICE MARKET Colliers International This report is intended as general market research and based upon material in our possession or supplied to us, which we believe to be reliable. Whilst every effort has been made to ensure its accuracy and completeness we cannot offer any warranty that factual errors may not have occurred. We would like to be told of any such errors so that these can be corrected. Colliers International takes no responsibility for any damage or loss suffered by reason of the inaccuracy or incorrectness of this report. The information presented in this report may not be used without the prior written permission of Colliers International Ukraine. All the forecasts and scenarios made by Colliers International in this report are based on macroeconomic indicators, provided in Economic Overview. In case of deviations of real macroeconomic indicators from those we used as basic, our prognosis might be ether optimistic or pessimistic accordingly.

3 F 2014F 2015F REAL ESTATE MARKET OVERVIEW MID-YEAR 2013 UKRAINE ECONOMIC OVERVIEW INDICATOR KEY ECONOMIC INDICATORS 2013F Real GDP 0.6% Consumer price index 4.3% Unemployment 8.0% Source: State Statistics Service of Ukraine, Focus Economics F - forecast ECONOMIC OVERVIEW GENERAL CHARACTERISTICS Ukrainian economy continues to show poor results due to slack external demand and macroeconomic imbalance. According to the data of the State Statistics Service of Ukraine, Ukraine's GDP decreased by 1.1% in the second quarter of 2013 compared to the same period of 2012, which corresponds to the rate of decline in the first quarter (-1.1%). 25% 20% 15% 10% GDP, INFLATION AND UNEMPLOYMENT RATE At mid-year 2013, industrial production dropped by 5.3% compared to the same period of The decline in industrial production is observed in all major segments and continues eleventh consecutive month. Consumer prices declined by 0.4% in May and 0.1% in June 2013 compared to the same months in According to the experts opinion, inflation rate will increase to 4.3% by the year end. 5% 0% -5% However, in 2013, retail turnover demonstrated a positive trend. At mid-year 2013, retail turnover growth was 11.2 % comparing to the same period of 2012; while the real wages growth was 9.6 %. -10% -15% FORECASTS -20% GDP, % Unemployment, % Inflation, % According to the consensus forecast of Focus Economics, Ukraine s GDP growth rate will amount to 0.6 % in 2013 and 2.5% in Source: State Statistics Service of Ukraine, Focus Economics МАКРОЭКОНОМИЧЕСКИЕ ИНДИКАТОРЫ F 2014F Population (million) GDP (USD bln.) GDP per capita (USD) 2,310 3,099 4,092 2,480 2,971 3,575 3,835 3,675 3,747 Economic Growth (GDP annual var. in %) Private consumption (annual var. in %) Government Consumption (annual var. in %) Fixed Investment (annual var. in %) Industrial Production (annual var. in %) Unemployment (% of active population, eop) Fiscal Balance (% of GDP) Public Debt (% of GDP) Inflation (CPI, annual var. in %, eop) Exchange Rate (UAH per USD, eop) Current Account Balance (% of GDP) Current Account Balance (USD bln.) Merchandise Trade Balance (USD bln.) Merchandise Exports (USD bln.) Merchandise Imports (USD bln.) Merchandise Exports (annual var. in %) Merchandise Imports (annual var. in %) International Reserves (USD bln.) External Debt (USD bln.) External Debt (% of GDP) F forecast Source: Focus Economics, August 2013 State Statistics Service of Ukraine

