Q1 2019 IR Presentation final

Q1 2019 IR Presentation FINANCIAL & BUSINESS RESULTS May 2019

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.

2

Company Overview SECTION 1

AFI Development at a glance Market Cap, as of 27 May 2019 Mkt price GDR, as of 27 May 2019 Mkt price B share, as of 27 May 2019 NAV (Equity), as of 31 March 2019 NAV per share, as of 31 March 2019 Portfolio Value*

US$182 mln US$0.170 US$0.177 US$780 mln US$0.74 US$ 1.26 bn

BUSINESS

PORTFOLIO VALUE*

HISTORY

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

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

FINANCIAL STABILITY

• Liquidity position: US$137.5 million as at 31 March 2019 • Secured financing for on-going projects • 40% 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

*Gross Asset Value of Portfolio based on JLL’s confirmation of their Valuations as of 31 March 2019 and BSV of Land Bank projects, Trading Properties and Hotels

• Substantial income generating portfolio.

Major project AFIMALL City BRAND

•Strong local and international brand

PORTFOLIO

• Four residential projects in active construction and marketing stage

• 8 Development Projects & land bank ** Bank loans only

4

Key Projects in Moscow Yielding Projects (retail, offices and hotels) Value, US$ mil**

BOTANIC GARDEN

Plaza II, Plaza Ib

Riverside Station Berezhkovskaya

AFIMALL

PLAZA SPA Kisl*

PLAZA SPA Zhel*

Aquamarine III

Aquamarine Htl

Paveletskaya I

H2O

791.2

(JLL and book value, as of 31 March 2019):

GLA (excl. hotels), sqm:

151.2K

* Outside of Moscow * * Hotels presented at cost value

Projects Under Development PLAZA IV PLAZA II PLAZA IC AFIMALL

BEREZHKOVSKAYA

FOUR WINDS

BOLSHAYA POCHTOVAYA

Value, US$ mil**

AQUAMARINE PAVELETSKAYA I H2O PAVELETSKAYA II

KOSSINSKAYA

Odinburg**

Paveletskaya II

Kossinskaya

Plaza Ic

Plaza IV

ODINBURG

Botanic Garden

B. Pochtovaya

445.0

(JLL and book value, as of 31 March 2019):

GLA, sqm:

218.7K

GSA, sqm:

743.2K

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

Land Bank Yielding Projects

4

Value (BSV), US$ mil:

Projects under Development Completed Assets

Other

5

Project Update. Yielding Projects SECTION 2

AFIMALL City Update

(as of March 2019) Total GBA, sqm

274.9K

Total GLA (shops, offices, storage), sqm

107.0K

Occupancy

(as part of GLA total)

Parking lots Terminal NOI (JLL est.)

90%

 The occupancy decreased marginally to 90% at the end of March 2019, vs 92% at the end of December 2018, due to lease expirations of some tenants  The AFIMALL’s revenue for the 3 months was US$21.7 million, while the NOI was US$16.6 million

2,022 US$ 76.8 m

MV (JLL est.)

US$ 637.3 m

Loan balance as at 31 March, 2019

US$ 462.0 m

ITEM, US$ million

Q1 2019 Q1 2018 Actual Actual USD=66

(1) Revenue (2) Operating expenses (3) Net Operating Income (NOI)

USD=57

21.7 (5.1) 16.6

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

22.1 (5.4) 16.8

7

Yielding Properties Building

AFIMALL Ozerkovskaya III*

Berezhkovskaya

Moscow

Moscow

Moscow City

CBD

Moscow

Retail

Office A

Office B

GBA, sqm

274 877

18 759

7 910

GLA, sqm

107 036

13 662

2 022

Location Class

Parking lots (total), # Ocupancy rate (31.03.2019), % NOI term., (JLL est.), US$ mn MV*, US$ mn

Moscow

Tvesrkaya Plaza Ib Moscow CBD Office & Street Retail

Paveletskaya I Moscow

H2O Crown Plaza Tretyakovska ya Moscow Moscow

Plaza SPA Plaza SPA Kislovodsk Zheleznovodsk

TOTAL

Caucasus Caucasus region region

CBD Office B

Office B

Hotel

Hotel

Hotel

2 338

16 082

9 002

8 848

25 000

11 701

374K

6 928

2 050

13 506

8 012

134 keys

151K

199

105

-

102

16

15

90%

100%

86%

83%

1%

68%

67%

76.8

6.9

1.6

0.6

2.1

1.3

-

-

-

89

637.3

57.4

10.0

3.4

9.5

7.0

13.9

42.4

10.3

791

159 keys

275 keys

**

46

14

64% **

67%**

* MV based on JLL’s confirmation of their valuations as of 31.03.2019. Hotels presented at cost value ** The hotel occupancy is presented as average for Q1 2019

