Moscow Warehouse Market

Moscow Warehouse Market Q3 2015 Market saw a record surge in demand for warehouse space over Q3 2015 The volumes of take-up over the first nine months exceeded 1m sq m (+76% YoY) As a result, the vacancy rate in existing warehouse premises decreased to 9.9% compared to 11.2% seen in the previous quarter The high vacancy rate will likely stay for the remainder of the year due to ongoing increase in availability in the secondary stock

Moscow Warehouse Market Snapshot JLL Industrial Outlook Q3 2015 2 Market Indicators 2014 Q3 2015 9M 2015 2015F Supply Total modern warehouse stock, m sq m 11.2 11.9 11.9 12.2 Completions, sq m 1,551,753 90,970 710,029 1,033,324 Availability, sq m 883,389 1,185,088 1,185,088 1,235,599 Demand Take-up, sq m 958,676 712,294 1,017,882 1,200,000 Vacancy rate in existing projects 7.9% 9.9% 9.9% 10.1% Commercial terms Class A prime rental costs* (incl. renegs/renewals), USD/sq m/year 130 105 105 105 Class A prime rent** (for new deals only), RUB/sq m/year 4,500 4,500 4,500 Class A average rental costs* (incl. renegs/renewals), USD/sq m/year 115 100 100 100 Class A average base rent** (for new deals only), RUB/sq m/year 4,000 4,000 4,000 Operating expenses, RUB/sq m/year 1,000 1,200 1,000 1,200 1,000 1,200 Prime yields 11.75% 12.0% 12.0% 12.0% *The level of rents for existing lease agreements **The level of rents for new deals

Supply and Availability Trends JLL Industrial Outlook Q3 2015 3 For the first nine months more than 0.7m sq m of new warehouse space was delivered in Moscow Region (or 20% lower the result of the same period 2014) bringing the total amount of warehouse stock to 11.9m sq m. In absolute terms, over 1.1m sq m of warehouse space in existing objects was vacant by the end of September 2015. '000 sq m 1 800 USD/sq m /year 160 1 600 1 400 1 200 1 000 800 600 400 200 1,552 1,030 140 120 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015F 0 Completions Availability Average rents, R axis Prime rents, R axis

Moscow Region Key Transport Corridors JLL Industrial Outlook Q3 2015 4 North-West: 0% M-10 Q4 2015 pipeline distribution North: 25% North-East: 0% A-104 M-8 M-11 A-103 East: 15% Only 3 existing highways currently meet international requirements: Novorizhskoye (M-9 Baltic), Simferopolskoye (M-2 Crimea) and Novokashirskoye (M-4 Don). Upcoming Moscow St. Petersburg (M-11) highway complies with international standards. Areas in the surrounding vicinity are deemed the most appropriate for logistics development. Due to historically high land supply and relatively low prices for land plots, warehouse density is higher in the south (35% of all warehouse supply). M-9 M-7 In view of better transport infrastructure (including that under construction), new projects are concentrated mainly in the North and South of Moscow Region. West: 0% M-1 M-3 A-107 Р-105 South-East: 14% North-west 11% West 4% Existing stock distribution North 11% North-east 6% East 7% South-east 16% South-West: 7% M-5 South-west 10% A-101 M-2 M-4 South: 39% South 35%

Examples of Warehouse Projects M-9 20 M-1 32 24 M-3 A-101 14 M-10 1 31 19 21 33 2 34 3 22 A-104 4 17 16 8 30 13 12 5 38 28 37 9 10 18 7 Р-105 27 39 25 1136 M-8 15 23 M-2 M-4 35 26 29 6 A-103 M-7 M-5 Existing LP - Logistic Park IP - Industrial Park WC - Warehouse Complex JLL Industrial Outlook Q3 2015 5 1 Sever LP 15 PNK-Chekhov 2 Lobnya LP 16 Klimovsk LP 3 Dmitrov LP 17 Podolsk MLP 4 Sholokhovo LP 18 PNK-Vnukovo 5 Pushkino LP 19 Krekshino LP 6 Noginsk I LP 20 Istra LP 7 Bykovo LP 21 Leningradskiy MLP 8 Berezhki WC 22 FM Logistic Khimki 9 TLK Tomilino 23 PNK - Chekhov 3 10 Belaya Dacha 24 PNK - Bekasovo (bldg. 3) 11 South Gate IP 25 Kholmogory IP (Phase I) 12 North Domodedovo LP 26 Stupino IP (Phase I) 13 Agroterminal 27 Leninskie Gorki WC Liger Group 14 Nova Riga LP 28 Sangri WC Pipeline Name Completion Total Area, sq m 29 Mikhailovskaya Sloboda WC (Phase III) Q4 2015 23,200 30 Synkovo LP (bldg. 9) Q4 2015 28,000 31 Logopark Sever - 2 (Phase III) Q4 2015 9,000 32 PNK - Bekasovo IP (bldg. 1) Q4 2015 22,000 33 PNK- North Sheremetievo II IP (bldg. 7) Q4 2015 53,000 34 Dmitrov LP (Phase III) Q4 2015 20,000 35 Novoselki WC Q4 2015 28,000 36 Shakhovo WC (Phase II) Q4 2015 12,500 37 Pechatniki WC Q4 2015 11,700 38 IWC Kozhukhovo Q4 2015 47,700 39 Leninskie Gorki WC RCS Development Q4 2015 21,500 IWC - Industrial and Warehouse Complex