4 REAL ESTATE MARKET OVERVIEW MID-YEAR 2013 UKRAINE INVESTMENT KEY INDICATORS OF REAL ESTATE INVESTMENT MARKET YIELDS (PRIME ASSETS IN KYIV) JUNE 2013 Shopping centres % Offices % Industrial % INVESTMENT OVERVIEW GENERAL CHARACTERISTICS In the first half of 2013, moderate interest in the Ukrainian commercial real estate investment market was observed. The unfavorable economic situation in Europe, another Ukraine s GDP forecast downgrade, as well as devaluation expectations do not contribute to the strengthening of activity among investors. INVESTMENT VOLUMES, UKRAINIAN COMMERCIAL REAL ESTATE MARKET* TRANSACTIONS Among major events in the commercial real estate market: million $ International development company Multi Development sold the minority share in the Forum Lviv shopping and entertainment centre (GLA 36,000 m²) to Ukrainian company Bud House Group. It is first retail project of Multi Development in Ukraine, and it will be developed together with Ukrainian real estate partners, Galereja Centre and Bud House Group * Investment transactions, excluding purchase of assets for the own use and development land INVESTMENT VOLUMES, EASTERN EUROPE Billion A deal on acquisition of operating retail property was completed in Kyiv. The estimated transaction value was approximately $25 million. YIELDS In H1 2013, yields level was within the expectations of late Prime yields for Kyiv stood in the range of % for the office and retail segments and % for the industrial market segment. FORECASTS Most likely, second half of 2013 will witness a moderate investment activity on the Ukraine s commercial real estate market. Interest in the operating assets will be concentrated mainly in retail and office segments; while interest in development opportunities, as in the past, will target the retail projects. In the absence of economic and political upheavals in Ukraine in H2 2013, yields will remain at their present levels. It is likely that by the end of the year a number of investment transactions for the acquisition of operating real estate assets will be completed , H1 Regional Total (Volumes) Regional Total (Deals) 0

5 REAL ESTATE MARKET OVERVIEW MID-YEAR 2013 UKRAINE OFFICE MARKET KEY INDICATORS OF KYIV OFFICE MARKET INDICATOR JUNE 2013 Total stock 1,480,000 m 2 Take-up, H1 76,000 m 2 Vacancy rate 15% Prime rents, Grade A offices $35-36 / m 2 / month 1,600 1,400 1,200 1,000 TOTAL STOCK AND NEW SUPPLY, KYIV OFFICE MARKET F forecast TOTAL STOCK, DISTRIBUTION BY GRADE OF BUILDING, KYIV OFFICE MARKET 100% 80% 60% 40% F Total stock as of the beginning of the year, thsd. m2 New supply during the year, thsd. m % 18% 16% 15% 14% 18% 20% 62% 61% 63% 65% 67% 62% 62% 184 А B OFFICE MARKET GENERAL CHARACTERISTICS AND MAIN TREND At mid-year 2013, the overall supply of competitive office space in Kyiv reached 1.48 million m 2. Take-up of office space increased by 26% compared to the first half of 2012 and amounted to approximately 76,000 m 2. In the first half of 2013, the vacancy dropped from 17% to 15%. Base rental rates remained nearly unchanged. At mid-year, Grade А office space rates were in the range of $24-36/m 2 /month, and Grade В office rents ranged from $17 to 22 /m 2 /month. The strongest demand for a competitive office space in 2013 came from the companies in IT sector, which continue to develop dynamically. There is an increasing demand for office space by agrarian and pharmaceutical companies, while demand from the financial sector continues to be low. In contrast to 2012, the Kyiv office market saw several open market sale transactions of the office space/buildings for the own use. SUPPLY In the first half of 2013, the new supply of competitive office space in Kyiv amounted to 64,000 m 2, which was associated with the completion of Grade A Gulliver BC, located at 1, Sportyvna Sq. At mid-year 2013, the overall supply of competitive office space in Kyiv reached 1.48 million m 2 *. Provided all office buildings announced for the completion in 2013 are commissioned on time, ca. 120,000 m 2 of new office space will be delivered to the market in the second half of the year. Among new major office developments expected to be delivered by the year-end: Senator BC (GLA 48,000 m 2 ), Silver Breeze BC (GLA 26,000 m²), SP Hall BC (GLA 23,000 m²), BC at 15, Leiptsyzka St. (GLA 15,400 m²), Kyiv Airport City BC (1 phase) (GLA 5,000 m²). 