2015 Year End Investor Presentation by AFI Development

FY 2015 IR Presentation FINANCIAL & BUSINESS RESULTS March 2016

Disclaimer This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of AFI Development Plc (the "Company") or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the document. This communication is only being distributed to and is only directed at (1) qualified institutional buyers (within the meaning of Rule 144A of the United States Securities Act of 1933, as amended (the "Securities Act") or (2) accredited investors (as defined in Rule 501(a) of Regulation D adopted pursuant to the Securities Act). Any person who is not a "qualified institutional buyer" or "accredited investor" should not act or rely on this document or any of its contents. This document contains "forward-looking statements", which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. Neither the Company, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document. The information contained in this document is provided as at the date of this document and is subject to change without notice.

Company Overview SECTION 1

AFI Development at a glance Market Cap, as of 18 March 2016 Mkt price GDR, as of 18 March 2015 Mkt price B share, as of 18 November 2015 NAV (Equity), as of 31 December 2015 NAV per share, as of 31 Cecember 2015 Portfolio Value*

US$133 mln US$0.14 US$0.11 US$796 mln US$0.76 US$ 1.4 bn

BUSINESS

PORTFOLIO VALUE*

HISTORY *Gross Asset Value of Portfolio based on JLL Valuation as for 31 December 2015 and BSV of Land Bank projects, Trading Properties and Hotels (inc. JV)

BRAND

•Full cycle real estate developer •Focus on unique large scale commercial and residential projects •Primary market: Moscow, Russia

•14 years on the market •Admitted to LSE in 2007 •Premium listing from 2010 •Free float – 35.12%

•Strong global brand •Subsidiary of Africa Israel Group (64.88% owner) , an international conglomerate with global focus on real estate, construction and infrastructure

FINANCIAL STABILITY

• Liquidity position: US$42.4 million as at 31 December, 2015 • Secured financing for on-going projects • 42% Debt to Total Assets ratio**

TRACK RECORD

•14 completed projects with total c. 0.6 mln sqm of space •Impeccable credit history •Market reputation for high quality and professional property management

PORTFOLIO

• Substantial income generating portfolio. Major project AFIMALL City • 8 Development Projects & land bank

** Bank loans only

Key Projects in Moscow Yielding Projects (retail, offices and hotels) US$949 mn

Value** (JLL, 31 December 2015): Plaza II, Plaza Ib

Riverside Station Riverside St-n

AFIMALL

193.1K sqm

GLA (excl. hotels), sqm: NOI terminal

US$128.5 mn

( excl. hotels): PLAZA SPA Kisl* PLAZA SPA Zhel*

Aquamarine III

* Outside of Moscow * * Hotels presented at cost value Aquamarine Htl

Paveletskaya I

H2O

Projects Under Development US$458 mn

Value** ( JLL, 31 December 2015): Odinburg**

Paveletskaya II

Plaza IIa

KOSSINSKAYA Kossinskaya

Plaza Ic

B. Pochtovaya

Botanic Garden

Plaza IV

GLA, sqm:

231.4K

GSA, sqm:

730.7K

NOI terminal

(JLL,

US$93.6 mn

Dec 31 2015):

** Odinburg and Botanic Garden presented at cost value

Land Bank Yielding Projects Value (BSV):

Projects under Development Completed Assets

US$7 mn

Note: the NOI projections are â&#x20AC;&#x153;forward looking statementsâ&#x20AC;? based on JLL valuation assumptions and Company estimations and they can be realized or not realized due to factors beyond the Company's control including, among others, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions

Project Update. Yielding Projects SECTION 2

AFIMALL City Update

Ownership:50%

(as of December 2015)

Total GBA, sqm

283.2K

Total GLA(shops, offices, storage), sqm

107.2K

Occupancy (as part of GLA total)

78%

Parking lots, numbers

2,075

Terminal NOI (JLL est.)

US$90.8 mn

MV (JLL est.)

