Valuation Report PO-17/2015

A portfolio of real estate assets in St. Petersburg and Leningradskaya Oblast', Moscow and Moskovskaya Oblast’, Yekaterinburg, Russia

Prepared on behalf of LSR Group OJSC

Date of issue: March 17, 2016

Contact details

LSR Group OJSC, 15-H, liter Ǩ, Kazanskaya St, St Petersburg, 190031, Russia Ludmila Fradina, Tel. +7 812 3856105, [email protected]

Knight Frank Saint-Petersburg ZAO, Liter A, 3B Mayakovskogo St., St Petersburg, 191025, Russia Svetlana Shalaeva, Tel. +7 812 3632222, [email protected]

Valuation report Ň A portfolio of real estate assets in St. Petersburg and Leningradskaya Oblast', Moscow and Moskovskaya Oblast’, Yekaterinburg, Russia Ň KF Ref: PO-17/2015 Ň Prepared on behalf of LSR Group OJSC Ň Date of issue: March 17, 2016 Page 1

Executive summary

The executive summary below is to be used in conjunction with the valuation report to which it forms part and, is subject to the assumptions, caveats and bases of valuation stated herein. It should not be read in isolation.

Location The Properties within the Portfolio of real estate assets to be valued are located in St. Petersburg and Leningradskaya Oblast', Moscow, Yekaterinburg, Russia

Description The Subject Property is represented by vacant, partly or completely developed land plots intended for residential and commercial development and commercial office buildings with related land plots.

Areas Ɣ Buildings – see the Schedule of Properties below

Ɣ Land plots – see the Schedule of Properties below

Tenure Ɣ Buildings – see the Schedule of Properties below

Ɣ Land plots – see the Schedule of Properties below

Tenancies As of the valuation date from the data provided by the Client, the office properties are partially occupied by the short-term leaseholders according to the lease agreements.

Valuation Ɣ Commercial Properties. We’ve analysed both the office real estate market of St. considerations Petersburg and Moscow in general and the competitive environment of the Projects particularly to determine the market rental, vacancy and capitalization rates and OPEX for the Properties. We used this information to compare it with the data provided by the Client and to calculate the market rents after the lease expires if the current rent does not correspond to the market. Furthermore we’ve analysed the supply of the similar properties for sale. Thus the value was determined by reference to observable prices.

Ɣ Residential Properties. We’ve analysed both the residential real estate market of St. Petersburg and Leningradskaya Oblast’, Moscow, Yekaterinburg in general and the competitive environment of the Projects particularly to determine market prices, sales pace per quarter, price growth due to the inflation and project completion and construction costs. We used this information to compare it with the data provided by the Client and to calculate the market sales prices if the current prices do not correspond to the market. We assumed that sale prices information provided by the Client refers to the current average prices for the appropriate unit (apartment (per unit), office or retail space (per sq. m) or parking lot (per unit)) as if the property was

commissioned at the valuation date.

Ɣ We used CPI forecast of Ministry of Economic Development of Russian Federation to index the construction costs.

Ɣ Residential Properties. We’ve analysed average residential prices dynamics by classes and extrapolated it on indexing the income from sales.

Ɣ All the general comments set out in this report refer to all the Properties within the portfolio if only special assumption is not provided.

Ɣ To the Tax Code of Russian Federation residential development performed by contractors is not subject to VAT excluding commercial and parking construction in case of charging VAT from selling prices. Thus VAT paid on construction and other development costs can be offset only proportionally to the costs incurred in non- residential construction. Commercial properties are subject to VAT in full (long-term leasehold of the land plot) or in respect of the price apportioned to the building (freehold of the land plot) if only the owner’s company is not using Simplified Tax System. Thus we have assumed that all development costs and prices provided by the Client include VAT (where applicable). In our value calculations we applied cash flows including VAT.

Ɣ More detailed valuation considerations for the particular Properties within the portfolio are expressed in the description placed in the attachments to the report.

Valuation date Date of issue: March 17, 2016.

Market Value 136,037,713,000 (One Hundred Thirty-Six Billion Thirty-Seven Million Seven Hundred (Fair Value), Thirteen Thousand) RUB. rounded

Key assumptions Ɣ The Subject Property is represented by vacant, partly or completely developed land plots intended for residential (residential premises) and commercial (apartments) development (hereinafter referred to as “Residential Properties”) and by commercial office buildings with related land plots (hereinafter referred to as “Commercial Properties”). It is assumed that the buildings under construction will be completed in accordance with the identified plans and specification provided by the Client.

Ɣ We have been provided with the Properties’ title information by the Client. Nevertheless we have not been provided with all the ownership certificates and land long-term lease agreements to verify it. Thus, in our valuation, we have assumed a good and marketable freehold (to the land plots and buildings) or long-term leasehold (to the land plots) title and that all documentation is satisfactorily drawn.

Ɣ Several legal entities are the owners of the Properties within the portfolio. The Client has informed us that all these legal entities belong to LSR Group OJSC. Thus we assume that

100% ownership of LSR Group OJSC is to be valued.

Ɣ To the title documents provided by the Client, part of the Properties is either the shared ownership or leasehold. For a shared ownership we assume it is the share of freehold tenure of the Client in all the properties to be assessed. For leasehold property we assume it is freehold tenure of the improvements and leasehold of the land to be assessed.

Ɣ We assume that all the utilities (heating, cold and hot water, electricity, sewerage / drainage and telecommunications) are available to the Property at the site borders.

Ɣ We assume that public and social (including school) facilities for the future development are sufficient.

Ɣ We have adopted the Developer’s estimate of project costs (project budget) within our assessment.

Ɣ Development project costs provided by the Client consist of already incurred and estimated outstanding costs. Since we provide our opinion on the value as of the valuation date, in our calculations we have adopted only estimated outstanding costs.

Ɣ Residential Properties. Sales proceeds provided by the Client consist of anticipated income from already sold but unpaid units and estimated income from the unsold units. In our DCF calculations we have adopted only income estimated from the unsold units. We assumed that a hypothetic potential purchaser of the Property would normally be entitled to all the Property rights including claim rights for the payment for sold unpaid units. Thus, we have added anticipated income from already sold but unpaid units to the NPV.

Ɣ We have assumed construction period in accordance with the Developer’s envisaged timetable when in our opinion this timetable complied with construction periods witnessed at developments of a comparable scale. Otherwise our knowledge of similar developments suggested a construction period allowance of approximately 1 year (per phase if applicable).

Ɣ Residential Properties. We have assumed construction phasing in accordance with the Client’s envisaged phasing. In the absence of construction phasing information provided by the Client, we have adopted the most probable market construction phasing. We assumed 100,000 – 200,000 sq. m of buildings constructed within 1 phase.

Ɣ If a whole portfolio, or a substantial number of properties within it, were to be placed on the market at the same time, it could effectively flood the market, leading to a reduction in values. Conversely, the opportunity to purchase a particular group of properties might produce a premium. In other words, the value of the whole could exceed the sum of the individual parts, and vice versa. Since valuing is for a purpose of inclusion in financial statements that assumes that the portfolio will continue to remain in the existing ownership or occupation, it would be inappropriate to make any reduction or

allowance in the valuation to reflect the possible effect of flooding the market.

Ɣ To the Terms of Engagement the valuation of portfolio should be presented in the format of the report. Market researches, competitors analyses, and description of the Properties within the Portfolio are placed in attachments to the report.

Ɣ We draw your attention to the fact that values change over time and a valuation given on a particular date may not be valid on an earlier or later date. Our opinion of value is only current at the valuation date. This is particularly important in current market conditions and subsequent re-valuation(s) may need to be considered to reflect any changes in inputs after the valuation date.

Ɣ To comply with the requirement to state restrictions on use, distribution or publication in IVS 103 para 5(j) the report shall include reference to any conditions on how it may be reproduced or referred to in the published financial statements of the entity. The extent and form of any references to the valuation that may appear in the published financial statements is stated within the relevant sections of this report and in the Terms of Engagement.

Ɣ The extent of the valuers' duty including the response to any questions on the valuation raised by the entity's auditor is stated within the relevant sections of this report and in the Terms of Engagement.

Property risks Ɣ Contamination risk Ɣ Planning risk Ɣ Construction costs risk Ɣ Cost and time over-runs risk Ɣ Discount and capitalization rate increases risk Ɣ Market uncertainty risk

Contents

Executive summary 2

1. Instructions 10

Engagement of Knight Frank Saint-Petersburg ZAO 10

Scope of enquiries & investigations 23

Valuation bases 24 2. The property 24

Location 24

Site 24

Description 24

Accommodation 24

Services 25

Legal title 25

Tenancies 31

Condition 31

Environmental considerations 32

Sustainability 32

Planning (Residential Properties) 33

Highways and access 34

Statutory licences & certificates 34 3. Proposed development 35

Proposed scheme (Residential Properties) 35

Development costs (Residential Properties) 35 4. Market analysis 37

Market commentary 37

Russia economic overview 38

Investment market commentary 38

Office market overview 39

Residential market overview 40 5. Valuation 40

Highest and Best Use analysis 40

Methodology 41

Valuation considerations 44

Valuation bases 46

Valuation date 46

Market Value 46 6. Property risk analysis 51

General comments 51

Risks relating to the property 52

Income risks 53

Development risks 53

Economic & property market risks 55

Valuation risks 57 Appendix 1 Terms of Engagement/ General Terms of Business for Russian Valuations 58

Appendix 2 Description of the Properties 59

1. Kazanskaya 36 69

2. Zolotaya Kazanskaya 71

3. Paradny Kvartal BC 11 73

4. Kazanskaya 60 76

5. Ruchyi/Tsvetnoy Gorod 78

6. Smolny Park 81

7. Radishcheva 39 84

8. Verona 86

9. Kovensky 88

10. Dom na Dvoryanskoy 90

11. Osobnyak Truvorova 92

12. Russkiy dom (Baskov) 94

13. Europa City 96

14. Tri Vetra 98

15. Moskovskoye Shosse, 3 100

16. Bogemia 102

17. Yuzhnaya Aquatoriya 104

18. Sofiya 107

19. Kalina-Park 110

20. VIVA 112

21. Kvartet 114

22. Shuvalovsky 117

23. Ruchyi/Novaya Okhta 119

24. Ruchyi-7 122

25. Tsivilizatsiya 124

26. Zapovednaya 126

27. Aeroport Rzhevka 128

28. Kosmonavtov 130

29. Paradny Kvartal 132

30. Nevsky 1 134

31. Fontanka 3 137

32. Nevsky 68 139

33. Leningradskoye Shosse 58 141

34. Donskoy Olimp 144

36. ZILART 148

37. Luchi 151

38. iBitsa 154

39. Podolsk-Erino 156

40. Novoe Domodedovo 158

41. Nakhabino Yasnoe 160

42. Noviy Balchug 165

43. Avtozavodskaya 167

44. Davydkovskaya 169

45. Tverskoy Blvd 172

46. Rassvetniy 175

47. Khrustalniye Klyuchi 178

48. Michurinskiy 181

49. Rastochnaya 186

50. Academicheskiy 189

51. Flagman 192

52. Shefskaya 195 Appendix 3 Market overview 198

Office market overview of St. Petersburg 199

Office market overview of Moscow 220

Residential market overview of St. Petersburg and Leningradskaya Oblast’ 231

Residential market overview of Moscow 298

Residential market overview of Yekaterinburg 314 Appendix 4 – Residential market segmentation according to the current classification 327

Appendix 5 – Office market segmentation according to the current classification 330

Galina Aleksandrovna Volchetskaya

LSR Group OJSC 15-H, liter Ǩ, Kazanskaya St, St Petersburg, 190031, Russia

Date of issue: March 17, 2016

Ref: PO-17/2015

Dear Ms. Volchetskaya,

Property: the portfolio of real estate assets in St. Petersburg and Leningradskaya Oblast', Moscow and Moskovskaya Oblast’, Yekaterinburg, Russia

1. Instructions

Engagement of Knight Frank Saint-Petersburg ZAO Instructions 1.1 We refer to the Agreement PO-17/2015 and to our subsequent Terms of Engagement letter and General Terms of Business for Valuations of December 04, 2015, to provide a valuation report on the portfolio of real estate assets in St. Petersburg and Leningradskaya Oblast', Moscow and Moskovskaya Oblast’, Yekaterinburg, Russia. Copies of Terms of Engagement letter and General Terms of Business for Valuations are attached in Appendix 1.

The properties that are the subject of this Valuation Report, each a “Property” and together the “Properties” are listed below as follows.

1.2 This valuation has been carried out in accordance with the Agreement PO-17/2015, the Terms of Engagement and our General Terms of Business for Russian Valuations (“General Terms of Business”), as attached in Appendix 1.

Client 1.3 Our client for this instruction is LSR Group OJSC (“the Client”).

Valuation 1.4 This valuation has been undertaken in accordance with the Royal Institution of standards Chartered Surveyors (RICS) Valuation - Professional Standards January 2014 Global & UK edition (“the Red Book”) including the International Valuation Standards (2013).

The report provided under this instruction has no status of valuation services in Russia and is not carried out in accordance with the requirements stipulated in the Federal Law “On Valuation in the Russian Federation” ȶ 135 dated July 29, 1998 as amended.

Valuation report Ň A portfolio of real estate assets in St. Petersburg and Leningradskaya Oblast', Moscow, Yekaterinburg, Russia Ň KF Ref: PO-17/2015 Ň Prepared on behalf of LSR Group OJSC Ň Date of issue: March 17, 2016 Page 10

Purpose of 1.5 You have confirmed that this valuation report is required for the purposes of the valuation preparation of financial statements in accordance with International Financial Reporting Standards for the year 2015. It also may be used for publication on the Clients’ website and the attraction of investors.

In addition to the requirement to identify the asset to be valued in IVS 101 para 2(d) the scope of work shall include confirmation of how that asset is used or classified by the reporting entity.

The required accounting treatment for identical or similar assets or liabilities can differ according to how they are used by an entity. Commercial Properties within the portfolio are mainly owned by the entity for the purpose of the entity's business, residential Properties are treated as stock in trade like in the case of a development company.

Conflict of 1.6 We confirm that we do not have any material connection or involvement giving rise interest to a conflict of interest and are providing an objective and unbiased valuation.

1.7 We are acting as External Valuers, as defined in the Red Book.

Responsibility to 1.8 Our valuation report is only for the use of our Client and no responsibility is accepted third parties to any third party for the whole or any part of its contents.

Disclosure & 1.9 Except as stated above, neither the whole nor any part of this valuation nor any publication reference thereto may be included in any published document, circular or statement nor published in any way without our prior written approval of the form or context in which it may appear. If our opinion of values is disclosed to the parties other than the addressee of this report, the basis of valuation should be stated.

Limitations on 1.10 No claim arising out of or in connection with this valuation report may be brought liability against any member, employee, partner or consultant of Knight Frank St Petersburg ZAO. Those individuals will not have a personal duty of care to any party and any claim for losses must be brought against Knight Frank St Petersburg ZAO.

1.11 Knight Frank St Petersburg ZAO’s total liability for any direct loss or damage caused by negligence or breach of contract in relation to this instruction and valuation report is limited to the amount specified in the Terms of Engagement letter/ General Terms of Business, a copy of which is attached. We do not accept liability for any indirect or consequential loss (such as loss of profits).

Expertise 1.12 The valuer, on behalf of Knight Frank St Petersburg ZAO with the responsibility for this report are

Ɣ Olga Baranova MRICS Registered Valuer, Head of Valuations, Knight Frank AO;

Ɣ Svetlana Shalaeva MRICS, RICS Registered Valuer, Head of Valuation Department, Knight Frank St Petersburg ZAO.

Parts of this valuation have been undertaken by additional valuers: Anna Vasileva, Dmitry Tsatskin, Senior Valuers, Evgenia Akulova, Project Manager, Konstantin Fomin, Director, Key Client Manager, Valuations, as listed below in accordance with VPS 3 of the Red Book.

We confirm that the valuers meet the requirements of the Red Book, having sufficient current knowledge of the particular market and the skills and understanding to undertake the valuation competently. Furthermore we confirm that valuation has been undertaken by all the valuers involved in accordance with the Royal Institution of Chartered Surveyors (RICS) Valuation - Professional Standards January 2014 Global & UK edition (“the Red Book”) including the International Valuation Standards (2013)

Vetting 1.13 This report has been vetted as part of Knight Frank St Petersburg ZAO’s quality assurance procedures.

Table 1. List of the Properties within the portfolio

145, RuchÌ Tsvetnoy 450,69 5 Piskarevsky Av, 429.29 5,458,098 2,960,380 2,960,380 2,509,690 0 25,686 Mar-16 freehold 100% 4% 0% Gorod 0 St.Petersburg RuchÌ Tsvetnoy 100,000 100,000 100,000 freehold design 13% 0% Gorod block 17 RuchÌ Tsvetnoy 450,69 concept 2,860,380 2,860,380 2,409,690 0 25,686 freehold 4% 0% Gorod, rest 0 development TOTAL, properties for 429.29 5,458,098 2,960,380 2,960,380 future development

Breakdown of areas (unsold / unleased net area), Presold / Estima Projec sq m prelease Net unsold Construc ted t d of net Net sellable / / unleased tion comple compl Gross LSR sellable / N Development Site Area, leasable area, net area, start tion Land plot Stage of etion, Address building area, share leasable o Project ha excl. car excl. car Residentia Othe Parking date date tenure development % (to sq m Offices Retail , % areas, parking, sq m parking, l r , lots (month / (mont the excl. car sq m year) h / borne parking, year) costs) % Elite (A) class residential properties Lit A, 4, 6 Smolny Park Smolnogo St, 8.65 131,411 73,179 23,758 15,483 8,275 0 0 483 leasehold 100% 92% 55% St.Petersburg Phase 2, bldgs. 40,032 24,503 3,060 2,289 771 81 Mar-12 Mar-16 completed 100% 80% Ǩ2,5,6 Phase 3 49,844 22,949 1,054 1,054 287 Nov-12 Mar-16 completed 100% 80% Phase 4 41,535 25,727 19,643 12,139 7,504 115 Nov-13 Dec-18 construction 78% 10% Lit M, 39, Radishcheva 7 Radishcheva, 39 0.85 31,923 20,879 1,504 444 989 70 22 Feb-13 Dec-18 freehold completed 100% 100% 90% St, St.Petersburg Lit A, 29, 8 Verona Morskoy Pr, 0.36 20,830 11,593 5,731 5,195 537 111 Aug-15 Dec-19 freehold construction 100% 25% 15% St.Petersburg Lit A, 5, 9 Kovensky Kovensky Lane, 0.39 12,324 5,871 749 749 8 Jun-11 Jun-16 leasehold completed 100% 100% 84% St.Petersburg Lit Ǩ, 13, Dom na 10 Kuybysheva St, 0.19 8,787 6,352 1,620 1,415 205 13 Feb-13 Dec-16 freehold completed 100% 100% 69% Dvoryanskoy St.Petersburg Lit A, 64, Osobnyak Martynova 11 0.21 1,212 1,212 1,212 1,212 Oct-16 freehold completed 100% 100% 0% Truvorova Emb, St.Petersburg 5, Korolenko 12 Russkiy Dom St, 2.40 93,725 56,253 30,219 26,341 3,877 519 Apr-15 Jul-19 freehold construction 100% 59% 33% St.Petersburg TOTAL, elite (A) class 13.04 300,212 175,338 64,793 residential properties

Breakdown of areas (unsold / unleased net area), Presold / Estima Projec sq m prelease Net unsold Construc ted t d of net Net sellable / / unleased tion comple compl Gross LSR sellable / N Development Site Area, leasable area, net area, start tion Land plot Stage of etion, Address building area, share leasable o Project ha excl. car excl. car Residentia Othe Parking date date tenure development % (to sq m Offices Retail , % areas, parking, sq m parking, l r , lots (month / (mont the excl. car sq m year) h / borne parking, year) costs) % Business (B) class residential properties Lit ǭ, 10, 13 Europa City Medikov Av, 7.36 135,554 84,259 45,339 43,103 1,739 0 497 378 freehold 100% 77% 37% St.Petersburg Phase 3 70,109 42,674 10,941 10,087 358 497 189 Mar-12 Dec-16 completed 100% 62% Phase 4 65,445 41,585 34,397 33,016 1,381 189 Apr-13 Dec-18 construction 51% 10% Plot 151, Block 66a, 14 Tri Vetra 3.05 108,246 56,364 41,971 39,013 2,157 0 801 649 Jun-15 Dec-18 leasehold construction 100% 29% 5% Savushkina St, St.Petersburg Lit ǫ, Moskovskoye Moskovskoye 15 0.41 13,369 9,550 8,389 8,115 0 274 81 Aug-15 Jun-18 freehold construction 100% 21% 0% Shosse, 3 Hwy, St.Petersburg 14, Smolenskaya 16 Bogemia 0.69 34,352 21,965 21,130 20,141 989 154 Apr-15 Aug-19 freehold design 100% 24% 0% St, St.Petersburg TOTAL, business (B) class 11.09 291,521 172,137 116,828 residential properties Mass market (Ǹ) class residential properties Block 28, 28a, Yuzhnaya 17 Doblesti St, 23.90 523,065 318,279 141,741 124,158 17,582 0 0 2,464 leasehold 100% 44% 37% Akvatoriya St.Petersburg Yuzhnaya Aquatoria, 1.82 64,609 39,004 1,710 1,710 0 300 Feb-13 Dec-16 construction 77% 75% plot13 Yuzhnaya Aquatoria, 2.85 110,320 63,576 1,020 912 108 600 Nov-12 Jun-16 completed 100% 92% plot14