20% 0% 18% 21% 21% 20% 19% 20% 18% C Following previous years trend, the new office developments are traditionally located in the Right Bank district; while the office developments in the Left Bank district are weak. The only large-scale project being under construction on the Left Bank is multifunctional complex Silver Breeze, the delivery of which is planned by the end of * Includes all classified office buildings with GLA exceeding 5,000 m 2. State institutions are not included. MAJOR BUSINESS CENTRES PLANNED FOR COMPLITION IN THE SESCOND HALF OF 2013 ** The Act of Commissioning is received; however, the BC is actually not ready to accept tenants based on the overall construction readiness. PROPERTY ADDRESS GRADE GLA, M² DEVELOPER Senator BC** Silver Breeze BC** 2, Moskovska St. / 32-34/2, Riznytska St. А 47,600 К.А.N. Development 1v, Pavla Tychyny Ave. В 26,000 SvitLand Ukraine SP Hall BC** 28а, Moskovskyi Ave. В 23,000 Linkorn BC on Leiptsyzka St. Kyiv Airport City BC (1 phase) 15, Leiptsyzka St. B+ 15,400 МЕRX Boryspil IA, Kyiv region B 5,000 K.A.C. Holding AG

6 REAL ESTATE MARKET OVERVIEW MID-YEAR 2013 UKRAINE OFFICE MARKET MAJOR COMPLETED AND PIPELINED BUSINESS CENTRES CENTRAL BUSINESS DISTRICT (CBD), KYIV # PROPERTY GRADE YEAR OF GROSS LEASABLE AREA COMPLETION (GLA), M 2 1 IOHC BC (9/2, Velyka Vasylkivska St.) B ,000 2 Europe BC (4, Muzeinyi Lane) B ,200 3 Kyiv-Donbas BC (42/4, Pushkinska St.) B ,000 4 OB at 29/31/34/36, Ivana Franka St. B ,200 5 Horizon Tower BC (42/44, Shovkovychna St.) A ,000 6 Khreshchatyk Plaza BC (19a, Khreshchatyk St.) B ,600 7 Millenium BC (12, Volodymyrska St.) A ,500 8 Olimpiiskyi BC (72, Velyka Vasylkivska St.) B ,700 9 NTBC (1 phase) (43, Zhylianska St.) B , Panorama BC (20, Velyka Zhytomyrska St.) B , Leonardo BC (phase 1) (17/52, Bohdana Khmelnytskoho St.) A , FIM Center (17, Liniina St.) B , Botanic Towers BC (119/121, Saksahanskoho St.) B , BC at 3, Sportyvna Sq. B , HPBC (4, Mykoly Hrinchenka St.) B , Renaissance BC (24, Vorovskoho St.) B , Europe plaza BC (1-2 phases) (Tarasa Shevchenka Blvd. / Saksahanskoho St.) B , OB at 5, Velyka Vasylkivska St. B , BC at 101, Volodymyrska St. B , Seven Hills BC (49а, Volodymyrska St.) B , OB at 6/28, Tarasa Shevchenka Blvd. B , BC at 38, Volodymyrska St. B ,400

7 REAL ESTATE MARKET OVERVIEW MID-YEAR 2013 UKRAINE OFFICE MARKET # PROPERTY GRADE YEAR OF GROSS LEASABLE AREA COMPLETION (GLA), M 2 23 OB at 6, Rylskyi Lane A , Parus BC (2, Mechnykova St.) A , Eurasia BC (75, Zhylianska St.) A , Fahrenheit BC (30v, Fizkultury St.) B , Leonardo BC (phase 2) (19/21, Bohdana Khmelnytskoho St.) A , OB at 28, Fizkultury St. B , Prime BC (48/50, Zhylianska St.) A , Maxim BC (33v, Antonovycha St.) B , Renome BC (5, Dymytrova St.) B , OB at 4, Rylskyi Lane A , BC at 35, Honchara St. B , Karat BC (110, Zhylianska St.) B , Protasov BP (2/1, Mykoly Hrinchenka St.) B , Capital Hall BC (31, Zhylianska St.) B , BC at 70/16b, Saksahanskoho St. / Pankivska St. B , Tower BC (57, Lva Tolstoho St.) A , Toronto BC (100, Velyka Vasylkivska St.) A , Gulliver BC (1, Sportyvna Sq.) A , Senator BC (2, Moskovska St. / 32-34/2, Riznytska St.) A , OB at 98, Velyka Vasylkivska St. A ,000 BC business centre OB office building TAKE-UP BY TRANSACTION TYPE 27% 3% 70% Relocation Expansion Renewal DEMAND Take-up of competitive office space in the first half of 2013 increased by 26% compared to the same period in 2012 and reached 76,000 m 2. The strongest demand for a competitive office space in the first half of 2013 came from the companies in IT sector (32%). There is an increasing demand for the office space from the companies in agrarian and pharmaceutical sectors, while demand from the financial sector continues to be weak. In contrast to 2012, the Kyiv office market saw several open market sale transactions of the office space/buildings for the own use. For example, one of the companies purchased approximately 7,500 m 2 in Premium BC at 6, Lepse Blvrd. The largest number of transactions in the office segment in the first half of 2013 was due to relocation. At mid-year, the share of relocation transactions reached about 70% of