US$685 mn

Loan balance as for December, 2015

US$416 mn

 The occupancy level was at 78% at the end of December 2015, a 2% increase compared to end of Q3 2015.  Notwithstanding the decreasing footfall across the Moscow shopping centres, the average monthly footfall in December 2015 was 3% higher than in December 2014  The Mall welcomed several new tenants during the year, most notably one of the leading Russian restaurant chains “Chaihona №1” and a well-known children’s goods store “Detsky Mir”. Recent openings include a Jo Malone London perfumery outlet, a Tschibo family store and British shoe retailer Clarks. ITEM, US$ million (1) Revenue (2) Operating expenses (3) NOI

Actual Actual Actual Actual Q1 2015 Q2 2015 Q3 2015 Q4 2015 19.1 19.4 16.2 16.6 -5.4 -4.0 -4.3 -4.3 13.7 15.4 11.9 12.3

Actual 2015 71.3 -18.0 53.3

Note: the NOI projections are “forward looking statements” based on JLL valuation assumptions and Company estimations and they can be realized or not realized due to factors beyond the Company's control including, among others, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions

Actual 2014 107.0 -24.0 83.0 7

Yielding Properties Building

AFIMALL

Ozerkovskaya III*

Berezhkovskaya Tverskaya Plaza II

Tvesrkaya Plaza Ib

Paveletskaya I

Aquamarine Hotel

Moscow

Moscow City

CBD

Moscow

CBD

Retail

Office A & Street Retail

Office B

Office & Street Retail

Office B

GBA, sqm

283 182

61 579

11 612

5 848

2 338

16 246

GLA, sqm

107 208

46 247

10 250

4 967

2 050

2 075

466

140

78%

61%

90.8

28.8

685

199

Location Class

Parking lots (total), # Ocupancy rate (31.12.2015), % NOI term., (JLL est.), US$ mn MV**, US$ mn

Moscow

H2O Moscow

Plaza SPA Kislovodsk

Moscow

Plaza SPA Zheleznovodsk

TOTAL

Caucasus region

Hotel

10 080

8 931

25 000

11 701

437K

13 412

8 990

159 keys

275 keys

134 keys

193K

126

98%

89%

57%

2.7

1.5

0.6

2.5

11.5

9.2

3.4

11.5

CBD

78% ***

76% ***

75%***

1.7

129

8.9

13.1

9.1

963

11.6 ****

* GBA and GLA presented after disposal of Bld. 1. ** MV based on JLLvaluation as for 31.12.2015. Hotels presented by cost value *** The hotel occupancy is presented as the annual average **** MV of the Plaza Spa Kislovodsk is presented as 50% (the Company share in the project)

Project Update. Development Projects SECTION 3

Odinburg Residential GBA, 821.1K sqm GSA residential, sqm 453,0K STATUS: Construction Bld.#2 SALE STATUS: Bld#1, Bld#2 are on sale Ownership:50%

Other 10

Odinburg Residential OVERVIEW  The ODINBURG residential district is located in the town of Odintsovo, a modern area considered to be one of the best and most environmentally clean towns in the Moscow region. (11 km from MKAD).  New highway to Moscow is in close proximity to the complex.  The entire residential district takes up an area of 33 hectares, which will host eight 8-to25 story buildings. The residential element will offer 9,059 apartments and a total sellable area of 453K sq.m. (Including city share).

Ownership:50%

CONSTRUCTION STATUS and SALES  As of today, 706 out of 723 contracts for sales of apartments in Building 1 (38.0K sqm) have been signed, while for Building 2 132 out of 706 contracts (6.7K sqm) have been signed. 40 parking units out of 71 (Building 1) have been sold.  Construction of Bld.#2 is ongoing. Bldg#1 completed, delivery starts end of March.

(as of December 2015)

Type

Residential

GBA, sqm

821.1K

GSA, sqm/GSA commercial total: GSA resi (Phase I), sqm: GSA resi (Phase II), sqm: GLA commercial, sqm: Apartments, total : Phase 1: • Stage 1 • Stage 2 Parking units:

 Construction is funded with proceeds from sales.