Breakdown of areas (unsold / unleased net area), Presold / Estima Projec sq m prelease Net unsold Construc ted t d of net Net sellable / / unleased tion comple compl Gross LSR sellable / N Development Site Area, leasable area, net area, start tion Land plot Stage of etion, Address building area, share leasable o Project ha excl. car excl. car Residentia Othe Parking date date tenure development % (to sq m Offices Retail , % areas, parking, sq m parking, l r , lots (month / (mont the excl. car sq m year) h / borne parking, year) costs) % Yuzhnaya concept Aquatoria, 2.42 49,950 25,000 25,000 25,000 300 Dec-16 Dec-19 0% 0% development plot24 Yuzhnaya 2.48 100,900 56,548 30,685 28,667 2,018 334 Jul-14 Jun-18 leasehold construction 31% 18% Aquatoria, plot9 Yuzhnaya 0.61 20,710 12,000 1,607 759 848 30 Jun-14 Dec-16 construction 70% 56% Aquatoria, plot1 Yuzhnaya 3.56 121,932 90,645 80,419 65,811 14,609 600 Aug-15 Jun-18 construction 11% 2% Aquatoria, plot2 Yuzhnaya 1.50 54,644 31,507 1,300 1,300 300 Jan-14 Sep-17 construction 66% 75% Aquatoria, plot6 Plots 3, 8, 12, 5, 7, 3*, 13, 8*, 18 Sophiya 1, Lit ǻ, 49, 6, 21.90 466,416 313,024 49,574 48,053 1,521 1,483 Mar-13 Dec-17 freehold construction 100% 72% 67% Yuzhnoe Hwy, St.Petersburg 12, Marshala 19 Kalina Park Blukhera, 34.45 544,700 342,657 197,351 194,147 3,204 0 0 1,013 Feb-12 Dec-19 freehold construction 100% 55% 34% St.Petersburg Lit ǫ, 3, Moskovskoe 20 Viva 9.15 135,029 93,558 1,126 960 166 0 0 104 May-12 Dec-16 freehold completed 100% 100% 98% Hwy, St.Petersburg Lit Ǫ1, Bldg 2, 27, Dunaysky 21 Kvartet 6.17 155,863 109,570 10,086 10,086 0 0 0 440 Nov-12 Dec-16 freehold construction 100% 78% 82% Av, St.Petersburg Plot 208, right to Prigorodny 22 Shuvalovsky 30.90 680,716 423,640 296,978 293,718 2,448 0 811 2,344 Jul-14 Dec-20 acquire construction 100% 21% 19% (Kamenka), freehold St.Petersburg Murinskaya 23 Novaya Okhta Road, 104.74 1,241,545 780,501 333,934 325,086 8,848 0 0 5,926 Sep-12 Mar-21 freehold construction 100% 55% 47% St.Petersburg

Breakdown of areas (unsold / unleased net area), Presold / Estima Projec sq m prelease Net unsold Construc ted t d of net Net sellable / / unleased tion comple compl Gross LSR sellable / N Development Site Area, leasable area, net area, start tion Land plot Stage of etion, Address building area, share leasable o Project ha excl. car excl. car Residentia Othe Parking date date tenure development % (to sq m Offices Retail , % areas, parking, sq m parking, l r , lots (month / (mont the excl. car sq m year) h / borne parking, year) costs) % 145, 24 Ruchyi-7 Piskarevsky Av, 23.66 282,321 211,421 211,421 209,435 1,986 0 0 2,546 Jan-18 Dec-21 freehold design 100% 1% 0% St.Petersburg 42, Oktyabrskaya Oktyabrskaya 25 59.53 1,329,981 823,524 823,524 800,827 22,697 0 0 4,478 freehold 100% 3% 0% Naberezhnaya Emb, St.Petersburg Oktyabrskaya Naberezhnaya 31.02 701,793 431,011 431,011 413,764 17,247 2,623 Mar-16 Dec-21 design 3% 0% Rudas Oktyabrskaya concept Naberezhnaya 28.51 628,188 392,513 392,513 387,063 5,450 1,855 Feb-19 Mar-26 4% 0% development Barrikada Plot 3, Zapovednaya St (north of Lit concept 26 Zapovednaya A, 51Ȉ, 5.92 146,664 88,667 88,667 86,687 1,980 744 Jan-17 Dec-20 freehold 100% 18% 0% development Zapovednaya St), St.Petersburg Airport Rzhevka, Kovalevo Aeroport Settlement, concept 27 175.00 1,637,974 1,025,000 1,025,000 1,000,000 25,000 12,462 Jul-17 Mar-26 freehold 100% 4% 0% Rzhevka Vsevolozhsky development District, Leningradskay a Oblast' Plots 1, 2, Kosmonavtov Pr (south-east concept 28 Kosmonavtov 2.43 64,317 45,900 45,900 45,400 500 255 Sep-18 Dec-20 leasehold 100% 1% 0% of Svirskaya St development crossing), St.Petersburg

Breakdown of areas (unsold / unleased net area), Presold / Estima Projec sq m prelease Net unsold Construc ted t d of net Net sellable / / unleased tion comple compl Gross LSR sellable / N Development Site Area, leasable area, net area, start tion Land plot Stage of etion, Address building area, share leasable o Project ha excl. car excl. car Residentia Othe Parking date date tenure development % (to sq m Offices Retail , % areas, parking, sq m parking, l r , lots (month / (mont the excl. car sq m year) h / borne parking, year) costs) % TOTAL, mass market (Ǹ) class 497.75 7,208,591 4,575,742 3,225,302 residential properties Commercial properties 1-3, Paradnaya 29 Paradny Kvartal St, 9.57 12,607 12,074 12,074 0 12,074 0 0 0% St.Petersburg Phase 5, bldgs. 9.57 12,607 12,074 12,074 12,074 Oct-12 Dec-16 RF freehold completed 100% 0% 17,18 1, Nevsky Av, concept 30 Nevsky 1 2.50 9,709 7,181 7,181 4,949 2,109 21 Dec-18 freehold 0% St.Petersburg development leasehold 3, Fontanka in concept 31 Fontanka 3 River Emb, 0.19 8,772 5,317 5,317 4,620 697 45 Dec-18 0% investment development St.Petersburg terms 68, Nevsky Av / Lit Ǩ, 40/68, 32 Nevsky 68 Fontanka River 0.15 8,614 5,962 5,962 3,677 2,285 26 Dec-20 freehold completed 100% 0% Emb, St.Petersburg TOTAL, commercial 12.41 39,702 30,533 30,533 properties TOTAL, properties, located in Saint- 974 13,314,550 7,927,301 6,411,008 Petersburg and Leningradskay a Oblast' Moscow and Moscovskaya Oblast' Business (B) class residential properties

Breakdown of areas (unsold / unleased net area), Presold / Estima Projec sq m prelease Net unsold Construc ted t d of net Net sellable / / unleased tion comple compl Gross LSR sellable / N Development Site Area, leasable area, net area, start tion Land plot Stage of etion, Address building area, share leasable o Project ha excl. car excl. car Residentia Othe Parking date date tenure development % (to sq m Offices Retail , % areas, parking, sq m parking, l r , lots (month / (mont the excl. car sq m year) h / borne parking, year) costs) % Bldg 14, 21, 58 Leningradskoe Leningradskoy concept 33 1.77 93,000 57,500 57,500 55,000 2,500 500 Jul-16 Dec-19 freehold 100% 16% 0% shosse 58 e Hwy, development Moscow Bldg 19, 21, 34 Donskoy Olimp Serpukhovsky 4.72 239,050 85,459 38,416 31,422 4,149 2,845 960 May-13 Nov-18 leasehold construction 100% 57% 39% Val St, Moscow Zarechye Settlement, freehold to Odintsovo 35 Grunvald 4.10 58,331 27,260 1,727 166 593 968 101 Mar-05 Dec-17 Housing completed 100% 100% 90% District, Code Moscovskaya Oblast' 23, 217,40 36 ZiL Avtozavodskay 65.09 1,215,040 979,127 963,896 746,494 10,916 Aug-15 Dec-25 leasehold construction 100% 7% 0% 2 a St, Moscow TOTAL, business (B) class 75.67 1,605,421 1,149,345 1,061,539 residential properties Mass market (Ǹ) class residential properties Bldg 6, Proizvodstvenn 132,22 leasehold/f 37 Luchi 39.12 1,000,000 476,359 476,359 344,132 4,827 Dec-15 Jun-22 design 100% 4% 0% aya St, 7 reehold Moscow Bachurino Village, Sosenskoye 68,00 38 iBitsa 59.85 571,363 280,766 280,766 208,705 0 4,061 3,086 settlement, 0 Novomoskovsk y AD, Moscow Phase 1 41,255 26,477 26,477 26,152 325 Sep-16 Dec-21 leasehold design 100% 2% 0% Phase 2 171,573 68,884 68,884 67,583 1,301 1,598 Jan-17 Dec-21 leasehold design 100% Phase 3 120,295 65,654 65,654 64,408 1,246 Sep-18 Dec-21 leasehold design 100%

Breakdown of areas (unsold / unleased net area), Presold / Estima Projec sq m prelease Net unsold Construc ted t d of net Net sellable / / unleased tion comple compl Gross LSR sellable / N Development Site Area, leasable area, net area, start tion Land plot Stage of etion, Address building area, share leasable o Project ha excl. car excl. car Residentia Othe Parking date date tenure development % (to sq m Offices Retail , % areas, parking, sq m parking, l r , lots (month / (mont the excl. car sq m year) h / borne parking, year) costs) % Phase 4 138,241 51,751 51,751 50,563 1,189 1,488 Sep-19 Dec-21 leasehold design 100% Shopping and 68,00 concept entertainment 100,000 68,000 68,000 0 Jul-19 Dec-21 leasehold 100% 0 development center Near Sal'kovo Village, leasehold / Ryazanovskoye 48,30 concept 39 Podolsk-Erino 87.70 900,720 358,800 358,800 303,600 6,900 4,112 Aug-17 Dec-23 freehold 100% 0% 0% Settlement, 0 development registration Novomoskovsk y AD, Moscow Zapadny Neighbourhoo leasehold / Novoe d, 40 39.33 567,063 318,274 7,895 2,792 5,103 458 Aug-11 Nov-18 freehold construction 100% 91% 94% Domodedovo Domodedovo, registration Moscovskaya Oblast' near Chernaya Village, Pavlo- Slobodskoye Nakhabino Settlement, 41 30.01 243,461 147,464 86,021 82,538 2,976 507 300 Dec-12 Mar-19 freehold construction 100% 47% 33% Yasnoe Istrinsky District, Moscovskaya Oblast' TOTAL, mass market (Ǹ) class 256.02 3,282,607 1,581,663 1,209,841 residential properties Commercial properties Bldgs. 1, 2, 3, 9, 42 Novy Balchug Sadovnicheska 0.40 24,815 11,222 11,222 8,527 2,695 170 Apr-16 Jun-20 leasehold design 100% 46% 0% ya St, Moscow TOTAL, commercial 0.40 24,815.00 11,222.27 11,222.27 properties

Breakdown of areas (unsold / unleased net area), Presold / Estima Projec sq m prelease Net unsold Construc ted t d of net Net sellable / / unleased tion comple compl Gross LSR sellable / N Development Site Area, leasable area, net area, start tion Land plot Stage of etion, Address building area, share leasable o Project ha excl. car excl. car Residentia Othe Parking date date tenure development % (to sq m Offices Retail , % areas, parking, sq m parking, l r , lots (month / (mont the excl. car sq m year) h / borne parking, year) costs) % Business centers 22, 43 Avtozavodskaya Avtozavodskay 0.64 7,767 7,767 7,767 7,767 16 leasehold completed 100% 0% a St, Moscow 16, freehold to 44 Davydkovskaya Davydkovskaya 1.14 41,819 19,090 1,737 1,737 6 Mar-04 Mar-08 Housing completed 100% 100% 83% St, Moscow Code 16, Tverskoy 16, Tverskoy operating 45 0.14 4,904 2,711 2,711 ǫǬǲ/0! Blvd Blvd, Moscow offices TOTAL, business 1.91 54,490 29,568 12,214.70 centers TOTAL, properties, located in 334.00 4,967,332 2,771,798 2,294,816 Moscow and Moscovskaya Oblast' Yekaterinburg Mass market (Ǹ) class residential properties 2B, 40-Letiya 46 Rassvetny Komsomola St, 8.75 206,884 143,437 71,282 71,282 Feb-14 Sep-18 freehold construction 100% 60% 36% Yekaterinburg Khrustalniye Latviyskaya St, 47 11.02 309,380 217,200 191,909 191,523 386 Apr-14 Oct-21 leasehold construction 100% 13% 8% Klyuchi Yekaterinburg Sukhodolskaya 48 Michurinsky St, 46.85 315,590 250,967 147,818 146,656 1,162 0 0 594 Nov-12 Dec-19 freehold 100% 47% 34% Yekaterinburg Phase 1 20.43 141,021 114,867 11,786 11,510 276 Nov-12 Sep-16 freehold construction 100% 95% 74% Phase 2 26.43 174,569 136,101 136,033 135,146 887 594 Nov-12 Dec-19 freehold construction 100% 7% 0% Rastochnaya 49 Rastochnaya St, 0.54 16,562 10,373 10,373 10,154 219 70 Jan-16 Dec-17 freehold design 100% 11% 0% Yekaterinburg

Scope of enquiries & investigations Inspection 1.14 You have instructed us to undertake a restricted service, namely: we have carried out limited external inspection of all the Properties within the portfolio, internal inspection of business centres in St. Petersburg.

Our limited inspection of the Properties was undertaken on December 18, 2015 - December 31, 2015 by

Ɣ Olga Baranova MRICS Registered Valuer, Head of Valuations – in Yekaterinburg,

Ɣ Evgenia Akulova, Project Manager, Konstantin Fomin, Director, Key Client Manager, Valuations, Knight Frank AO – in Moscow,

Ɣ Svetlana Shalaeva MRICS Registered Valuer, Head of Valuation Department and Anna Vasileva and Dmitry Tsatskin, Senior Valuers, Knight Frank St Petersburg – in St. Petersburg.

We assume there have been neither material changes to the physical attributes of the property, nor changes to the nature of its location, since the last inspection up to valuation date.

This fact significantly limits the extent to which reliance can be placed upon this valuation report.

Investigations 1.15 The extent of enquiries/ investigations made is set out in our General Terms of Business. In carrying out this instruction we have undertaken verbal/ web based enquiries referred to in the relevant sections of this report. We have relied upon this information as being accurate and complete.

Information 1.16 In this report we have been provided with information by the Client. We have relied provided upon this information as being materially correct in all aspects.

1.17 In particular, we detail the following:

Ɣ Information relating to the extent of the property, produced by special services of public authorities Title documents (ownership certificates and lease agreements);

Ɣ Information relating to the proposed development scheme, produced by the Client;

Ɣ Information relating to the planning status of the Property, from the Client;

Ɣ Information relating to the construction costs, terms of project realization of the proposed development as produced by the Client;

Ɣ Information relating to the sales prices of the proposed development as produced by the Client.

The information pointed above is not attached to this report but is kept in the valuers’ archive and can be provided at a request if necessary.

1.18 In the absence of any documents or information provided, we have had to rely solely upon our own enquiries as outlined in this report. Any assumptions resulting from the lack of information are also set out in the relevant section of this report.

1.19 In the presence of data difference in the documents or information provided, we have had to rely upon our own enquiries or more precise information provided by the Client as outlined in this report. Any assumptions resulting from the lack of information are also set out in the relevant section of this report.

Valuation bases 1.20 In accordance with your instructions, we have provided opinions of value on the following bases:

Market Value 1.21 The Market Value (Fair value) of the freehold interest in the Properties in its current Fair value physical condition, subject to the existing tenancy / ies / with vacant possession (where applicable) or intended for / in course of development according to the proposed development scheme, produced by the Client (where applicable). Our key assumptions are set out in the Valuation Section of this report.

Valuation date 1.22 The valuation date is December 31, 2015

2. The property

Location Location 2.1. The brief description of the location and the street plans of the Properties within the portfolio are attached in Appendix 2.

Site Site area 2.2. The brief description of the sites of the Properties within the portfolio are attached in Appendix 2.

Description General 2.3. The brief description of the Properties within the portfolio and its images are information attached in Appendix 2.

Accommodation Measurement 2.4. We were not able neither to inspect internally all the buildings and sites within the portfolio nor to take sample check measurements to ensure that the measurements fall within acceptable tolerance.

Thus we have relied upon the areas provided to us by the Client.

2.5. A breakdown of floor areas by tenancy is not attached to this report but is kept in the

valuers’ archive and can be provided at a request if necessary.

2.6. The valuation given does not include any plant & machinery or contents within the property.

Services 2.7. In accordance with the General Terms of Business enclosed in Appendix 1, no tests have been undertaken on any of the services.

2.8. Specifications on connecting utilities are not provided.

We have assumed for the purposes of this valuation that mains heating, cold and hot water, electricity, sewerage / drainage and telecommunications will be all available for the properties under development (in course of construction).

We also have assumed that these services will have sufficient capacity to accommodate the proposed development and that no works are required to upgrade their capacity. Should any upgrades be required and the costs required are to be borne by the Developer, our opinion of property value may be affected.

Legal title Land register 2.9. As stated in our General Terms of Business, we do not undertake searches or searches inspections of any kind (including web based searches) for title or price-paid information in any publicly available land registers.

Sources of 2.10. We have been provided with the Properties’ title information by the Client. Information Nevertheless we have not been provided with all the ownership certificates and land long-term lease agreements to verify it. Thus, in our valuation, we have assumed a good and marketable freehold (to the land plots and buildings) or long-term leasehold (to the land plots) title and that all documentation is satisfactorily drawn.

2.11. We recommend that our understanding of all legal title issues is referred to your legal advisers for their confirmation that our understanding is correct. It is also particularly important that your legal advisers should be asked to check whether there have been any transactions relating to the property which reveal price paid information which we should be made aware of.

2.12. If any matters come to light as a result of your legal adviser’s review of these issues, we request that these matters are referred back to us as this information may have an important bearing upon the values reported.