the overall volume of all leased or purchased office space. Over the past several years, the main reasoning of tenants willing to relocate has not changed and included: improve office premises quality, optimise office rent costs, consolidate disengaged offices in one building and/or expansion. At the same time, landlords are clearly ready and eager to provide their potential tenants with the above options in a Tenant Market. RENTAL RATES AND VACANCY In the first half of 2013, the vacancy dropped from 17% to 15%. At the same time, the Grade A vacancy rate continued to remain high, at around 28%, at midyear; the Grade B and C vacancy rate 13% and 6% respectively.

8 REAL ESTATE MARKET OVERVIEW MID-YEAR 2013 UKRAINE OFFICE MARKET $90 $80 $70 $60 $50 $40 $30 $60 RENTAL RATES AND VACANCY $ % 16.8% 17.0% 14.7% 14.0% 13.5% $38 $35 $36 $36 $30 $ % 20.0% 15.0% 10.0% Given high vacancy rate, the lower limit of Grade A rents dropped from $27/m 2 /month in 2012 to $24/m 2 /month in the first half of Meanwhile, the lowest rates in the range were offered primarily to the first main anchor tenants in the new office buildings, whereas in existing Grade A business centres enjoying low vacancy levels, the rental rates remained relatively stable ranging from $34 to 36/m 2 /month. At mid-year, Grade B and C office space rates were in the range of $17-22/m 2 /month and $12-15/m 2 /month respectively. $20 5.0% $10 0.0% 0.0% $0 0.0% Prime rents in Grade A offices Vacancy, % VACANCY RATE 0.0% 10.0% 20.0% 30.0% Grade A 27.5% Grade B 12.8% Overall 14.7% FORECASTS In the second half of 2013, significant new supply is expected in Kyiv office segment. Provided all office projects announced for this period are commissioned on schedule, ca. 120,000 m 2 of new office space will be delivered to the market. Rental rate dynamics in many respects will be defined by the actions of developers of the major office projects planned for commissioning. Due to the competition between major high-quality projects, certain developers may demonstrate the evidence of dumping actions in their pricing policy, thereby collapsing the market. In this case, the rental rates may decrease. If developers opt to take into account common global market practices, which indicate that new large-scale projects (above 40,000 m²) are usually occupied gradually and steady, reaching a 100% occupancy rate in 2-3 years after being commissioned, and given that developers do not resort to the dumping actions, the market will gradually consume all delivered supply and the rental rates may remain at their current levels. Grade BASE RENTAL RATES FOR OFFICE SPACE IN KYIV, 2H H H 2010 $/M 2 /MONTH 1H H H H H 2013 Grade A Grade B Grade C TYPICAL TERMS AND CONDITIONS OF LEASE AGREEMENT, GRADE А, H Term of Lease Agreement 3 to 5 years Priority Prolongation Option for Existing Tenant YES Currency of Rental Payments $ / m 2 / month Rent Payable in Advance Monthly or quarterly advance payment Security deposit / Bank guarantee Equivalent of rental payment for 2-3 months Indexation of Rental payments 3 to 5 % annually, starting from the second year of lease Operating Expanses $7-9 / m 2 / month, net of VAT Indexation of Operating Expanses 3 to 5 % annually, starting from the second year of lease Parking Aboveground parking $ parking space/month, net of VAT Underground parking $ parking space/month, net of VAT Parking index CBD: 1:120 to 1:250; non-cbd: 1:50 to 1:100 Handover Condition (Landlord s Work) Partially equipped room with open floor space without basic fit-out (shell & core) Rent free period 1 to 5 months Method of Office Area Measurement BOMA or BTI (Bureau of Technical Inventory) Common Area Factor 12-19%