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

8

Project Update. Development Projects SECTION 3

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 friendly 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 461K sq.m (Including city share)

Ownership:50%

CONSTRUCTION STATUS AND SALES As of March 2019 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 GSA commercial, sqm: 19.6K Apartments, total : 9,419 Phase I: 2,846 • Building 1 723 • Building 2 706 • Building 3 923 Phase II: 6,573 • Building 6 224 • Building 3 1329 Parking units: 4,563 Book value, US$ m (including value 88.8 of unsold apartments):

 Construction and pre-sales of apartments are ongoing in Buildings 3 (Phase I) and Building 3 (Phase II)  Construction works and pre-sales of Building 3 (Phase II) are ongoing  Builging 6 was delivered in May 2019, transfer of apartments to

customers is ongoing  As of 20 May 2019, at Building 3 (Phase I) 719 out of 923 contracts have been signed; for Building 3 (Phase II) 26 out of 1329 contracts have been signed and for Building 6 211 out of 224 contracts have been signed  Parking lots sold: Building 3: 46 units out of 86. Building 3 (Phase II): 4 units out of 416. Building 6: 53 units out of 57.

10

AFI Residence Paveletskaya As of March 2019 GBA (total), sqm:

140.5K

GBA (phase I), sqm

52.9K

GBA (phase II), sqm

54.3K

GSA (total), sqm:

79.4K

Apartments (total), amnt

549

Apartments (phase I), amnt

175

Apartments (phase II), amnt

270

“Special units” (total), sqm

11.7K

“Special units“ (total), amnt

187

Commercial space, sqm

17.3K

Commercial space (phase I), sqm

5.9K

Commercial space (phase II), sqm

1.4K

Book value, US$ m (including value of unsold apartments):

52.9

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).

 Phase I has been fully delivered and apartments have been transferred to customers, while sales of completed apartments continue Phase II was delivered in May 2019, transfer of apartments to customers is ongoing Phase III is under construction and presales As of 20 May 2019, contracts for 381 apartments and 186 “special units” out of 632 total units have been signed . Parking lots sold: 463 units 11

Bolshaya Pochtovaya As of March 2019 GBA (total), sqm:

138.8K

GBA (phase I), sqm

43.5K

GBA (phase II)

36.9K

GSA (total), sqm

84.8K

Apartments (total), amnt

626

Apartments (phase I), amnt

187

Apartments (phase II), amnt

219

Apartments (phase III), amnt

220

“Special units” (total), sqm

16K

“Special units“ (total), amnt

280

Commercial space, sqm

16K

Commercial space (phase I), sqm

8.4K

Book value, US$ m:

82.1

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. 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 apartment purchasers.

 The development is located in Bolshaya Pochtovaya Street, in the Central Administrative District of Moscow  The project is constructed in four phases. The construction of Phase I has started in March 2017. Phases II and III are currently also under construction.

Marketing and sales at Phase III started in Q1 2019.  As of 20 May 2019, contracts for 274 apartments out of 626 (Phase I and II, III) have been signed.  Parking lots sold: 167 units

12

Botanic Garden As of March 2019 GBA (total), sqm:

206.8K

GBA (phase 1), sqm

138.7K

GSA (total), sqm:

118.0K

GSA (phase 1), sqm

71.8K

Apartments (total), amnt

1384

Apartments (phase 1), amnt

805

Commercial space, sqm

6.9K

Commercial space (phase 1), sqm

6.2K

Book value, US$ m:

79.3

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. 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 apartment purchasers.

