COMMERCIAL REAL ESTATE RUSSIA # MARKETBEAT. Cushman & Wakefield Research Q1 2016

COMMERCIAL REAL ESTATE RUSSIA # MARKETBEAT Cushman & Wakefield Research Q1 2016

03 17 47 51 CONTENTS SECTION 1 OUTLOOK SECTION 2 COMMERCIAL REAL ESTATE SECTION 3 APPENDIX SECTION 4 OUR TEAM Major economic trends of current period, market review and forecast Macroeconomic and analytic review of various commercial real estate market sectors Major indicators of Moscow commercial real estate market, standard commercial lease terms Information about Cushman & Wakefield in Russia, Research department contact details 03 Outlook 04 Regulation 05 Macroreview 12 Capital Markets 17 Office 28 Retail 40 Warehouse & Industrial 47 Market Indicators 49 Lease Terms #MARKETBEAT Q3 2015 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 2 #MARKETBEAT Q1 2016

CONSUMER MARKET MAY FORM SECOND WAVE OF DECLINE OUTLOOK Russian economy is stagnating. Even slight RUB appreciation does not relief inflation pressure. Business activity is low and consumer market is under pressure. Decreasing household income and conservative adaptation strategies adopted by population suggest that sales will continue to diminish. By the end of Q1 2016 business generally adapted to new norm by cutting expenses, optimizing volumes and headcounts. In Q2 we expect low business activity to remain. Real estate indicators (vacancies, rents, take up) will be stable, but still in the red zone. Many factors suggest that we are close to the bottom of the cycle, however major threat now comes from consumer market. If it sustains for Q2 there will be more evidence of the recovery. Russian population adopted survival adaptation strategy: people are slashing expenditures to compensate decreasing incomes without any significant efforts to maintain lifestyle. Today 72% of households have absolutely no savings, and together with inflating consumer prices this may lead to further contraction of consumer market. CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 3 #MARKETBEAT Q1 2016

DEDOLLARIZATION OFF THE AGENDA REGULATION Last year the Ministry of Trade scared business community with its plan to ban commercial rents nominated in any foreign currency. Recently they pulled back with the initiative and switched towards recommendation practice. Together with the fact that Vympelcom case did not stand appeal in the higher court, this suggests that government will not push forward with involuntary dedollarisation. The Moscow government slashed property tax rate from planned 1.5% to 1.3% of cadastral value. This shows their concern about the property market performance. However, no other stimulus package is being discussed. On one hand the Moscow authorities are trying to create attractive environment for citizens by offering public spaces, pedestrian zones, etc. But on the other hand they are very unwelcome to any sort of non organized activities including street musicians and micro retail. This will create opportunity for empty offices to be used for public events and social projects. CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 4 #MARKETBEAT Q1 2016

MACRO FORECAST BUDGET DEFICIT (% of GDP) 2016 2017 2018 2019-4.6% -3.9% -1.8% -0.4% RUB/USD EXCHANGE RATE MACROREVIEW 2016 2017 2018 2019 67.4 61.7 57.1 56.7 PERSONAL CONSUMPTION 2016 2017 2018 2019-4.2% -0.7% 2.2% 3.8% Consumer market remains weak. Most likely domestic demand will contract till 2018. GDP GROWTH 2016 2017 2018 2019-2.4% 0.8% 1.8% 2.1% CPI 2016 2017 2018 2019 7.8% 5.6% 5.2% 4.6% REAL WAGES8 2016 2017 2018 2019-2.9% 1.7% 2.1% 2.0% Source: Oxford Economics (02/2016), the Ministry Of Economics (03/2016)* CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 5 #MARKETBEAT Q1 2016

SUMMARY CONSUMER MARKET CORPORATE CURRENCY MACRO SUMMARY 2016: THE SECOND YEAR OF RECESSION. AUTHORITIES ARE STILL OPTIMISTIC -2.4% GDP growth outlook for 2016 According to Oxford Economics -0.3% GDP growth outlook for 2016 According to the Ministry of Economics Economists continue to downgrade outlook for the Russian economy, and this is one of the signs that we are still in the decline phase. Also there is a growing gap between official and independent forecasts that reflects p0orer transparency of the Russian economy. GDP GROWTH 5,2% -7,8% 4,5% 4,3% 3,4% 1,3% 0,6% -3,7% -0,3% -2,4% GDP Growth Рост ВВП, % 1,5% 0,8% 2,3% 2,5% 1,8% 2,1% Base case forecast Базовый прогноз, (03/2016) Oxford Economics (02/2016) 4% 2008 2009 2010 2011 2012 2013 2014 F2015 F2016 F2017 F2018 F2019 While the Ministry of Economics expect that GDP will contract by -0.3% with rapid recovery in 2017, Oxford Economics insists on the -2.4% in 2016 with recovery only in 2018. Even looking back at 2015 CPI estimates vary from 12.9% to 15.5% INFLATION 18% 16% 14% 12% 10% 8% 6% CPI ИПЦ, % Oxford Economics (02/2016) Base case forecast Базовый прогноз, (03/2016) 2008 2009 2010 2011 2012 2013 2014 F2015 F2016 F2017 F2018 F2019 #MARKETBEAT Q1 2016 Source: Rosstat, the Ministry of Economics, Oxford Economics CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 6

SUMMARY CONSUMER MARKET CORPORATE CURRENCY CONSUMER MARKET CONSUMER MARKET COLLAPSE IS A MAJOR RISK FACTOR FOR REAL ESTATE Over the last 3 years the share of households possessing savings decreased from 72% to 27%. This means that savings will no longer support household budgets and people will have to slash spending. -9.4% Household consumption Contracted in 2015-0,4% Government consumption Contracted in 2015 CONSUMER DEMAND Disposable income Раcполагаемые доходы 13,7% Retail trade Оборот розничной торговли 6,5% 7,1% 6,3% 3,9% 3,5% 3,7% 2,5% 1,5% -3,3% -5,1% -10,0% 2008 2009 2010 2011 2012 2013 2014 2015 F2016 F2017 F2018 F2019 There is a risk of further decline in consumer demand in Q2 2016. Savings are almost exhausted and even appreciation of RUB will play against consumers because it will devaluate their foreign currency reserves. Conservative adaptation model is a major threat for consumer market stability. People will be expecting the government to support them instead of looking for alternative sources of income. Additional social programs will ask for increasing taxation. Household consumption will be under pressure until 2018. Three years of recession in consumer market will lead to structural shots in consumption patterns and supply chains. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 7

01-14 03-14 05-14 07-14 09-14 11-14 01-15 03-15 05-15 07-15 09-15 11-15 01-16 03-16 01-14 03-14 05-14 07-14 09-14 11-14 01-15 03-15 05-15 07-15 09-15 11-15 01-16 03-16 01-14 03-14 05-14 07-14 09-14 11-14 01-15 03-15 05-15 07-15 09-15 11-15 01-16 03-16 MACROREVIEW CAPITAL MARKETS OFFICES RETAIL WAREHOUSES SUMMARY CONSUMER MARKET CORPORATE CURRENCY CREDIT MARKET CONSUMER CREDIT SLOWS DOWN. MORTGAGE GROWS In December 21015 decrease of debt was registered. His means that even the New Year period did not provoke spending. In February debt decreased even further. 37% Share of mortgage In total debt While overall debt is shrinking, there is a substantial increase in mortgage loans. Over the last 3 years a share of mortgage had risen from 25% to 37% of total household debt. State support is a major facilitator for mortgage loans. CONSUMER CREDITS IN RUSSIA Decrease in residential prices makes apartments more affordable for population. Households consider this period as a window of opportunity to upgrade living space and they appreciate state support for mortgage rate. The side effect of these long term obligations will be a drainage of money available for retail spending. 188 000 RUB AVERAGE HOUSEHOLD DEBT Household debt m-o-m change Total debt Share of overdue debt 2,0% 1,5% 1,0% 0,5% 0,0% -0,5% -5 000 3% -10 000-1,0% -15 000 Personal savings, bn RUR Накопления, млрд. руб. -1,5% Total Debt, bn RUB Задолженность, млрд. #MARKETBEAT Q1 2016 руб. CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 8 Source: The Central Bank of the Russian Federation 25 000 20 000 15 000 10 000 5 000 0 9% 8% 7% 6% 5% 4%

Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 MACROREVIEW CAPITAL MARKETS OFFICES RETAIL WAREHOUSES SUMMARY CONSUMER MARKET CORPORATE CURRENCY CREDITS CONSTRUCTION IS UNDER PRESSURE 20% Construction debt isstagnating since mid 2015. Minor decrease of the RUB debt is compensated by modest increase of the foreign currency debt. However total corporate debt in nominal Rubles grows steadily. Surprisingly over 22% of RUB construction debt is overdue, while only 4% of foreign currency debt is not serviced. Probably a few of large scale RUB borrowers experience problems with their debts. Of construction debt IS OVERDUE 7% Of all corporate debt IS OVERDUE CORPORATE AND CONSTRUCTION DEBT 32 000 30 000 28 000 26 000 24 000 22 000 20 000 7,0% 6,8% 6,6% 6,4% 6,2% 6,0% 5,8% 5,6% 5,4% 5,2% 5,0% OVERDUE DEBT 25% 20% 15% 10% 5% 0% % of overdue debt Общая доля просроченных кредитов, % Total Corporate debt (bn RUR) Все кредиты, млрд.руб Overdue debt in construction Просроченные кредиты на строительство Share of debt for construction Доля кредитов на строительство, % #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 9

SUMMARY CONSUMER MARKET CORPORATE CURRENCY CURRENCY INFLATION IS A MAJOR FACTOR FOR COMMERCIAL REAL ESTATE MARKET Ruble and Dollar inflation in Russia 350% 37% Loss of the USD purchasing power in Russia since 1004 In 2004 prices USD in 2016 costs 22 Rubles. 300% 250% 200% 150% 100% 50% 0% Aggregated CPI ИПЦ нарастающим итогом RUB/USD USD inflation in Russia Инфляция доллара в РФ CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 10 #MARKETBEAT Q1 2016

SUMMARY CONSUMER MARKET CORPORATE CURRENCY CURRENCY IN SPITE OF THE MAJOR CHANGE IN NOMINAL RENTS, CORRECTION IN REAL TERMS IS RELATIVELY INSIGNIFICANT Nominal and real office rents reached historical minimum by March 2016 Growth of nominal USD nominated rents driven by RUR appreciation and inflation make commercial real estate very attractive for foreign investment. However if the market will be switched to Rubles this investment opportunity will be lost. Nominal and real office rents indices 300% 250% 200% 150% 100% 50% 0% Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Constant price office rents indeх Индекс офисных ставок в постоянных ценах USD Office rents index relative to 01.2004 Индекс долларовых офисных ставок к январю 2004 г. CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 11 #MARKETBEAT Q1 2016

ACTUAL INVESTMENT VOLUMES 2015 2.8 US$ bn 2016 2.5 US$ bn CAPITAL MARKETS In Q1 2016, the total volume invested in the Russian commercial real estate was US$ 2.5 bn. We expect US$ 3.5 bn of investments by the end of 2016. EXPECTED TOTAL INVESTMENTS PRIME CAPITALIZATION RATES OFFICES SHOPPING CENTERS 2016 3.5 US$ bn Q4 2015 Q1 2016 10.50% 10.50% Q4 2015 Q1 2016 11.00% 11.00% WAREHOUSES Q4 2015 Q1 2016 12.75% 12.75% Source: Cushman & Wakefield #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 12

CAPITALIZATION RATES INVESTMENT VOLUMES INVESTMENT STRUCTURE BIGGEST DEALS CAPITALIZATION RATES CAPITALIZATION RATES REMAIN UNCHANGED 10.5% CAPITALIZATION RATE FOR OFFICE OBJECTS In Q1 2016, we kept capitalization rates at the same level. All the indicated capitalization rates are applicable to the objects with dollar cash-flow. In Q1 2016, tenants kept popping more and more objects into ruble zone. Comparing to Q4 2015 the total amount of ruble deals increased. CAPITALIZATION RATES In March 2016, the Central Bank of the Russian Federation made a decision to keep the key rate at 11.00% per annum. The previous change took place in June 2015 the key rate was decreased 0.50 pp from 11.50 to 11.00. The regulatory authority promises to revise the key rate to the downside as soon as inflation slows down firmly. CBR KEY RATE, CBR REFINANCING RATE 16% 18% 14% 16% 11.0% CBR KEY RATE 12% 10% 8% 6% 4% 14% 12% 10% 8% 6% 4% 2% 0% Q1 2% 0% 11,00% 10,00% 13,00% 8,75% 7,75% 8,00% 8,25% 8,25% 17,00% 11,00% 11,00% Q1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 OFFICES SHOPPING CENTERS WAREHOUSES 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 CBR REFINANCING RATE CBR KEY RATE #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 13

CAPITALIZATION RATES INVESTMENT VOLUMES INVESTMENT STRUCTURE BIGGEST DEALS INVESTMENT VOLUMES THE MARKET STALLS No bad news is the best news. INVESTED VOLUMES, US$ MN 3.5 US$ bn 2016 FORECAST 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 OFFICE RETAIL INDUSTRIAL OTHER FORECAST In Q1 2016, the total volume invested in the Russian commercial real estate was US$ 2.5 bn. The bigger volumes were registered only twice during the last ten years in Q2 2012 and Q1 2013. Such a big volume of investments may be explained with prolongation of transaction completions. The investors believe office objects are overestimated by vendors. The latter do not rebate. The threat of increasing vacancy rate in shopping centers and economy mode as a de facto behavior model of Russian consumers make the segment unattractive for potential investors. The industrial segment kept to be the most predictable one. The market players believe the market meets minimum in the nearest months which may be qualified as a prerequisite of revival. We revised our 2016 forecast expecting US$ 3.5 bn by the end of the year. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 14

CAPITALIZATION RATES INVESTMENT VOLUMES INVESTMENT STRUCTURE BIGGEST DEALS INVESTMENT STRUCTURE NO SIGNIFICANT SHIFTS 60% of money spent in Q1 2016 are invested in offices for owner occupation. 1739 US$ mn INVESTED IN OFFICE SEGMENT 23 CASH FLOWS INVESTOR RUSSIA SEGMENT OFFICES VENDOR RUSSIA In Q1 2016, the foreign companies refrained from active investment activities. Welcome but modest (just US$ 50 mn) entering the market by Mubadala of UAE is to be mentioned. The lion share of all the investment volume US$ 2.43 bn are the purchases by domestic companies. And the major part of them US$ 1.74 bn is the investment in office segment. Domestic companies spent US$ 1.47 bn for buying office properties for their own needs. There were no landmark deals with retail properties by neither domestic nor foreign companies. US$ mn INVESTED IN RETAIL SEGMENT UAE USA FINLAND HOTELS INDUSTRIAL RETAIL AUSTRIA #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 15