Tenure 2.13. Thus we have made the assumption that that title to the Properties is the following (presented in the table below):

Table 2. Tenure

Gross Site Area, Building Land plot/ No Development Project Address building Land owner ha owner buildings tenure area, sq m Saint-Petersburg and Leningradskaya Oblast' Business centers Lit ǩ, 36, Kazanskaya A Plus Estate A Plus Estate 1 Kazanskaya 36 0.25 7,434.0 Freehold/ freehold St, St.Petersburg ZAO ZAO 44, Kazanskaya St, A Plus Estate A Plus Estate 2 Zolotaya Kazanskaya 0.15 3,060.6 Leasehold/ freehold St.Petersburg ZAO ZAO LSR. The right of Lit A, 39, Kirochnaya Nedvizhimost'- permanent 3 Paradny Kvartal BC 11* 9.57 3,717.8 St, St.Petersburg Severo-Zapad (perpetual) use / OOO freehold Lit A, 18, Fonarny A Plus Estate Land plot is not 4 Kazanskaya 60 - 2,212.8 Lane, St.Petersburg ZAO formed/ freehold TOTAL, business 9.97 16,425 centers Properties for future development LSR. 145, Piskarevsky Av, Nedvizhimost'- 5 RuchÌ Tsvetnoy Gorod 429.29 5,458,098 Freehold St.Petersburg Severo-Zapad OOO RuchÌ Tsvetnoy Gorod Freehold block 17 RuchÌ Tsvetnoy Gorod, Freehold rest TOTAL, properties for 429.29 5,458,098 future development Elite (A) class residential properties Lit A, 4, Smolnogo St, Smolny Park 6 Smolny Park 8.65 131,411 Leasehold St.Petersburg OOO Phase 2, bldgs. Ǩ2,5,6 40,032 Phase 3 49,844 Phase 4 41,535 Stroitelnaya Korporatsiya Lit M, 39, Radishcheva Vozrozhdeniye 7 Radishcheva, 39 0.85 31,923 Freehold St, St.Petersburg Sankt- Peterburga OAO Stroitelnaya Stroitelnaya Korporatsiya Korporatsiya Lit A, 29, Morskoy Pr, Vozrozhdeniye Vozrozhdeniye 8 Verona 0.36 20,830 Freehold St.Petersburg Sankt- Sankt- Peterburga Peterburga OAO OAO Stroitelnaya Korporatsiya Lit A, 5, Kovensky Vozrozhdeniye 9 Kovensky 0.39 12,324 Leasehold Lane, St.Petersburg Sankt- Peterburga OAO Stroitelnaya Korporatsiya Lit Ǩ, 13, Kuybysheva Vozrozhdeniye 10 Dom na Dvoryanskoy 0.19 8,787 Freehold St, St.Petersburg Sankt- Peterburga OAO Lit A, 64, Martynova 11 Osobnyak Truvorova 0.21 1,212 Freehold Emb, St.Petersburg LSR. 5, Korolenko St, Nedvizhimost'- 12 Russkiy Dom 2.40 93,725 Freehold St.Petersburg Severo-Zapad OOO TOTAL, elite (A) class 13.04 300,212 residential properties

Gross Site Area, Building Land plot/ No Development Project Address building Land owner ha owner buildings tenure area, sq m Business (B) class residential properties Stroitelnaya Korporatsiya Lit ǭ, 10, Medikov Av, Vozrozhdeniye 13 Europa City 7.36 135,554 Freehold St.Petersburg Sankt- Peterburga OAO Phase 3 70,109 Stroitelnaya Korporatsiya Vozrozhdeniye Phase 4 65,445 Sankt- Peterburga OAO Plot 151, Block 66a, Zapadny 14 Tri Vetra Savushkina St, 3.05 108,246 Skorostnoy Leasehold St.Petersburg Diametr OAO LSR. Lit ǫ, Moskovskoye Nedvizhimost'- 15 Moskovskoye Shosse, 3 13,369 Freehold Hwy, St.Petersburg Severo-Zapad OOO LSR. 14, Smolenskaya St, Nedvizhimost'- 16 Bogemia 0.69 34,352 Freehold St.Petersburg Severo-Zapad OOO TOTAL, business (B) class residential 11.09 291,521 properties Mass market (Ǹ) class residential properties LSR. Block 28, 28a, Doblesti Nedvizhimost'- 17 Yuzhnaya Akvatoriya 23.90 523,065 Leasehold St, St.Petersburg Severo-Zapad OOO Yuzhnaya Aquatoria, 1.82 64,609 plot 13 Yuzhnaya Aquatoria, 2.85 110,320 plot 14 Yuzhnaya Aquatoria, 2.42 49,950 plot 24 Yuzhnaya Aquatoria, 2.48 100,900 Leasehold plot 9 Yuzhnaya Aquatoria, 0.61 20,710 plot 1 Yuzhnaya Aquatoria, 3.56 121,932 plot 2 Yuzhnaya Aquatoria, 1.50 54,644 plot 6 Plots 3, 8, 12, 5, 7, 3*, LSR. 13, 8*, 1, Lit ǻ, 49, 6, Nedvizhimost'- 18 Sophiya 21.90 466,416 Freehold Yuzhnoe Hwy, Severo-Zapad St.Petersburg OOO LSR. 12, Marshala Blukhera, Nedvizhimost'- 19 Kalina Park 34.45 544,700 Freehold St.Petersburg Severo-Zapad OOO LSR. Lit ǫ, 3, Moskovskoe Nedvizhimost'- 20 Viva 9.15 135,029 Freehold Hwy, St.Petersburg Severo-Zapad OOO LSR. Lit Ǫ1, Bldg 2, 27, Nedvizhimost'- 21 Kvartet Dunaysky Av, 6.17 155,863 Freehold Severo-Zapad St.Petersburg OOO

Gross Site Area, Building Land plot/ No Development Project Address building Land owner ha owner buildings tenure area, sq m LSR. Plot 208, Prigorodny Nedvizhimost'- Right to acquire 22 Shuvalovsky (Kamenka), 30.90 680,716 Severo-Zapad freehold St.Petersburg OOO LSR. Murinskaya Road, Nedvizhimost'- 23 Novaya Okhta 104.74 1,241,545 Freehold St.Petersburg Severo-Zapad OOO LSR. 145, Piskarevsky Av, Nedvizhimost'- 24 Ruchyi-7 23.66 282,321 Freehold St.Petersburg Severo-Zapad OOO Oktyabrskaya 42, Oktyabrskaya Emb, 25 59.53 1,329,981 Freehold Naberezhnaya St.Petersburg LSR. Nedvizhimost'- Severo-Zapad Oktyabrskaya 31.02 701,793 OOO / Aerok Naberezhnaya Rudas Saint- Petersburg OOO LSR. Nedvizhimost'- Oktyabrskaya Severo-Zapad Naberezhnaya 28.51 628,188 OOO / Barrikada Oktyabrskaya, 42 OOO Plot 3, Zapovednaya St LSR. (north of Lit A, 51Ȉ, Nedvizhimost'- 26 Zapovednaya 5.92 146,664 Freehold Zapovednaya St), Severo-Zapad St.Petersburg OOO Airport Rzhevka, LSR. Kovalevo Settlement, Nedvizhimost'- 27 Aeroport Rzhevka Vsevolozhsky District, 175.00 1,637,974 Freehold Severo-Zapad Leningradskaya OOO Oblast' Plots 1, 2, LSR. Kosmonavtov Pr Nedvizhimost'- 28 Kosmonavtov (south-east of 2.43 64,317 Leasehold Severo-Zapad Svirskaya St crossing), OOO St.Petersburg TOTAL, mass market Ǹ) class residential 497.75 7,208,591 properties Commercial properties Stroitelnaya Korporatsiya 1-3, Paradnaya St, Vozrozhdeniye 29 Paradny Kvartal 9.57 12,607 St.Petersburg Sankt- Peterburga OAO Phase 5, bldgs. 17,18 9.57 12,607 Rf freehold Stroitelnaya Korporatsiya Vozrozhdeniye 1, Nevsky Av, 30 Nevsky 1 2.50 9,709 Sankt- Freehold St.Petersburg Peterburga OAO / Nevinvest OOO 3, Fontanka River Emb, Royal Gardens Leasehold in 31 Fontanka 3 0.19 8,772 St.Petersburg Hotel OOO investment terms LSR. LSR. 68, Nevsky Av / Lit Ǩ, Nedvizhimost'- Nedvizhimost'- 32 Nevsky 68 40/68, Fontanka River 0.15 8,614 Freehold Severo-Zapad Severo-Zapad Emb, St.Petersburg OOO OOO

Gross Site Area, Building Land plot/ No Development Project Address building Land owner ha owner buildings tenure area, sq m TOTAL, commercial 12.41 39,702 properties TOTAL, properties, located in Saint- Petersburg and 974 13,314,550 Leningradskaya Oblast' Moscow and Moscovskaya Oblast' Business (B) class residential properties Bldg 14, 21, 58 Leningradskoe shosse MSR-BUTOVO 33 Leningradskoye Hwy, 1.77 93,000 Freehold 58 OOO Moscow Bldg 19, 21, LSR. 34 Donskoy Olimp Serpukhovsky Val St, 4.72 239,050 Nedvizhimost'- Leasehold Moscow M OOO Zarechye Settlement, Freehold to housing 35 Grunvald Odintsovo District, 4.10 58,331 n/a code Moscovskaya Oblast' 23, Avtozavodskaya St, PROMOBYEKT 36 ZiL 65.09 1,215,040 Leasehold Moscow OOO TOTAL, business (B) class residential 75.67 1,605,421 properties Mass market (Ǹ) class residential properties Bldg 6, LSR. 37 Luchi Proizvodstvennaya St, 39.12 1,000,000 Nedvizhimost'- Leasehold/freehold Moscow M OOO Bachurino Village, Sosenskoye 38 iBitsa settlement, 59.85 571,363 Novomoskovsky AD, Moscow Phase 1 41,255 Verkros OOO Leasehold Phase 2 171,573 Verkros OOO Leasehold Phase 3 120,295 Verkros OOO Leasehold Phase 4 138,241 Verkros OOO Leasehold Shopping and 100,000 Verkros OOO Leasehold entertainment center Near Sal'kovo Village, Ryazanovskoye LSR. Leasehold / 39 Podolsk-Erino Settlement, 87.70 900,720 Nedvizhimost'- freehold registration Novomoskovsky AD, M OOO Moscow Zapadny LSR. Neighbourhood, Leasehold / 40 Novoe Domodedovo 39.33 567,063 Nedvizhimost'- Domodedovo, freehold registration M OOO Moscovskaya Oblast' near Chernaya Village, Pavlo-Slobodskoye LSR. 41 Nakhabino Yasnoe Settlement, Istrinsky 30.01 243,461 Nedvizhimost'- Freehold District, Moscovskaya M OOO Oblast' TOTAL, mass market Ǹ) class residential 256.02 3,282,607 properties Commercial properties Bldgs. 1, 2, 3, 9, Velikan-XXI vek 42 Novy Balchug Sadovnicheskaya St, 0.40 24,815 Leasehold OOO Moscow TOTAL, commercial 0.40 24,815.00 properties Business centers 22, Avtozavodskaya St, A Plus Estate A Plus Estate 43 Avtozavodskaya 0.64 7,767 Leasehold Moscow AO ZAO

Gross Site Area, Building Land plot/ No Development Project Address building Land owner ha owner buildings tenure area, sq m 16, Davydkovskaya St, A Plus Estate Freehold to housing 44 Davydkovskaya 1.14 41,819 Moscow ZAO code 16, Tverskoy Blvd, Arkhproekt 45 16, Tverskoy Blvd 0.14 4,904 n/a Moscow MTO OAO TOTAL, business 1.91 54,490 centers TOTAL, properties, located in Moscow 334.00 4,967,332 and Moscovskaya Oblast' Yekaterinburg Mass market (Ǹ) class residential properties 2B, 40-Letiya LSR. 46 Rassvetny Komsomola St, 8.75 206,884 Nedvizhimost'- Freehold Yekaterinburg Ural ZAO Latviyskaya St, NOVA-stroy 47 Khrustalniye Klyuchi 11.02 309,380 Leasehold Yekaterinburg ZAO LSR. Nedvizhimost'- Sukhodolskaya St, 48 Michurinsky 46.85 315,590 Ural ZAO / Freehold Yekaterinburg NOVA-stroy ZAO Phase 1 20.43 141,021 Freehold Phase 2 26.43 174,569 Freehold LSR. Rastochnaya St, 49 Rastochnaya 0.54 16,562 Nedvizhimost'- Freehold Yekaterinburg Ural ZAO Verkhneuphaleyskaya 50 Akademichesky 13.00 161,651 n/a Freehold St, Yekaterinburg LSR. Repina St, 51 Flagman 3.39 99,130 Nedvizhimost'- Freehold Yekaterinburg Ural ZAO LSR. 11, Shefskaya St, 52 Shefskaya 11 1.76 30,662 Nedvizhimost'- Freehold Yekaterinburg Ural ZAO TOTAL, properties, located in 85.31 1,139,859 Yekaterinburg TOTAL, properties 1,392.87 19,421,742

In the absence of a copy lease, we have assumed that normal covenants and liabilities devolve upon the lessee. It is further assumed that there are no onerous restrictions or outgoings contained within the lease that would impact on the valuation provided within this report.

The owners of the Properties within the portfolio are several legal entities. We have been informed by the Client that all these legal entities are parts of LSR Group OJSC. Thus we assume that 100% ownership of LSR Group OJSC is to be valued.

To the title documents provided by the Client part of the Properties are either the shared ownership or leasehold. For the shared ownership we assume it is the share of freehold tenure of the Client in all the properties to be assessed. For leasehold property we assume it is freehold tenure of the improvements and leasehold of the land to be assessed. 2.14. These assumptions should be verified by your legal advisors. If they prove incorrect, any variation may have a material impact on value and should be referred back to us

for further comment.

Rights of way 2.15. From the title documents we noted rights of way and easements referred to some of the Properties within the portfolio, which may potentially have a detrimental impact upon the valuations in this report. We recommend that your legal advisers are instructed to investigate this matter further.

Tenancies Vacant 2.16. Residential Properties. We have valued all the Properties within the portfolio being possession either under development (in course of construction) or intended for future development on the assumption of vacant possession.

Commercial Properties. As some commercial Properties and business centres within the portfolio are multi-tenanted i.e. occupied by the owner and other tenants we have valued it on the assumption of vacant possession after the lease expires.

Tenancy 2.17. Commercial Properties. We have been provided with the tenancy information by the information Client and have relied on that information as being correct. If the contract does not specify the expiration date we assumed the contract shall expire with one year after the valuation date. No additional verification has been undertaken.

Condition Scope of 2.18. As stated in the General Terms of Business attached, we have not undertaken a inspection building or site survey of the property.

2.19. During our limited inspection we did not inspect any inaccessible areas .We are unable to confirm whether the property is free from urgent or significant defects or items of disrepair.

Comments 2.20. Apart from any matters specifically referred to below, we have assumed that it is in sound order and free from structural faults, rot, infestation or other defects, and that the services are in a satisfactory condition.

At the date of inspection, the buildings (where applicable) appeared to be in a generally reasonable state of repair commensurate with their age and use. No urgent or significant defects or items of disrepair were noted which would be likely to give rise to substantial expenditure in the foreseeable future or which fall outside the scope of the normal annual maintenance programme.

Ground 2.21. We have not been provided with a copy of a ground condition report for the sites. conditions Residential Properties. We have assumed that there are no adverse ground or soil conditions and that the load bearing qualities of the site are sufficient to support the building constructed thereon.

Residential Properties. We have also assumed that no special efforts related to site preparation except already planned by the Client will be required for development.

Residential Properties. Should any preparations be required and the costs required

are to be borne by the Developer, our opinion of property value may be affected.

Mining 2.22. The property is not situated in an area within which specialist consultants recommend that an Archive Mining Survey is commissioned due to former mining. Our valuation assumes that the property is not affected by mining, but, in the event that a survey reveals an adverse position, our valuation could be materially affected.

Environmental considerations Flooding 2.23. We have been unable to ascertain the risks of flooding relating to the subject property. We have therefore assumed that the risk is low due to the existing flood defence system of St Petersburg (Dam) and will not affect the property’s value.

Contamination 2.24. As stated in the General Terms of Business, investigations into environmental matters would usually be commissioned from suitably qualified environmental specialists. Knight Frank St Petersburg ZAO is not qualified to undertake scientific investigations of sites or buildings to establish the existence or otherwise of any environmental contamination, nor do we undertake searches of public archives to seek evidence of past activities which might identify potential for contamination.

2.25. Subject to the above, while carrying out our valuation inspection, we have not been made aware of any uses conducted at the subject property that would give cause for concern as to possible environmental contamination. Our valuation is provided on the assumption that the property is unaffected.

High voltage 1.23 The possible effects of electric and magnetic fields from high voltage electrical supply equipment equipment is a matter for specialist advice and we have assumed that there is no adverse effect on value.

Noise pollution 2.26. There are no airports, underground or train way in the vicinity of the Properties’ location. Nevertheless measuring noise pollution is a matter for specialist advice and we have assumed that there is no adverse effect on value.

Sustainability Sustainability 2.27. The issue of sustainability is becoming increasingly important to participants in the property market. There is a general expectation that buildings that minimise environmental impact through all parts of the building life cycle and focus on improved health for their occupiers may retain value over a longer term than those that do not.

Sustainable buildings should optimise utility for their owners and occupiers and the wider public, whilst minimising the use of natural resources and presenting low environmental impact, including their impact on biodiversity. Definitions of sustainability address both social equity, for example, indigenous and affordable aspects, and environmental impacts, including energy use, both within and “upstream” of the building itself, in terms of the resources consumed in creating and operating it.

2.28. Some of the key issues relating to a building’s sustainability are:

Ɣ Land use; Ɣ Design and configuration; Ɣ Construction materials and services; Ɣ Location and accessibility considerations; Ɣ Fiscal and legislative considerations; Ɣ Management and leasing issues. 2.29. From a value perspective, sustainability is likely to be a long term issue and its relative importance will change over time. Our valuation provides our opinion of value at the valuation date based on market related factors at that date.

EPCs 2.30. The properties within the Russian Federation do not require an Energy Performance Certificate (EPC) when bought, sold, built or rented. An EPC measures the asset rating of a building in relation to its energy performance.

Planning (Residential Properties) Sources of 2.31. We have not made any enquiries of the appropriate Planning Authority in respect of planning matters affecting the Properties. Where reassurance is required on planning matters, information we recommend that formal written enquiries should be undertaken by your legal advisors who should also confirm the position with regard to any legal matters referred to in our report. We assume that property will be constructed and will be occupied or used in accordance with the appropriate permissions and that there are no outstanding statutory notices.

2.32. These enquiries should not be taken as personal searches and information on the relevant website is assumed to be both accurate and up to date. For a formal planning enquiry to be made, the Local Authority will require written representation which has not been possible as part of our report.

2.33. We have been informed by the Client that the Property is intended for residential (residential premises) and commercial (apartments) development.

We have not been provided with further planning information by the local authorities and we depend on all information provided by the Client.

Thus it is assumed that the buildings to be constructed will comply with all necessary Planning and Building Regulation approvals as appropriate.

Construction 2.34. The Client has provided us the copies of planning permissions for the Properties permit within the portfolio under development (in some cases for the current phase of construction). For the Properties intended for future development design projects are being prepared; thus planning permissions are not still obtained.

Planning 2.35. The property is not located within a Conservation Area. restrictions

Highways and access Highways 2.36. We are unaware of any highway proposals that may have a detrimental effect on the value of the Properties.

Residential Properties. We have assumed that all estate roads within the proposed scheme will be adopted and maintained at the expense of the Highways Authority.

Access 2.37. In reporting our opinion of value, we have assumed that there are no third party interests between the boundary of the Properties and the adopted highways and that accordingly the Properties has unfettered vehicular and pedestrian access.

2.38. We have assumed that there are no issues relating to visibility splays which may impact upon the use or proposed use of the Properties.

Statutory licences & certificates 2.39. The Subject Property is represented by undeveloped or partly developed land plots intended for residential and commercial development. Thus future development requires project design preparation and approval, and further construction permit obtaining. Construction permit is a document, which approves that project document complies with construction land plan or complies with plan of the territory, complies with survey of the territory in case of construction and re-construction of the buildings, complies with all regulations, statutory licences & certificates including health and safety standards, fire safety standards and access for disabled persons provision standards.

Residential Properties. Hence we have assumed in our valuation that property development will be undertaken in accordance with all regulations, statutory licences & certificates necessary to be complied with.

Commercial Properties. For the commercial office buildings with related land plots within the portfolio we have assumed in our valuation that all regulations have been complied with.

Leadership in 2.40. Some properties may have a Leadership in Energy and Environmental Design Energy and Certificate (LEED) when they are constructed, let or sold. Leadership in Energy and Environmental Environmental Design (LEED) is one of the most popular green building certification Design (LEED) program used worldwide. Developed by the non-profit U.S. Green Building Council (USGBC) it includes a set of rating systems for the design, construction, operation, and maintenance of green buildings, homes, and neighborhoodsthat aims to help building owners and operators be environmentally responsible and use resources efficiently.

We are unaware of Client’s plans in respect of existing and future buildings LEED Certification. We have not seen any such documents relating to the property and cannot comment further in this regard.

Access for 2.41. Disability discrimination legislation provides that the majority of organisations must

disabled persons make provision for disabled persons to have access to the goods and services they provide. This refers to both non-residential and residential buildings. This may require an access audit of the property to be undertaken and for specific arrangements relating to physical aspects of the building. We have not been provided with any information in this respect and our valuation has been undertaken on the assumption that the property is capable of being made fully compliant at no significant additional cost with all relevant disability access requirements.

Fire safety 2.42. It is a requirement for a fire safety risk assessment to be carried out and for a fire management plan to be maintained.

We have not viewed any such documents relating to the property and have assumed for the purposes of our valuation that the relevant requirements will be fully complied with.

3. Proposed development

Proposed scheme (Residential Properties) Source of 3.1. The Client provided us the design parameters for the construction of Properties information development considered in the valuation as the highest and best use.

Scheme outline 3.2. The design parameters of Properties development, provided by the Client, are attached in Appendix 2 within the description of the Properties.

Proposed 3.3. We have relied upon floor areas provided to us by the Client. accommodation We recommend that the design parameters for the construction are confirmed by the Developer’s architect.

3.4. A summary of the proposed specification is set out in Appendix 2 within the Properties’ description. In general terms we believe the proposed schemes are adequate for the developments of this nature and in this location. This will have a positive impact on the properties value because the costs to be beard will be warranted by the achievable sales and rental rates.

Building 3.5. In reporting our opinions of value we have assumed that the schemes are compliant Regulations with all Building Regulations and can be implemented in accordance with the plans provided. In the event that amendments need to be made to the proposed scheme as a consequence of it failing to meet statutory requirements, our opinions of value may be affected.

Rights of lights 3.6. We have assumed that the proposed scheme does not raise any issues with regard to rights of light and that no third parties are entitled to compensation and that no injunctions could be made in this respect.

Development costs (Residential Properties) General 3.7. As stated in our General Terms of Business, we strongly recommend that you supply

comment us with build cost and other relevant information prepared by a suitably qualified construction cost professional, such as a quantity surveyor. We do not hold ourselves out to have expertise in assessing build costs and any property valuation advice provided by us will be stated to have been arrived at in reliance upon the build cost information supplied to us by you.

3.8. To verify build cost information supplied to us, we have had regard to published build cost information. There are severe limitations on the accuracy of build costs verified by this approach and professional advice on the build costs should be sought by you. The reliance which can be placed upon our advice in these circumstances is severely restricted. If you subsequently obtain specialist in build cost advice, we recommend that we are instructed to review our advice.

Source of cost 3.9. We have been supplied with a summary of the development project costs provided information by the Client.

Development project costs include construction costs, costs of utilities, site purchase and preparation (demolition of existing building excluding monuments of culture and art), project design and concept costs, engineering, and expenses for consultants and miscellaneous.

Construction costs include all the fees, material and labour costs incurred in building a structure. It involves construction of foundation, frames, overlappings, roof, openings (doors and windows), external walls with fit-out, floors fit-out.

Utilities include electricity and lightening and low-voltage systems, water supply and sewerage, gas.

Site preparation includes access road construction (if needed), existing buildings demolition, land plot clearing and levelling, drainage systems construction.

We have been provided with the development project costs (project budget) by the Client and have therefore relied upon them. Nevertheless we have undertaken web based enquiries referred to the development cost figures to verify the data provided by the Client. We have compared Client’s figures with the development cost figures (excl. land plot acquisition costs) produced by other developers and published on their web sites in the project declarations.