463.0/19.6K 150.9K 311.9K 16.8K

9,142 2,569* 723 (Sold 706) 706 (Sold 132) 3,399

* Including City Share

* Including City share 11 Other

AFI Residence Paveletskaya As of December 2015 GBA (total), sqm:

133.5K

GBA (phase 1), sqm

50.4K

GSA (total), sqm:

78.8K

Flats (total), amnt

549

Flats (phase 1), amnt

175

“Apartments” (total), amnt

220

“Apartments “ (phase 1), amnt

220

Commercial space, sqm

17.1K

Commercial space (phase 1), sqm

5.8K

Book value, US$ mn:

56.4

According to common market practice in Russia and to applicable Russian laws, preliminary sales of apartments during construction are done in the form of “contracts of participation in construction”, which are executed between the developer and purchaser of an apartment. These contracts are registered with state authorities and enter into legal force after this state registration. However the Company considers that signed contracts have high probability of registration and entering into legal force and reports “units sold” as the number of contracts signed with the apartments purchasers. “Apartments” are premises legally not zoned for housing, but are widely sold for residence (a person cannot register in this address, but the premises cannot be used for housing). The prices of ‘apartments’ are normally lower than this of similar flats

 Construction of Phase 1 started in December 2015.  As of 17 March 2016, contracts for 22 flats and 2 “apartments” have been signed.  Parking lots sold: 32 units.

(properly zoned housing units).

Development Projects - Residential POCHTOVAYA

PAVELETSKAYA II

Botanic Garden

(as December 2015) (as of December 2015) Type

Resi

GBA, sqm

151.4K

GSA/GLA, sqm

48.2/26.1K

Parking

1,760 pp

Status

Construction launched in Q4 2015

MV, US$

55.5 mil

Pochtovaya

Type

Resi

GBA, sqm

170.3K

GSA/GLA, sqm

56.9/34.2K

Parking

1,771 pp

Status

Launch of construction in H2 2016

MV, US$

71.5 mil

Paveletskaya

BOTANIC GARDEN

(as of December 2015)

Other

Type

Resi

GBA, sqm

255.0K

GSA/GLA, sqm

107.5/5,1K

Parking

1,334 pp

Status

Construction permit received. Project concept being reviewed

MV, US$

18.6 mil 13

Development Projects - Commercial PLAZA IC

KOSSINSKAYA

(as of December 2015) Type GBA, sqm GLA, sqm Parking

Office A 61.8K 37.0K 467 pp

Status

Ready for construction launch 65.5 mil

MV, US$

(as of December 2015) Type GBA, sqm GLA, sqm Parking MV, US$

Plaza IV Plaza IC

Mixed use 108.0K 70.0K 1,200 pp 27.8 mil

Kossinskaya

PLAZA IV*

(as of December 2015)

Other

Type GBA, sqm GLA/GSA, sqm

Office A 108.0K 58.6/2.7K

Parking Status

1,210 pp

MV, US$

Preparing for construction 68.6 mil

*For 100% of the project

Financial update SECTION 4

Consolidated P&L ITEM, US$ million (1) (2) (3)

Construction consulting/management services Rental income Sale of residential and trading property

Actual Actual Actual Actual Q1 2015 Q2 2015 Q3 2015 Q4 2015

Actual 2015

Actual 2014

0.0 24.4 -

0.0 26.0 0.6

0.0 21.0 0.1

0.0 21.5 (0.0)

0.1 92.9 0.7

0.2 141.4 2.4

(4) TOTAL REVENUE

24.4

26.6

21.1

21.5

93.7

144.1

(5) (6) (7) (8) (9)

1.1 (11.4) (2.7) (0.4)

0.3 (9.7) (2.2) (0.6) (0.6)

1.2 (9.3) (2.3) 0.0 (0.2)

0.4 (10.1) (3.4) 0.0 (0.5)

3.0 (40.5) (10.6) (0.6) (1.6)

3.5 (62.5) (22.3) (1.6) (6.8)

(13.4)

(12.9)

(10.5)

(13.5)

(50.4)

(89.7)

(1.6)

(0.7)

(1.3)

(4.5)

7.3

Other income Operating expenses Administrative expenses Cost of sales of residential and trading property Other expenses