CAPITALIZATION RATES INVESTMENT VOLUMES INVESTMENT STRUCTURE BIGGEST DEALS THE BIGGEST DEALS THE FIVE TOP DEALS OF Q1 2016 US$ 2.3 BN 1140 US$ mn THE BIGGEST DEAL SEGMENT QUARTER PROPERTY INVESTOR AMOUNT, US$ MN OFFICES Q1 EVOLUTION TRANSNEFT 1140 OFFICES Q1 EURASIA VTB 300 OFFICES Q1 AVRORA BUSINESS PARK O1 PROPERTIES 250 WAREHOUSES RETAIL Q1 METRIKA (ST. PETERSBURG) KESKO 10 Q1 PNK - CHEKHOV 3 PNK - SEVERNOYE SHEREMETYEVO RDIF MUBADALA 100 WAREHOUSES Q1 BIN GROUP NIKOLSKOYE LOGOPARK (DMITROV) 50 НОТЕLS Q1 KURORT PLUS KRASNAYA POLYANA (SOCHI) 500 НОТЕLS Q1 APART GROUP NOVY ARBAT 15 35 #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 16

OFFICES SHARE OF VACANT OFFICE SPACES 16 mn sq m TOTAL STOCK 3.1 mn sq m VACANT OFFICES 19.3 VACANCY RATE % Following tough 2015, Q1 2016 continues the descent. We expect market indicators to keep consistently low in 2016. CONSTRUCTION 63,000 NET ABSORBTION -21,500 SQ M SQ M RENTAL RATES CLASS A CLASS B CLASS A&B $433 $193 $249 TAKE-UP 360,000 Source: Cushman & Wakefield SQ M #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 17

000 sq m 2008 - Q1 2008 - Q3 2009 - Q1 2009 - Q3 2010 - Q1 2010 - Q3 2011 - Q1 2011 - Q3 2012 - Q1 2012 - Q3 2013 - Q1 2013 - Q3 2014 - Q1 2014 - Q3 2015 - Q1 2015 - Q3 2016 - Q1 MACROREVIEW CAPITAL MARKETS OFFICES RETAIL WAREHOUSES SUMMARY ABSORPTION DEMAND NEW SUPPLY AVAILABILITY EXPOSITION RENTAL RATES Absorption 2016 STARTED WITH NEGATIVE ABSORPTION -21-210 ABSORPTION ABSORPTION IN Q1 2016 000 sq m 000 sq m IN Q1 2015 ABSORPTION AND NEW CONSTRUCTION QUARTERLY ABSORPTION BY CLASSES 2 500 2 000 1 500 1 000 500 0-500 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 New Supply Absorption 600 000 500 000 400 000 300 000 200 000 100 000 0-100 000-200 000-300 000 Class A Class B Source: Cushman & Wakefield #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 18

SUMMARY ABSORPTION DEMAND NEW SUPPLY AVAILABILITY EXPOSITION RENTAL RATES DEMAND TAKE UP REMAINS AT THE SAME LEVEL FOR THREE QUARTERS 405 +70% TAKE New deals UP IN Q1 2016 COMPARED TO Q1 2015 MAJOR DEALS IN Q1 2016 COMPANY AREA BUILDING CLASS / SUBMARKET VTB 93,878 sq m Eurasia A / Central Moscow Government 31,860 sq m ОКО А / Central Philip Morris 4,784 sq m Kuntsevo Plaza A / OTA Rusatom Overseas 3,010 sq m Simonov Plaza B+ / OTA Tele2 2,208 sq m Vodny A / OTA INTREK 2,068 sq m WTC III A / Central In Q1 2016 the total volume of office take-up amounted to 360,000 sq m which is stable for three quarters in a row already. Considerable growth of the indicator in Q1 2016 compared to Q1 2015 is due to low base effect. However the absorption was negative coming to - 21,500 sq m. Negative absorption is generally caused by low business activity in the beginning of the year and does not imply negative trend, especially with quite high activity on the background. Low new construction volume in Moscow maintains the balance of supply and demand and keeps the stability of the market. Source: Cushman & Wakefield #MARKETBEAT I КВАРТАЛ 2016 ОТДЕЛ ИССЛЕДОВАНИЙ CUSHMAN & WAKEFIELD 19

Thousands sq m MACROREVIEW CAPITAL MARKETS OFFICES RETAIL WAREHOUSES SUMMARY ABSORPTION DEMAND NEW SUPPLY AVAILABILITY EXPOSITION RENTAL RATES NEW SUPPLY SIGNIFICANT DECREASE IN CONSTRUCTION ACTIVITY New construction volume will remain low for upcoming two or three years. NEW CONSTRUCTION BY CLASSES 2 500 2 000 1 500 1 000 500 0 765 131 1 212 1 768 881 275 331 403 623 386 348 674 292 297 219 225 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 693 714 394 327 63 150 150 2016f In Q1 2016 no new class A office buildings were delivered to the market. 63,000 sq m of the delivered space are class B office buildings located outside of the city centre. As it was expected, at the beginning of 2016 delivery dates of the majority of projects under construction were postponed. Delivery of many projects was moved to 2017. Some were converted from offices to residential projects. There is still a lot of office space (around one million sq m) under construction. However construction activity is very low so we don t expect these projects to be delivered to the market in a short time period. By the end of 2016 new construction volume is expected to reach 300,000 sq m. The vast majority of projects to be completed in 2016 and 2017 were initially planned for commissioning in 2015. Class A Class B (B+&B-) Source: Cushman & Wakefield #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 20

Thousands sq m MACROREVIEW CAPITAL MARKETS OFFICES RETAIL WAREHOUSES SUMMARY ABSORPTION DEMAND NEW SUPPLY AVAILABILITY EXPOSITION RENTAL RATES AVAILABILITY EVERY FIFTH SQUARE METER OF THE EXISTING OFFICES IS VACANT 19.3 % VACANCY RATE IN Q1 2016 3.1 mn sq m EXISTING AVAILABILITY Vacancy rate has been increasing every month since the beginning of economic downturn. By the end of 2015 average level for classes A and B almost reached 20% and then the growth has stopped. It was the first time in history of the Moscow office market when the vacancy rate reached that high. VACANCY RATES 35% 30% 25% 20% 15% 10% 5% 0% 28,93% 16,33% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 Class A Class B (B+&B-) Considering low volume of new construction, we expect the indicator to be at the similar level during 2016 and no significant increase in 2017. However, vacancy rate is not likely to decrease significantly in the upcoming 2-3 years. VACANT PREMISES 3 500 3 000 2 500 2 000 1 500 1 000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 Class A Class B (B+&B-) 2016 Source: Cushman & Wakefield #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 21

SUMMARY ABSORPTION DEMAND NEW SUPPLY AVAILABILITY EXPOSITION RENTAL RATES EXPOSITION SOME PREMISES HAVE BEEN VACANT FOR 3 YEARS AND MORE 900 800 18,5% 780 20% 18% 700 16% 600 13,09% 12,48% 13,14% 14% 500 400 300 200 100 0-100 11,29% 317 7,00% 275 273 173 192 210 168 3,68% 4,17% 2,81% 1,95% 13-39 -40-50 -20 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Vacancies 12% 10% 8% 6% 4% 2% 0% Exposition period, days Vacancy rate, % Source: Cushman & Wakefield #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 22