According to the opinion of experts from Knight Frank St Petersburg Strategic Consulting Department the applied construction costs are in line with the market level. The additional verification of the applied construction costs is based on the experience of several consultancies for different development projects and on information from quantity surveyor and construction companies.

Build costs 3.10. In light of the above evidence, we have adopted the Developer’s estimate of project adopted costs (project budget) outlined above within our assessment. These development costs include VAT and exclude sales and marketing costs and legal and finance costs required to complete the scheme as set out in the excel tables with input provided by the Client.

These development project costs consist of already incurred and estimated outstanding costs. Since we provide our opinion on the value as of the valuation date, in our calculations we have adopted only estimated outstanding costs.

The information provided by the Client and pointed above is not attached to this report but is kept in the valuers’ archive and can be provided at a request if necessary.

3.11. Our valuation has been undertaken upon the assumption that the build costs adopted by us above are adequate to complete the development to the scheme adopted by us. Any variation in the build costs may have a significant impact upon the reported Market Value of the Properties. In this respect we additionally draw your attention to the importance of our recommendation in relation to the appointment of an independent quantity surveyor below.

Construction 3.12. We have assumed construction period in accordance with the Developer’s envisaged period and timetable when in our opinion this timetable complied with and reflected phasing construction periods witnessed at developments of a comparable scale.

Otherwise our knowledge of similar developments suggested a construction period allowance of approximately 1 year (per phase if applicable).

3.13. We have assumed construction phasing in accordance with the Client’s envisaged phasing. In the absence of construction phasing information provided by the Client, we have adopted the most probable market construction phasing. We have assumed 100,000 – 200,000 sq. m of buildings constructed within 1 phase. We based on the experience due to several consulting service for different development projects and information from quantity surveyor and construction companies

3.14. Our assumed build costs have been inflated to account for predicted build cost inflation through the life of the development. This is because we have assumed that the Developer could not negotiate a fixed price contract at the outset of the development at the level of our assumed costs due to the long term construction period.

We have used the CPI forecast by the Ministry of Economic Development of Russian Federation to index the construction costs.

4. Market analysis

Market commentary 4.1. It should be appreciated that this section of the valuation report is published for general information only and while rigorous research has been used in preparing this analysis, the views and projections provided in the report should not form the basis of any formal decision. Being a general report, the material does not necessarily represent the view of Knight Frank St Petersburg ZAO in relation to specific properties or projects and no responsibility can be accepted by Knight Frank St

Petersburg ZAO resulting from the contents of the document.

Source of 4.2. Our market analysis has been undertaken using market knowledge within Knight information Frank and Knight Frank St Petersburg ZAO, enquiries of other agents, searches of property databases, as appropriate and any information provided to us.

Russia economic overview 4.3. Ɣ GDP growth in 2014: 0.7%; in 2015: -3.7%1; in 2016 – 0.7%, 2017 – 1.9%, 2018 – 2.4% (2016 – 2018 – base forecast prepared by Ministry of Economic Development of the Russian Federation2)

Ɣ Inflation in 2014: 11.4%; in 2015: 12.9%3; in 2016 – 6.4%, 2017 – 6.0%, 2018 – 5.1% (2016 – 2018 – base forecast prepared by Ministry of Economic Development of the Russian Federation4)

Ɣ Unemployment rate in December 2014: 5.3%; November 2015: 5.8%5

Ɣ Key rate: 11%

Ɣ Exchange Rates as at December 31, 2015: RUB 72.8827 per 1 USD; RUB 79.6972 per 1 Euro6

Ɣ EURIBOR 12M as at December 31, 2015: 0.0600%7

Ɣ LIBOR USD 12M as at December 31, 2015: 1.1780%8

Investment market commentary Background 4.4. The oil price drop and the consequent weakening of the Russian ruble had a significant impact on the investors’ mood in 2015. On the one hand, considerable assets’ price decrease made commercial real estate more appealing for investors. However, on the other hand, transition from dollar to ruble rental rates in the commercial market made the rental income less attractive. Though high quality assets still keep dollar pricing.

Financing 4.5. Since sanctions limitations in 2014 Russian investors still are not able to attract

1 Preliminary estimate, source: http://www.gks.ru/bgd/free/B15_00/Main.htm

2http://economy.gov.ru/minec/about/structure/depMacro/20151026

3 As a percentage of Inflation of December 2014 / 2015, source: http://www.gks.ru/bgd/free/B15_00/Main.htm

4http://economy.gov.ru/minec/about/structure/depMacro/20151026

5http://www.gks.ru/bgd/free/B14_00/Main.htm http://www.gks.ru/bgd/free/B15_00/Main.htm

6 http://cbr.ru/

7 http://www.global-rates.com/interest-rates/euribor/euribor-interest-12-months.aspx

8 http://www.global-rates.com/interest-rates/libor/american-dollar/usd-libor-interest-rate-12-months.aspx

available financing as opposed to international funds that have an access to global capital markets. This fact resulted in the low investors’ activity.

Supply/ 4.6. In addition to traditionally active representatives of the United States and Europe, Demand new players started to heighten interest in Russian assets from mid-2014. They are investment funds of the Middle East and Asia. However, it shall be emphasized that not a single transaction was closed from the beginning of the year with the participation of these companies. Investors from Asia express an interest in both residential real estate and infrastructural projects along with the high quality commercial properties. The volume of transactions with foreign investment amounted to $540 million at the end of 2015, which is a minimum level since 2009.

Total investment volume in commercial real estate in 2015 amounted to $2.7 billion. Compared to 2014 it reduced by 27%.

The average size of transaction was minimal since 2010 and amounted to $81 million. Such a low value is due to a decrease in the assets’ value, and inaccessibility of debt financing necessary for major acquisitions. Thus, in 2015 the number of transactions up to $100 million has increased.

Investors in the market face the shortage of high-quality assets. Volatility in rental income caused by the rental rates reduction and the tenants’ desire to revise tenancy terms create a barrier to market entry for potential investors seeking stabilized assets.

Contrary to expectations, in 2015 there were only a few transactions of the ownership of the real estate transferring to the banks. This was the result of the buyer’s fail to pay the loan under the mortgage loan agreement. However, since further reduce in the market in 2016 similar transactions may be more spread.

Evidence of 4.7. The current market fails to provide sales transactions on the properties under investment sales development. A number of commercial real estate transactions the information on which is complete and reliable is also quite few. Thus in our commercial Properties valuation within the portfolio we relied upon the offer prices available in the market.

Capitalization 4.8. In 2015 Moscow prime yields remained at 10.50-11.00% and 11.00-12.00% for A and rate B class offices respectively, 10.50-11.00% for shopping centres and 12.00-13.00% for warehouses.

Potential 4.9. Potential purchasers of large-scale assets, i.e. land plots for residential development purchasers are mainly domestic developer companies or, less likely, investment funds who look for medium to long-term investment. Share of international players is very low and tends to shrink further.

Potential purchasers of commercial real estate are mainly domestic investors, foreign investors take ca 20%.

Office market overview Summary 4.10. St Petersburg and Moscow office market overview are attached in Appendix 3.

Evidence of 4.11. We’ve analysed both the office real estate market of St Petersburg and Moscow in comparable general and the competitive environment of the Projects particularly to determine lettings and the market rental, vacancy and capitalization rates and OPEX for the Properties. We sales used this information to compare it with the data provided by the Client and to calculate the property value if the current rent does not correspond to market. Furthermore we’ve analysed the supply of the similar properties for sale.

Competitive environment analysis for the commercial office Properties and business centres within the portfolio follow appropriate office market overview (St Petersburg and Moscow) and are attached in Appendix 3.

Residential market overview Summary 4.12. St Petersburg, Moscow and Yekaterinburg residential market overview are attached in Appendix 3.

Evidence of 4.13. We’ve analysed both the residential real estate market of St Petersburg and comparable Leningradskaya Oblast’, Moscow , Yekaterinburg in general and the competitive sales environment of the Projects particularly to determine market prices, sales pace per quarter, price growth due to the inflation and project completion. We used this information to compare it with the data provided by the Client and to calculate the market sales prices if the current prices do not correspond to the market. We assumed that sale prices information provided by the Client refers to the current average prices for the appropriate unit (apartment (per unit), office or retail space (per sq. m) or parking lot (per unit)) as if the property was commissioned at the valuation date.

We’ve analysed average residential prices dynamics by classes and extrapolated it to index the income from sales.

Competitive environment analysis for the Properties being either under residential development (in course of construction) or intended for future residential development within the portfolio follow appropriate residential market overview (St Petersburg, Moscow and Yekaterinburg) and are attached in Appendix 3.

5. Valuation

Highest and Best Use analysis 5.1. The analysis of relevant data to develop a market value opinion requires two important steps in the valuation process before the applicable approaches to value are applied. Market/marketability analysis begins the process of narrowing the focus from a broader macro view to data that is especially pertinent to the appraised property (see Section 4). Highest and best use relies on that analysis to identify the most profitable, competitive use to which the subject property can be put. The highest and best use is shaped by the competitive forces within the market where the property is located and provides the foundation for a thorough investigation of the

competitive position of the property in the minds of market participants.

5.2. The highest and best use analysis allows to define the most profitable and competitive use of the real estate property, i.e. the use, which guarantees the highest value of the subject property.

The highest and best use includes four compulsory criteria:

Ɣ Physical possibility – physical possibility of constructing a building for the highest and best use of the subject site;

Ɣ Legal possibility – planned use should correspond to the current legislation restricting use of the site;

Ɣ Financial feasibility – the legally acceptable use of the site should guarantee income to the owner;

Ɣ Highest effectiveness – the highest and best use implies either maximization of owner's net income, or value of the subject property.

5.3. Residential Properties. We have assumed that the development scheme of the Properties within the portfolio either under development (in course of construction) or intended for future development provided by the Client and described in this report is consistent with the highest and best use of the Properties as of the valuation date. Thus we recommend that our assumption on the proposed development scheme adoption was referred to the appropriate legal and planning advisors. Any alteration of the proposed scheme may cause the failure to maximising value.

Commercial Properties. We have assumed that the current use of the office real estate within the portfolio is the highest and best use of the Properties at the valuation date.

Methodology 5.4. Our valuation has been undertaken using appropriate valuation methodology and our professional judgement.

Comparative 5.5. Comparative Method of Valuation is the most commonly used and accepted method Method in ascertaining the market value of properties. Under the Comparative Method, the valuation approach entails comparing the subject property with similar properties that were sold recently and those that are currently being offered for sale in the vicinity or other comparable localities. The characteristics, merits and demerits of these properties are noted and appropriate adjustments thereof are then made to arrive at the value of the subject property.

5.6. Residential Properties. Taking into account the type of the Properties within the portfolio, namely being either under development or intended for future development land plots assumed as suitable for residential and commercial development, we believe that the Comparative Method is not appropriate for its

valuation.

Commercial Properties. In undertaking our valuation of the commercial office Properties within the portfolio, we made our assessment only on the basis of a collation and analysis of appropriate comparable negotiations due to the lack of evidence of comparable sales transactions.

5.7. Comparative Method was applied to market value assessment of the commercial office Properties within the portfolio.

Residual Method 5.8. The Residual Method of Valuation is normally used for development land or projects. The Residual Method is a generally accepted method for valuing properties that are considered to have possible development potential.

This approach entails estimating the gross development value of the development components and deducting them from the development costs to be incurred, i.e. preliminary expenses, statutory payments, earthworks, infrastructure and building construction costs, professional fees, contingencies, project management fees, marketing and legal fees, financing costs, developer’s profits and other costs (if any) to arrive at the residual value. This residual value appropriately discounted for the period of development and sale is deemed to be the present market value of the subject property.

5.9. Taking into account the type of the properties, we believe that the Residual Method is appropriate for its valuation.

Residential Properties. The Client’s projects are assumed to be the highest and best development of Subject Properties. This concept requires estimating forthcoming net operating income (NOI – sales or rental or both of them), deducting outstanding development costs (total project budget) from NOI and discounting resulting cash flow (CF) to calculate net present value (NPV). Thus, for the purposes of valuation the concept of construction and future selling is considered.

Commercial Properties. Current use of commercial office Properties and business centres within the portfolio is assumed to be the highest and best use. This concept is applicable for the vacant commercial office Properties and requires estimating forthcoming NOI (Effective Gross Income (EGI) purified from operating expenses (OPEX)), and discounting resulting CF to calculate NPV. Thus, for the purposes of valuation the concept of future letting and selling in the end of the forecast period is considered.

Investment 5.10. The Investment Method of valuation is usually applied for investment properties. In Method this method, the annual rental income presently received or expected over a period of time for the lease of the property is estimated and deducted from the expenses or outgoings incidental to the ownership of the property to obtain the net annual rental value. This net annual income is then capitalised by an appropriate capitalisation rate.

The relevant capitalisation rate is chosen based on the investment rate of return expected (as derived from comparisons of other similar property investments) for the

type of property concerned taking into consideration such factors as risk, capital appreciation, security of income, ease of sale, management of the property, etc.

Investment Method is used for valuing properties that are potentially capable of generating income like the rental properties which include non-owner occupied building, houses and duplex, apartment building, etc. The income from rent that an owner expects from a property is also a part of the value of that property. This approach is not suitable for purely residential properties that do not generate any income.

This approach to value is best suited for income generating property that has adequate market data, because it is meant to reflect the behaviour and expectation of participant of typical market.

5.11. Residential Properties. Russian secondary land rental market is quite undeveloped. Partially developed land having encumbrance are not purchased as investment property. Purchasing for further development is the most spread way of land investment. Thus the future owner doesn’t rely on possible rental income from property when taking a buying decision.

Thus rate of return expected from rent cannot arrive from comparisons of other similar property investments for appropriate comparable buying and rental transactions/ negotiations are lacking. This fact confirms that purchasing land investment properties is not for rent for it does not result in the best rate of return on assets.

The adequate market data on capitalization rate is lacking taking into account all the aforesaid.

Taking into account the type of the property, namely residential (residential premises and apartments) Properties being either under development (in course of construction) or intended for future development within the portfolio, we believe that Investment Method is not appropriate for its valuation.

Commercial Properties. Taking into account the type of the property, namely multi- tenanted commercial office Properties and business centres within the portfolio, we have arrived at opinion that this approach to value is best suited. We also used the modification of the Investment Method - Terms&Reversion method (where applicable).

Profits method 5.12. The Profits Method of Valuation is used to determine the market value of properties with special licensing requirements. It entails the use of the trading accounts derived from the business operation of the subject property. The gross receipts are adjusted to cover payments for purchases and stocks to determine the gross profit. The operating expenses are then deducted to assess the net trading profit. This figure of net trading profit less the remunerative interest on the tenant’s capital is the divisible balance. A percentage of the divisible balance is deemed to be the estimated net annual rental value of the subject property. This estimated net annual income is then

capitalised by an appropriate capitalisation rate or Years’ Purchase figure to capitalise the income to the present Capital Value of the property.

5.13. Taking into account the type of the property, namely partially developed land plots suitable for development without special licensing requirements, we believe that Profits Method is not appropriate for its valuation.

Depreciated 5.14. The Depreciated Replacement Cost (DRC) method is based on an estimate of the replacement Market Value for the existing use of the land, plus the current gross replacement cost method (reproduction) costs of the improvements, less allowances for physical deterioration and all relevant forms of obsolescence and optimisation. The DRC method is used for certain types of properties which are rarely, if ever, sold in the open market, except by way of a sale of the business of which they are a part (called the business in occupation), due to their uniqueness arising from the specialised nature and design of the buildings, their configuration, size, location or otherwise.

5.15. Taking into account the type of the property, we believe that Depreciated Replacement Cost Method is not appropriate for its valuation.

Valuation considerations 5.16. Ɣ Commercial Properties. We’ve analysed both the office real estate market of St Petersburg and Moscow in general and the competitive environment of the Projects particularly to determine the market rental, vacancy and capitalization rates and OPEX for the Properties. We used this information to compare it with the data provided by the Client and to calculate the market rents after the lease expires if the current rent does not correspond to the market. Furthermore we’ve analysed the supply of the similar properties for sale. Thus the value was determined by reference to observable prices.

Ɣ Residential Properties. We’ve analysed both the residential real estate market of St Petersburg and Leningradskaya Oblast’, Moscow , Yekaterinburg in general and the competitive environment of the Projects particularly to determine market prices, sales pace per quarter, price growth due to the inflation, project completion and construction costs. We used this information to compare it with the data provided by the Client and to calculate the market sales prices if the current prices do not correspond to the market. We assumed that sale prices information provided by the Client refers to the current average prices for the appropriate unit (apartment (per unit), office or retail space (per sq. m) or parking lot (per unit)) as if the property was commissioned at the valuation date.

Ɣ We have used the CPI forecast by the Ministry of Economic Development of Russian Federation to index the construction costs.

Ɣ Residential Properties. We’ve analysed average residential prices dynamics by classes and extrapolated it on indexing the income from sales.

Ɣ All the general comments set out in this report refer to all the Properties within

the portfolio if only special assumption is not provided.

Ɣ To the Tax Code of Russian Federation residential development performed by contractors is not subject to VAT excluding commercial and parking construction in case of charging VAT from selling prices. Thus VAT paid on construction and other development costs can be offset only proportionally to the costs incurred in non-residential construction. Commercial properties are subject to VAT fully (long-term leasehold of the land plot) or in respect of the price apportioned to the building (freehold of the land plot) if only the owner’s company is not using Simplified Tax System. Thus we have assumed that all development costs and prices provided by the Client include VAT (where applicable). In our value calculations we have applied cash flows including VAT.

Ɣ More detailed valuation considerations for the particular Properties within the portfolio are expressed in the description placed in attachments to the report.

Development 5.17. Ɣ We have adopted the Developer’s estimate of project costs (project budget) costs within our assessment.

Ɣ There are severe limitations on the accuracy of build costs applied by this approach and professional advice on the build costs should be sought by you. The reliance which can be placed upon our advice in these circumstances is severely restricted. If you subsequently obtain specialist build cost advice, we recommend that we are instructed to review our advice.

Financing and 5.18. We’ve applied discount rate for the calculations using the Residual Method discount rate (generally, for Residential Properties).

Despite the general shortage of construction financing in Russia – in particular financing provided by Western banks – we have assumed in this particular case a 100% equity financing at an interest rate specified for every Property within its description in the attachment. This interest rate was derived on the basis of the government bonds yield (OFZ-46020-AD, maturity date – February 06, 2036, yield to maturity – 9.79%)9 and a margin of approximately 8.00% to 18.00%.

The average applied nominal yield (discount rate) of 21.3% falls within the range of discount rate of 17%-22% and equals to the average value of this range proposed by Association of Banks of the North-West Russia for the period of 10.5% key interest

9 http://www.rusbonds.ru/quotes.asp?go=1&tool=%CE%D4%C7-46020- %C0%C4&emit=0&sec=1&status=&cat=0&per=0&rate=0&ctype=0&pvt=0&grnt=0&conv=0&amm=0&mp=10013&dtd=29&dtm=12&d ty=2014&bdate=&edate=&byeff=&eyeff=&bvol=&evol=&bsdvol=&esdvol=&btrade=&etrade=

rate. At the valuation date key interest rate is 11%10.

Thus, we are of opinion that the average nominal discount rate of 21.3% applied for discounting the cash flow in the Residual Method used in undertaking our valuation of the residential properties within the portfolio is adequate to the market data.

Capitalization 5.19. We have applied a capitalization rate (all-risk yield) of 9% to 11.5% for the Properties rate located in Moscow and of 10% to 11.5% for the Properties located in St. Petersburg as explained in paragraph 4.8.

Calculation 5.20. This valuation does not reflect purchaser’s costs, which we would anticipate to be approximately 1.5–2% of the property value, including legal and tax advisers’ fees. The Value provided doesn’t include these fees.

The valuation calculations are attached as the Excel files in the electronic form.

Valuation bases Market Value 5.21. Market Value is defined within RICS Valuation – Professional Standards as:

“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”

Fair Value 5.22. Fair Value for financial reporting is defined within RICS Valuation – Professional Standards / International Valuation Standards , adopting the definition of the International Accounting Standards Board (IASB) in IFRS 13, as:

“The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”

Portfolios 5.23. In a valuation of a property portfolio, we have valued the individual properties separately and we have assumed that the individual properties have been marketed in an orderly way.

Valuation date Valuation date 5.24. The valuation date is December 31, 2015.

Market Value Assumptions 5.25. Our valuation is necessarily based on a number of assumptions which have been drawn to your attention in our Agreement ȶ PO-17/2015 dated December 04, 2015, General Terms of Business, Terms of Engagement Letter and within this report.

Key assumptions 5.26. Whilst we have not provided a summary of all these assumptions here, we would in

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particular draw your attention to a key assumption that state assumptions which are particularly important / relevant as instructed by you so drawn to your attention within this report:

Ɣ The Subject Property is represented by vacant, partly or completely developed land plots intended for residential (residential premises) and commercial (apartments) development (hereinafter referred to as “Residential Properties”) and by commercial office buildings with related land plots (hereinafter referred to as “Commercial Properties”). It is assumed that the buildings under construction will be completed in accordance with the identified plans and specification provided by the Client.

Ɣ The owners of the Properties within the portfolio are several legal entities. We have been informed by the Client that all these legal entities are parts of LSR Group OJSC. Thus we assume that 100% ownership of LSR Group OJSC is to be valued.

