2017 IR Presentation Final by AFI Development

FY2017 IR Presentation FINANCIAL & BUSINESS RESULTS April 2018

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 13 April 2018 Mkt price GDR, as of 13 April 2018 Mkt price B share, as of 13 April 2018 NAV (Equity), as of 31 December 2017 NAV per share, as of 31 December 2017 Portfolio Value*

US$216 mln US$0.181 US$0.231 US$771 mln US$0.74 US$ 1.42 bn

BUSINESS

PORTFOLIO VALUE*

HISTORY

*Gross Asset Value of Portfolio based on JLL Valuation as of 31 December 2017 and BSV of Land Bank projects, Trading Properties and Hotels

BRAND

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

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

•Strong local and international brand

FINANCIAL STABILITY

• Liquidity position: US$106.0 million as at 31 December 2017 • Secured financing for on-going projects • 41% Debt to Total Assets ratio**

TRACK RECORD

•14 completed projects with total c. 0.6 mln sqm of space •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) Value** Plaza II, Plaza Ib

Riverside Station Berezhkovskaya

AFIMALL

GLA (excl. hotels), sqm: PLAZA SPA Kisl*

PLAZA SPA Zhel*

US$891 mn

(JLL and book value, as of 31 December 2017):

166.4K sqm

Aquamarine III

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

Paveletskaya I

H2O

Projects Under Development Value** Odinburg**

Paveletskaya II

Plaza II

KOSSINSKAYA Kossinskaya

US$513 mn

(JLL and book value, as of 31 December 2017):

Plaza Ic

B. Pochtovaya

Botanic Garden

Plaza IV

GLA, sqm:

231.6K

GSA, sqm:

730.9K

** Odinburg, Paveletskaya, Pochtovaya and Botanic Garden presented at cost value

Land Bank Yielding Projects Value (BSV):

US$4 mn

Projects under Development Completed Assets 5

Project Update. Yielding Projects SECTION 2

AFIMALL City Update

(as of December 2017) Total GBA, sqm

275.0K

 The occupancy was 89% at the end of December 2017, vs. 87% at the end of September 2017

Total GLA (shops, offices, storage), sqm

107.2K

 AFIMALL City’s performance continues to improve, reflected in increased revenue (US$59.8 million for 12M) and NOI (US$44.4 million for 12M)

89%

 A number of new retailers entered the mall during the past year including: Gulliver and Reima children goods outlets, Otto Berg men’s fashion, a large fragrance and beauty shop “Golden Apple” and Tumi travel accessories.

Occupancy

(as part of GLA total)

Parking lots

2,022

Terminal NOI (JLL est.)

US$ 81. 8 m

MV (JLL est.)

US$ 696.0 m

Loan balance as of the end of Q4, 2017

US$ 444.4 m

ITEM, US$ million (1) Revenue (2) Operating expenses (3) NOI

Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017 2016 Actual Actual Actual Actual Actual Actual 19.5 20.3 20.0 22.8 82.7 66.2 (5.2) (5.2) (5.0) (4.2) (19.6) (16.1) 14.3 15.1 15.0 18.6 63.0 50.1

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

Ozerkovskaya III (as of December 2017) Total GBA, sqm

18.8K

Total GLA, sqm

13.7K

Parking lots, units Terminal NOI (JLL)

199 US$6.3 m

MV (JLL)

US$ 63.2 m

Loan balance as of 31 December, 2017

US$ 83.4 m

• Disposal transaction for Buildings 2 and 4 for RUR7.89 billion (circa US$135 million) was successfully completed in February 2018 • The Company currently owns one remaining building, which is leased to Deutsche Bank, Brown-Forman and other tenants (current occupancy about 90%, one remaining floor is under negotiations with tenants)

• The loan to VTB Bank was fully repaid in February 2018

Yielding Properties Building

AFIMALL Ozerkovskaya III*

Berezhkovskaya

Moscow

Moscow City

CBD

Moscow

Retail

Office A

GBA, sqm

275 046

18 805

7 910

GLA, sqm

107 208

13 662

2 022

Location Class

Parking lots (total), # Ocupancy rate (31.12.2017), % NOI term., (JLL est.), US$ mn MV*, US$ mn