SUMMARY ABSORPTION DEMAND NEW SUPPLY AVAILABILITY EXPOSITION RENTAL RATES RENTAL RATES DEDOLLARIZATION USD Triple net OpEx+VAT US CPI indexation All inclusive Russian CPI ~ 12.5% Lease RUB USD at fixed rate Discount Exchange risk management Corridor RUB rate reverted to USD after fixed period Splits risk between landlord and tenant Splits risk over time Source: Cushman & Wakefield #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 23

SUMMARY ABSORPTION DEMAND NEW SUPPLY AVAILABILITY EXPOSITION RENTAL RATES RENTAL RATES RENTAL RATES* IN US DOLLARS EQUIVALENT ARE SETTING NEW NEGATIVE RECORDS 94 % SHARE OF RUSSIAN ROUBLE DEALS IN Q1 2016 In Q1 2016 rental rates in dollar equivalent again showed the historically lowest figures. Both rouble and dollar rates are dropping down. We expect that stable USD currency exchange rate in 2016 will keep rental rates at the same level during the whole year. Lease agreements with rents nominated in rubles or with special conditions of payment for dollar-nominated rental rates will be a market tendency in the upcoming years. RENTAL RATES IN US DOLLARS VALUE $1 200 $1 000 $800 $600 $400 $200 $- $193 $433 RENTAL RATES IN RUSSIAN ROUBLES VALUE 40 000 rub. 35 000 rub. 30 000 rub. 25 000 rub. 20 000 rub. 15 000 rub. 10 000 rub. 5 000 rub. - rub. 31 828 rub. 14 214 rub. *hereinafter all rental rates are net of OPEX and VAT Class A Class B (B+&B-) Class A Class B (B+&B-) Source: Cushman & Wakefield #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 24

Thousands sq m MACROREVIEW CAPITAL MARKETS OFFICES RETAIL WAREHOUSES SUMMARY ABSORPTION DEMAND NEW SUPPLY AVAILABILITY EXPOSITION RENTAL RATES ROUBLES VS DOLLARS DOLLAR IS STEPPING BACK 433 14 214ROUBLE US Dollars per sq m per annum DOLLAR EQUIVALENT ALL A CLASS DEALS Roubles per sq m per annum EQUIVALENT ALL DEALS IN B CLASS ROUBLE DEALS VS DOLLAR DEALS DEMAND AND RATES 450 400 350 300 250 200 150 100 50 0 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Class Deal Currency Deals Volume, sq m Rate А USD 17 433 $564 RUB 161 978 27 454 roubles BB USD 2 584 $563 RUB 175 502 14 082 roubles RUB Deals USD Deals Source: Cushman & Wakefield #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 25

$2 000 $1 800 $1 600 37 000 DEALS СДЕЛОК Class B / Класс B Class A / Класс А Moscow office lease deals by rent and transaction date bubble size reflects deal size Сделки аренды на московском рынке по дате заключения и арендной ставке. размер точки соответствует площади сделки ( Weighted average A class rent / Среднее взвешенное значение за год, Класс А Weighted average B class rent / Среднее взвешенное значение за год, класс B = 10 000 sq m) $1 400 Rental rate, USD/sq m / Арендная ставка, долл. за кв.м. $1 200 $1 000 $800 $600 $400 $200 $0 2004 #MARKETBEAT Q1 2016 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 Source: Cushman & Wakefield Deal date / Дата сделки CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 26

$1 300 CLASS A CLASS B+ MKAD Log. (CLASS A) Log. (CLASS B+) Log. (CLASS B- and C) Quality premium $500 $700 $900 MOSCOW CITY $1 100 CLASS B- and C $300 $100 Rental rate USD/sq.m (3 year average) MOSCOW OFFICE MARKET LOCATION AND QUALITY PREMIUMS CBD 0 #MARKETBEAT Q1 2016 5 10 15 20 25 Distance from city center, km Source: Cushman & Wakefield CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 27

RETAIL At the beginning of 2016 market slowed down falling, market players are noticing relative stabilization. Shrinking consumer market remains the main risk factor. Considering continuing inflation, income level drop and high household debt load, we expect consumer activity to decline. As a result, there is a potential of tenants activity decrease and shopping centers vacancy rate growth. Source: Cushman & Wakefield Research 12 % VACANCY RATE (all shopping centers, Moscow) 145 000 RUB PRIME RENTAL RATE INDICATOR 116 QUALITY PROJECTS TOTAL QUALITY STOCK, MOSCOW (Quality shopping malls, mixed-use buildings, outlets, and retail parks) 4.6 MN SQ M TOTAL QUALITY STOCK, MOSCOW (Quality shopping malls, mixed-use buildings, outlets, and retail parks) #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 28

SUMMARY RETAILERS SHOPPING CENTRES COMMERCIAL TERMS SUMMARY VAGUE BALANCE WITH UNCLEAR PERSPECTIVES Unpredictable depth of consumer market decrease and limited financial resources are base factors influencing the market. Consumers reduce costs. Owners have provided maximum of personalized conditions. The market came to a vague balance by the end of 2015 rapid decrease of the main market indicators slowed down showing all market players being in consensus with noticeably changed circumstances. However, there are still no basic trends preparing basics for confident optimism - shrinking consumer market and hard-to-reach financing as well as stagnation in economics in general. Rotation of the tenants in sustainable shopping centers continues, but not massive and total occupancy rate keeps relatively stable. Newly opened properties are moving to higher occupation. Exposition period of vacant premises is now longer, but properties opened in 2014-2015 attract new operators. Some of them have noticeably decreased vacancy rates, others keep stable. We see activity on the market - retailers still consider opportunities for development, but lease terms are carefully negotiated. Developers consider personally tailored terms for each tenant. Last year turned the market from a market of developer to a market of tenant, now consumer is the main focus of attention. Applying a conservative scenario, the decrease of money amount that is redistributed between different formats and categories of operators can lead to vacancy rate growth as the number of chain retailers stores will decrease and new shopping centres will be opened with high vacancy rate. Large players and food retailers will remain active in this situation. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 29

SUMMARY RETAILERS SHOPPING CENTRES COMMERCIAL TERMS CONSUMER MARKET CONSUMER ACTIVITY DECREASE IS MOSTLY NOTICEABLE IN LARGE CITIES -3.6% Q1 2016 Average monthly footfall change in Moscow shopping centres* -2.5 Q1 2016 Average monthly footfall change in St. Petersburg shopping centres* Source: Watcom, Cushman & Wakefield calculation According to Watcom data in Q1 2016 footfall in shopping centres keeps decreasing (the trend has been noticed since 2015). The most sustainable format is a neighborhood shopping centre. In St. Petersburg football decrease is less noticeable due to low base effect. FOOTFALL CHANGE BY SHOPPING CENTRE SIZE (Q1 2016 TO Q1 2015) 4% 2% 0% -2% -4% -6% -8% -10% 5-20 000 20-40 000 40-80 000 >80 000 St. Petersburg Moscow Source: Watcom, Cushman & Wakefield calculation Moscow market has shown bigger changes in consumer behaviour Muscovites have always been aggressive in consumption, so consumer habits correction is more evident. CONSUMER MARKET, 2015 COMPARED TO 2014 #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 30-14% -12% -10% Source: Rosstat -8% -6% -5% Retail trade turnover Catering turnover Moscow St. Petersburg Russia

