RAVEN RUSSIA LIMITED Results for the 6 months ending 30 June 2017
1 KEY FINANCIALS Income Statement for the 6 months ended: June 2017 June 2016 Net Rental and Related income ($m) 69.9 77.0 IFRS Earnings Before Tax ($m) 26.0 16.5 Revaluation surplus/(deficit) ($m) 11.6 (8.5) Underlying Earnings Before Tax ($m) 24.3 34.7 Basic EPS (cents) 1.38 1.35 Distribution per share (pence) 1.0 0.5 Balance Sheet at: June 2017 Dec 2016 Investment property Market Value ($m) 1,428 1,324 Adjusted fully diluted NAV per share ($) 0.70 0.68 IFRS fully diluted NAV per share ($) 0.72 0.71
2 RUSSIAN ECONOMY UPDATE Highlights: Low inflation Central bank rates dropping Exchange rates relatively stable in the 6 months to 30 June 2017 RUB/USD & Brent oil price Russian CPI & Policy rate Oil 90 80 RUB 0 20 18% 70 60 50 40 30 20 10 0 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 RUB/USD exchange rate Brent oil price, USD/bbl Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 40 60 80 100 120 140 160 13% 8% 3% Jan-14 Mar-14 Jun-14 Sept-14 Jan-15 Mar-15 Jun-15 Sept-15 Jan-16 Mar-16 Inflation, YoY Policy rate Jun-16 Sept-16 Jan-17 Mar-17 9.0% 8.5% F 4.4% 3.8% F Jun-17 Sept-17 Dec-17 Source: Bloomberg, CBR, Rosstat, JLL Research Q2 2017
3 MARKET UPDATE - MOSCOW, CLASS A Rents and yields $140 $125 $110 $95 $80 $125 11.5% $130 $132 $135 $130 $130 $125 14.5% $105 12.5% $95 11.5% 11.0% 11.5% 11.0% 10.0% 9.8% $115 11.8% $95 18% 14% 11.8% * 10% Rent Yield $65 4,000 4,000 $50 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 2017 *Average of the yield range 6% Supply vs demand and vacancy dynamics 1800 '000 sqm 14% Take-up 1600 1400 1200 11.6% 10.5% 12.2% 11.3% 12% 10% New completion Vacancy rate 1000 7.9% 8% 800 600 400 200 0 3.3% 3.8% 2.5% 0.5% 0.7% 1.3% 0.7% 1.4% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 2017 6% 4% 2% 0% Source: JLL Moscow Warehouse Market, H1 2017
4 EUROPEAN COMPARISON AT 30 JUNE 2017 Warehouse yields 12% 10% 8% 6% Warehouse capital values USD/sq m 1,600 1,200 800 4% Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016 Q4 2016 Q2 2017 400 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016 Q4 2016 Q2 2017 Moscow Paris Moscow Paris Frankfurt Warsaw Frankfurt Warsaw Prime rents in European cities, H1 2017 London Munich Frankfurt Hamburg Düsseldorf Moscow 67 Source: JLL Research H1 2017 Berlin Prague Budapest Warsaw 0 50 100 150 200 USD/sqm/year
5 LEASING HIGHLIGHTS Portfolio occupancy of 79% at 30 June 2017 36% of leases USD pegged Weighted average term of USD leases of 3 years Weighted average term of RUB leases of 3 years Average Rouble rent of RUB 5,600 per sqm
6 LEASING UPDATE Occupancy by region Lease Expiries, Space ('000 sqm) 100 93% 675 80 75% 79% 60 40 20 130 21 143 48 218 33 14 0 Moscow St Petersburg Regions 2017 2018 2019 Sqm ( 000) 2020-2027 Lease expires Lease breaks Currency exposure of leases 3% 5% 21% 41% 40% 36% 54% Sqm NOI EUR RUB USD Vacant
7 TENANT MIX AT 30 JUNE 2017 By Sector INTERNATIONAL 48% RUSSIAN 52% MANUFACTURER 16% DISTRIBUTOR 14% 3PL 40% RETAIL 27% OTHER 3%
8 DEBT SUMMARY Percentage of total debt maturing (%) Highlights: 300 0 0 2 1 20 2 34 Number of maturing facilities 3 1 4 23 2 19 2 Average cost of debt 7.7% Weighted average term to maturity of 4 years 250 250 All facilities US Dollar denominated 200 166 150 144 142 100 50 0 14 15 0 2017 2018 2019 2020 2021 2022 2023-2024 Debt maturing ($m)
9 ACQUISITIONS - ST PETERSBURG Three high quality income producing assets: Gorigo logisitcs warehouse Kellermann office building Primium office building Deal completed April 2017 Rub 4.9 billion consideration 16% initial yield Equivalent of USD 13.8 million of income over the next 12 months