New Warehouse Supply Dynamics JLL Industrial Outlook Q3 2015 6 The total amount of expected completions of warehouse space for the rest of the year is estimated at 0.3m sq m which is half of what was commissioned a year ago bringing the total amount of new deliveries for the full 2015 to 1m sq m representing a 34% YoY drop. The majority of expected completions are located in the Northern and Southern directions. '000 sq m Completion dynamics Key Deliveries in Q3 2015 1 800 1 600 1 400 1,552 Logopark Sever - 2 1 200 1 000 800 1,030 Sangri AWC 600 400 Leninskiye Gorki WC 200 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F Class A Class B

Moscow Warehouse Stock JLL Industrial Outlook Q3 2015 7 The share of Class A stock continues to grow, accounting for almost 80% of total warehouse stock as of the end of September. Moreover, the number of objects of a superior quality compared to the standards of Class A is increasing due to growing demand from tenants. '000 sq m Distribution by Class Distribution by Type 14 000 12 000 10 000 8 000 35% 33% 6 000 40% 39% 38% 36% 4 000 2 000 60% 61% 62% 64% 65% 67% 0 2010 2011 2012 2013 2014 2015F Class А Class В Speculative Owner-occupied

Major Developers: Moscow Projects for 2015 2016 JLL Industrial Outlook Q3 2015 8 The key players in the Moscow warehouse market are BIN Group, PNK Group, Radius Group, Raven Russia, AT Nedvizhimost, Ghelamco etc. Q4 2015 Pipeline 2016 Pipeline * Others 64,292 sq m 19.9% PNK Group 74,744 sq m 23.1% Others 110,738 sq m 25.9% Radius Group 100,000 sq m 23.3% Meridian 23,277 sq m 7.2% Construction Alliance Holding 28,052 sq m 8.7% Freight Village 35,594 sq m 11.0% MonArkh Development 47,715 sq m 14.8% RCS Development 49,622 sq m 15.3% Meridian 34,907 sq m 8.1% Freight Village 38,820 sq m 9.1% Logistics Partners 40,000 sq m 9.3% Sovremennie Skladskie Technologies 50,000 sq m 11.7% FM Logistic 54,000 sq m 12.6% *Projects under-construction

Availability by Direction JLL Industrial Outlook Q3 2015 9 On the back of the surge in demand the vacancy rate decreased from 11.2% seen in Q2 to the levels seen at the beginning of the year and stood at 9.9%. We expected the vacancy rate to stay at the levels close to 10% for the remainder of the year due to ongoing increase in availability in the secondary stock. Available space dynamics Availability by direction North: 22% '000 sq m M-10 A-104 North-East: 9% M-8 1 400 1 300 1 200 1 100 1 000 900 800 700 600 500 400 300 200 100 0 57 95 51 95 131 245 533 448 883 1 318 1 236 1 203 1 185 M-11 North-West: 5% M-9 West: 8% M-1 A-107 M-3 South-West: 4% A-103 East: 6% M-7 Р-105 South-East: 9% M-5 A-101 M-2 M-4 South: 11%

Supply Trends JLL Industrial Outlook Q3 2015 10 Only 91,000 sq m of new warehouse space was delivered in Q3 in the Moscow Region which was 65% less than the same period in 2014. Among the largest deliveries there were new warehouse premises in Logopark Sever 2 (24,650 sq m total area) and in LP Leninskie Gorky (20,000 sq m). At the same time, the total amount of new supply of warehouse space for the first nine months was close to 0.7m sq m which was 20% lower than the total amount delivered over the same period 2014. By the end of Q3, the total warehouse stock of Moscow region reached the level of 11.9m sq m. The total amount of expected completions of warehouse space for the rest of the year is estimated at 0.3m sq m which is half of what was commissioned a year ago. Among the largest upcoming warehouse projects there are new complexes in PNK North Sheremetyevo (52,700 sq m), Dmitrov LP (20,000 sq m) and Synkovo LP (28,000 sq m). A further significant decline in the amount of deliveries in warehouse space is expected going forward, as the majority of developers are switching to built-to-suit schemes due to the fall in rents coupled with the rising costs of construction. There is currently only about 0.4m sq m of warehouse space under construction which can enter the market in coming year.