SUMMARY RETAILERS SHOPPING CENTRES COMMERCIAL TERMS RETAILERS NEW OPENINGS WITH NEW TERMS Many tenants are considering new openings, however they are trying to minimize costs and expansion risks. NEW RETAILERS EXPANSION Retailers activity is much lower than it was before 2014. If developer is interested in brand attraction, some preferences can be given to tenant (fit-out compensation, discount period). Mostly, food retail chains, fast-food / café / confectionary operators, DIY and alcoholic stores announce their expansion plans. Developers continue the trend to create own brands (Aviapark starts operating a 6,000 sq m department store). Some operators have financial difficulties (for example, Sbarro, Moon Accessorize, Deti, Centrobuv ). Luxury brands report on sales growth and new shops openings. Among possible reasons of this trend there are: increase of Chinese tourists flow and currency exchange rate growth that made it cheaper to buy luxury brands in Russia. Another obvious tendency is expansion of entertainment areas in shopping centres they are aimed to increase footfall and create identity of the project, decrease vacancy. Perception and approach to development of these areas is changing. Instead of traditional ice-rings, bowling, gaming machines new formats are becoming more popular contact zoos, edutainment centres, rope parks, trampoline centres, quests, thematic theatres, exhibitions and hobby goods shops. New children entertainment centre Fiesta Park is entering the Moscow market, Leonardo retail chain is expanding, the store with radio control models Pilotage was opened in a new format (with training tracks and areas for competitions and master classes) in Aviapark shopping centre. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 31

SUMMARY RETAILERS SHOPPING CENTRES COMMERCIAL TERMS SHOPPING CENTRES. MOSCOW VACANCY RATE LEVEL TENDS TO GROW 12% Vacancy rate* by shopping center type: Prime: 2-3% Sustainable: 7-8% Opened in 2014-2015: 25-30% Average market vacancy rate 2016 forecast: 14-15%. The possibility of further growth is high as new projects with high vacancy rate will be opening and there will be further rotation of tenants in existing shopping centres. Announced to be opened in 2016: 35-40% Size of a bubble is a size of each shopping center. *Calculation is based on the actual vacant space in shopping centres, and not according to signed lease contracts. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 32

SUMMARY RETAILERS SHOPPING CENTRES COMMERCIAL TERMS SHOPPING CENTRES. MOSCOW ALMOST 25% OF TOTAL MOSCOW RETAIL SPACE WAS CONSTRUCTED OVER THE PAST TWO YEARS 70% Share of sustainable shopping centres Vacancy rate in sustainable shopping centres (opened more than 2 years ago, with loyal target audience and balanced tenant mix) hasn t changed significantly during past year. Prime shopping centres (successful projects in prime locations) show high occupancy rate consistently, though the rotation of tenants is registered. Aviapark, March 2015 Projects constructed over the past two years that had high vacancy rate at the opening, are slowly decreasing the vacancy level. Retailers activity dropped noticeably and exposition period increased. Preferences that tenants receive for opening and for the initial lease period is an important driver to decrease the vacancy rate. Aviapark, March 2016 23% of total retail space was constructed in 2014-2015 #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 33

SUMMARY RETAILERS SHOPPING CENTRES COMMERCIAL TERMS SHOPPING CENTRES. MOSCOW AND REGIONS 4 SHOPPING CENTRES WERE OPENED IN Q1 2016 IN RUSSIA Average size of shopping centre decreases as well as construction volumes. 460 QUALITY SHOPPING CENTRES IN RUSSIA 18.6 mn sq m EXISTING QUALITY RETAIL SPACE IN SHOPPING CENTRES NEW CONSTRUCTION IN RUSSIA, 000 SQ M 4 shopping centres with total GLA of 204,500 sq m were opened in Q1 2016. Shopping centres keep opening with low occupancy of retail gallery. Developers tend to open the projects in phases. For example, in MegaGRINN mixed-use complex in Kursk several floors were partially opened, launch of the rest of the complex (including entertainment, sports areas, hotel) is expected later in 2016. Construction of smaller size shopping centres instead of large-scale projects has become a trend. Average size of existing shopping centre is 36,000 sq m, of a shopping centre to be delivered in 2016 31,000 sq m. Half of retail space planned for delivery to the market in 2016 is being constructed in the cities with population of less than one million people. Due to the high level of retail space density in the cities with population of more than one million people, 25% of the space planned for delivery to the market in such cities in 2016 are new phases of existing retail projects. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 34

SUMMARY RETAILERS SHOPPING CENTRES COMMERCIAL TERMS SHOPPING CENTRES. REGIONS OF RUSSIA REGIONAL MARKETS ARE MORE SENSITIVE TO THE CHANGES IN DEMAND FROM POTENTIAL TENANTS MegaGRINN (Kursk) Good OK (Samara) Absorption potential of regional markets is lower than in larger markets of Moscow and Saint Petersburg, so even delivery of one large-scale shopping center with high vacancy rate to the market affects indicators of the whole market significantly. For example, after the opening of Galereya Novosibirsk shopping centre in Novosibirsk, average market vacancy rate grew up to 15%, but as there were no more new large-scale projects opened, average market vacancy rate returned to the level of 8-10% during the year. In the big cities where no large-scale projects were opened in 2015, we observe tenants rotation in existing shopping centers, but vacancy rate remains at the level of 10% (for example, in Saint Petersburg, Kazan, Ekaterinburg). In the key and most successful projects vacancy rate remains low (2-3%). OkhtaMall (St. Petersburg) Star City Mall (Tumen) #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 35

SUMMARY RETAILERS SHOPPING CENTRES COMMERCIAL TERMS SHOPPING CENTRES. MOSCOW AND MOSCOW REGION NO NEW SHOPPING CENTRES WERE OPENED IN Q1 2016 MOSCOW: 116 QUALITY SHOPPING CENTRES 4.6 mn sq m QUALITY RETAIL SPACE IN SHOPPING CENTRES NEW CONSTRUCTION IN MOSCOW AND MOSCOW REGION, 000 SQ M No new shopping centres were opened in Moscow in Q1 2016. Riviera shopping centre, which was planned for delivery to the market in March, was opened in April 2016. Delivery dates of the majority of projects were postponed for 2-3 months. However we expect large projects such as Okeaniya, Horosho!, Butovo Mall, second phase of Metropolis shopping centre to be delivered to the market till the end of the year. Shopping centres will keep opening with high vacancy rate despite the fact that the number of lease contacts signed is more than the actual number of shops opened. Tenants will occupy the shopping centers step by step after the opening. New shopping centres are being announced, however in general these are small projects or support retail objects inside mixed-use complexes or transport transit hubs. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 36