Tvesrkaya Plaza Ib Moscow

CBD Office & Street Office B Retail

Paveletskaya I Moscow

H2O Moscow

Aquamarine Hotel Moscow

Plaza SPA Plaza SPA Kislovodsk Zheleznov odsk Caucasus Caucasus

CBD

region

TOTAL

Office B

Hotel

2 338

16 082

10 080

8 848

25 000

11 701

437K

6 928

2 050

13 506

8 990

134 keys

193K

199

105

88%

89%

85%

83%

53%

81.8

6.3

1.9

0.6

2.5

1.8

696.0

63.2

11.9

3.6

11.8

9.9

16.3

45.6

12.0

870

159 keys

275 keys

80%**

63%**

62%**

* MV based on JLL valuation as for 31.12.2017 . Hotels presented at cost value ** The hotel occupancy is presented as average for Q4 2017

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. Development Projects SECTION 3

Odinburg Residential GBA, 831.1K sqm GSA residential, sqm 462.0K STATUS: Construction Bldg #3, Bldg #6, kindergarten of phase I SALES STATUS: Bldg #2, 3 and 6 are on sale Ownership:50%

Other 11

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). A 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-to-25 story buildings. The residential element will offer 9,419 apartments and a total sellable area of 462K sq.m (Including city share)

Ownership:50%

CONSTRUCTION STATUS and SALES

(as of December 2017) Type GBA, sqm

Residential 828.6K

GSA, sqm/GSA commercial total: 461.0/19.6K GSA resi (Phase I), sqm: 153.8K GSA resi (Phase II), sqm: 307.2K GLA commercial, sqm: 19.6K Apartments, total : 9,419 Phase 1: 2,846 • Building 1 723 • Building 2 706 • Building 3 923 Phase2: 6,573 • Building 6 224 Parking units: 4,563 Book value, US$ m (including value 100 of unsold apartments): Outstanding loan, US$ m 0

 Construction and pre-sales of apartments started in Building 3.  As of 10 April, in Building 2 676 out of 706 contracts (40.14K sqm) have been signed; for Building 3 134 out of 923 contracts (6.21K sqm) have been signed and for Building 6 134 out of 224 contracts for sales of apartments in Building 6 (7.63K sqm) have been signed  Parking lots sold: Building 2: 67 units out of 81. Building 3: 3 units out of 86. Building 6: 20 units out of 57. APARTMENTS DELIVERY

AFI Residence Paveletskaya As of December 2017 GBA (total), sqm:

135.2K

GBA (phase 1), sqm

52.9K

GBA (phase 2), sqm

51.8K

GSA (total), sqm:

79.4K

Apartments (total), amnt

549

Apartments (phase 1), amnt

175

Apartments (phase 2), amnt

270

“Special units” (total), sqm

11.4K

“Special units“ (total), amnt

187

Commercial space, sqm

17.3K

Commercial space (phase 1), sqm

6.1K

Commercial space (phase 2), sqm

1.4K

Book value, US$ m:

115.0

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. “Special units” are premises legally not zoned for housing, but are widely sold for residence (a person cannot register in this address, but the premises can be used for housing). The prices of ‘special units’ are normally lower than that of similar apartments (properly zoned housing units).

 The construction continues as planned; both phase I and phase II are under construction  As of today, contracts for 315 apartments and “special units” (out of 632) have been signed  Parking lots sold: 263 units.