10 CAPITAL STRUCTURE AT 31 JULY 2017 Ordinary Shares 667,465,439 Irredeemable Preference Shares (12p annual dividend) 98,998,046 Convertible Redeemable Preference Shares (6.5p annual dividend) 198,455,862 Warrants (strike @ 25p, expiry in 2019) 11,086,965 Institutional and Directors Shareholdings Ordinary Preference Convertible Redeemable Preference Warrant number % number % number % number % Invesco Perpetual 214,525,036 32.1 41,803,518 42.2 42,118,860 21.2 Woodford IM 93,938,346 14.1 8,196,481 8.3 87,969,298 44.3 Schroder Investment 66,276,615 9.9 JO Hambro 63,103,583 9.5 Raven Russia Directors & EBT 61,013,400 9.1 9,871,419 10.0 10,597,349 5.3 7,385 0.1 Old Mutual Global Investors 28,186,069 4.2 1,291,429 1.3 46,315,789 23.4 Ruffer 20,024,787 3.0 1,551,738 1.6 Legal & General 10,416,577 1.6 Progressive Capital Partners 9,866,906 1.5 2,900,000 1.5 Black Rock 7,994,358 1.2 274,831 0.2 NBIM 5,552,279 0.8 Aberdeen AM 4,484,851 0.7 Subtotal 585,382,807 87.7 62,989,416 63.6 189,901,296 95.7 7,385 0.1 Others 82,082,632 12.3 36,008,630 36.4 8,554,566 4.3 11,079,580 99.9 TOTAL 667,465,439 100% 98,998,046 100% 198,455,862 100% 11,086,965 100%
11 CONVERTIBLE REDEEMABLE PREFERENCE SHARES On 3 July 2017 the Company issued 89,766,361 New Convertible preference shares. The shares are listed on The International Stock Exchange and trade on the SETSqx platform of the London Stock Exchange. Total in issue 198,455,862 Ticker* Fixed cumulative preferential annual dividend Current conversion rate** RUSC 6.5 pence (cash, quarterly) 1.779 Ordinary Shares (RUS) for each RUSC Final redemption date 7 July 2026 Redemption premium 35p *The New Convertible Preference Shares will initially trade under the ticker "RUC2" with ISIN GG00BYPB9J77 up to and including 29 September 2017 after which they will trade, together with the Existing Convertible Preference Shares, under the ticker "RUSC" with ISIN GG00BYVFCC74. **Full details in Articles of Incorporation available on www.ravenrussia.com
12 DISTRIBUTIONS Ordinary and Preference shares cash payments per annum, US$ 000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 6M 2017 Total Ordinary 17,075 31,081 50,923 4,048 11,996 25,107 30,740 38,581 68,928 41,906 7,988 328,373 Preference 19,226 24,599 25,973 31,570 36,424 18,225 17,156 15,088 7,108 195,369 Convertible preference 4,349 4,502 8,851 Total 17,075 31,081 50,923 23,274 36,595 51,080 62,310 75,005 87,153 59,062 27,425 11,611 532,594 Distributions declared on Ordinary shares, pence per share Pence per share 7 6 5 4 3 2 1 0 4.0 2006 6.5 2007 3.0 2008 6.0 5.0 3.75 3.0 2.5 2.0 2.0 1.0 1.0 2009 2010 2011 2012 2013 2014 2015 2016 6M 2017 Share buy backs Oct-10 Nov-11 2012 2013 2014 2015 2016 6M 2017 Total to date Number of ordinary shares purchased 8,677,910 4,406,122 27,293,896 32,194,378 52,062,521 37,495,681 14,705,997 14,314,798 191,151,303
13 THE PORTFOLIO RUSSIAN FEDERATION INVESTMENT PROPERTY LAND BANK ST PETERSBURG MOSCOW NIZHNIY NOVGOROD ROSTOV-ON-DON UFA CHELYABINSK OMSK NOVOSIBIRSK
14 PORTFOLIO REVIEW Moscow St Petersburg KAD LOBNYA SHOLOKHOVO KAD M10 PRIMIUM PUSHKINO SHEREMETIEVO AIRPORT ISTRA KELLERMANN NOGINSK NOVA RIGA KONSTANTA KREKSHINO KAD SOUTHERN VNUKOVO AIRPORT SHUSHARY PULKOVO GORIGO PULKOVO AIRPORT DOMODEDOVO AIRPORT KLIMOVSK
15 Warehouses
16 Pushkino, Moscow DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANTS DHL Itella Makita Megapolis LOCATION The property is located on the Yaroslavskoe Highway, approximately 15km from the MKAD in the northeastern part of Moscow Region. GLA 213,700 sqm