SUMMARY RETAILERS SHOPPING CENTRES COMMERCIAL TERMS SHOPPING CENTRES. MOSCOW AND REGIONS SHOPPING CENTRES DELIVERED TO THE MARKET IN Q1 2016 AND PIPELINE FOR 2016 LOCATION PROPERTY NAME RETAIL GLA, SQ M DELIVERY LOCATION PROPERTY NAME RETAIL GLA, SQ M DELIVERY Moscow Riviera 100,000 Q2 Moscow Kosino Park 39,000 Q2 Moscow Okeaniya 60,000 Q3 Moscow Butovo Mall 57,000 Q3 Moscow Horosho! 50,000 Q3 Moscow Metropolis (Phase 2) 40,000 Q3 Moscow Auchan Proletarskiy 14,877 Q4 Moscow Fashion House Outlet (Phase 2) 4,500 Q4 Total GLA Moscow, 2016 392,763 Zhukovsky Torgovy Park N1 45,488 Q2 Balashikha Vostochniy veter 10,000 Q2 Krasnogorsk Riga Mall 80,000 Q3 Mytischi 4Daily 25,000 Q3 Vidnoe Vidnoe Park 70,000 Q4 Total GLA Moscow Region, 2016 230,488 Total GLA Moscow and Moscow Region, 2016 623,251 The table includes all major quality projects in Moscow and Moscow Region planned for delivery in 2016. Kursk MegaGRINN 129,000 Q1 Pskov Aquapolis 34,000 Q1 Ekaterinburg Akademicheskiy 30,000 Q1 Balakovo Green House (phase 2) 11,500 Q1 Total GLA Russia (without Moscow and Moscow region), 2016 204,500 Vladivostok Sedanka-City 45,000 Q2 Samara Good'Ok 115,000 Q3 Saint Petersburg Okhta Mall 78,000 Q3 Lipetsk Riviera 61,000 Q3 Voronezh Chizhov Gallery (phase III) 60,000 Q3 Arkhangelsk Maxi 49,243 Q3 Nizhniy Tagil Retail Park Depo 40,000 Q3 Kursk Evropa Phase 2 107,000 Q4 Tumen Star City Mall 53,000 Q4 Orenburg Armada Capital 51,000 Q4 Novosibirsk Evropeyskiy 45,000 Q4 Ekaterinburg Greenvich (phase V) 41,836 Q4 Total GLA Russia (without Moscow and Moscow region), announced development plans for 2016 1,637,477 The table includes all quality projects completed in Q1 2016 and the largest (GLA 40,000+ sq. m ) projects announced for delivery later in 2016. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 37

#MARKETBEAT Q1 2016 Riviera Okeaniya Horosho!

SUMMARY RETAILERS SHOPPING CENTRES COMMERCIAL TERMS COMMERCIAL TERMS RELATIVE STABILIZATION OF RENTAL RATE INDICATOR IN RUBLES In 2015 short-term agreements fixing rates in rubles were signed in addition to existing contracts. In new projects nominating rents in foreign currency is a rare, almost unique case. 145 000 rub / sq m / year Prime shopping mall indicator*, Moscow, Q1 2016 For the first time in the history of the retail market research, prime rental rate indicator is nominated in rubles. In fact, even if principal lease contracts are nominated in foreign currency rental payments are temporarily fixed in rubles. From the middle of the last year rent indicator in rubles hasn t shown any significant changes this is applicable for both Moscow and regional markets. In sustainable shopping centers, preferences in existing leases that were agreed last year are being extended (usually a discount on fixed rent or exchange rate fixation). In shopping centres that are currently under construction rent is calculated on the basis of a percentage of projected tenant turnover, however maximum(% of turnover with maximum fixed payment) or minimum limit (% of turnover, but no less than a fixed amount) is fixed in agreements. In new agreements with preferential payment structure lease period tend to be reduced from 5 to 3 years (for retail gallery operators). Percentage of turnover that is fixed in the agreements remains the same: 3-7% for anchor tenants of retail gallery, 12-15% for retail gallery operators, 10-15% for food-court operators and restaurants, 1-3% for large anchor tenants (hypermarkets). * Prime shopping mall indicator - base asking rental rate for a 100 sq m gallery unit on the ground floor of prime shopping centres. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 39

2016 Q1 NEW CONSTRUCTION (CLASS A AND B) RUSSIA 58 000 sq m MOSCOW 48 000 sq m REGIONS 10 000 sq m TAKE UP (CLASS A AND B) WAREHOUSE & INDUSTRIAL In Q1 2016 average rental rates have been decreased. Vacancy rate level remains stable. Demand is supported by retail chains. Large share of deals are relocations in order to improve commercial terms. Tenants are very active in lease terms renegotiation. RUSSIA 279 000 sq m MOSCOW 218 000 sq m FORECAST 2016 NEW CONSTRUCTION (CLASS A AND B) RUSSIA 1.30 mn sq m MOSCOW 0.83 TAKE UP (CLASS A AND B) RUSSIA 1.30 mn sq m mn sq m MOSCOW 0.85 mn sq m REGIONS 61 000 sq m REGIONS 0.47 mn sq m REGIONS 0.45 mn sq m Source: Cushman & Wakefield CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 40 #MARKETBEAT Q1 2016

TRENDS NEW CONSTRUCTION DEMAND REGIONS TRENDS. MOSCOW REGION IN Q1 2016 AVERAGE RENTAL RATE DECREASED. VACANCY RATE REMAINS STABLE The warehouse real estate segment is influenced by the situation in the consumer sector of the Russian economy. 218 000 sq m TAKE-UP Q1 2016 High vacancy rate is a key factor influencing the warehouse market. During the past 6 months vacancy rate in Moscow remains stable at the level of 10%. Vacancy rate is not decreasing because of high construction volumes and extra warehouse space that came back to the market after space optimization by tenants. VACANCY RATE, CLASS A In order to increase occupation quickly, some landlords decreased rental rates. In Q1 2016 rental rate in Moscow region dropped by 3-5% and now comprises 3,800 4,000 rub per square meter per year. Lease term is getting shorter. NET RENTAL RATE IN RUBLES (RUB/ SQ M/ YEAR) 4 000 RUB / sq m / year CURRENT RENTAL RATE, EXCLUDING OPERATIONAL EXPENCES, UTILITY COSTS AND VAT 14% 12% 10% 8% 6% 4% 2% 13.5% 10.0% 10.5% 7.0% 3.9% 1.5% 2.0% 1.0%1.0% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016F Source: Cushman & Wakefield Research 4 500 4 250 4 000 3 750 3 500 3 250 3 000 3 325 3 480 3 331 3 341 4 299 4 198 3 820 4 500 4 150 4 000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 41 #MARKETBEAT Q1 2016

'000 sq m MACROREVIEW CAPITAL MARKETS OFFICES RETAIL WAREHOUSES TRENDS NEW CONSTRUCTION DEMAND REGIONS NEW CONSTRUCTION. MOSCOW REGION NEW CONSTRUCTION VOLUME REMAINS AT THE LEVEL OF 2015 After the peak of development activity in 2014, the volume of construction decreased twice in 2015. Downward trend in activity retains in 2016. 47 000 sq m NEW CONSTRUCTION, Q1 2016 824 000 sq m NEW CONSTRUCTION, 2016F NEW CONSTRUCTION, CLASSES A AND B 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F Actual Construction Forecast In Q1 2016 47,000 sq m of quality warwhouse space was delivered to the market. Developers announce 824,000 sq m of warehouse premises be delivered to the market by the end of 2016 which is the same as in 2015. Only 20% of the new space are new projects, the rest of them are new phases of existing warehouses. Vacancy rate hasn t changed in Q1 2016 and is now at the level of 10%. By the end of the year we forecast vacancy rate to remain the same and to be at the level of 9.5 10.5%. Source: Cushman & Wakefield Research CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 42 #MARKETBEAT Q1 2016