Bolshaya Pochtovaya As of December 2017 GBA (total), sqm:

136.6K

GBA (phase 1), sqm

40.8K

GSA (total), sqm

84.9K

Apartments (total), amnt

626

Apartments (phase 1), amnt

187

“Special units” (total), sqm

16K

“Special units“ (total), amnt

281

Commercial space, sqm

16K

Commercial space (phase 1), sqm

8.6K

Book value, US$ m:

84.3

 The development is located in Bolshaya Pochtovaya Street, in the Central Administrative District of Moscow  The project is planned in four phases. The construction of Phase I has started in March 2017  As of 10 April 2018, contracts for 105 apartments out of 187 have been signed  Parking lots sold: 78 units

Botanic Garden As of December 2017 GBA (total), sqm:

206.4K

GBA (phase 1), sqm

138.2K

GSA (total), sqm:

119.9K

GSA (phase 1), sqm

73.9K

Apartments (total), amnt

1384

Apartments (phase 1), amnt

805

Commercial space, sqm

8.6K

Commercial space (phase 1), sqm

2.4K

Book value, US$ m:

50.4

 The development is located in Proezd Serebryakova, in the Northern Administrative District of Moscow  The project is planned in three phases. The construction of Phase I has started in March 2017.  As of 10 April 2018, 142 out of 805 contracts for sales of apartments have been signed  Parking lots sold: 81 units out of 794

Development Projects - Commercial PLAZA IC

KOSSINSKAYA

(as of December 2017) Type GBA, sqm GLA, sqm Parking

Office A 50.2K 37.0K 521 pp

Status

Ready for construction launch 66.3 mil

MV, US$

(as of December 2017) Type GBA, sqm GLA, sqm Parking MV, US$

Plaza II Plaza IV Plaza IC

Mixed use 108.5K 70.0K 1,200 pp 28.7 mil

Kossinskaya

PLAZA IV

PLAZA II

(as of December 2017)

(as of December 2017) Type

Retail

GBA, sqm GLA, sqm Parking MV, US$

22K 12.4K 44 pp 21.7 mil

Other

Type GBA, sqm GLA/GSA, sqm

Office A 108.0K 58.7/2.7K

Parking Status

1,210 pp

MV, US$

67.0 mil

Design phase

Financial update SECTION 4

Consolidated P&L

ITEM, US$ million (1) (2) (3)

Q1 2017 Q2 2017 Q3 2017 Q4 2017 Actual Actual Actual Actual

USD=59 Construction consulting/management services 0.1 Rental income 25.5 Sale of residential and trading property 21.9

2017 Actual

2016 Actual

USD=57 0.0 30.6 27.9

USD=59 0.0 29.4 7.3

USD=58 0.0 31.5 4.8

USD=58 0.2 117.0 61.8

USD=67 0.2 83.6 54.5

179.1

138.3

(4) TOTAL REVENUE

47.5

58.6

36.6

36.4

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

0.2 (12.3) (0.5) (20.3) (0.4)

0.4 (14.2) (2.6) (27.0) (1.7)

0.1 (14.1) (1.2) (6.9) 0.0

3.2 (16.5) (1.7) (4.2) (0.4)

3.8 (57.1) (6.0) (58.4) (2.4)

3.5 (38.8) (6.6) (49.5) (1.3)

(33.4)

(45.0)

(22.0)

(19.6)

(120.0)

(92.7)

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

(10) TOTAL EXPENSES (11)

Share of profit of equity-accounted investees

2.0

3.7

49.4

(12) GROSS PROFIT (LOSS)

16.1

13.6

14.6

16.7

61.0

(13)

(43.6)

42.7

(12.6)

15.5

2.0

(123.0)

(14) RESULTS FROM OPERATING ACTIVITIES

(27.5)

56.3

2.0

32.3

63.0

(73.7)

(15) (16) (17) (18) (19)

7.5 0.4 (16.5) 28.7

(0.0) 0.1 (12.9) (18.9)

(3.9)

0.2 (13.2) 6.6

0.5 (12.8) 0.6

(3.9) 7.5 1.2 (55.5) 17.0

1.8 2.1 (44.6) 63.7

12.6 (7.4)

(31.7) 24.6

(6.4) (4.4)

(11.8) 16.5

(37.3) 29.3

21.2 (50.7)

(0.5) 8.9

(1.8) (15.9)

(0.7) (2.3)

(9.9) (11.8)

(12.9) (21.1)

1.0

6.9

(7.4)

(5.2)