Ownership:50%

(10) TOTAL EXPENSES (11)

Share of profit of equity-accounted investees

0.1

0.9

(12) GROSS PROFIT (LOSS)

11.2

14.6

9.0

(13) (14)

21.4 (0.7)

(63.8) (0.0)

98.5 0.0

(15) RESULTS FROM OPERATING ACTIVITIES

32.0

(49.2)

107.4

(16) (17) (18) (19)

1.5 (11.3) (16.2)

1.2 (12.1) 19.9

(26.0) 6.0 (0.2) 0.3

Valuation gain (loss) on investment property Impairment loss for trading property and hotels Profit on sale/disposal of properties/investment Finance income Finance expenses FX Gain/(Loss)

(20) Net finance income/(costs) (21) PROFIT BEFORE INCOME TAX (22) (23)

Current income tax Deferred income tax

(24) PROFIT (LOSS) FOR THE PERIOD

6.0

42.0

49.9

(490.5) (12.0)

(434.4) (12.7)

(85.9) (8.9)

(495.2)

(405.0)

(44.8)

0.1 0.7 (11.4) (78.2)

(0.0) 0.8 (11.3) (35.9)

0.1 4.2 (46.2) (110.3)

0.1 7.0 (60.8) (224.8)

9.1 (40.1)

(88.9) 18.6

(46.4) (541.7)

(152.3) (557.2)

(278.6) (323.3)

(0.2) 1.0

(0.2) (6.0)

(0.2) 95.9

(0.8) 91.3

(0.6) 36.7

(445.9)

(466.7)

(287.3)

(39.2)

12.5 Other

Balance Sheet as of 31 December 2015 #

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25) (26) (27) (28) (29) (30) (31) (32) (33) (34)

Investment property Investment property under Investment in Joint Ventures Property, plant and equipment Long-term loans receivable VAT recoverable Inventory of real estate Total non-current assets Trading property Trading properties under Inventory Short-term loans receivable Trade and other receivables Current tax assets Cash, cash equivalents and tradable securities Total current assets TOTAL ASSETS Equity Share capital Share premium Translation reserve Capital reserve Retained earnings TOTAL EQUITY Minority interest Long-term loans and borrowings Deferred tax liabilities Deferred income Total non-current liabilities Short-term loans and borrowings Trade and other payables Advances from customers Income tax payable Total current liabilities

(35) TOTAL LIABILITIES (36) TOTAL EQUITY AND LIABILITIES

31.12.2015 30.09.2015 30.06.2015 31.03.2015 31.12.2014 Change YoY US$ mn US$ mn US$ mn US$ mn US$ mn US$ mn % 933.7 1 351.9 1 351.9 1 375.4 1 375.4 (441.7) -31% 238.9 355.9 425.2 431.5 431.5 (192.5) -44% 0.0 0.0 0.0 0.0 0.0 (0.0) 26.3 29.2 35.1 33.5 35.1 (8.8) -25% 14.3 14.8 15.8 17.6 18.1 (3.8) -10% 0.0 0.0 0.0 0.0 0.0 (0.0) -17% 18.6 18.3 21.6 20.1 20.1 (1.5) -14% 1 231.8 1 770.2 1 849.7 1 878.2 1 880.2 (648.4) -33% 2.1 2.1 2.6 2.9 3.0 (0.9) (20%) 204.4 211.2 143.9 134.9 133.0 71.4 42% 0.5 0.4 0.4 0.5 0.6 (0.1) 25% 0.1 0.1 0.1 0.1 0.0 0.1 (21%) 29.0 37.8 43.7 39.4 39.0 (9.9) (34%) 1.6 1.5 1.4 1.4 1.3 0.3 18% 42.4

62.5

78.6

74.7

93.3

(50.8)

(46%)

280.1 1 512.0

315.7 2 085.8

270.6 2 120.3

253.9 2 132.0

270.2 2 150.4

4% -29%

1.0 1763.4 (339.0) (9.2) (620.8) 795.5 (3.9) 389.8 25.6 8.5 423.9 224.3 18.2 54.0 0.0 296.5