Ɣ To the title documents provided by the Client part of the Properties are either the shared ownership or leasehold. For the shared ownership we assume it is the share of freehold tenure of the Client in all the properties to be assessed. For leasehold property we assume it is freehold tenure of the improvements and leasehold of the land to be assessed.

Ɣ We assume that all the utilities (heating, cold and hot water, electricity, sewerage / drainage and telecommunications) are available to the Property at the site borders.

Ɣ We assume that public and social (including school) facilities for the future development are sufficient.

Ɣ We have adopted the Developer’s estimate of project costs (project budget) within our assessment.

purchaser of the Property would normally be entitled to all the Property rights including claim rights for the payment for sold unpaid units. Thus, we have added anticipated income from already sold but unpaid units to the NPV.

Ɣ We have assumed construction period in accordance with the Developer’s envisaged timetable when in our opinion this timetable complied with construction periods witnessed at developments of a comparable scale Otherwise our knowledge of similar developments suggested a construction period allowance of approximately 1 year (per phase if applicable).

Ɣ Residential Properties. We have assumed construction phasing in accordance with the Client’s envisaged phasing. In the absence of construction phasing information provided by the Client, we have adopted the most probable market construction phasing. We have assumed 100,000 – 200,000 sq. m of buildings constructed within 1 phase.

Ɣ To the Terms of Engagement the valuation of portfolio should be presented in the format of the report. Market researches, competitors analyses and description of the Properties within the Portfolio are placed in the attachments to the report.

Market Value 5.27. We are of the opinion that the Market Value of the Properties within the portfolio at

the valuation date is:

136,037,713,000 (One Hundred Thirty-Six Billion Thirty-Seven Million Seven Hundred Thirteen Thousand) RUB.

Table 3. Market Value of the Properties within the portfolio

incl. income Market Value of from deals LSR 100% before No Development Project Address share, ownership, RUB, December 31, % incl. VAT 2015, RUB, incl. VAT Saint-Petersburg and

Leningradskaya Oblast' Business centers 1 Kazanskaya 36 Lit ǩ, 36, Kazanskaya St, St.Petersburg 100% 569,208,000 2 Zolotaya Kazanskaya 44, Kazanskaya St, St.Petersburg 100% 282,476,000 3 Paradny Kvartal BC 11* Lit A, 39, Kirochnaya St, St.Petersburg 100% 426,407,000 4 Kazanskaya 60 Lit A, 18, Fonarny Lane, St.Petersburg 100% 237,820,000 TOTAL, business centers 1,515,911,000 Properties for future development 5 RuchÌ Tsvetnoy Gorod 145, Piskarevsky Av, St.Petersburg 100% 10,492,929,000 RuchÌ Tsvetnoy Gorod block 17 354,445,341 RuchÌ Tsvetnoy Gorod, rest 10,138,483,659 TOTAL, properties for future 10,492,929,000 development Elite (A) class residential

properties 6 Smolny Park Lit A, 4, Smolnogo St, St.Petersburg 100% 5,581,203,000 1,422,753,907 Phase 2, bldgs. Ǩ2,5,6 1,868,808,047 201,681,008 Phase 3 1,750,279,592 276,963,886 Phase 4 1,962,115,361 944,109,013 7 Radishcheva, 39 Lit M, 39, Radishcheva St, St.Petersburg 100% 409,193,000 130,265,359 8 Verona Lit A, 29, Morskoy Pr, St.Petersburg 100% 1,557,785,000 1,075,040,816 9 Kovensky Lit A, 5, Kovensky Lane, St.Petersburg 100% 137,496,000 22,638,806 10 Dom na Dvoryanskoy Lit Ǩ, 13, Kuybysheva St, St.Petersburg 100% 311,601,000 37,663,478 11 Osobnyak Truvorova Lit A, 64, Martynova Emb, St.Petersburg 100% 520,000,000 12 Russkiy Dom 5, Korolenko St, St.Petersburg 100% 2,706,390,000 1,283,250,877 TOTAL, elite (A) class residential 11,223,668,000 properties Business (B) class residential

properties 13 Europa City Lit ǭ, 10, Medikov Av, St.Petersburg 100% 4,374,548,000 1,097,621,026 Phase 3 2,215,552,417 663,832,225 Phase 4 2,158,995,583 433,788,801 Plot 151, Block 66a, Savushkina St, 14 Tri Vetra 100% 2,415,881,000 1,470,932,594 St.Petersburg 15 Moskovskoye Shosse, 3 Lit ǫ, Moskovskoye Hwy, St.Petersburg 100% 666,152,000 231,295,989 16 Bogemiya 14, Smolenskaya St, St.Petersburg 100% 855,495,000 121,580,305 TOTAL, business (B) class 8,312,076,000 residential properties Mass market (Ǹ) class residential

properties 17 Yuzhnaya Aquatoriya Block 28, 28a, Doblesti St, St.Petersburg 100% 5,223,365,000 3,435,205,879 640,109,454 525,885,162 1,043,359,639 73,960,230 410,281,758 928,017,621 1,438,933,707 196,936,557 262,400,475 1,487,597,464 805,841,214

incl. income Market Value of from deals LSR 100% before No Development Project Address share, ownership, RUB, December 31, % incl. VAT 2015, RUB, incl. VAT 517,062,509 328,185,092 Plots 3, 8, 12, 5, 7, 3*, 13, 8*, 1, Lit ǻ, 49, 6, 18 Sophiya 100% 3,973,981,000 4,245,541,089 Yuzhnoe Hwy, St.Petersburg 19 Kalina Park 12, Marshala Blukhera, St.Petersburg 100% 7,790,894,000 2,401,734,477 20 Viva Lit ǫ, 3, Moskovskoe Hwy, St.Petersburg 100% 202,431,000 31,314,817 Lit Ǫ1, Bldg 2, 27, Dunaysky Av, 21 Kvartet 100% 485,599,000 604,045,632 St.Petersburg Plot 208, Prigorodny (Kamenka), 22 Shuvalovsky 100% 2,515,077,000 3,143,724,890 St.Petersburg 23 Novaya Okhta Murinskaya Road, St.Petersburg 100% 4,111,896,000 3,414,437,410 24 Ruch’i-7 145, Piskarevsky Av, St.Petersburg 100% 1,856,362,000 25 Tsivilizatsiya 42, Oktyabrskaya Emb, St.Petersburg 100% 4,546,611,000 Oktyabrskaya Naberezhnaya Rudas 2,258,510,000 Oktyabrskaya Naberezhnaya 2,288,101,000 Barrikada Plot 3, Zapovednaya St (north of Lit A, 26 Zapovednaya 100% 2,503,789,000 51Ȉ, Zapovednaya St), St.Petersburg Airport Rzhevka, Kovalevo Settlement, 27 Aeroport Rzhevka Vsevolozhsky District, Leningradskaya 100% 2,172,110,000 Oblast' Plots 1, 2, Kosmonavtov Pr (south-east of 28 Kosmonavtov 100% 547,150,000 Svirskaya St crossing), St.Petersburg TOTAL, mass market (Ǹ) class 35,929,265,000 residential properties Commercial properties 29 Paradny Kvartal 1-3, Paradnaya St, St.Petersburg 1,198,289,000 Phase 5, bldgs. 17,18 100% 1,198,289,000 30 Nevsky 1 1, Nevsky Av, St.Petersburg 1,696,734,000 31 Fontanka 3 3, Fontanka River Emb, St.Petersburg 970,308,000 68, Nevsky Av / Lit Ǩ, 40/68, Fontanka 32 Nevsky 68 100% 2,795,754,000 River Emb, St.Petersburg TOTAL, commercial properties 6,661,085,000 TOTAL, properties, located in Saint-Petersburg and 74,134,934,000 Leningradskaya Oblast' Moscow and Moscovskaya Oblast' Business (B) class residential

properties Bldg 14, 21, 58 Leningradskoye Hwy, 33 Leningradskoe shosse 58 100% 3,458,946,000 Moscow 34 Donskoy Olimp Bldg 19, 21, Serpukhovsky Val St, Moscow 100% 6,681,489,000 1,616,961,330 Zarechye Settlement, Odintsovo District, 35 Grunvald 100% 334,634,000 43,759,124 Moscovskaya Oblast' 36 ZILART 23, Avtozavodskaya St, Moscow 100% 22,121,905,000 1,779,299,976 TOTAL, business (B) class 32,596,974,000 residential properties Mass market (Ǹ) class residential

properties 37 Luchi Bldg 6, Proizvodstvennaya St, Moscow 100% 7,454,796,000 Bachurino Village, Sosenskoye settlement, 38 iBitsa 6,111,779,000 Novomoskovsky AD, Moscow Phase 1 100% 576,366,472 Phase 2 100% 1,499,475,387 Phase 3 100% 1,429,167,704 Phase 4 100% 1,126,529,764 Shopping and entertainment center 100% 1,480,239,673

incl. income Market Value of from deals LSR 100% before No Development Project Address share, ownership, RUB, December 31, % incl. VAT 2015, RUB, incl. VAT Near Sal'kovo Village, Ryazanovskoye 39 Podolsk-Erino 100% 1,849,725,000 Settlement, Novomoskovsky AD, Moscow Zapadny Neighbourhood, Domodedovo, 40 Novoe Domodedovo 100% 52,333,000 641,171,040 Moscovskaya Oblast' near Chernaya Village, Pavlo-Slobodskoye 41 Nakhabino Yasnoe Settlement, Istrinsky District, Moscovskaya 100% 3,284,210,000 344,431,140 Oblast' TOTAL, mass market (Ǹ) class 18,752,843,000 residential properties Commercial properties Bldgs. 1, 2, 3, 9, Sadovnicheskaya St, 42 Novy Balchug 100% 2,076,886,000 Moscow TOTAL, commercial properties 2,076,886,000 Business centers 43 Avtozavodskaya 22, Avtozavodskaya St, Moscow 100% 1,148,208,000 44 Davydkovskaya 16, Davydkovskaya St, Moscow 100% 262,475,000 45 16, Tverskoy Blvd 16, Tverskoy Blvd, Moscow 1,101,112,000 TOTAL, business centers 2,511,795,000 TOTAL, properties, located in 55,938,498,000 Moscow and Moscovskaya Oblast' Yekaterinburg Mass market (Ǹ) class residential

properties 2B, 40-Letiya Komsomola St, 46 Rassvetny 100% 2,395,317,000 1,124,926,609 Yekaterinburg 47 Khrustalniye Klyuchi Latviyskaya St, Yekaterinburg 100% 614,742,000 252,844,179 48 Michurinsky Sukhodolskaya St, Yekaterinburg 100% 1,701,989,000 298,769,658 Phase 1 100% 664,406,000 298,769,658 Phase 2 100% 1,037,583,000 49 Rastochnaya Rastochnaya St, Yekaterinburg 100% 97,980,000 50 Akademichesky Verkhneuphaleyskaya St, Yekaterinburg 100% 212,459,000 51 Flagman Repina St, Yekaterinburg 100% 698,959,000 491,107,693 52 Shefskaya 11 11, Shefskaya St, Yekaterinburg 100% 242,835,000 343,614,837 TOTAL, properties, located in 5,964,281,000 Yekaterinburg TOTAL, properties 136,037,713,000

6. Property risk analysis

General comments 6.1. In this section of our report we summarise the property related risks which we have identified as part of our valuation report and which we consider should be drawn to your attention. This summary should not be taken to be exhaustive and must be considered in conjunction with the remainder of the report. Nothing in this section should be construed as being a recommendation of taking any particular course of action.

Risks relating to the property Location 6.2. We assume a high level attraction of the location of Properties within the portfolio for future tenants and customers.

Contamination 6.3. While carrying out our valuation inspection, we have not been made aware of any uses conducted at the subject property that would give cause for concern as to possible environmental contamination. Our valuation is provided on the assumption that the property is unaffected.

For the purposes of valuation we referred to the design parameters for the construction according to the Properties development, provided by the Client. We consider these parameters especially for residential construction satisfy sanitary requirements.

Nevertheless in our opinion the absence of the existing sanitary protection zone requires further investigation.

Planning 6.4. We have been informed by the Client that the Property is intended for residential and commercial development.

We assume that all necessary permissions for the scheme described in this report will be obtained and that this scheme will be completed, in order to arrive at our opinion of the Market Value of the Property.

We recommend that our assumption on the proposed development scheme adoption was referred to the appropriate legal and planning advisers.

Legal title 6.5. Any legal title issues are matters which should be referred to your legal advisers. However the following matters have come to our attention which we consider require further investigation

We have been provided with the Properties’ title information by the Client. Nevertheless we have not been provided with all the ownership certificates and land long-term lease agreements to verify it. Thus, in our valuation, we have assumed a good and marketable freehold (to the land plots and buildings) or long-term leasehold (to the land plots) title and that all documentation is satisfactorily drawn.

We recommend that our assumption on the good and marketable title was referred to the appropriate legal advisers.

Tenancies 6.6. Any tenancy issues are matters which should be referred to your legal advisors. However the following matters have come to our attention which we consider require further investigation.

Commercial Properties. As some commercial office Properties and business centres within the portfolio are multi-tenanted i.e. occupied by the owner and other tenants we have valued it on the assumption of vacant possession after the lease expires.

We have been provided with the tenancy information by the Client and have relied on that information as being correct. If the contract does not specify the expiration

date we assumed the contract shall expire with one year after the valuation date. No additional verification has been undertaken.

We recommend that our understanding of the expiration date of the current lease agreements is referred to your legal advisers. Should this be subject to any amendment our valuation should be reviewed.

Income risks Tenant covenant 6.7. Due to the quality of the future building we estimate high quality of tenants and buyers interested in renting and living space in the Subject Property.

Cashflow 6.8. Residential Properties. The apartments and residential premises are or will be put on sale at the early stage of construction that would guarantee stable cash flow. The pace of sales and prices for the discounted cash flow calculations are in line with market. Nevertheless in current market conditions there is a higher than normal degree of uncertainty attached to our opinion of the stability of cash flows.

Commercial Properties. Some commercial office Properties and business centres within the portfolio are multi-tenanted i.e. occupied by the owner and other tenants. Most of the contracts do not specify the expiration date thus we assumed the contract shall expire with one year after the valuation date.

The necessity of new tenants searching may result in cash flows. Nevertheless taking into account that most of the commercial office Properties and business centres within the portfolio are owner occupied and intended for further owner occupation and not for income gaining and will continue to remain in the existing ownership or occupation uncertainty attached to our opinion of the stability of cash flows is not so significant.

Reletting 6.9. Commercial Properties. As the commercial office Properties and business centres within the portfolio will continue to remain in the existing ownership or occupation the risk of reletting the premises might be low.

Void costs 6.10. As a result of stable cash flow and low reletting uncertainty the void costs tend to decrease which also means lower expenses for agent’s rewarding.

Development risks Construction 6.11. Capital expenditures are to be incurred in course of the actual project development – costs construction of utilities and buildings. The scope of estimating both the parameters of future development and the construction and other costs is beyond the scope of our expertise. We recommend that our understanding of the parameters of future development is referred to a project surveyor for confirmation that our understanding is correct. We recommend that our understanding of the development costs is referred to a quantity surveyor for confirmation that our understanding is correct. Should this be subject to material amendment our valuation should be reviewed.

Cost over-runs 6.12. The development scheme described in this report is not unusual type of construction. Nevertheless we would like to draw your attention to the fact that in current market conditions the construction of buildings especially within the integrated development of the territory or any contingencies related to environmental, planning and site conditions may cause additional costs difficult to pin down in advance. Thus we recommend that the construction costs should be carefully reviewed by a quantity surveyor after the building project approval and building permit obtaining.

Time over-runs 6.13. Consequential losses may arise if the development over-runs and the construction term increases. Thus we recommend that the construction costs should be carefully reviewed by a quantity surveyor after the building project approval and building permit obtaining.

Design concerns 6.14. The development scheme of the Properties within the portfolio described in this report is highest and best use of the Property at the valuation date. Thus we recommend that our assumption on the proposed development scheme adoption was referred to the appropriate legal and planning advisers. Any alteration to the proposed scheme may cause the failure to maximising value.

Discount and 6.15. Appraisal is based on the current market discount and capitalization rates based capitalization frequently on estimations and expert opinions of capital markets specialists due to rate increases the fact that the buildings sales market is not transparent. We draw to your attention that in the current economic climate there is a higher than normal degree of uncertainty attached to our opinion of discount and capitalization rates at the date of valuation.

Sales rate 6.16. Sales rates assumed are in line with the market data. (market Commercial Properties. For the commercial office Properties and business centres absorption) within the portfolio intended for remaining in the existing ownership and mostly owner occupation Comparative Method is the most appropriate. Due to the lack of evidence of comparable sales transactions we made our assessment only on the basis of a collation and analysis of appropriate comparable negotiations. Nevertheless the discounts applied to the asking price are in line with the market.

Profitability of 6.17. Scheme generates a property value if average profit level in the current market scheme adopted.

Cancellation of 6.18. The scheme is in line with the market data and doesn’t assume a high level of off-plan off-plan sales or sales. Pre-lets are not assumed. pre-lets

Movement in 6.19. We highlight that our opinion of value is only current at the valuation date. This is inputs after particularly important in current market conditions and subsequent re-valuation(s) valuation date may need to be considered to reflect any changes in inputs after the valuation date.

Economic & property market risks Market 6.20. We refer to the RICS Valuation – Professional Standards, Guidance Note 1 (Valuation uncertainty Certainty). Our opinion of value represents our professional view based upon any available market evidence and our professional judgement. In the current market, there is a general lack of market evidence. The lack of market evidence means that the speed with which values are moving is very difficult to assess. As a result, we need to place a high degree of reliance upon our professional judgement in arriving at our opinion of value.

As for commercial real estate investor sentiment towards property investment has weakened considerably over the past months. Far fewer negotiations are resulting in transactions as many investors wait to see how market pricing will ultimately adjust to changing economic and restrictive credit conditions. In consequence, there is a limited number of comparable transactions. You should note that our opinion of Market Value is provided in light of these conditions. Accordingly, given the current economic and property market volatility, we recommend that the valuation is kept under regular review.

We draw to your attention that in the current economic climate there is a higher than normal degree of uncertainty attached to our opinion of value at the date of valuation. We also highlight that our opinion of value is only current at the valuation date. This is particularly important in current market conditions and subsequent re- valuation(s) may need to be considered to reflect any changes in value after the valuation date.

The further impact of the changing economic and restrictive credit conditions on the Russian economy is currently unclear.

Macro 6.21. Macro risks refer to types of economic factors which influence the volatility over time economic/ of investments and the value of properties. The further significant changes in the political risks interest rates, inflation or exchange rate may cause changes in value after the valuation date. We draw to your attention that our opinion of value is only current at the valuation date.

Demand from 6.22. Residential Properties. The market showed high buying activity relating to the owners / residential (residential premises or flats) and commercial (apartments) properties. occupiers Commercial Properties. Commercial real estate investor sentiment towards property investment has weakened considerably over the past year. Volatility in rental income caused by the rental rates reduction and the tenants’ desire to revise tenancy terms create a barrier to market entry for potential investors seeking stabilized assets. Far fewer negotiations are resulting in transactions as many investors wait to see how market pricing will ultimately adjust to changing economic and restrictive credit conditions. The market of the properties acquired for owner occupation is almost completely intransparent. Thus there is a general lack of market evidence.

Supply of similar 6.23. Commercial Properties. The average weighted vacancy rate of similar properties in the properties area (the existing direct and indirect competitors in the zone of influence) is not high and doesn’t exceed 15%.

The vacancy rates of the Properties within the portfolio (except 1 building - bldgs. 17, 18, 1-3, Paradnaya St, St.Petersburg) are low or absent at all. This fact corresponds with the market data and forecast as of the valuation date.

Availability of 6.24. The shortage of bank financing, especially for investment and from Western banks, is finance now felt in the current real estate market.

Liquidity of the 6.25. Residential Properties. The Properties may take unusually long time to sell butit property type / normally will continue to remain partially in the existing ownership or occupation up to Time to sell the completion of the costruction and selling of the units (flats, apartments, built-in premises and car-parking spaces with related land plots).

Commercial Properties. The Properties would take unusually long time to sell but it normally will continue to remain in the existing ownership or occupation.

Valuation risks Methodology 6.26. You need to be aware that the residual method requires the input of a large amount of data, which are rarely absolute or precise, together with making of a large number of assumptions. Small changes in any of the inputs can cumulatively lead to a large change in the site value. Some of the inputs can be assessed with reasonable objectivity, but others require a high degree of professional judgement.

Quality / 6.27. The real estate market in Russia is very opaque. Information on our provided sales quantity of and lease comparables is based on published information and internal marketing comparables researches of Knight Frank Research Departments.

Signature

Olga Baranova Svetlana Shalaeva RICS Registered Valuer RICS Registered Valuer Head of Valuations Head of Valuation

Konstantin Fomin Evgenia Akulova

Director, Key Client Manager Project Manager

Anna Vasileva Dmitry Tsatskin

Senior Valuer Senior Valuer

For and on behalf of Knight Frank St Petersburg ZAO

Appendix 1 Terms of Engagement/ General Terms of Business for Russian Valuations

LSR Group OJSC

St. Petersburg

Russia

December 4, 2015

Dear Sir/Madam

Our Terms of Engagement for a Valuation of the property, located in St. Petersburg and Leningradskaya Oblast', Moscow and Moskovskaya Oblast’, and Yekaterinburg, Russia

We are writing to set out our Terms of Engagement for carrying out a valuation of the above property.