Demand Activity JLL Industrial Outlook Q3 2015 11 The volume of take-up in Q3 was 712,300 sq m which is almost three times higher compared to the levels seen over the same period last year. The volumes of take-up over the first nine months 2015 was around 1m sq m. 000' sq m 1 800 1 600 1,552 1 400 1 200 1 000 800 960 1,200 1,033 600 400 200 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F Take-up Q1 Take-up Q2 Take-up Q3 Take-up Q4 Completions

Major Deals on the Moscow Market in 2015 JLL Industrial Outlook Q3 2015 12 Period Tenant Deal Type Sector Total Area, sq m Logopark Sever 2 8 3 PNK Northern Sheremetievo 6 Kholmogory IP 1 Q3 2015 Adidas* sale Retail 120,000 2 Q3 2015 X5 Retail Group lease Retail 65,698 3 Q3 2015 Dixi sale Retail 55,123 4 Q3 2015 Dixi lease Retail 54,257 5 Infrastroy Bykovo 5 Q3 2015 Dochkisynochki lease Retail 42,232 2 Sofyino LP 6 Q3 2015 Globus* lease Retail 40,063 4 A Terminal 7 Q3 2015 X5 Retail Group lease Retail 38,665 8 Q3 2015 OBI lease Retail 35,765 7 Freight Village Vorsino 1 PNK Chekhov 2 *Deals closed by JLL

The Structure of Demand JLL Industrial Outlook Q3 2015 13 Retail companies and distributors were among the most active players and accounted for 55% and 18% share respectively in total volume of demand for warehouse space while manufacturing companies were the least active players with roughly 7% share of all recorded transactions over the first nine months. Demand distribution by sector, 9M 2015* Distribution by deal type* Distributor 18% 2012 50% 19% 7% 24% Retail 55% Logistic 15% 2013 51% 12% 7% 30% 2014 53% 10% 4% 33% Manufacturing 7% 2015F 68% 7% 16% 9% Others 5% Lease BTS Lease Sale BTS Sale *Calculations are based on deals known to JLL

Demand Trends JLL Industrial Outlook Q3 2015 14 The volume of take-up in Q3 was 712,300 sq m which is almost three times higher compared to the levels seen over the same period last year. The volumes of take-up over the first nine months 2015 was around 1m sq m beating our forecast for the entire 2015 year (0.85m sq m). Location-wise, the demand for warehouse space was concentrated mostly in the South and North of Moscow region. Retailers took almost a 75% share of all deals over Q3 (or 55% for the nine months) followed by distributors and logistic companies. The amount of take-up in warehouse space is expected to be at 1.2 1.3m sq m for the entire year. Despite the actual deferred demand which could be met by the end of the year, such high levels of activity will unlikely extend far into 2016, as the Russian warehouse market is still heavily influenced by external factors such as rouble volatility and the ongoing recession in the economy.

Market Balance JLL Industrial Outlook Q3 2015 15 The average rental costs (including level of rents for renewals and renegotiations) saw slight decrease QoQ and stood at USD100 per sq m per year in Q3. On the back of the surge in demand the vacancy rate decreased from 11.2% seen in Q2 to the levels seen at the beginning of the year and stood at 9.9%. USD/sq m/year 140 14% 12% 120 10% 100 8% 6% 80 4% 2% 60 2007 2008 2009 2010 2012 2013 2014 Q1 2015 Q2 2015 Q3 2015 0% Average rental costs Vacancy rate

International Comparison JLL Industrial Outlook Q3 2015 16 Stock provision per capita is among the lowest in Europe, at the same time Moscow unlike other European capital cities is the key logistic hub for the whole country. Stock provision in European cities* Prime rents in European cities** London Berlin Moscow Budapest Munich Prague Warsaw Hamburg Düsseldorf Frankfurt 0.9 0,0 1,0 2,0 3,0 4,0 5,0 6,0 sq m per capita Warsaw Budapest Prague Berlin Hamburg Frankfurt Munich Moscow London 105 0 50 100 150 200 250 300 USD/sq m/year *As of Q3 2015 **Rent excludes VAT and operating expenses

Summary JLL Industrial Outlook Q3 2015 17 The total amount of new supply of warehouse space for the first nine months was close to 0.7m sq m which was 20% lower than the total amount delivered over the same period 2014. For the rest of the year the total amount of expected completions of warehouse space is estimated at 0.3m sq m which is half of what was commissioned a year ago. Due to the fall in rents coupled with the rising costs of construction as well as limited sources of finance, the majority of future supply is represented by BTS (built-to-suit) schemes. The volumes of take-up over the first nine months 2015 was around 1m sq m with retailers took almost 55% share of all deals followed by distributors and logistic companies. The amount of take-up for warehouse space is expected to be at 1.2 1.3m sq m for the entire 2015 year. On the back of the surge in demand the vacancy rate decreased from 11.2% seen in Q2 to the levels seen at the beginning of the year and stood at 9.9%. We expected the vacancy rate to stay at the levels close to 10% for the remainder of the year due to ongoing increase in availability in the secondary stock. Over the course of Q3, the average level of rents for new deals in Class A decreased slightly to RUB4,000 sq m per year (triple net) from RUB4,300 sq m seen in Q2, while the level of prime rents was around RUB4,500 sq m per year (triple net) compared to RUB5,000 sq m in Q2. At the same time, the average rental costs (including level of rents for renewals and renegotiations) saw also slight decrease QoQ and stood at USD100 per sq m per year in Q3. The actual level of rents varies quite significantly depending on the particular object and its location.

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