 The development is located in Proezd Serebryakova, in the Northern Administrative District of Moscow  The project is developed in two phases. The construction of Phase I has started in March 2017 As of 20 May 2019, 355 out of 805 contracts for sales of apartments have been signed Parking lots sold: 154 units out of 542

13

Revenue recognition in residential projects

The revenue from the sales of trading properties was calculated in accordance with IFRS 15. The revenue was recognised from pre-sales in the Odinburg, AFI Residence Paveletskaya, AFI Residence Pochtovaya and Botanic Garden projects, taking into account the degree of construction: REVENUE FROM RESIDENTIAL SALES

Sqm, as per registered contracts Revenue recognised, US$ '000 Cost recognised, US$ '000 Gross profit, US$ '000

Q1 2019 23 391 62 477 (44 002) 18 475

Deferred tax liability, US$ '000

(3 695)

Net profit, US$ '000

14 780

Net profit margin, %

24%

14

Development Projects - Commercial PLAZA IC

KOSSINSKAYA

(as of March 2019) Type GBA, sqm GLA, sqm Parking

Office A 50.2K 40.0K 216 pp

Status

Construction started in Q1 2019 61.1 mil

MV, US$

(as of March 2019) Type GBA, sqm GLA, sqm Parking MV, US$

Plaza II Plaza IV Plaza IC

Mixed use 108.5K 70.0K 1,200 pp 25.7 mil

Kossinskaya

PLAZA IV

PLAZA II

(as of March 2019) Type

Retail

GBA, sqm GLA, sqm Parking MV, US$

22K 12.4K 44 pp 18.0 mil

Other

(as of March 2019) Type Office A GBA, sqm 90.5K GLA/GSA, sqm 75.3K Parking 391 pp Status Construction started in Q2 2019 MV, US$ 54.0 mil

Financial update SECTION 4

Consolidated P&L Q1 2019

Q1 2018

USD=66 Construction consulting/management services 0.1 Rental income 31.4 Sale of residential and trading property 62.5

USD=57 0.0 31.5 17.9

ITEM, US$ million

(1) (2) (3)

(4) TOTAL REVENUE

94.0

49.4

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

0.8 (14.6) (0.7) (43.9) (0.3)

0.2 (15.8) (1.4) (17.6) (0.3)

(59.6)

(35.1)

-

-

(12) GROSS PROFIT (LOSS)

35.2

14.6

(13)

(34.6)

(4.0)

0.6

10.6

2.0 (6.9) 10.0

0.4 (10.6) 6.2

(18) Net finance income/(costs) (19) PROFIT BEFORE INCOME TAX

5.1 5.7

(4.1) 6.5

(20) (21)

(1.6) 2.0

(1.0) (0.4)

6.1

5.1

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 Valuation gain (loss) on investment property

(14) RESULTS FROM OPERATING ACTIVITIES (15) (16) (17)

Finance income Finance expense FX Gain/( Loss)

Current income tax Deferred income tax

(22) PROFIT (LOSS) FOR THE PERIOD

17

Balance Sheet as of 31 March 2019 Unaudited #

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15)

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

(16) Cash, cash equivalents and tradable securities (19) (20) (21) (22) (23) (24) (25) (26) (27) (28) (29) (30) (31) (32) (33) (34) (35) (36) (37) (38) (39)

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 Long-term lease liabilities Total non-current liabilities Short-term loans and borrowings Trade and other payables Advances receivable Income tax payable Short-term lease liabilities Total current liabilities

(40) TOTAL LIABILITIES (41) TOTAL EQUITY AND LIABILITIES

Audited

31.03.2019 31.12.2018 US$ mn US$ mn 746,4 742,6 147,5 141,9 71,5 67,9 2,3 2,8 0,1 0,1 0,3 0,2 5,2 5,2 7,8 0,0 981,1 960,7 18,6 19,1 285,9 278,8 1,0 1,1 0,6 0,6 54,5 54,6 3,6 4,4

0

0

Change to year-end US$ mn % 3,8 1% 5,6 4% 3,6 5% (0,5) (18%) 0,0 1% 0,0 11% 0,0 0% 7,8 n/a 20,4 2% (0,5) (3%) 7,1 3% (0,1) (9%) 0,0 8% (0,0) (0%) (0,8) (18%)

137,5

100,2

37,3

37%

501,9 1 482,9

458,8 1 419,4

43,1 63,5

9% 4%

1,0 1763,4 (340,3) (19,3) (624,3) 780,6 (0,0) 487,6 51,5 13,0 17,5 569,6 17,1 46,6 64,2 0,3 4,7 132,8