Our Terms of Engagement for this instruction comprise our “General Terms of Business for Valuations” which are attached to this letter, together with the specific terms contained within this letter. This letter shall take precedence, to the extent that there is any inconsistency with the General Terms of Business for Valuations. A copy of this letter and our General Terms of Business for Valuations are attached for you to sign and return to us, signifying your acceptance of the terms.

In addition to our General Terms of Business for Valuations, our Terms of Engagement for carrying out this instruction are as follows:

Our Client

Our client for this instruction is LSR Group OJSC.

Fees

Our fee for undertaking this instruction will be 4,500,000 Rubles inclusive of VAT 18%.

Conflicts of interest

We confirm that we do not have any material connection or involvement giving rise to a conflict of interest and are in a position to provide an objective and unbiased valuation.

Limitation of liability and restrictions on use

Clause 3 of our General Terms of Business for Valuations limits our liability under this instruction.

Third party liability

Additionally, as stated in Clause 3.1 of our General Terms of Business for Valuations, no liability is accepted to any third party for the whole or any part of the valuation report.

Disclosure

The valuation report is confidential to the Client.

Valuation standards

The valuation will be undertaken in accordance with the Royal Institution of Chartered Surveyors (RICS) Valuation - Professional Standards January 2014 Global & UK edition (“the Red Book”) including the International Valuation Standards (2013)

Status of valuer

External valuers, as defined in the Red Book.

Valuer and Competence Disclosure

The valuer, on behalf of Knight Frank St Petersburg ZAO with the responsibility for this report is

Ɣ Svetlana Shalaeva MRICS, RICS Registered Valuer, Head of Valuation Department, Knight Frank St Petersburg ZAO;

Parts of this valuation will be undertaken by additional valuers. We confirm that the valuer and the additional valuers meet the requirements of the Red Book, having sufficient current knowledge of the particular market and the skills and understanding to undertake the valuation competently.

Purpose of valuation

The valuation is required for the purposes of publication on the Clients’ website, providing it to the Ǹlient's counterparties, attraction of investors and for the preparation of financial statements in accordance with International Financial Reporting Standards for the year 2015.

Property to be valued

The list of the property to be valued (the Portfolio) is presented in the Appendix 1 to the Agreement No. PO-17/2015 dated December 04, 2015 (hereinafter the Agreement).

Interest to be valued

Freehold/ leasehold.

Property type and use

Vacant, partly or completely developed land plots intended for residential and commercial development; commercial office buildings with related land plots.

Basis of valuation

As defined in the RICS Red Book, our valuation will be undertaken on the following bases: x Market Value.

Special Assumptions and Assumptions

Our valuation will necessarily be based upon a number of assumptions, as set out in the General Terms of Business for Valuations, this letter and within our valuation report.

Valuation date

December 31, 2015.

Currency to be adopted

Russian ruble (RUB).

Extent of inspection and investigations

Our General Terms of Business set out the scope of our on-site inspection and investigations.

Unless prevented from doing so, we will inspect the properties internally. For properties to which access cannot be gained the valuation will be on a “drive by” basis.

You should note that this significantly limits the extent to which reliance can be placed upon our valuation report.

Information to be relied upon

In the following a list of Required Information that we need in order to undertake our valuation is set out:

x Information relating to the extent of the property, produced by special services of public authorities Title documents (ownership certificates and lease agreements);

x Information relating to the proposed development scheme, produced by the Client;

x Information relating to the planning status of the Property, from the Client;

x Information relating to the construction costs, terms of project realization of the proposed development as produced by the Client;

x Information relating to the sales prices of the proposed development as produced by the Client. This information will be relied upon by us in our final valuation report, subject only to any verification that we have agreed to undertake.

Where we express an opinion of legal issues, any such opinion must be verified by your legal advisors before the valuation can be relied upon or published.

Report format

Our valuation report will be prepared in our standard format which will be compliant with VPS 3 of the Red Book. Market researches, competitors’ analyses, and description of the Properties within the Portfolio will be placed in attachments to the report.

If any of the details set out above are incorrect please let us know – we will assume they are correct unless you tell us otherwise.

Please will you sign and return the duplicate copy of this Terms of Engagement letter, signifying your agreement to the terms contained therein. We should point out that the report will not be discussed or disclosed before these Terms have been returned.

Thank you for instructing Knight Frank ZAO.

Yours faithfully

Svetlana Shalaeva RICS Registered Valuer Head of Valuation Knight Frank St Petersburg ZAO [email protected]

Enclosed: General Terms of Business for Russian Valuations

………………………………………………….. …………….

Signed for and on behalf of LSR Group OJSC Date

General Terms of Business for Russian Valuations

These General Terms of Business comprise a part of our Terms of Engagement. The following General Terms of Business apply to all valuations and appraisals undertaken by Knight Frank Saint-Petersburg ZAO unless specifically agreed otherwise in confirming instructions and so stated within the main body of the valuation report.

1. Knight Frank St.Petersburg

Knight Frank Saint-Petersburg ZAO,

Liter A, 3B Mayakovskogo St., St Petersburg, 191025, Russia

2. Jurisdiction

Russian law shall apply in every respect in relation to the valuation and the agreement with the client which shall be deemed to have been made in Russia (the Agreement). In the event of a dispute arising in connection with a valuation, unless expressly agreed otherwise in writing by Knight Frank Saint-Petersburg ZAO, the client, and any third party using the valuation, will submit to the jurisdiction of the Russian Courts only. This will apply wherever the property or the client is located or the advice is provided.

3. Limitations on Liability

3.1. Our valuation is confidential to the party to whom it is addressed for the stated purpose and no liability is accepted to any third party for the whole or any part of its contents. Liability will not subsequently be extended to any other party save on the basis of written and agreed instructions; this may incur an additional fee. Except as set out in 3.2 below the terms of the Agreement between Knight Frank Saint-Petersburg ZAO and the client are not enforceable by any third party.

3.2. No claim arising out of or in connection with the Agreement may be brought against any member, employee, partner or consultant of Knight Frank Saint-Petersburg ZAO (each called a ‘Knight Frank Person’). Those individuals will not have a personal duty of care to the client or any other party and any such claim for losses must be brought against Knight Frank Saint-Petersburg ZAO.

3.3. Our maximum total liability for any direct loss or damage whether caused by our negligence or breach of contract or otherwise is limited to Knight Frank Saint-Petersburg ZAO’s fee under the instruction set out in the Terms of Engagement letter and the Agreement which will be sent to the client.

3.4. We do not accept liability for any indirect or consequential loss (such as loss of profits). Nothing in these Terms of Business (or in our Terms of Engagement letter) shall exclude or limit our liability in respect of fraud or for death or personal injury caused by our negligence or for any other liability to the extent that such liability may not be excluded or limited as a matter of law.

4. Severance

If any provision of the Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision shall be deemed deleted. Any modification to or deletion of a provision under this clause shall not affect the validity and enforceability of the rest of the Agreement.

If any provision is invalid, illegal or unenforceable, the parties shall negotiate in good faith to amend such provision so that, as amended, it is legal, valid and enforceable and, to the greatest extent possible, achieve the intended commercial result of the original provision.

5. Disclosure and Publication

If our opinion of value is disclosed to persons other than the addressees of our report, the basis of valuation should be stated.

6. Complaints Procedure

If you have any concerns about our service, please raise them in the first instance with the valuer concerned. If this does not result in a satisfactory resolution, please contact the relevant Head of Department. As required by RICS, we will send you a copy of our Complaints Procedure on request.

7. Our Fees

The Fee terms are stipulated in the Agreement.

8. Disclosable Interests

We may offer the following services to prospective purchasers and similarly the services may be offered to them by another organisation in circumstances where we may benefit financially: financial services, property letting and management services, building construction, refurbishment and maintenance services and the sale of the prospective purchaser’s property.

9. RICS Valuation – Professional Standards - "The Red Book"

Valuations and appraisals will be carried out in accordance with the relevant edition of the RICS Valuation - Professional Standards by valuers who conform to its requirements and with regard to relevant statutes or regulations. Compliance with The Red Book is mandatory for Chartered Surveyors in the interests of maintaining high standards of service and for the protection of clients.

10. Monitoring

The valuation may be subject to monitoring under the RICS conduct and disciplinary regulations.

11. Valuation Basis

Valuations and appraisals are carried out on a basis appropriate to the purpose for which they are intended and in accordance with the relevant definitions, commentary and assumptions contained in The Red Book. The basis of valuation will be agreed with you in the letter covering the specific terms for the instruction.

12. Portfolios

Where requested to value a portfolio, unless specifically agreed with you otherwise, we will value the individual properties separately, upon the assumption that the properties have been marketed in an orderly manner.

13. Land Register Inspection and Searches

We do not undertake searches or inspections of any kind (including web based searches) for title or price paid information in any publicly available land registers.

14. Title and Burdens

We do not read documents of title although, where provided, we consider and take account of matters referred to in solicitor’s reports or certificates of title. We would normally assume, unless specifically informed and stated otherwise, that each property has good and marketable title and that all documentation is satisfactorily drawn and that there are no unusual outgoings, planning proposals, onerous restrictions or local authority intentions which affect the property, nor any material litigation pending.

15. Disposal Costs and Liabilities

No allowance is made in our valuation for expenses of realisation or for taxation which may arise in the event of a disposal and our valuation is expressed as exclusive of any VAT that may become chargeable. Properties are valued disregarding any mortgages or other charges.

16. Sources of Information

We rely upon the information provided to us, by the sources listed, as to details of tenure and tenancies (subject to 'Leases' below), planning consents and other relevant matters, as summarised in our report. We assume that this information is complete and correct.

17. Identity of Property to be Valued

We will exercise reasonable care and skill (but will not have an absolute obligation to you) to ensure that the property, identified by the property address in your instructions, is the property inspected by us and contained within our valuation report. If there is ambiguity as to the property address, or the extent of the property to be valued, this should be drawn to our attention in your instructions or immediately upon receipt of our report.

18. Boundaries

Plans accompanying reports are for identification purposes only and should not be relied upon to define boundaries, title or easements. The extent of the site is outlined in accordance with information given to us and/or our understanding of the boundaries.

19. Planning, Highway and Other Statutory Regulations

Enquiries of the relevant Planning and Highways Authorities in respect of matters affecting the property, where considered appropriate, are normally only obtained verbally or from a Local Authority web site, and this information is given to us, and accepted by us, on the basis that it should not be relied upon. Written enquiries can take several weeks for response and incur charges. Where reassurance is required on planning matters, we recommend that formal written enquiries should be undertaken by the client’s solicitors who should also confirm the position with regard to any legal matters referred to in our report. We assume that properties have been constructed, or are being constructed, and are occupied or used in accordance with the appropriate consents and that there are no outstanding statutory notices.

We assume that the premises comply with all relevant statutory requirements including fire and building regulations.

20. Property Insurance

Our valuation assumes that the property would, in all respects, be insurable against all usual risks including terrorism, flooding and rising water table at normal, commercially acceptable premiums.

21. Building Areas and Age

Where so instructed, areas provided from a quoted source will be relied upon. Where the age of the building is estimated, this is for guidance only.

22. Structural Condition

Building, structural and ground condition surveys are detailed investigations of the building, the structure, technical services and ground and soil conditions undertaken by specialist building surveyors or engineers and fall outside the normal remit of a valuation. Since we will not have carried out any of these investigations, except where separately instructed to do so, we are unable to report that the property is free of any structural fault, rot, infestation or defects of any other nature, including inherent weaknesses due to the use in construction of deleterious materials. We do reflect the contents of any building survey report referred to us or any defects or items of disrepair of which we are advised or which we note during the course of our valuation inspections but otherwise assume properties to be free from defect.

23. Ground Conditions

We assume there to be no unidentified adverse ground or soil conditions and that the load bearing qualities of the sites of each property are sufficient to support the building constructed or to be constructed thereon.

24. Environmental Issues

Investigations into environmental matters would usually be commissioned of suitably qualified environmental specialists by most responsible purchasers of higher value properties or where there was any reason to suspect contamination or a potential future liability. Furthermore, such investigation would be pursued to the point at which any inherent risk was identified and quantified before a purchase proceeded. Anyone averse to risk is strongly recommended to have a proper environmental investigation undertaken and, besides, a favourable report may be of assistance to any future sale of the property. Where we are provided with the conclusive results of such investigations, on which we are instructed to rely, these will be reflected in our valuations with reference to the source and nature of the enquiries. We would endeavour to point out any obvious indications or occurrences known to us of harmful contamination encountered during the course of our valuation enquiries.

We are not, however, environmental specialists and therefore we do not carry out any scientific investigations of sites or buildings to establish the existence or otherwise of any environmental contamination, nor do we undertake searches of public archives to seek evidence of past activities which might identify potential for contamination. In the absence of appropriate investigations and where there is no apparent reason to suspect potential for contamination, our valuation will be on the assumption that the property is unaffected. Where contamination is suspected or confirmed, but adequate investigation has not been carried out and made available to us, then the valuation will be qualified by reference to appropriate sections of The Red Book.

25. Leases

The client should confirm to us in writing if they require us to read leases. Where we do read leases reliance must not be placed on our interpretation of these documents without reference to solicitors, particularly where purchase or lending against the security of a property is involved.

26. Covenant

We reflect our general appreciation of potential purchasers' likely perceptions of the financial status of tenants. We do not, however, carry out detailed investigations as to the financial standing of the tenants, except where specifically instructed, and assume, unless informed otherwise, that in all cases there are no significant arrears of payment and that they are capable of meeting their obligations under the terms of leases and agreements.

27. Loan Security

Where instructed to comment on the suitability of property as a loan security we are only able to comment on any inherent property risk. Determination of the degree and adequacy of capital and income cover for loans is the responsibility of the lender having regard to the terms of the loan.

28. Build Cost Information

Where our instruction requires us to have regard to build cost information, for example in the valuation of properties with development potential, we strongly recommend that you supply us with build cost and other relevant information prepared by a suitably qualified construction cost professional, such as a quantity surveyor. We do not hold ourselves out to have expertise in assessing build costs and any property valuation advice provided by us will be stated to have been arrived at in reliance upon the build cost information supplied to us by you. In the absence of any build cost information supplied to us, we may have regard to published build cost information. There are severe limitations on the accuracy of build costs applied by this approach and professional advice on the build costs should be sought by you. The reliance which can be placed upon our advice in these circumstances is severely restricted. If you subsequently obtain specialist build cost advice, we recommend that we are instructed to review our advice.

29. Reinstatement Assessments

A reinstatement assessment for insurance purposes is a specialist service and we recommend that separate instructions are issued for this specific purpose. If advice is required as a check against the adequacy of existing cover this should be specified as part of the initial instruction. Any indication given is provided only for guidance and must not be relied upon as the basis for insurance cover. Our reinstatement assessment should be compared with the owner’s and if there is a material difference, then a full reinstatement valuation should be considered.

30. Comparable Evidence

Where comparable evidence information is included in our report, this information is often based upon our oral enquiries and its accuracy cannot always be assured, or may be subject to undertakings as to confidentiality. However, such information would only be referred to where we had reason to believe its general accuracy or where it was in accordance with expectation. In addition, we have not inspected comparable properties.

31. Regulated Purpose Valuations (RPV)

RICS has established particular requirements in circumstances where a valuation although provided for a client may also be of use to third parties, for instance, the shareholders in a company, defined by the RICS as “Regulated Purpose Valuations”.

When instructed in a continuing role as a Valuer it is Knight Frank Saint-Petersburg ZAO’s policy to rotate persons responsible for valuations and the signatory to the report, on a seven yearly basis, unless specifically agreed otherwise.

Valuation Bases 1. Market Value (MV): Market Value is defined as: The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. 2. Market Rent (MR): Market Rent is defined as: The estimated amount for which a property would be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. 3. Fair Value The definition of Fair Value adopted by the International Accounting Standards Board is: The price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 4. Investment Value Investment Value (or Worth) is defined as: Investment Value is the value of an asset to the owner or a prospective owner for individual investment or operational objectives. 5. Projected Market Value (PMV) of Residential Property only Projected Market Value is designed to provide residential mortgage lenders with a simple numeric indication of the valuer’s opinion of short-term market trends and is defined as: The estimated amount for which a property is expected to exchange at a date, after the valuation date and specified by the valuer, between a willing buyer and a willing seller, in an arm’s-length transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

Appendix 2 Description of the Properties

1. Kazanskaya 36

Property type Operating office

Address Litera Ǩ, 36, Kazanskaya St., St Petersburg

Location

The Property is located in Admiralteysky District of St Petersburg within 10-minute walk from Sadovaya, Spasskaya and Sennaya Ploschad metro stations, convenient transport available. The following landmarks are situated in close proximity to the Property: Palace Square, Hermitage Museum, Senatskaya Square, St. Kazansky Cathedral, Kazanskaya Square, Nikolskaya Square, Teatralnaya Square and etc. The variety of restaurants, bars, boutiques and stores are located on Nevsky Ave. Bolshoy Gostiny Dvor Shopping Centre is located within a 20-minute walk of the Property.

Image 1 Image 2 Description The Property comprises an office scheme building around a square courtyard with vehicular access via the front facade. The five- to eight- floor scheme retains its historic facade and provides partitioned class ǩ office accommodation with completed finishing. There is internal parking for 6 parking spaces in the five-floor section. 15 open-air parking spaces are provided in the internal yard.

Stage of Completed development

Development Hold strategy

Areas Ɣ Total building area –7,434 sq m; Ɣ GLA – 4,755.2 sq m (GLA Ratio – 64% of the total area); Ɣ Land plot – 0.25 hectares (2,526.4 sq m)

Tenure Ɣ Buildings – freehold (ownership certificates 78-ǧǮ 359967 dated June 10, 2014; 78- ǧǮ 359968 dated June 10, 2014; 78-ǧǮ 359971 dated June 10, 2014)

Ɣ Land plot – freehold (ownership certificate 78-ǧǮ 359970 dated June 10., 78-ǧǮ 359969 dated June 10)

Tenancies At the valuation date all the premises of the Property are leased by the companies affiliated with LSR Group.

Valuation Terms and Reversion Method and Comparative Method were applied. considerations Terms and Reversion Method considerations: Average rental rate (Terms /Reversion period), rubles per sq m p.a.: 13,634/17,814; Average OpEx, rubles per sq m p.a.: 3,114 Caprate (Terms /Reversion period): 10%/11%; Comparative Method considerations: Comparative method was based on the data of offers of comparable subjects. The regression model was used to determine the Value.

Valuation date December 31, 2015

Inspection date December 28, 2015

Market value 569,208,000 RUB

2. Zolotaya Kazanskaya

Property type Operating office

Address 44, Kazanskaya St., St Petersburg

Location

The Property is located in Admiralteysky District of St Petersburg within 15-minutes walk from Sadovaya, Spasskaya and Sennaya Ploschad metro stations, convenient transport access available. The following landmarks are situated in close proximity to the Property: Palace Square, Hermitage Museum, Senatskaya Square, St. Kazansky Cathedral, Kazanskaya Square, Nikolskaya Square, Teatralnaya Square and etc. The variety of restaurants, bars, boutiques and stores are located on Nevsky Ave. Bolshoy Gostiny Dvor Shopping Centre is located within a 20-minute walk of the Property.

Image 3 Image 4 Description The Property comprises an office scheme building around a square courtyard with vehicular access via the front facade. The five-floor scheme retains its historic facade and provides partitioned class ǩ office accommodation fully fitted out. There is a parking for 10 cars in the internal yard.

Stage of Completed development

Development Hold strategy

Areas Ɣ Total building area –3,060.6 sq m; Ɣ GLA – 2,671.5 sq m (GLA Ratio – 87% of the total area); Ɣ Land plot – 0.15 hectares (1,475 sq m)

Tenure Ɣ Buildings – freehold (ownership certificates 78-ǧǮ 055289 dated September 4, 2013; 78-ǧǮ 055287 dated September 4, 2013; 78-ǧǮ 055283 dated September 4, 2013; 78-ǧǮ 055408 dated September 4, 2013; 78-ǧǮ 055403 dated September 4, 2013; 78-ǧǮ 055401 dated September 4, 2013; 78-ǧǮ 055290 dated September 4, 2013; 78-ǧǮ 055288 dated September 4, 2013; 78-ǧǮ 055404 dated September 4, 2013; 78-ǧǮ 055285 dated September 4, 2013; 78-ǧǮ 055282 dated September 4, 2013; 78-ǧǮ 055284 dated September 4, 2013; 78-ǧǮ 055281 dated September 4, 2013; 78-ǧǮ 055411 dated September 4, 2013; 78-ǧǮ 055410 dated September 4, 2013; 78-ǧǮ 055409 dated September 4, 2013; 78-ǧǮ 055286 dated September 4, 2013; 78-ǧǮ 055402 dated September 4, 2013; 78-ǧǮ 055405 dated September 4, 2013; 78-ǧǮ 055496 dated September 4, 2013; 78-ǧǮ 055406 dated September 4, 2013; 78-ǧǮ 055721 dated September 4, 2013; 78-ǧǮ 055560 dated September 4, 2013; 78-ǧǮ 112236 dated September 4, 2013; 78-ǧǮ 055658 dated September 4, 2013; 78-ǧǮ 055297 dated September 4, 2013; 78-ǧǮ 112238 dated September 4, 2013; 78-ǧǮ 112237 dated September 4, 2013; 78-ǧǮ 055659 dated September 4, 2013; 78-ǧǮ 112235 dated September 4, 2013; 78-ǧǮ 055657 dated September 4, 2013; 78-ǧǮ 479049 dated September 2, 2014)

Tenancies At the valuation date all the premises of the Property are leased by the companies affiliated with LSR Group.