1.0 1763.4 (328.6) (9.2) (178.6) 1 248.1 (0.6) 593.2 115.0 9.2 717.5 48.0 19.9 53.0 0.0 120.8

1.0 1763.4 (311.1) 0.0 (190.8) 1 262.5 (8.8) 629.7 100.9 11.3 741.9 46.1 23.2 55.4 0.0 124.7

1.0 1763.4 (320.7) 0.0 (152.4) 1 291.4 (8.7) 632.7 103.6 12.2 748.5 30.6 24.5 45.7 0.0 100.8

1.0 1763.4 (314.9) 0.0 (159.0) 1 290.6 (8.8) 455.1 102.6 13.0 570.7 231.7 28.2 38.0 0.0 297.9

10.0 (638.4) 0.0 (0.0) 0.0 (24.1) (9.2) (461.8) (495.1) 4.9 (65.3) (77.1) (4.4) (146.8) (7.4) (10.1) 16.0 0.0 (1.5)

716.4

837.7

857.8

840.7

859.8

(141.3)

(16%)

1 512.0

2 085.8

2 120.3

2 132.0

2 150.4

(608.3)

(29%)

Note: In Q4 the value of the Companyâ&#x20AC;&#x2122;s portfolio of properties was reduced from US$2.0 billion to US$1.4 billion due to continuous macroeconomic pressures on the Russian real estate market

9% 225% -37% -56% (38%) (75%) (24%) -43% 386% (22%) (3%) 138%

Loans and cash position as of 31 December 2015  Gross balance of the bank loan portfolio (as of 31 December 2015): US$609 million  Total cash balance and deposits (as of 31 December 2015): US$42.4 million (including marketable securities)

Project

Bank

Balance as of 31 December, 2015 (US$ mn)

Available (US$ mn)

Nominal Interest rate

Currency

VTB

$132.4

9.5%

RUB

VTB

$283.4

3-m Libor+5.02%

USD

$415.8

6.85%

$193

3-m Libor+7%

AFIMALL

01.04.2018

TOTAL AFIMALL

Ozerkovskaya III (100%)

TOTAL/AVERAGE RATE

Maturity

VTB

$609

USD

26.01.2018

6.90%

Financial covenants AFIMALL Liquidation Value of the property should be higher than sum of the outstanding principal and six months interest Q4 2015 Revenue: not less than RUR 1 037 million (including VAT)

Ozerkovskaya III LTV ratio for Ozerkovskaya III project 65%, starting from Q4 2015. DSCR ratio should be at 1.2 starting from Q4 2015.

As of 31 December 2015 the Company was in line only with the covenants of AFIMALL City. The Company is in breach of the covenants for the Ozerkovskaya III loan. 18

Gross/Net Asset Value PROJECT

Book Value Book Value

% change, Net Company Bank Loan 2014 vs 2015 Share

31.12.2014

31.12.2015

1 000 21 20 12 300 5 15 2 1 375

685 16 12 9 199 3 9 1 934

-31% -27% -41% -26% -34% -37% -39% -74% -32%

88 4 107

66 2 69

54 108 4

28 71 4

-25% -47% -36% -48% -34% 0%

TOTAL INVESTMENT PROPERTY UNDER DEVELOPMENT:

364

239

-34%

Ozerkovskaya Phase II (26) 4Winds residential

2 0 2 13 9 3 12 37 148 19 56

-12% -100% -31%

Aquamarine Hotel Plaza SPA Zheleznovodsk Pyatigorskaya (Park Plaza Kislovodsk) Plaza Spa Kislovodsk (50%) TOTAL PROPERTY PLANT AND EQUIPMENT: Odinburg Botanic Garden Paveletskaya II

2 1 3 17 12 4 14 48 133 20 67

TOTAL TRADING PROPERTY UNDER DEVELOPMENT:

220

223

2 011

1 435

-29%

(609)