1,0 1763,4 (371,7) (19,3) (627,3) 746,1 (0,1) 487,3 54,8 12,0 554,1 16,4 37,4 65,4 0,0 0,0 119,3

0,0 0,0 31,4 0,0 3,1 34,4 0,0 0,3 (3,3) 1,0 17,5 15,5 0,6 9,2 (1,3) 0,3 4,7 13,6

(8%) (0%) (0%) 5% (26%) 0% (6%) 9% n/a 3% 4% 25% (2%) 652% n/a 11%

702,4

673,3

29,1

4%

1 482,9

1 419,4

63,5

4% 18

Loans and cash position as of 31 March 2019  Gross balance of the bank loan portfolio (as of 31 March 2019) – US$504.4 million  Total cash balance and deposits (as of 31 March 2019) – US$137.5 million (including marketable securities)

Project

Bank

Historical debt limit

VTB AFIMALL

Balance as of 31 March 2019, (US$ mn)

Available (US$ mn)

Nominal Interest rate

Currency

145.1

0

CB Key Rate + 0,75% (8,5%)

RUB

316.9

0

4.2%

EUR

RUB 36.5 bn VTB

TOTAL AFIMALL

Maturity

27.12.2022 462.0

5.6%

Kislovodsk #1*

VTB

EUR 18.6 mn

13.7

0

4.2%

EUR

21.02.2022

Kislovodsk #2*

VTB

EUR 10.3 mn

11.1

0

4.2%

EUR

20.09.2022

Zheleznovodsk*

VTB

EUR 16.3 mn

17.7

0

4.2%

EUR

20.09.2022

TOTAL/AVERAGE RATE

504.4

5.4%

* In May 2019 the Company repaid EUR35 million under the three Sanatoria loans, their combined remaining balance is currently EUR 2.96 million

Financial covenants Kislovodsk #1, Kislovodsk #2 and Zheleznovodsk: 1) EBITDA/((Interest (LTM) + Debt (last reporting date)): >=0.15X; 2) Projected DSCR: =>1.2x; 3) Positive value of net assets AFIMALL City:

1) Projected DSCR and Actual DSCR: =>1.20x; 2) Positive value of net assets; 3) Total amount of CAPEX should not be higher than EBITDA for the current quarter 19

Gross/Net Asset Value PROJECT

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 INVESTMENT PROPERTY UNDER DEVELOPMENT: Ozerkovskaya Phase II (26) Odinburg Paveletskaya II TOTAL TRADING PROPERTY: Crowne Plaza Tretyakovskaya Hotel Plaza SPA Zheleznovodsk Pyatigorskaya (Park Plaza Kislovodsk) Plaza Spa Kislovodsk TOTAL PROPERTY PLANT AND EQUIPMENT: Odinburg Botanic Garden Paveletskaya II Bolyshaya Pochtovaya TOTAL TRADING PROPERTY UNDER DEVELOPMENT:

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

TOTAL EQUITY:

Book Value Book Value

Bank Loan

31.12.2018 31.03.2019 637 637 10 10 10 10 7 7 57 57 3 3 18 18 743 743 61 61 54 54 26 26 1 1

31.03.2019 (462)

(462)

0

Net Company Share 31.03.2019 175 10 10 7 57 3 18 281 61 54 26 1

142

142

1 3 15 19 13 10 4 41 67 87 78 38 76

1 3 14 19 14 10 4 42 70 86 79 38 82

279

286

0

286

1 249

1 259

(504)

755 138 (51) (60) 781

0 (18) (25) (42)

Loans To Assets Value = 40% (LTV ratio) Loans To Equity (LTE ratio)

= 65%

142 1 3 14 19 14 (7) 4 18 28 86 79 38 82

20

Market Update SECTION 5

Macro Overview and RE Investment Market RUSSIAN MACROECONIMIC OVERVIEW • Russian economic growth: The Russian economy is expected to grow at moderate rates. OECD estimated 2018 GDP growth at 1.63% with 2019 forecast at 1.46%.

• Exchange rates: In Q1 2019, the rouble strengthened versus the dollar, from 69 in the beginning of January to the minimum of 63.87 in March. The rate at 31.03.2019 was RUR64.73 (vs.

RUR69.47 on 31.12.2018).

• The Central Bank of Russia (“CBR”) has been keeping its key lending rate at 7.75% since December 2018, aiming at lowering inflation to its target levels.