TRENDS NEW CONSTRUCTION DEMAND REGIONS DEMAND. MOSCOW REGION TAKE UP REMAINS HIGH Demand is mostly supported by retail chains specializing in food and household goods. 218 000 sq m TAKE UP, Q1 2016 850 000 sq m TAKE UP, 2016F TAKE UP, CLASSES A AND B, 000 sq m 1 400 1 200 1 000 800 600 400 200 0 2009 2010 2011 2012 2013 2014 2015 2016F Moscow Forecast Volume of lease and purchase transactions in Q1 2016 exceeds the average of 2008-2015 by 60% and comprises 218,000 sq m. Demand is supported by retail chains specializing in food and household goods. Though price of warehouse premises is now low, consumers prefer rather lease than purchase, in Q1 2016 only 6% of space was purchased. Tenants benefit from low rental rates nominated in rubles and sufficient availability of vacant space they are more active in renegotiation of existing lease contracts, relocation to projects with higher quality, consolidation of warehouse space. Source: Cushman & Wakefield Research CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 43 #MARKETBEAT Q1 2016

TRENDS NEW CONSTRUCTION DEMAND REGIONS REGIONS NEW CONSTRUCTION DECREASES, TAKE UP REMAINS STABLE 61 000 sq m TAKE-UP, Q1 2016 New construction decreases in the regions. We forecast around 470,000 sq m of quality warehouse space to be constructed by the end of the year, which is 40% lower than last year. Local developers continue to construct small warehouse projects (less than 30,000 sq m). Large federal developers offer build-to-suit options on their land plots. NEW CONSTRUCTION, CLASSES A AND B, 000 sq m 1 200 In Q1 2016 take up exceeds the average indicator of 2008-2015 by 10% and comprises 61,000 sq m. We forecast the volume of lease and purchase transactions to be the same as in 2015 and to comprise around 450,000 sq m. TAKE UP, CLASSES A AND B, 000 sq m 600 470 1 000 800 600 400 500 400 300 200 000 sq m TAKE-UP, 2016F 200 0 2009 2010 2011 2012 2013 2014 2015 2016F Actual Construction Forecast 100 0 2009 2010 2011 2012 2013 2014 2015 2016F Regions Forecast Source: Cushman & Wakefield Research CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 44 #MARKETBEAT Q1 2016

TRENDS NEW CONSTRUCTION DEMAND REGIONS NEW CONSTRUCTION, MOSCOW AND REGIONS THE BIGGEST WAREHOUSE PROJECTS TO BE COMPLETED IN 2016 1.3 mn sq m NEW CONSTRUCTION, 2016F PROJECT HIGHWAY REGION Mihaylovskaya sloboda Novoryazanskaya Moscow DISTANCE FROM CITY, KM 20 70.3 TOTAL AREA, 000 SQ M DELIVERY Q1, Q2 Logopark Sever II Leningradskoye Moscow 30 105.6 Q2, Q3 PNK Valischevo Kashirskoye Moscow 39 117.9 Q3, Q4 Industrial Park South 30 100 Kashirskoye Moscow Gate Q4 Klin logistic park Leningradskoye Moscow 65 57.5 Q4 A Plus Shushary Moscovskoye St. Petersburg 20 95.0 Q2 Fright Village Vorsino Kievskoye Kaluga 67 35.6 Q2 Aviapolis Yankovskiy Vladivostok-port 30 28 Vladivostok Vostochniy Q2 A Plus Park Perm Zapadniy obhod Perm 19 26.4 Q3 Octavian Toksovskoye St. Petersburg 11 53 Q3, Q4 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 45 #MARKETBEAT Q1 2016

Market indicators Standard lease terms Interactive services APPENDIX Cushman & Wakefield Research Department provides clients with the most detailed information on the market indicators, including average rental and vacancy rates split by metro stations, administrative districts and submarkets in Moscow, as well as data on planned projects and projects under construction in Russia. If you need more detailed information please contact the Research Department. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 46 #

APPENDIX INDICATORS STANDARD COMMERCIAL LEASE TERMS INTERACTIVE SERVICES COMMERCIAL REAL ESTATE MARKET INDICATORS (1) OFFICES AND SHOPPING CENTRES The forecast is based on the conservative macroeconomic scenario. MOSCOW REAL ESTATE MARKET INDICATORS FORECAST/ПРОГНОЗ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 2017 2018 Q1 Average annual exchange rate RUB/USD 27,1 25,6 24,9 31,8 30,4 29,4 31,1 31,9 38,6 61,3 74,9 67,4 61,7 57,1 MOSCOW OFFICES Stock class A, EOP '000 sq m 720 995 1 326 1 729 2 021 2 318 2 536 2 684 3 416 3 821 3 821 3 971 4 071 4 171 Stock class B (B+ and B-), EOP '000 sq m 5 297 6 509 8 277 9 158 9 781 10 167 10 515 11 227 11 838 12 132 12 195 12 282 12 382 12 482 New construction, A, '000 sq m 131 275 331 403 292 297 219 225 714 327 0 150 100 100 New construction, B (B+ and B-), '000 sq m 765 1 212 1 768 881 623 386 348 674 693 394 63 150 100 100 Vacancy rate class A 3,9% 4,8% 12,8% 23,6% 22,5% 16,8% 14,6% 17,6% 23,8% 31,1% 28,9% 32,9% 32,6% 31,8% Vacancy rate class B (B+ and B-) 2,7% 4,1% 6,1% 11,1% 10,4% 8,9% 9,1% 9,8% 10,8% 14,4% 16,3% 16,6% 16,9% 16,8% Take up class A, '000 sq m 287 487 456 183 388 638 459 361 324 427 179 300 200 250 Take up class B (B+ and B-), '000 sq m 863 1 024 1 237 558 911 1 224 1 398 1 205 937 872 180 700 800 850 Rental rates class A, USD/sq m pa $714 $934 $1 092 $729 $645 $733 $790 $867 $772 $549 $433 $450 $470 $500 Rental rates class B (B+ and B-), RUB/sq m pa 14 337 16 486 20 240 16 141 12 671 13 370 14 624 17 041 18 699 17 820 14 214 13 480 13 574 14 275 Prime capitalization rate 8,25% 7,25% 12,00% 13,00% 9,00% 8,50% 8,75% 8,50% 11,00% 10,50% 10,50% 10,50% 10,50% 9,50% MOSCOW QUALITY SHOPPING CENTERS Total stock, EOP, '000 sq m 1 477 1 696 2 052 2 569 2 957 3 147 3 297 3 482 4 129 4 555 4 555 4 912 5 112 5 212 New construction, '000 sq m 369 219 356 517 388 190 150 185 647 426 0 360 200 100 Prime vacancy rate, EOP 0,7% 1,0% 3,0% 5,0% 2,1% 0,4% 0,5% 1,2% 1,5% 2,0% 2,5% 3,0% 2,5% 2,0% Prime rental rate indicator, RUB/sq m pa* 94 990 91 980 99 480 87 368 88 102 105 804 114 959 121 258 127 380 159 432 145 000 145 000 145 000 160 000 (until 2016 nominated in USD, paid in RUB by offical exchange rate) Prime capitalization rate 9,50% 9,00% 12,00% 13,00% 10,00% 9,25% 9,50% 9,00% 11,00% 11,00% 11,00% 11,00% 11,00% 10,50% #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 47