Valuation Terms and Reversion Method and Comparative Method were applied. considerations Terms and Reversion Method considerations: Average rental rate (Terms /Reversion period), rubles per sq m p.a.: 14,474/14,492; Average OpEx, rubles per sq m p.a.: 1,589 Caprate (Terms /Reversion period): 10%/11%; Comparative Method considerations: Comparative method was based on the data of offers of comparable subjects. The regression model was used to determine the Value.

Valuation date December 31, 2015

Inspection date December 28, 2015

Market value 282,476,000 RUB

3. Paradny Kvartal BC 11

Property type Operating office

Address liter A, 39, Kirochnaya St, St Petersburg

Location

The office center is located in Central District of St Petersburg, it takes 10 minutes to walk from Chernyshevskaya metro station. The access to the Property is provides from Paradnaya St. or Kirochnaya St. The proximity of main thoroughfares such as Suvorovskiy Ave, Nevsky Ave, Ligovsky Ave, Voskresenskaya and Smolnaya Embankments provides easy access the Property from various parts of the city. The following landmarks are situated in the surroundings of the Property: Tavrichesky Garden and Palace, Smolny Cathedral, Suvorov Museum. Paradny Kvatal is a mixed-use complex. It is implied the residents will access the diverse infrastructure of this residential complex consisting of stores, supermarkets, educational facilities and a fitness center nearby.

Image 5 Image 6

Description At the valuation date the Property comprises the office complex (3 floors above ground and 1 underground) with a preserved historic facade. The building was built in 1802- 1805 years and after reconstruction in 2010 bacame a part of Paradny Kvartal mixed- used complex. At the valuation date the Property is used by the owner (LSR group). The construction scheme, the floor layouts and the finishing of the Property matches standards of A-class business center.

Stage of Completed development

Development Hold strategy

Areas Ɣ Total building area –3,806 sq m; Ɣ GLA – 3,717.8 sq m (GLA Ratio – 98% of the total area); Ɣ Land plot – 9.57 hectares (the part of the land plot related to the Property is not isolated)

Tenure Ɣ Building – freehold (ownership certificates 78-ǧǭ 837255 dated February 8, 2013; 78-ǧǭ 837256 dated February 8, 2013; 78-ǧǭ 837257 dated February 8, 2013; 78- ǧǭ 837258 dated February 8, 2013; 78-ǧǭ 837259 dated February 8, 2013; 78-ǧǭ 837380 dated February 8, 2013; 78-ǧǭ 837381 dated February 8, 2013; 78-ǧǭ 837382 dated February 8, 2013; 78-ǧǭ 837383 dated February 8, 2013; 78-ǧǭ 837384 dated February 8, 2013; 78-ǧǭ 837385 dated February 8, 2013; 78-ǧǭ 837400 dated February 8, 2013; 78-ǧǭ 837386 dated February 8, 2013; 78-ǧǭ 837387 dated February 8, 2013; 78-ǧǭ 837388 dated February 8, 2013; 78-ǧǭ 837389 dated February 8, 2013; 78-ǧǭ 837390 dated February 8, 2013; 78-ǧǭ 837391 dated February 8, 2013; 78-ǧǭ 837392 dated February 8, 2013; 78-ǧǭ 837393 dated February 8, 2013; 78-ǧǭ 837394 dated February 8, 2013; 78-ǧǭ 837395 dated February 8, 2013; 78-ǧǭ 837396 dated February 8, 2013; 78-ǧǭ 837397 dated February 8, 2013; 78-ǧǭ 837399 dated February 8, 2013)

Tenancies At the valuation date all the premises of the Property are leased by the companies affiliated with LSR Group.

Valuation Terms and Reversion Method and Comparative Method were applied. considerations Terms and Reversion Method considerations: Average rental rate (Terms /Reversion period), rubles per sq m p.a.: 11,175/16,867; Average OpEx, rubles per sq m p.a.: 3,694 Caprate (Terms /Reversion period): 10%/11%; Comparative Method considerations: Comparative method was based on the data of offers of comparable subjects. The regression model was used to determine the Value.

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 426,407,000 RUB

4. Kazanskaya 60

Property type Operating office

Address liter A, 18, Fonarny lane, St Petersburg

Location

The Property is located in Admiralteysky District of St Petersburg within a 10-minute walk from Sadovaya/Spasskaya/Sennaya Ploschad metro stations. The entrance to the office center is available from Kazanskaya St. The Property is easily accessible from the main thoroughfares of the district such as Nevsky Ave, Sadovaya St. and Fontanka River Embankment. The main landmarks of the city are situated in the neighbourhood of the Property: Hermitage Museum, Palace Square, Admiralty, Senatskaya Square, Kazansky Cathedral, Kazanskaya Square, Nikolskaya Square and Teatralnaya Square. A great number of restaurants, bars, boutiques and stores are located in the neighborhood.

Image 7 Image 8 Description The Property comprises an office center complex with vehicular access via the front facade. The 6-floor scheme (6 floors on one side and 5 floors with mansard on the other) retains its historic facade and provides partitioned class ǩ office with completed finishing.

Stage of Completed development

Development Hold strategy

Areas Ɣ Total building area –2,213 sq m; Ɣ GLA – 2,027.5 sq m (GLA Ratio – 92% of the total area); Ɣ Land plot – 9.57 hectares (the part of the land plot related to the Property is not isolated)

Tenure Ɣ Buildings – freehold (ownership certificates 78-AZ 113626 dated October 9, 2013; 78-AZ 113628 dated October 9, 2013; 78-AZ 304014 dated February 21, 2014; 78- ǧǭ 351209 dated November 24, 2011; 78-ǧǭ 351210 dated November 24, 2011; 78-ǧǭ 351361 dated November 24, 2011; 78-ǧǭ 351514 dated November 11, 2011; 78-ǧǭ 351515 dated November 11, 2011; 78-ǧǭ 351516 dated November 11, 2011; 78-ǧǭ 351953 dated November 18, 2011; 78-ǧǭ 417754 dated December 20, 2011; 78-ǧǭ 418336 dated January 11, 2012; 78-ǧǭ 518398 dated April 4, 2012; 78-ǧǭ 518971 dated April 7, 2012; 78-ǧǭ 580081 dated May 22, 2012; 78-ǧǭ 629149 dated June 9, 2012; 78-ǧǭ 750904 dated October 17, 2012; 78-ǧǭ 419033 dated January 30, 2012; 78-ǧǭ 419213 dated February 1, 2012; 78- ǧǭ 518130 dated April 7, 2012; 78-ǧǭ 518131 dated April 7, 2012; 78-ǧǭ 518132 dated April 7, 2012; 78-ǧǭ 630698 dated July 31, 2012; 78-ǧǭ 751253 dated November 10, 2012)

Tenancies At the valuation date all the premises of the Property are leased by the companies affiliated with LSR Group.

Valuation Terms and Reversion Method and Comparative Method were applied. considerations Terms and Reversion Method considerations: Average rental rate (Terms /Reversion period), rubles per sq m p.a.: 14,400/17,818; Average OpEx, rubles per sq m p.a.: 3,275 Caprate (Terms /Reversion period): 10%/11%; Comparative Method considerations: Comparative method was based on the data of offers of comparable subjects. The regression model was used to determine the Value.

Valuation date December 31, 2015

Inspection date December 28, 2015

Market value 237,820,000 RUB

5. Ruchyi/Tsvetnoy Gorod

Property type Held for future development

Address 145, Piskarevsky Av., St Petersburg

Location

The Property located at the North-East of St Petersburg, along the border with Leningradskaya Oblast’. The surrounding area consists of former agricultural land plots, private cottages and territories of new residential development. The infrastructure of this area is not developed, but all the projects of complex development imply the construction of infrastructure objects. The immediate proximity of St Petersburg Ring road and Piskarevsky Ave provides easy access to the Property from other districts of the city. Public transport accessibility at the valuation date is unsatisfactory but due to current residential development of this district the situation with public transport will be improved in process of completing projects.

Image 9 Image 10

Description At the valuation date the land plots are vacant of any improvements. The project is currently in the design and survey stage. Pre-construction works are being held at a part of land plots. The future housing complex will consist of residential buildings of different number of floors with integrated commercial premises, multilevel aboveground ventilated parking, and social facilities: 8 schools, 16 kindergartens, 4 clinics and 1 hospital. The construction stage of the 1st phase is planned to start in 2016.

Stage of Design/Concept development development

Development Build and sell strategy

Areas Ɣ Total buildings area –5,458,098 sq m; Ɣ NSA (excluding parking) – 2,960,380 sq m; Ɣ Residential premises area – 2,509,690 sq m; Ɣ Commercial premises area – 450,690 sq m; Ɣ Parking – 25,686 parking lots/321,075 sq m; Ɣ Land plot – 429.29 hectares

Tenure Land plots – freehold (ownership certificates: 78-ǧǭ 868718 dated February 20, 2013; 78-ǧǭ 868643 dated February 20, 2013; 78-ǧǭ 868654 dated February 20, 2013; 78-ǧǮ 602858 dated October 25, 2014; 78-ǧǮ 602859 dated October 25, 2014; 78-ǧǭ 868716 dated February 20, 201378-ǧǮ 603174 dated November 14, 2014; 78-ǧǮ 603175 dated November 14, 2014;, 78-ǧǮ 603193 dated November 14, 2014; 78-ǧǮ 603194 dated November 14, 2014; 78-ǧǮ 603044 dated November 14, 2014; 78-ǧǮ 603171 dated November 14, 2014; 78-ǧǮ 603046 dated November 14, 2014; 78-ǧǮ 603172 dated November 14, 2014; 78-ǧǮ 603048 dated November 14, 2014; 78-ǧǮ 603113 dated November 14, 2014; 78-ǧǮ 603114 dated November 14, 2014; 78-ǧǮ 603115 dated November 14, 2014; 78-ǧǮ 603116 dated November 14, 2014; 78-ǧǮ 603117 dated November 14, 2014; 78-ǧǮ 603118 dated November 14, 2014; 78-ǧǮ 603119 dated November 14, 2014; 78-ǧǮ 603120 dated November 14, 2014; 78-ǧǮ 603121 dated November 14, 2014; 78-ǧǮ 603122 dated November 14, 2014; 78-ǧǮ 603123 dated November 14, 2014; 78-ǧǮ 603173 dated November 14, 2014; 78-ǧǮ 603050 dated November 14, 2014; 78-ǧǮ 603051 dated November 14, 2014; 78-ǧǮ 603052 dated November 14, 2014; 78-ǧǮ 603053 dated November 14, 2014; 78-ǧǮ 603054 dated November 14, 2014; 78-ǧǮ 603055 dated November 14, 2014; 78-ǧǮ 603056 dated November 14, 2014; 78-ǧǮ 603057 dated November 14, 2014; 78-ǧǮ 603058 dated November 14, 2014; 78-ǧǮ 603059 dated November 14, 2014; 78-ǧǮ 603060 dated November 14, 2014; 78-ǧǮ 603104 dated November 14, 2014; 78-ǧǮ 603105 dated November 14, 2014; 78-ǧǮ 603106 dated November 14, 2014; 78-ǧǮ 603107 dated November 14, 2014; 78-ǧǮ 603108 dated November 14, 2014; 78-ǧǮ 603109 dated November 14, 2014; 78-ǧǮ 603110 dated November 14, 2014; 78-ǧǮ 603111 dated

November 14, 2014; 78-ǧǮ 603112 dated November 14, 2014; 78-ǧǭ 868652 dated February 20, 2013; 78-ǧǭ 234734 dated June 01, 2011; 78-ǧǭ 234732 dated June 01, 2011; 78-ǧǭ 234623 dated June 01, 2011; 78-ǧǭ 327800 dated September 13, 2011; 78-ǧǭ 234733 dated June 01, 2011; , 78-ǧǭ 868659 dated February 20, 2013; 78-ǧǭ 868715 dated February 20, 2013; 78-ǧǭ 868714 dated February 20, 2013; 78-ǧǭ 868713 dated February 20, 2013; 78-ǧǭ 868712 dated February 20, 2013; 78-ǧǭ 868711 dated February 20, 2013; 78-ǧǭ 868644 dated February 20, 2013; 78-ǧǭ 327802 dated September 13, 2011; 78-ǧǭ 868777 dated February 21, 2013; 78-ǧǭ 868723 dated February 20, 2013; 78-ǧǯ 095584 dated July 3, 2015; 78-ǧǯ 095585 dated July 3, 2015; 78-ǧǯ 095586 dated July 3, 2015; 78-ǧǯ 095596 dated July 3, 2015)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: April 2016/December 2025; Ɣ Sales start/completion dates: June 2016/December 2025; Ɣ Number of phases: 17 (Valuer’s forecast according to tempo of sales); Ɣ Estimated costs after the valuation date: 154,593,711,000 RUB Ɣ Prices per sq m or parking unit: (residential (17th block): 57,000 RUB; residential (other): 60,000 RUB; commercial premises: 100,000 RUB; parking: 350,000 RUB) Ɣ Estimated Revenue (in current prices): 204,340,500,000 RUB Ɣ Discount Rate: 27.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 10,492,929,000 RUB

6. Smolny Park

Property type Elite class residential

Address Liter A, 4, Smolnogo St., St Petersburg

Location

The Property is located in the Central Administrative District of St Petersburg, on Smolnogo St., within a 25-minute walk from Chernyshevskaya metro station. The Property is situated in the historical centre of the city, a short distance from Shpalernaya St. and Suvorovsky Ave that provide direct access to Vosstaniya Square and Nevsky Prospect (approx., 3.3 km from the Property), and borders Smolnaya Embankment. The Smolny Cathedral, Alexander Institute for Noble Maidens, the Parter Garden with fountains comprises the immediate surroundings of the Property. The existing amenities will be further improved by retail premises on the ground floors of the Smolniy Park residential buildings and of the Basel ǩǸ, where a supermarket and a fitness-centre are planned. The scheme will provide residential accommodation in a quiet park zone in the very centre of the city with educational institutions nearby.

Description

Image 11 Image 12 Elite-class residential complex of 14 buildings, 4 of which are reconstructed buildings of historical value. The scheme varies in height between 1 and 8 above ground floors with 3-3.45 m ceiling height, comprises office and retail space, and an underground car park with 1025 car spaces and elevators connecting parking and apartments.

Stage of Completed/construction development

Development Build and sell strategy

Areas Ɣ Total buildings area –131,411 sq m (Ph.2: 40,032 sq m; Ph.3: 49,844 sq m; Ph.4: 41,535 sq m); Ɣ NSA (excluding parking)– 73,179 sq m (Ph.2: 24,503 sq m; Ph.3: 22,949 sq m; Ph.4: 25,727 sq m); Ɣ Residential premises area – 63,032 sq m (Ph.2: 22,667 sq m; Ph.3: 22,949 sq m; Ph.4: 17,417 sq m); Ɣ Commercial premises area – 10,146 sq m (Ph.2: 1,837 sq m; Ph.3: 0 sq m; Ph.4: 8,310 sq m); Ɣ Parking – 849 parking lots/10,612.5 sq m (Ph.2: 245 lots; Ph.3: 489 lots; Ph.4: 115 lots); Ɣ Available residential premises area – 15,483 sq m (Ph.2: 2,289 sq m; Ph.3: 1,054 sq m; Ph.4: 12,139 sq m); Ɣ Available commercial premises area – 8,275 sq m (Ph.2: 771 sq m; Ph.3: 0 sq m; Ph.4: 7,504 sq m); Ɣ Available parking lots – 483 parking lots (Ph.2: 81 lots; Ph.3: 287 lots; Ph.4: 115 lots). Ɣ Land plots – 8.65 hectares.

Tenure Ɣ Land plots – leasehold (lease agreement on investment terms 20/ZK-02037 dated June 24, 2004; Addendumdated July 18, 2006; Addendusq m dated December 28, 2006; Addendumdated September 6, 2007; Addendum4 dated August 20, 2009; Addendum5 dated May 12, 2010)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: March 2012/December 2016; Ɣ Sales start/completion dates: July 2012/December 2018 Ɣ Stage of development: Ph.2, Ph.3 – completed; Ph.4 – construction; Ɣ Number of phases: 3 (according to provided data); Ɣ Estimated costs after the valuation date: 781,059,000 RUB Ɣ Prices per sq m or parking unit: residential Ph.2: 300,000 RUB; residential Ph.3: 270,000 RUB; residential Ph.4: 300,000 RUB; commercial Ph.2: 150,000 RUB; commercial Ph.4: 133,175 RUB; parking: 2,100,000 RUB Ɣ Estimated Revenue (in current prices): 8,165,313,000 RUB (including 1,422,754,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 5,581,203,000 RUB

7. Radishcheva 39

Property type Elite Class Residential

Address 39 Litera M, Radishcheva St., St Petersburg

Location

The Property is located in the Central District of St Petersburg, within a 10-minute walk from Chernyshevskaya metro station. The Property borders the mix-used complex of “Paradny Kvartal” and is logical extension of its concept. The landmarks and recreation subjects in the surrounding are Tavrichesky Garden, Tavrichesky Palace, Suvorov Museum. Also a number of educational facilities are in close proximity to the Property.

Description

Image 13 Image 14 Mixed use complex of 8 above ground and 1 underground floors comprising elite-class residential with 148 app., office and retail space, and an underground car park for 189 car spaces. The Property comprises a regularly shaped land plot. The complex has neoclassic style façade made as individual design project.

Stage of Completed development

Development Sell strategy

Areas Ɣ Total buildings area –31,923 sq m; Ɣ NSA (excluding parking)– 20,879 sq m; Ɣ Residential premises area – 18,768 sq m; Ɣ Commercial premises area – 1,998 sq m; Ɣ Other premises area (self-storage) – 112.6 sq m; Ɣ Parking – 197 parking lots/2,367 sq m; Ɣ Available residential premises area – 444 sq m; Ɣ Available commercial premises area – 989 sq m; Ɣ Available other premises area (self-storage) – 70 sq m; Ɣ Available parking lots – 22 parking lots. Ɣ Land plot – 0.85 hectares

Tenure Ɣ Land plot – freehold (ownership certificates 78 ǧǩ 11435 dated August 31, 2006)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: February 2013/August 2015; Ɣ Sales start/completion dates: October 2012/December 2018; Ɣ Stage of development: Completed; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 0 RUB Ɣ Prices per sq m or parking unit: (residential: 300,000 RUB; commercial: 140,000 RUB; parking: 2,100,000 RUB) Ɣ Estimated Revenue (in current prices): 448,121,000 RUB (including 130,265,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 19.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 409,193,000 RUB

8. Verona

Property type Elite class residential

Address Litera A, 29, Morskoy Ave , St Petersburg

Location

The Property is located in Petrogradsky District of St Petersburg, in the central part of Kresotvsky Island and is within a 5-minute walk from Krestovsky Ostrov metro station. The surrounding of the land plot is represented by elite residential complexes. There is a park zone a short walking distance to the east of the Property. Also the landmarks in the neighborhood are Elagin Palace, Divo-Ostrov entertainment park, two yacht-clubs, restaurants, sporting and educational facilities. The construction of the new Zenit football team stadium is underway in the eastern part of Krestovsky Island.

Description

Image 15 Mixed-use complex comprising 80 elite-class residential premises with 3-3.2 m ceiling height, office and retail premises with practical layout, and an underground car park for 90 car spaces. . The Property comprises the modern security system, business-grade

elevators and modern building engineering systems.

Stage of Construction development

Development Sell strategy

Areas Ɣ Total buildings area –20,830 sq m; Ɣ NSA (excluding parking)– 11,593 sq m; Ɣ Residential premises area – 10,198 sq m; Ɣ Commercial premises area – 1,395 sq m; Ɣ Parking – 111 parking lots/1,388 sq m; Ɣ Available residential premises area – 5,195 sq m; Ɣ Available commercial premises area – 537 sq m; Ɣ Available parking lots – 111 parking lots. Ɣ Land plot – 0.36 hectares

Tenure Ɣ Land plot – freehold (ownership certificate 78-ǧǭ 029869 dated November 18, 2010)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: August 2015/August 2017; Ɣ Sales start/completion dates: December 2014/December 2019; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 1,374,158,000 RUB Ɣ Prices per sq m or parking unit: (residential: 350,000 RUB; commercial: 240,000 RUB; parking: 2,500,000 RUB) Ɣ Estimated Revenue (in current prices): 3,299,499,000 RUB (including 1,075,041,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 1,557,785,000 RUB

9. Kovensky

Property type Elite class residential

Address Litera A, 5, Kovenskiy Line, St Petersburg

Location

The Property is located in the Central District of St Petersburg within a 10-minute walk of Mayakovskaya, Ploshchad Vosstaniya and Chernischevskaya metro stations. The immediate neighborhood of the Property is comprised of historical buildings (such as the Madonna of Lurd catholic church, Golitsyn princes’ house (Kovensky, 1)). Nevsky Prospect, St.Petersburg's prime retail street with its numerous restaurants, cafes, shops, museums and exhibition halls is located within a 10-minute walking distance from the Property. There are two large shopping centres – Nevsky Center and Galeria - are located close to Ploshchad Vosstaniya, within a 20-minute walk of the Property. This part of the city is also rich in educational amenities from kindergartens and leisure centres to higher education institutions.