(4.7)

Valuation gain (loss) on investment property Profit on sale/disposal of properties/investment Profit on sale of Investment property Finance income Finance expense 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

0.6 2.2

(47.9)

Balance Sheet as of 31 December 2017 #

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

Investment property Investment property under development Property, plant and equipment Long-term loans receivable Intangible assets Total non-current assets Trading property Trading properties under construction Inventory Short-term loans receivable Trade and other receivables Current tax assets

(13) Cash, cash equivalents and tradable securities (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25) (26) (27) (28) (29) (30) (31) (32)

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

(33) TOTAL LIABILITIES (34) TOTAL EQUITY AND LIABILITIES

Change YoY 31.12.2017 30.09.2017 31.12.2016 US$ mn US$ mn US$ mn US$ mn % 818.1 1 926.1 915.3 (97.3) (11%) 163.2 2 159.9 232.9 (69.7) (30%) 77.6 77.4 31.2 46.4 149% 1.7 8.0 15.8 (14.1) (89%) 0.2 0.0 0.0 0.2 1 060.9 1 171.4 1 195.2 (134.4) (11%) 10.8 15.0 6.9 3.9 57% 3 349.7 327.6 243.3 106.4 44% 1.3 1.0 0.7 0.7 98% 1.1 (7.2) 0.0 1.1 15873% 70.4 53.8 42.4 28.0 66% (5.8) 3.5 2.5 (8.3) (328%) 106.0

67.7

16.7

89.3

535%

533.5 1 594.4

461.4 1 632.9

312.5 1 507.7

221.0 86.6

71% 6%

1.0 1763.4 (301.3) (19.3) (672.7) 771.1 (0.2) 492.5 4 42.7 12.6 547.8 86.8 4 65.1 123.8 0.0 275.6

1.0 1763.4 (305.0) (19.3) (667.5) 772.6 (0.1) 48.3 31.1 12.1 91.5 647.0 40.9 81.1 0.0 769.0

1.0 1763.4 (311.3) (9.2) (667.8) 776.1 (3.8) 627.1 14.9 10.5 652.5 0.7 31.0 51.3 0.0 83.0

(0.0) (0.0) 10.0 (10.1) (4.9) (5.0) 3.7 (134.6) 27.7 2.2 (104.7) 86.0 34.1 72.5 0.0 192.6

(0%) (0%) (3%) 110% 1% (1%) (96%) (21%) 186% 21% (16%) 11489% 110% 141% 232%

823.4

860.5

735.5

88.0

12%

1 594.4

1 632.9

1 507.8

86.6

Notes: 1. Investment property decreased following the disposal of two buildings at Ozerkovskaya III 2. Investment property under development increased due to reclassification of Bolshaya Pochtovaya to Trading property under development following launch of construction 3. Trading property under construction increased due to launch of construction at Bolshaya Pochtovaya, Botanic Garden (reclassification) and incurred construction cost

4. As of 31 December 2017, the AFIMALL and the Ozerkovskaya loans were still under the Short-term loans category. In Q1 2018 the AFIMALL City loan was reclassified back to long-term borrowing after successful restructuring, while the Ozerkovksya III loan was fully repaid.

Loans and cash position as of 31 December 2017  Gross balance of the bank loan portfolio (as of 31 December 2017) – US$579.0 million  Total cash balance and deposits (as of 31 December 2017) – US$106.0 million (including marketable securities)

Project

Bank

Historical debt limit

Balance as of 31 Dec, 2017, (US$ mn)

Available (US$ mn)

Nominal Interest rate

Currency

167.5

9.5%

RUB

276.9

3m Libor + 5.02%

USD

444.4

7.3% 3m Libor + 8% from 24.01.15 to 20.03.15 3m Libor + 7% from 21.03.15 to 26.01.18