9 REAL ESTATE OVERVIEW MID-YEAR 2013 UKRAINE 482 offices 62 countries 6 continents Europe, Middle East and Africa: 85 USA: 140 Canada: 42 LATAM: 20 Asia: 38 ANZ: 157 $2 billion annual revenue 103 million m 2 managed 13,500 professionals UKRAINE: Colliers International Bohdana Khmelnytskoho Street Kyiv Ukraine tel ukraine@colliers.com The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. COLLIERS RESEARCH Colliers Research Services Group is recognized as a knowledge leader in the commercial real estate industry, providing clients with valuable market intelligence to support business decisions. Colliers research analysts provide multi-level support across all property types, ranging from data collection to comprehensive market analysis. Across the Eastern European region of EMEA, Colliers researchers regularly collect and update data on key real estate metrics, set to consistent definitions bringing greater transparency and reliability to our real estate market analysis in the region. In most Eastern European markets, the office definitions used are consistent with those set out by the CEE Research Forum an umbrella group, of which Colliers is a founding member. Definitions of the key metrics used in our regular reports are highlighted below. KEY METRIC DEFINITIONS Prime Net Initial Yield: The yield an investor is prepared to pay to buy a Grade A building, fullylet to high quality tenants at an open market rental value in a prime location. Lease terms should be commensurate with the market. As a calculation Net initial yield = First years net income/purchase price (prior to deducting fees and taxes) Prime Headline Rent: Represents the top open-market tier of rent that could be expected for a unit of standard size commensurate with demand, of the highest quality and specification in the best location in the market at the survey date. This should reflect the level at which relevant transactions are being completed at the time but need not be exactly identical to any of them, particularly if deal flow is very limited or made up of unusual one-off deals. If there are no relevant transactions during the survey period, the quoted figure will be more hypothetical, based on expert opinion of market conditions. The figure excludes service charges, taxes, and tenant incentives. Prime Net Effective Rent: Prime Net Effective Rent is the lowest rent payable, based on a calculation of the Prime Headline Rent, less the monetary value of the discount achieved through landlord incentives inc. rent-free periods and/or fit-out contributions. Total Occupational Market Activity (Take-up): Total Occupational Market Activity is the total floorspace known to have been let or sold as one of the following activity types during the survey period: Pre-let, New Occupation/Lease, Renewal/Renegotiation, Expansion, Sub-lease and Sale & Leaseback. Net Take-up: Net Take-up represents the sum of all Total Occupational Market Activity categories which represent a net increase in demand for space. This would only include the following activity types: Pre-lets, New Occupation/lease, Expansion Total Competitive Stock - Offices: Includes the gross leasable floorspace in all Grade A and B buildings, including owner-occupied buildings but excluding government owned properties. Anciilary office space is only included if it can be reasonably used independently of the primary use of the building in which it is located. Total Competitive Stock Retail Shopping Centres: Split into two categories Traditional & Specialised as per ISCS definitions. Traditional includes retail properties that are planned, built and managed as a single entity, comprising units and communal areas with a minimum gross leasable area (GLA) of 5,000 square metres. Specialised A specialised shopping center is defined as a specific, purpose-built retail that is typically open-air with a minimum gross leasable area (GLA) of 5,000 m2. This includes Retail Parks, Factory Outlet Centres and Theme-Oriented Centres. Vacant Space: The total gross leasable floorspace in existing properties that meet the Competitive Stock definition, which is physically vacant and being actively marketed at the survey date. Space should be available for immediate occupation. Accelerating success.