826

AFI Mall Berezhkovskaya (100%) Paveletskaya I Plaza H20 Ozerkovskaya III Plaza Ib Plaza II Sadovaya -Samotechnaya TOTAL INVESTMENT PROPERTY: Plaza Ic Plaza II a Plaza IV (100%) Kossinskaya Bolshaya Pochtovaya Ruza

TOTAL TRADING PROPERTY:

TOTAL PORTFOLIO:

31.12.2015

(416)

269 16 12 9 6 3 9 1 325

(193)

(609)

66 2 69

28 71 4 0

-25% -26% -22% -20% -23%

12% -8% -17%

239 2 0 2 13 9 3 12 37 148 19 56

CASH AND CASH EQUIVALENTS DEFFERED TAX LIABILITY TOTAL OTHER ASSETS AND LIABILITIES

42 (26) (47)

TOTAL EQUITY:

796

Loans To Assets Value = 42% (LTV ratio) Loans To Equity (LTE ratio)

= 77%

The main changes in the valuation models reflect a higher long-term vacancy rates (both in the retail and the office segments) and lower rents. At the AFIMALL, the long term vacancy was increased from 3% to 8.3% due to general increase in the market vacancy rate. The increasing switch of retail rents to roubles in most shopping centres has also undermined market rents. In addition, there is a divergence between the existing and new leases, with significant discounts having to be offered to lease currently vacant space, compared with higher deals that can be agreed with incumbents â&#x20AC;&#x201C; all this influenced negatively the Estimated Rental Value (ERV) of the Mall. In the office segment, the process of switching rents from US dollars to roubles has been less marked, however this has had a depressing effect on market rental levels. ERVs have been reduced across the board, vacancy rates have been increased and for existing vacant space the lease up period has been extended. In the residential segment, the sale prices in dollar terms have been reviewed downwards. Note: the Paveletskaya II Project was reclassified in Q3 2015 from Investment properties to Trading properties under development

Market Update SECTION 5

Macro Overview and RE Investment Market RUSSIAN MACROECONIMIC OVERVIEW • Russian economic growth: According to the Federal State Statistics Beaurau, the Russian YY GDP growth rate was -4.1% on quarterly basis • Exchange rates: Against the background of further weakening of oil prices, during Q4, the spot RUR/USD rate fluctuated between 62.53 and 73.19. Reaching a peak of RUR82.37 per $1 on 21 January 2016, the rouble is currently trading in the range 75-80 roubles per dollar. The rate at 31.12.2015 was RUR72.8827. • In this volatile environment, the Central Bank of Russia (“CBR”) continues to keep the key lending rate unchanged at 11% in order to control inflation. • Inflation: The consumer prices inflation for 2015 was at 12.9%.

RUSSIAN REAL ESTATE INVESTMENT MARKET • During 2015, about US$2.8 billion were invested by domestic and foreign investors in Russian commercial real estate • 38% of the volume was invested in the office segment, which remains the most attractive. 25% was invested in the retail, 18% in the warehouse/industrial and 11% in hotel segments respectively (the biggest transactions were the acquisition of Hermitage Plaza by EPH, of Metropolis by PPF/Hines, Avrora Business Centre by O1 Properties, of Modny Sezon SC by Kompleksnye Investitsii, the disposal of three PNK warehouses) Investment Volume in 2015 (USD billion)

JLL*

CBRE

C&W

2.3

2.8

* JLL estimation excludes acquisitions by end-users and joint ventures

CBR key lending rate and inflation

Source: Oxford Economics Source: Rosstat, CBR, Focus Economics, C&W, JLL, CBRE

Office and Retail Markets Overview OFFICE MARKET OVERVIEW

RETAIL MARKET OVERVIEW

• The take up in 2015 demonstrated 18% growth compared to 2014. 870.4 thousand sqm of quality office premises were taken up during the year, versus 737.6 thousand sqm in 2014. The delivery of quality space amounted to 721.5 thousand sqm for the year, 45% of them being in Class A. Net absorption for the year was 87 thousand sqm.

• 9 new shopping centres were opened in Moscow during 2015 (total GLA 526 thousand sqm), the largest being Columbus (GLA 136K sqm) and Zelenopark (GLA 110K sqm).