VTB AFIMALL

RUR 21 bn VTB

TOTAL AFIMALL

Maturity

01.04.2018

Ozerkovskaya III

VTB

$220 mn

83.4

Kislovodsk #1 Kislovodsk #2 Zheleznovodsk TOTAL/AVERAGE RATE

VTB VTB VTB

$22.5 mn $11.6 mn $18.4 mn

21.4 11.5 18.2 579.0

0 0 0

3m Libor + 4.5% 5.5% 5.5% 7.4%

USD

26.01.2018

USD USD USD

22.02.2022 20.09.2022 20.09.2022

Financial covenants Ozerkovskaya III: Following execution of addenda to loan agreements in September 2016, the covenants in the Ozerkovskaya III facility (the LTV covenant and the DSCR covenant) were removed. Kislovodsk #1, Kislovodsk #2 and Zheleznovodsk: 1) EBITDA/((Interest rate (LTM) + Debt (last reporting date)): >=0.15X; 2) Projected DSCR: =>1.2x; 3) Positive value of net assets 20

Gross/Net Asset Value PROJECT

Book Value

Book Value Bank Loan

Net Company Share

30.09.2017

31.12.2017

671 12 12 9 199 4 20 926 66 65 28 0

696 12 12 10 63 4 22 818 66 67 29 1

(444)

252 12 12 10 (20) 4 22 290 66 67 29 1

TOTAL INVESTMENT PROPERTY UNDER DEVELOPMENT:

160

163

Ozerkovskaya Phase II (26) Odinburg Aquamarine Hotel Plaza SPA Zheleznovodsk Pyatigorskaya (Park Plaza Kislovodsk) Plaza Spa Kislovodsk TOTAL PROPERTY PLANT AND EQUIPMENT: Odinburg Botanic Garden Paveletskaya II Bolyshaya Pochtovaya

2 13 15 16 12 4 45 76 104 42 103 79

2 9 11 16 12 4 45 77 100 50 115 84

TOTAL TRADING PROPERTY UNDER DEVELOPMENT:

328

350

1 505

1 419

(579)

840

AFI Mall Berezhkovskaya (100%) Paveletskaya I Plaza H20 Ozerkovskaya III Plaza Ib Plaza II TOTAL INVESTMENT PROPERTY: Plaza Ic Plaza IV (100%) Kossinskaya Starokaluzhskoye shosse

TOTAL TRADING PROPERTY:

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

TOTAL EQUITY:

(83)

(528)

0 (18) (33) (51) 0

Loans To Assets Value = 41% (LTV ratio) Loans To Equity (LTE ratio)

= 75%

163 2 9 11 16 (6) 4 12 26 100 50 115 84

106 (43) (132)

771

Market Update SECTION 5

Macro Overview and RE Investment Market RUSSIAN MACROECONIMIC OVERVIEW • Russian economic growth: OECD projects the 2017 GDP growth at +1.86%, and 1.93% for 2018. • Exchange rates: In Q4 2017, the spot rouble exchange rate fluctuated between 57.2 and 60.2 for US$1, with a strengthening trend towards the year end. The rate at 31.12.2017 was RUR57.60 (vs. RUR58.02 on 30.09.2017). • The Central Bank of Russia (“CBR”), has been gradually reducing its key lending rate. At its recent March meeting the rate was reduced to 7.25%. The key argument of the CBR is lower than planned inflation. At the same time the Central Bank seemingly opposes drastic reductions.

• Inflation: The consumer prices inflation in February 2018 was quite low at 2.2% (annualised), well below the CBR target of 4.0% (the official CBR figure for 2017 was 3.2%).

Consumer Price Inflation forecasts

RUSSIAN REAL ESTATE INVESTMENT MARKET • During 2017, about US$4.6 billion (JLL) were invested in Russian commercial real estate (9% decrease year-on-year). • According to JLL, in 2017 40.3% of the volume were invested in the retail segment, 33.5% in office and 14.2% in hotels and warehouses. 83.2% of the invested capital was of Russian origin. • The biggest transactions during year were the disposal of the Immofinanz Moscow retail portfolio to Fort Group (EUR901 million), disposal of the shopping centre “Gorbushkin Dvor” in Moscow to a Russian private investor (the transaction is estimated at EUR445 million) and the sale of Vozdvizhenka BC (“Voentorg”) to Fosun Group and Avica Management Co. (estimated at RUR10 billion) Investment Volume in 2017 (USD billion)