17 Istra, Moscow DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANTS DSV Solutions Azbuka Vkusa Major Terminal Danom Bacardi LOCATION The property is directly adjacent to the Nova Riga highway, approximately 50km from Moscow city centre, 41km from the MKAD and 8km from the Betonka A107 motorway. GLA 206,100 sqm
18 Noginsk, Moscow DESCRIPTION Grade A Logistics Warehouse Complex with 26ha of land suitable for construction KEY TENANTS X5 Retail Group Dixy Sportmaster ID Logistics LOCATION The property is located approximately 55km from the city centre, 44km from the MKAD and 3km from the Betonka A107 motorway. Access is from the Volga highway, which links Moscow to Nizhniy Novgorod. A rail spur serves the site. GLA 203,800 sqm
19 Klimovsk, Moscow DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANTS Gradient Private Trade (Kupi VIP) TM Project (Marvel) Danone FARM LOCATION The property is located to the south of Moscow, approximately 21km from the MKAD in the town of Klimovsk. The project is a short distance from the M2 Simferopolskoye highway, a major route to the south of Moscow. GLA 157,500 sqm
20 Shushary, St Petersburg DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANTS RosLogistics Dixy Officemag Sbp Lear Bbraun Amway LOCATION The property is located in the Shushary District of St. Petersburg, approximately 15km south of the city centre and 5km from the St Petersburg ring road (KAD) on a motorway linking St. Petersburg to Moscow, close to Pulkovo International airport. GLA 147,900 sqm
21 Novosibirsk DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANTS Pepsi Sportmaster Wildberries Roust Russia Elektrosystem OSG Metro LOCATION The property is located on Petukhova Street in the south of the city of Novosibirsk, close to the M51 highway to Moscow, with a rail spur serving the site. GLA 121,000 sqm
22 Krekshino, Moscow DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANTS Itella Gorenje GLA 117,700 sqm LOCATION The property is located in Moscow about 40km to the south west of the city centre, 24km from the MKAD, between the Minsk and Kiev highways. Vnukovo airport, one of the largest airports in Moscow, is located within 15km of the complex.
23 Rostov-on-Don DESCRIPTION Grade A Logistics Warehouse Complex with 27ha of land suitable for construction KEY TENANTS Auchan Elektrosystem Mars Mir Instrumenta Mobis Parts CIS Tarkett LOCATION The scheme is located on the Federal Highway M4 to Moscow, approximately 10km from the city centre and 7km from the airport. GLA 100,700 sqm
24 Gorigo, St Petersburg DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANTS Otis Philipp Morris DB Schenker Simba Toys Orimi LOCATION The property is located south of St Petersburg close to Pulkovo International Airport, just 2 km away from the Ring Road and Tallin highway, which provides easy access to the city. GLA 84,800 sqm
25 Nova Riga, Moscow DESCRIPTION Grade A Logistics Warehouse Complex with 25ha of land suitable for construction KEY TENANTS Pernod Ricard McKenzie LOCATION The property is directly adjacent to the Nova Riga highway allowing easy access to the centre of Moscow, 25km from the MKAD and 5km from the Betonka A107 motorway. GLA 67,400 sqm
26 Lobnya, Moscow DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANTS Nippon Express RosLogistics GLA 52,300 sqm LOCATION The property is located on the Rogachevckoe highway approximately 35km to the north of the Moscow city centre, 20km from the MKAD and 10km north-east of Sheremetyevo airport.