• The vacancy rates in class A and B are high: In Class A the vacancy in was recorded at 26% (vs 28% in 2014) and in Class B at 14.8% (vs 12.8% in 2014). Vacancy in the MoscowCity submarket is estimated at 29% (CBRE).

• The vacancy rate as of the end of 2015 was at 8.3%.

• In the second half of 2015 the rents remained relatively stable. Asking rents for Class A non-prime central premises were at US$600-750 psqmpa. Asking rents for off-centre Class A office buildings were US$400-600 and for Class B $200-400. Rouble denominated rents prevail now in Class B space (for 85% of B class rent agreements signed/renewed in 2015) Key indicators Base Rent, US$ psqmpa

Base rent Class A (Prime), US$ psqmpa

Units

• Although as in 2014, some brands left the market in 20015, new brands continue to enter the market, mainly in the fashion, footwear & accessories category. • The fixed exchange rates are commonly provided to tenants, while most new leases are roubledenominated. Turnover rent with a low minimum rent is the most common lease structure.

C&W Prime rental rate indicator, US$ psqmpa

Key indicators

Units

Prime rent, US$ psqma

1,5003,220

600-800

Base rent Class A, US$ psqmpa

400-600

Base rent Class B, US$ psqmpa

200-400

Overall vacancy,% Vacancy rate, Class A, % Source: CBRE Marketview Moscow Office Q4 2015, C&W MarketBeat Q4 2015, JLL Moscow Office Market Q4 2015

(prime shopping centre gallery)

Base rent, US$ psqma

1,230

Vacancy rate,%

8.3%

17.7% 26% Source: C&W MarketBeat Q4 2015, JLL Moscow Shopping Centre Market Q4 2015 22

Residential Market Overview RESIDENTIAL MARKET MOSCOW AND MOSCOW REGION

MOSCOW:

• According to the Moscow Statistics Agency, the volume of commissioned residential construction in Moscow for 2015 amounted to 3.2 million sqm, which is 3% lower than in 2014 (the official statistics does not include “apartments”, which legally are not considered residential).

Average weighted asking price in primary residential market of “old” Moscow, by districts, end of Q4 2015 (USD/RUR ‘000 psqm)

NORTHERN USD

• Blackwood estimates that about 0.4 million sqm of “apartments” were delivered during 2015.

RUR ‘000

• At the end of Q4 2015 the supply at the Moscow primary residential market (excluding “apartments”) was about 1.9 million sqm (about 27,100 residential units), an increase of 32% compared to the end of Q3 2015.

NORTH-WESTERN

• Supply including “apartments” at the end of Q4 2015 was estimated at 2.6 million sqm, and increase of 24% vs end of Q3 2015. • By the end of December 2015 the weighted average asking price in the newly built business class residential market in Moscow amounted to 251.8 thousand roubles per sqm (US$3,449, USD/RUB = 73). Compared with the end of December 2014, prices decreased in average by 2.9% in roubles. Price decreases in the comfort class were at the level of 5.5%. MOSCOW REGION (< 30 km from MKAD):

2,612 184.9

NORTH-EASTERN USD RUR ‘000

EASTERN USD

2,969 189.0

USD RUR ‘000

WESTERN USD RUR ‘000

2,305 163.2

RUR ‘000 CENTRAL USD

4,862

RUR ‘000

344.2

3,104 219.8

2,531 179.2

SOUTH-EASTERN USD

2,013

RUR ‘000

142.5

SOUTH-WESTERN USD RUR ‘000

• At the end of Q4 2015, the primary market supply (newly built residential units) in the Moscow region amounted to about 10,181 residential units.

2,701 191.2

SOUTHERN USD RUR ‘000

2,335 165.2

• As of December 2015 the weighted average price per sqm in Moscow region was RUR83,600 (US$1,267, USD/RUB= 66) Source: Blackwood Q4 2015 Moscow Residential Market Overview Source: Blackwood Q4 2015 Moscow Residential Market Overview, Peresvet 4Q 2015 Moscow Region Primary Residential Market Overview

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