JLL 4.6

CBRE

C&W

4.9

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

Source: CBR, RBC, OECD, C&W 23

Source: C&W, JLL, CBRE

Office and Retail Markets Overview OFFICE MARKET OVERVIEW

RETAIL MARKET OVERVIEW

• The take up in 2017 was 1,278K sqm (JLL) The take up was led by the financial sector, business services and manufacturing. 408K sqm of new office space has been delivered in 2017, (compared to 317K sqm delivered in 2016)

• Three new shopping centres were open in 2017: Vegas Kuntsevo (113.4K sqm GLA), Vidnoe Park (24K sqm GLA) and the retail zone of Fili Grad (12K GLA). The completions in 2017 were the lowest in the past five years.

• The vacancy rates in class A and B slowly decrease: According to JLL, in Class A the vacancy was recorded at 16.5% (vs 18.9% in 2016) and in Class B at 12.9% (vs 13.5% in 2016). Overall vacancy was 13.8%.

• 49 new international brands entered the market in 2017. Most of these brands were in luxury and premium apparel and jewelry. At the same time, some known brands left the market in 2017: Debenhams, C&A, Accesorize and Mexx among them.

• In Q4 2017 the rents remained relatively stable. Asking rents for Class A non-prime central premises were at US$600-750 psqmpa. Asking rents for Class A office buildings were US$420700 and for Class B $210-440. Rouble denominated rents continue to prevail, with Class B working almost exclusively in roubles.

Base Rent, US$ psqmpa

Key indicators (JLL)

Units

Base rent Class A (Prime), US$ psqmpa

600-750

Base rent Class A, US$ psqmpa

420-700

Base rent Class B, US$ psqmpa

210-440

• The vacancy rate across Moscow shopping centres as of the end of Q4 2017 was at 6.2% (JLL). • Turnover rent with a low minimum rent continues to be the most common lease structure. Fixed exchange rates are commonly provided to tenants whose leases are foreign currency denominated.

C&W Prime rental rate indicator, US$ psqmpa

Key indicators (JLL)

Units

Prime rent, RUR psqma (prime shopping

195,000

centre gallery)

Overall vacancy,%

13.8%

Vacancy rate, Class A, %

16.5%

Source: JLL, C&W

Average rent, RUR psqma

74,000

Vacancy rate,%

Source: JLL, C&W

6.2%

Residential Market Overview RESIDENTIAL MARKET MOSCOW AND MOSCOW REGION

Average weighted asking price in primary residential market of “old” Moscow, by districts, end of Q4 2017 (RUR psqm)

MOSCOW:

• At the end of Q4 2017 the supply on the “Old Moscow” primary residential market (excluding “apartments”) was about 2.84 million sqm (about 43,600 residential units), about the same level as at the end of Q3 2017. The supply in “New Moscow” was about 410.3 thousand sqm, a 12.8% decrease vs Q3 2017 (data by Miel Real Estate).

• By the end of Q4 2017 the weighted average asking price in the newly built business class residential market in Moscow amounted to RUR247,500 psqm (US$4,342, USD/RUB = 57). Compared with the end of Q3 2017, the average prices increased by 1.7% in roubles. In the comfort class the weighted average asking price was RUR153,900 psqm (US$2,700, USD/RUB = 57). MOSCOW REGION:

North North-East

East North-West

Central West

• At the end of Q4 2017, the primary market supply (newly built residential units) in the Moscow region amounted to 2.6 million sqm (a decrease of 7.1% vs end of Q3 2017, according to Miel Real Estate). • In Q4 2017 the weighted average price per sqm in the Moscow region was RUR85,000 (US$1,491, USD/RUB = 57), a 0.6% decrease in roubles compared to end of Q3 2017 (data by Miel Real Estate).

Source: Miel Real Estate

South-East

South South-West

Source: NDV Real Estate 2 5