APPENDIX INDICATORS STANDARD COMMERCIAL LEASE TERMS INTERACTIVE SERVICES COMMERCIAL REAL ESTATE MARKET INDICATORS (2) WAREHOUSE AND INDUSTRIAL, INVESTMENTS The forecast is based on the conservative macroeconomic scenario. MOSCOW REAL ESTATE MARKET INDICATORS FORECAST/ПРОГНОЗ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 2017 2018 Q1 WAREHOUSES, MOSCOW REGION Stock, class A, EOP '000 sq m 1 943 3 129 3 723 4 352 4 676 4 933 5 598 6 456 7 852 8 669 8 716 9 433 9 933 10 483 Stock, class B, EOP '000 sq m 1 789 1 978 2 060 2 109 2 157 2 264 2 317 2 409 2 688 2 690 2 690 3 060 3 100 3 145 New construction, class A, '000 sq m 863 1 186 594 629 324 257 664 858 1 396 817 47 764 500 550 New construction, class B, '000 sq m 126 188 82 49 48 107 53 92 279 2 0 62 40 45 Vacancy rate class A 2,0% 2,0% 2,0% 10,5% 8,0% 1,0% 1,0% 1,5% 7,0% 10,0% 10,0% 10,5% 9,0% 8,0% Vacancy rate class B 2,0% 2,0% 2,0% 5,9% 6,1% 1,5% 1,5% 2,0% 5,0% 8,0% 8,0% 9,0% 8,0% 6,0% Net Absorption Class A, '000 sq m 846 1 162 582 247 409 580 658 817 944 500 42 640 596 605 Net Absorption Class B, '000 sq m 123 185 80-33 40 205 53 78 192-79 0 56 67 104 Rental rates class A, RUB/sq m pa 3 691 3 322 3 482 3 336 3 342 3 968 4 194 4 308 4 500 4 150 4 000 3 900 4 000 4 100 Rental rates class B, RUB/sq m pa 3 284 2 989 3 109 2 859 2 795 3 821 4 039 4 148 4 000 3 800 3 700 3 600 3 700 3 800 Prime capitalization rate 10,50% 9,25% 13,00% 14,00% 10,50% 10,50% 11,50% 11,00% 13,00% 12,75% 12,75% 12,75% 12,75% 12,25% INVESTMENTS TOTAL, MN US$ 4 560 5 354 5 798 2 256 3 994 7 657 7 458 8 066 4 309 2 828 2 517 3 500 3 000 4 000 Office, US$ mn 1 244 1 719 3 149 1 998 3 282 3 432 2 854 3 517 2 230 1 198 1 739 Retail, US$ mn 2 224 2 216 2 029 30 459 1 767 2 585 2 798 639 731 23 Warehouse, US$ mn 616 723 110 81 1 080 660 1 395 363 584 202 Other, US$ mn 476 696 510 228 172 1 379 1 358 355 1 076 315 553 * Base rental rate for 100-150 sq m unit on the ground floor of retail gallery of prime shopping mall for fashion retailer #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 48

APPENDIX INDICATORS STANDARD COMMERCIAL LEASE TERMS INTERACTIVE SERVICES STANDARD COMMERCIAL LEASE TERMS LEASE TERMS DURATION OF LEASE Office: 5 years Industrial: either short-term (1-3 years) or long-term (5+ years) Retail: 3-5 years, anchor tenants - 10-25 years. BREAK OPTIONS Offices: Possible after 3 years with deposit withdrawal as penalty. After crises has become very popular. Notice period is 6-9 months. When there is an option to review the rent after the third year, contract can be terminated from both sides. Retail: a standard lease agreement is not supposed to include break option. RENTAL PAYMENTS RENT PAYMENT AND FREQUENCY Offices and retail: RUB or US$ per square meter per year, payable due monthly or quarterly in advance. Industrial: Rubles. RENT DEPOSIT Offices: 1-3 months rent equivalent (bank guarantee optional, very seldom however). Retail: 1-2 months rent equivalent (bank guarantee optional). Industrial: 1-3 months rent equivalent (bank guarantee optional, very seldom however as landlords as landlords prefer the deposit) RENT REVIEWS After crises have become more popular, negotiable. INDEXATION Offices: 7-10% for RUB agreements; 3-5% or at the level of USA / EU CPI. Retail: if rents in US$ US CPI or 5%; if rents are in RUB Russia CPI or 8-9%. Industrial: 8-10% ENTRANCE FEE It is possible to pay extra-fee to enter the project applicable only for prime projects. Turnover rents (only in Retail): Compound rental rates (fixed rent and a percentage of turnover) are almost always used in shopping centers. Normally, the percentage of turnover varies between 10 %- 15% (fashion), 2-5% for anchors. DISPOSAL OF LEASES ASSIGNMENT AND SUB-LETTING Offices & Industrial: Usually possible, but subject to negotiation. Retail: Not common. SERVICE CHARGES, REPAIRS & INSURANCE REPAIRS Tenant: Internal repairs and maintenance. Landlord: Structural repairs, common areas. INSURANCE Tenant: Contents insurance. Landlord: Building insurance which is normally charged back to tenant via the service charge. SERVICE CHARGES Service charge is payable by the tenant at either an open book basis or as a fixed cost. UTILITY EXPENSES Often included to service charges, but depends on landlord and different types of projects. TAXATION REAL ESTATE TAX Tenant: None. Landlord: For office and industrial the amount of tax depends on the region. In Moscow: 1.2% of cadastral value in 2015, 1.3% in 2016, 1.4% in 2017 and 1.5% in 2018. VAT: 18% MEASUREMENT PRACTICE Space is measured generally on the BOMA system. Some Landlords have apply BTI (Bureau of Technical Inventory) measurements. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 49

APPENDIX INDICATORS STANDARD COMMERCIAL LEASE TERMS INTERACTIVE SERVICES CUSHMAN & WAKEFIELD IN RUSSIA CUSHMAN & WAKEFIELD MOBILE APPS CUSHMAN AND WAKEFIELD The only commercial real estate app in Russia C&W INTERACTIVE MAPS Commercial real estate and infrastructure interactive maps www.interactivemaps.ru Moscow offices Shopping centers in Russia Warehouses Hotels Infrastructure development #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 50

OUR TEAM RESEARCH DEPARTMENT CUSHMAN & WAKEFIELD IN RUSSIA RESEARCH DEPARTMENT CUSHMAN & WAKEFIELD, RUSSIA DENIS SOKOLOV Partner, Head of Research Denis.Sokolov@cushwake.com TATYANA DIVINA Associate Director, Deputy Head of Research Tatyana.Divina@cushwake.com For more information and contacts please visit CWRUSSIA.RU ALEXANDER KUNTSEVICH Senior Analyst YULIA BOGOMOL Associate Director Alexaner.Kuntsevich@cushwake.com Yulia.Bogomol@cushwake.com EVGENIYA SAFONOVA Junior analyst ANDREY VLADIMIRSKY Analyst Evgenia.Safonova@cushwake.com Andrey.Vladimirsky@cushwake.com The information provided in this report is intended for informational purposes only and should not be relied on by any party without further independent verification. Classifications of individual buildings are reviewed on a continuing basis and are subject to change. The standards used in this process are consistent with those used by Moscow Research Forum and in the United States by the Society of Industrial and Office Realtors (SIOR) and BOMA International. Reproduction of this report in whole or part is permitted only with written consent of Cushman & Wakefield. Data from this report may be cited with proper acknowledgment given. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 51

OUR TEAM RESEARCH DEPARTMENT CUSHMAN & WAKEFIELD IN RUSSIA СUSHMAN & WAKEFIELD, RUSSIA Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way people work, shop, and live. The firm s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facility services (branded C&W Services), global occupier services, investment management (branded DTZ Investors), project & development services, tenant representation and valuation & advisory. #MARKETBEAT Q1 2016 CUSHMAN & WAKEFIELD RESEARCH DEPARTMENT 52 #