27 Sholokhovo, Moscow DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANT RosLogistics GLA 45,300 sqm LOCATION The property is located in Myitischensky District of the Moscow Region, on the Dmitrovskoe highway, approximately 16km from the MKAD, and 15km from Sheremetyevo airport.
28 Pulkovo, St Petersburg DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANTS SKL irts OSG Edil Import UPM LOCATION The property is located to the south of the city centre on Pulkovskoe highway forming part of the Finland-Russia- Ukraine corridor and in close proximity to the Ring Road (KAD) and 2km from Pulkovo International airport. GLA 36,700 sqm Southern, Moscow DESCRIPTION Grade A Logistics Warehouse Complex KEY TENANTS Lindex A&D Rus L Occitane Stomatorg LOCATION The property is located in an industrial area of the Southern administrative district of Moscow, approximately 10km from the city centre, around 1km from the Varshavskoye highway and 5km from the MKAD. GLA 14,100 sqm
29 Offices
30 Kellermann, St Petersburg DESCRIPTION High quality Office Complex KEY TENANTS Oracle Development Baltiyskiy Leasing Melon Fashion MAERSK LOCATION The property is located in historical centre of St Petersburg in Admiralteyskiy district, 15 min drive from the Nevskiy prospect. GLA 21,500 sqm
31 Primium, St Petersburg DESCRIPTION Class A Office Complex KEY TENANT YIT GLA 11,100 sqm LOCATION The property is located northwest of St Petersburg in Primorskiy district, close to the new Gazprom headquarters. Konstanta, St Petersburg DESCRIPTION Grade B+ office building KEY TENANT LenEnergo GLA 15,800 sqm LOCATION The Konstanta office is located on Leninsky Prospekt in the Moskovskiy district of St. Petersburg, approximately 8km to the south of the city centre. The property is a modernised administrative building, which was converted in 2005 to provide an eight storey, self contained office building for Lenenergo.
32 CORPORATE HISTORY 4 JULY 2005 29 JULY 2005 27 APRIL 2006 27 NOVEMBER 2008 24 MARCH 2009 9 JULY 2009 2 AUGUST 2010 RAVEN RUSSIA ( RR ) INCORPORATED 153M ORDINARY SHARES ( RUS ) ADMITTED TO TRADING ON AIM FURTHER 269.5M RUS PLACED AND ADMITTED TO TRADING ON AIM RR COMPLETES INTERNALISATION OF ITS PROPERTY ADVISER RR ISSUES 76M PREFERENCE SHARES ( RUSP ) AND WARRANTS ( RUSW ) TRADING ON AIM RR COMPLETES THE TAKEOVER OF RAVEN MOUNT PLC RUS AND RUSW ARE ADMITTED TO TRADING ON THE MAIN MARKET OF THE LSE 3 JULY 2017 26 APRIL 2017 7 JULY 2016 31 DECEMBER 2013 26 JUNE 2012 27 JULY 2011 RR ISSUES FURTHER 89.8M CONVERTIBLE PREFERENCE SHARES (RUSC) ADMITTED TO TRADING ON TISE RR ACQUIRES GORIGO LOGISTICS PARK AND TWO OFFICE CENTRES IN ST PETERSBURG AT 16% INITIAL YIELD RR ISSUES 108.7M CONVERTIBLE PREFERENCE SHARES (RUSC) ADMITTED TO TRADING ON TISE 50% OF RUSP IN ISSUE CONVERTED INTO RUS (1 RUSP FOR 2 RUS) RR PLACES FURTHER 48.4M RUSP AND COMPLETES THE ACQUISITION OF PUSHKINO LOGISTICS PARK, A CLASS 1 TRANSACTION RUSP ARE ADMITTED TO TRADING ON THE MAIN MARKET OF THE LSE
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