• Inflation: The consumer prices inflation in March 2019 was 5.1% (annualised), against the CBR target of 4.0%. CBR expects the inflation to reach this target in H1 2020.

RUSSIAN REAL ESTATE INVESTMENT MARKET • In Q1 2019, US$979 million (JLL), including land plots for residential development, were invested in Russian real estate (a 32% increase y-o-y), largely due to postponed completions of a number of 2018 transactions.

• According to JLL, in Q1 2019, 39% were invested in the office segment, 26.9% were invested in residential projects (land plots and development rights) and 22.1% in retail. 80% of the invested capital was of Russian origin.

Estimated Forecasted Investment Volume in 2019 (USD billion)

JLL*

CBRE

C&W*

3.5

3.8

2.8

* JLL estimate excludes acquisitions by end-users and joint ventures. C&W excludes residential transactions

Consumer Price Inflation forecasts

Source: CBR, RBC, OECD, C&W, Interfax 22

Source: C&W, JLL, CBRE

Office and Retail Markets Overview OFFICE MARKET OVERVIEW

RETAIL MARKET OVERVIEW

• New supply in Q1 2019 amounted to 27K sqm of new space in classes A and B combined (compared to 37K sqm delivered in Q1 2018, data by C&W).

• The take up in Q1 2019 was about 377K sqm (C&W), a 21% decrease year-on-year. The take up was led by banks, statecontrolled companies and IT. The vacancy rates in class A and B continue to decrease: According to JLL, in Class A the vacancy was recorded at 10,5% in Q1 2019 (vs 14.2% in Q1 2018) and in Class B at 9.8% (vs 12.6% in Q1 2018). Overall vacancy was 10.0% (vs 13.1% in Q1 2018).

• The rents in Q1 2019 remained relatively stable. Asking rents for Class A prime central premises were at US$600-750 psqmpa. Asking rents for Class A office buildings were 24 to 40 thousand RUR psqmpa, for Class B 8 to 25 thousand RUR psqmpa. Rouble denominated rents continue to prevail, with Class B working exclusively in roubles. Dollar denominated transactions accounted for 8.8% of all transactions during Q1 2019 (C&W).

Base Rent, US$ psqmpa

Key indicators (JLL)

Base rent Class A (Prime), US$ psqmpa

Units

• No new shopping centres were opened Moscow in Q1 2019. However, about 315K sqm of new space is planned for 2019. The development activity in the sector remains at historically lowest levels.

• Only 4 new brands entered the market in Q1 2019. Most of these brands were in the fashion, footwear and cosmetics segments. 4 international retailers have left the market during the period.

• The vacancy rate across Moscow shopping centres as of the end of Q1 2019 was at 4.3% (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

600-750

Base rent Class A, ‘000 RUR psqmpa

24-40

Base rent Class B, ‘000 RUR psqmpa

8-25

centre gallery)

Overall vacancy,%

10.0%

Vacancy rate, Class A, %

10.5%

Source: JLL, C&W

Average rent, RUR psqma

74,000

Vacancy rate,%

Source: JLL, C&W

4.3% 23

Residential Market Overview RESIDENTIAL MARKET MOSCOW AND MOSCOW REGION

Average weighted asking price in primary residential market of “old” Moscow, by districts, end of Q1 2019 (RUR psqm)

MOSCOW:

• At the end of Q1 2019, the supply of the “Old Moscow” primary residential market (excluding “apartments”) was about 2.53 million sqm (about 39 500 residential units), a 3.2% decrease compared to the end of Q4 2018 (data by Miel Real Estate).

• By the end of Q1 2019 the weighted average asking price in the newly built business class residential market in Moscow amounted to RUR246,500 psqm (US$3,735, USD/RUB = 66).

Compared with the end of Q4 2018, the average prices decreased by 0.2% in roubles. In the mass segment the weighted average asking price was RUR135,900 psqm (US$2,059, USD/RUB = 66) (data by Miel Real Estate).

North North-East

East North-West

Central

MOSCOW REGION:

• As of end of Q1 2019 the weighted average price per sqm in the Moscow region was RUR82,800 (US$1,254, USD/RUB = 66), (data by Azbuka Zhilya).

Source: Metrium Group, IRN, Azbuka Zhilya

West

South-East

Source: NDV Real Estate 2 4