Description

Image 16 Image 17 Mixed-use office and residential complex of 5 above floors comprising elite-class apartments, office, retail premises and a car parking.

Stage of Completed development

Development Sell strategy

Areas Ɣ Total buildings area –12,324 sq m; Ɣ NSA (excluding parking)– 5,871 sq m; Ɣ Residential premises area – 1,058 sq m; Ɣ Commercial premises area – 4,665 sq m; Ɣ Retail premisesarea – 148.6 sq m; Ɣ Parking – 42 parking lots/726 sq m; Ɣ Available residential premises area – 0 sq m; Ɣ Available commercial premises area – 749 sq m; Ɣ Available parking lots – 8 parking lots. Ɣ Land plot – 0.39 hectares

Tenure Ɣ Land plot – freehold (ownership certificate)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: June 2011/April 2013; Ɣ Sales start/completion dates: August 2011/June 2016; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 0 RUB Ɣ Prices per sq m or parking unit: (commercial: 150,000 RUB; parking: 1,900,000 RUB) Ɣ Estimated Revenue (in current prices): 150,174,000 RUB (including 22,639,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 19.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 137,496,000 RUB

10. Dom na Dvoryanskoy

Property type Elite class residential

Address liter Ǩ, 13, Kuybysheva St, St Petersburg

Location

The Property is located in the Petrogradsky District of St Petersburg, it takes 10-min walking to reach the Property from Gorkovskaya metro station. This exact area is where St Petersburg was initially founded, a lot of beautiful and historical buildings are situated here. St Petersburg's most gorgeous landmarks such as Peter and Paul's Fortress (often named "the heart of the city") with its Cathedral, Aurora cruiser, St Petersburg Cathedral Mosque, and recreational facilities (Summer Garden and Marsovo Pole) are located nearby. Also the Artillery museum, St Petersburg's zoo and Planetarium, the Music hall, Entertainment center Velican Park, a few theatres and cinemas create the great cultural and entertainment infrastructure. The Business Centres, educational facilities, restaurants and stores are highly concentrated in the neighborhood as well.

Description

Image 18 Image 19 "Dom na Dvoryanskoy" is an elite-class residential 8-floor building with two main entrances and 57 apartments. The style of the complex can be described as modern, the same as the other buildings in the area. The curved shape of window openings on the upper floors and ornaments in facades add expressiveness and emphasize the style of affiliation. Huge windows let in plenty of light: this method is actively used the outstanding architects of the late XIX century.

Stage of Completed development

Development Sell strategy

Areas Ɣ Total buildings area – 8,787 sq m; Ɣ NSA (excluding parking)– 6,352 sq m; Ɣ Residential premises area – 5,610 sq m; Ɣ Commercial premises area – 743 sq m; Ɣ Parking – 35 parking lots/437.5 sq m; Ɣ Available residential premises area – 1,415 sq m; Ɣ Available commercial premises area – 205 sq m; Ɣ Available parking lots – 13 parking lots. Ɣ Land plot – 0.19 hectares

Tenure Land plot – freehold ( ownership certificate 78 ǧǪ 953380 dated March 05, 2009)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: February 2013/June 2015; Ɣ Sales start/completion dates: August 2011/December 2017; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 0 RUB Ɣ Prices per sq m or parking unit: (residential: 190,000 commercial: 140,000 RUB; parking: 1,800,000 RUB) Ɣ Estimated Revenue (in current prices): 358,665,000 RUB (including 37,663,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 19.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 311,601,000 RUB

11. Osobnyak Truvorova

Property type Elite class residential

Address liter A, 64, Martynova Emb., St Petersburg

Location

Osobnyak Truvorova has the premium location for elite residential property in St Petersburg – on Krestovsky island. A lot of high-end real estate is concentrated here. The main advantages of the place are comfortability, calmness and safety due to the extended park area located in immediate proximity. Many cafes, restaurants, sports facilities (for instance, courts for lawn tennis, football fields, etc.), entertainment services are situated in the neighborhood.

Image 20 Description The mansion that belonged to Askalon Truvorov, famous St Petersburg archeografer, was built in the neoclassical style on Krestovsky Island in 1893 by architect Rukteshel. Osobnyak Truvorova was renovated with care for its historic appearance. It has its own landscaped area, separated from Martynova Emb. The main facade overlooks

Srednyaya Nevka embankment and Elagin Island. The building looks impressive: the front facade is decorated with columns and mascarons (lion masks), large arched windows. The building is colored in light yellow. The Property may have a different purpose of use – from the comfortable living residence to an apartment of class de luxe, as well as any commercial purpose. The house consists of 3 floors including the basement.

Stage of Completed development

Development Sell strategy

Areas Ɣ Building – 1,212 sq m Ɣ Land plot – 0.21 hectares

Tenure The Client hasn’t provided us with any Title Documents. In accordance with the information of the Client type of the tenure for land plot and the building –freehold

Valuation Ɣ Applied method(-s) of valuation: Comparative Method; considerations Ɣ Comparative method was based on the data of offers of comparable subjects. The regression model was used to determine the Value.

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 520,000,000 RUB

12. Russkiy dom (Baskov)

Property type Elite class residential

Address 5/5A, Korolenko St., St Petersburg

Location

The Property is located in the Central District of St Petersburg within a 10-minute walk from Chernyshevskaya metro station. The proximity of main thoroughfares such as Nevsky Ave, Ligovsky Ave, Voskresenskaya and Smolnaya Embankments provides easy access the Property from various parts of the city. The Property is surrounded by the administrative buildings built in the 18th-19th centuries, many of which are of historical value. The largest orthodox church in the city, Spaso-Preobrazhensky Cathedral is in close proximity to the Property.

Image 21 Description A land plot with an elite residential complex under construction. The object is planned to be completed in 2017. Compositional decision of the project is based on a

combination of open pedestrian area and two spacious private courtyards. The core of the composition is the courtyard space visually opened to Baskov Lane. Dynamic silhouette, expressiveness of the facade composition, the presence of bay windows, towers allow the new complex to become an organic element of the existing historic look of the city.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total building area – 93,725 sq m; Ɣ NSA (excluding parking)– 56,253 sq m; Ɣ Residential premises area – 49,322 sq m; Ɣ Commercial premises area – 6,931sq m; Ɣ Parking – 519 parking lots/6,488 sq m; Ɣ Available residential premises area – 26,341 sq m; Ɣ Available commercial premises area – 3,877 sq m; Ɣ Available parking lots – 519 parking lots. Ɣ Land plots – 2.4 hectares

Tenure Ɣ Land plots – freehold (ownership certificate)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: April 2015/December 2017; Ɣ Sales start/completion dates: December 2014/July 2019; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 3,801,654,000 RUB Ɣ Prices per sq m or parking unit: (residential: 215,000 commercial: 190,000 RUB; parking: 2,100,000 RUB) Ɣ Estimated Revenue (in current prices): 8,773,206,000 RUB (including 1,283,251,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 2,706,390,000 RUB

13. Europa City

Property type Business class residential

Address Litera ǭ, 10, Medikov Ave, St Petersburg

Location

The Property is located to the north-east of the Petrogradsky District of St Petersburg, within a 10-minute walk from Petrogradskaya metro station. The project has a good transport accessibility from vary districts of the city due to the main thoroughfares of Petrogradsky District – Medikov Ave, Kamennoostrovsky Ave and Bolshoy Petrogradskoi Storony Ave, Aptekarskaya Embankment. The major arterial routes of Petrogradsky District have a large number of retail shops, restaurants, cinemas and modern business centers. Botanical Garden and Lopuhinskiy Garden are within a 10- minute walk from the site.

Image 22 Image 23 Description Business-class residential complex comprising 17 residential buildings of varied height (9 and 14 floors), some of which comprise ground floor commercial premises. The construction of the housing divided into 4 Phases. At the valuation date the 1st, the 2nd and the 3rd phases have been constructed, the 4th phase is being constructed. The project includes a kindergarten, an underground car park, a surface parking and green

areas with a unique landscape design.

Stage of Completed/construction development

Development Build and sell strategy

Areas Ɣ Total buildings area –135,554 sq m (Ph.3: 70,109 sq m; Ph.4: 65,445 sq m); Ɣ NSA (excluding parking)– 84,259 sq m (Ph.3: 42,674 sq m; Ph.4: 41,585 sq m); Ɣ Residential premises area – 71,829 sq m (Ph.3: 36,743 sq m; Ph.4: 35,086 sq m); Ɣ Commercial premises area – 11,933 sq m (Ph.3: 5,434 sq m; Ph.4: 6,499 sq m); Ɣ Self-storage premises area – 497 sq m (only within the 3rd phase); Ɣ Parking – 492 parking lots/6,150 sq m (Ph.3: 303 lots; Ph.4: 189 lots); Ɣ Available residential premises area – 43,103 sq m (Ph.3: 10,087 sq m; Ph.4: 33,016 sq m); Ɣ Available commercial premises area – 1,739 sq m (Ph.3: 358 sq m; Ph.4: 1,381 sq m); Ɣ Available self-storage premises area – 497 sq m (only within the 3rd phase); Ɣ Available parking lots – 378 parking lots (Ph.3: 189 lots; Ph.4: 189 lots); Ɣ Land plots – 7.36 hectares

Tenure Ɣ Land plot – freehold (ownership certificate 78-ǧǭ 570124 dated June 26, 2012)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: March 2012/September 2017 ; Ɣ Sales start/completion dates: May 2014/December 2018; Ɣ Stage of development: Ph.1, Ph.2, Ph.3, – completed; Ph.4 – construction; Ɣ Number of phases: 4 (according to provided data); Ɣ Estimated costs after the valuation date: 1,794,870,000 RUB Ɣ Prices per sq m or parking unit: residential Ph.3: 125,000 RUB; residential Ph.4: 120,000 RUB; commercial Ph.3: 160,000 RUB; commercial Ph.4: 140,000 RUB; self storage: 40,000 RUB, parking: 1,450,000 RUB Ɣ Estimated Revenue (in current prices): 7,139,015,000 RUB (including 1,097,621,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 4,374,548,000 RUB

14. Tri Vetra

Property type Business class residential

Address Plot 151, Block 66a, Savushkina St., St Petersburg

Location

The Property is located in the Primorsky District of St Petersburg. The neighborhood of the Property includes new built housing complexes, shopping centers, hypermarkets. Despite of the location in the district with a difficult transport accessibility, the Property has a beneficial location due to the proximity to the new thoroughfare – West high- speed Diameter (ZSD). The other benefit of the Property location is the proximity to the Gulf of Finland. The city park (“Park 300-letiya Sankt-Peterburga”) is in 10-minutes walk from the Property. The closest metro station - Staraya Derevnya is in 10-minutes drive by public transport from the Property.

Image 24

Description Business class residential complex comprising 3 residential 13-floor buildings including in total 758 apartments. The Property comprises commercial premises, an underground parking and two multilevel above ground parking buildings for 703 parking spaces in total.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 108,246 sq m; Ɣ NSA (excluding parking)– 56,364 sq m; Ɣ Residential premises area – 53,083 sq m; Ɣ Commercial premises area – 2,480 sq m; Ɣ Self-storage premises area – 801 sq m; Ɣ Parking – 703 parking lots/7,987 sq m; Ɣ Available residential premises area – 39,013 sq m; Ɣ Available commercial premises area – 2,157 sq m; Ɣ Available self-storage premises area – 801 sq m; Ɣ Available parking lots – 649 parking lots. Ɣ Land plot – 3.05 hectares

Tenure Ɣ Land plots – leasehold (land lease agreement 17/Ǯǫ-03630 dated January 20, 2006, and #2 dated September 1, 2011)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: June 2015/June 2018 ; Ɣ Sales start/completion dates: April 2015/December 2018; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 3,698,618,000 RUB Ɣ Prices per sq m or parking unit: residential: 120,000 RUB; commercial: 150,000 RUB; self storage: 65,000 RUB, parking: 923,948 RUB) Ɣ Estimated Revenue (in current prices): 6,883,252,000 RUB (including 1,470,933,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 2,415,881,000 RUB

15. Moskovskoye Shosse, 3

Property type Business class residential

Address liter ǫ, Moscovskoye Hw., St Petersburg

Location

Moskovskoye Shosse 3

The Property is located in Moskovsky District of St Petersburg, at the crossroads of Moskovskoye Highway and Dunaisky Ave. "Moskovskoye Shosse 3" is located in 15 minutes walk from Zvezdnaya metro station. Moskovskoye and Pulkovskoye Highways provide easy and direct access both to the city center and to the areas beyond the St Petersburg ring road, and to Pulkovo Airport also. Dunaysky Ave is also an important thoroughfare connecting the south districts of the city. The commercial infrastructure of the neighborhood is represented by hypermarkets (Lenta, O'Key, METRO Cash & Carry, OBI, Castorama). In the proximity to the Property two new shopping and entertainment centers are located – Kontinent and Torgovy Dvor. Park Gorodov Geroyev, a large green area with a pond, is only 100 m from the Property.

Image 25 Image 26

Description At the valuation date the residential complex is being constructed. The business class residential complex comprises 89 residential premises, parking for 81 cars, self-storage premises. The Property is located at its own land plot closely to Viva housing complex, but belongs to the higher class. Proximity to the housing complex of Viva makes its infrastructure available.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 13,369 sq m; Ɣ NSA (excluding parking)– 9,550 sq m; Ɣ Residential premises area – 9,275 sq m; Ɣ Self-storage premises area – 274 sq m; Ɣ Parking – 81 parking lots/1,012.5 sq m; Ɣ Available residential premises area – 8,115 sq m; Ɣ Available self-storage premises area – 274 sq m; Ɣ Available parking lots – 81 parking lots. Ɣ Land plot – 0.41 hectares (the Property is on the land plot of Viva housing complex with the total area of 1.15 hectares)

Tenure x Land plot – freehold (ownership certificate 78-ǧǭ 910247 dated March 25, 2013)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: August 2015/December 2017; Ɣ Sales start/completion dates: September 2015/June 2018; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 646,589,000 RUB Ɣ Prices per sq m or parking unit: residential: 182,070 RUB; self storage: 100,000 RUB, parking: 1,705,128 RUB) Ɣ Estimated Revenue (in current prices): 1,874,274,000 RUB (including 231,296,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 666,152,000 RUB

16. Bogemia

Property type Business class residential

Address 14, Smolenskaya St, St Petersburg

Location

Bogemia complex is located in Moskovsky District of St Petersburg, within 7 min walk of Frunzenskaya metro station. "Bogemia" is situated in close proximity to Moskovsky Ave - one of the main thoroughfares of the city, but at the same time it is in a quiet area of Smolenskaya St., far from the bustle of the city noises. In recent years Moskovsky district became a business district due to a lot of new constructed business centers. On the other side there are respectable residential blocks located along Moskovsky Ave. The infrastructure was mainly formed long time ago, so it is convenient to live there closely to shops, supermarkets, entertainment of all kinds, etc.

Image 27 Description The business class residential complex is to be constructed in 2018, currently there are old buildings on the land plot. The existing buildings will be demolished within the development process. The new building will have from 7 to 14 floors, 228 apartments, a few of the apartments will comprise the large terraces. Wide halls and corridors, large windows, high ceilings - these all are advantages of grand neoclassical building. In front of the house there will be nice courtyard. For vehicles of residents "Bohemia" will provide underground parking for 154 cars. On the ground floor the commercial premises will be located.

Stage of Design development

Development Build and sell strategy

Areas Ɣ Total buildings area (of the future buildings) – 34,352 sq m; Ɣ NSA (excluding parking)– 21,965 sq m; Ɣ Residential premises area – 20,814 sq m; Ɣ Commercial premises area – 1,151 sq m; Ɣ Parking – 154 parking lots/1,925 sq m; Ɣ Available residential premises area – 20,141 sq m; Ɣ Available commercial premises area – 989 sq m; Ɣ Available parking lots – 154 parking lots. Ɣ Land plot – 0.69 hectares

Tenure Ɣ Land plot – freehold (ownership certificate 78-ǧǭ 978449 dated June 14, 2013)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: April 2015/September 2018; Ɣ Sales start/completion dates: November 2015/August 2019; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 1,733,891,000 RUB Ɣ Prices per sq m or parking unit: residential: 133,819 RUB; commercial: 120,000 RUB, parking: 1,500,000 RUB) Ɣ Estimated Revenue (in current prices): 3,166,463,000 RUB (including 121,580,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 21.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 855,495,000 RUB

17. Yuzhnaya Aquatoriya

Property type Mass-market residential

Address Block 28, 28a, Doblesti St, St Petersburg

Location

The Property is located in the northwestern part of Krasnoselsky District of St Petersburg, in the block bordered with Marshala Kazakova St., Doblesti St., Leninsky Ave., Geroyev Ave and also in the planned block bordered with Marshala Kazakova St., Geroyev Ave., Leninsky Ave., Patriotov Ave. The neighborhood is not serviced by metro stations, the nearest metro stations - Leninsky Prospekt and Prospect Veteranov are located in 6 km from the Property. The new metro station, Prospekt Geroev, is planned to be built by 2025 in close proximity to the Property.

Image 28 Image 29 Description Mass-market residential complex consists of several residential buildings of 7 - 25 floors with commercial premises, a multilevel above ground parking, and a guest parking zone. The complex comprises sport outside facilities, children playgrounds,

promenades and green zones. At the valuation date the construction is held on plots No 1, 6, 9, 13, 2, the buildings on plot 14 are completed and commissioned.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 523,065 sq m; Ɣ NSA (excluding parking)– 318,279 sq m (Plot 13: 39,004 sq m, Plot 14: 63,576 sq m, Plot 24: 25,000 sq m, Plot 9: 56,548 sq m, Plot 1: 12,000 sq m, Plot 2: 90,645 sq m, Plot 6: 31,507 sq m); Ɣ Residential premises area – 295,087 sq m (Plot 13: 38,759 sq m, Plot 14: 61,750 sq m, Plot 24: 25,000 sq m, Plot 9: 52,129 sq m, Plot 1: 10,889 sq m, Plot 2: 75,220 sq m, Plot 6: 31,340 sq m); Ɣ Commercial premises area – 23,192 sq m (Plot 13: 245 sq m, Plot 14: 1,826 sq m, Plot 24: 0 sq m, Plot 9: 4,418 sq m, Plot 1: 1,111 sq m, Plot 2: 15,425 sq m, Plot 6: 167 sq m); Ɣ Parking – 2,509 parking lots/32,112.5 sq m (Plot 13: 300 lots, Plot 14: 600 lots, Plot 24: 300 lots, Plot 9: 334 lots, Plot 1: 75 lots, Plot 2: 600 lots, Plot 6: 300 lots); Ɣ Available residential premises area – 124,158 sq m (Plot 13: 1,710 sq m, Plot 14: 912 sq m, Plot 24: 25,000 sq m, Plot 9: 28,667 sq m, Plot 1: 759 sq m, Plot 2: 65,811 sq m, Plot 6: 1,300 sq m); Ɣ Available commercial premises area – 17,582 sq m (Plot 13: 0 sq m, Plot 14: 108 sq m, Plot 24: 0 sq m, Plot 9: 2,018 sq m, Plot 1: 848 sq m, Plot 2: 14,609 sq m, Plot 6: 0 sq m); Ɣ Available parking lots – 2,464 parking lots (Plot 13: 300 lots, Plot 14: 600 lots, Plot 24: 300 lots, Plot 9: 334 lots, Plot 1: 30 lots, Plot 2: 600 lots, Plot 6: 300 lots). Ɣ Land plots – 23.90 hectares

Tenure Ɣ Land plots – leasehold (lease agreement 08-ǮǫǱ-02441 dated December 2, 2013,, 08-ǮǫǱ-02442 dated December 2, 2013, 08-ǮǫǱ-02443 dated December 2, 2013, 08-ǮǫǱ-02444 dated December 2, 2013, 08-ǮǫǱ-02445 dated December 2, 2013, 08-ǮǫǱ-02446 dated December 2, 2013, 08-ǮǫǱ-02447 dated December 2, 2013, 08-ǮǫǱ-02448 dated December 2, 2013, Ǳ 08-ǮǫǱ-02449 dated December 2, 2013, Ǳ 08-ǮǫǱ-02450 dated December 2, 2013, 08-ǮǫǱ-02453 dated December 2, 2013, 08-ǮǫǱ-02454 dated December 2, 2013, 08-ǮǫǱ-02456 dated December 2, 2013, 08-ǮǫǱ-02451 dated December 2, 2013, 08-ǮǫǱ-02452 dated December 2, 2013, 08-ǮǫǱ-02455 dated December 2, 2013, 08-ǮǫǱ-02457 dated December 2, 2013, 08-ǮǫǱ-02458 dated December 2, 2013, 08-ǮǫǱ-02459 dated December 2, 2013, 08-ǮǫǱ-02460 dated December 2, 2013, 08-ǮǫǱ-02461 dated December 2, 2013, Addendum7 to the lease agreement 08/ZKS-000069 dated June 8, 2007)

Ɣ Number of phases: 7; Ɣ Estimated costs after the valuation date: 10,325,393,000 RUB Ɣ Prices per sq m or parking unit: residential (econom): 73,798 – 90,000 RUB; residential (comfort): 96,853 RUB; commercial: 120,000 – 150,000 RUB, parking: 300,000 – 500,000 RUB) Ɣ Estimated Revenue (in current prices): 17,485,312,000 RUB (including 3,435,206,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 5,223,365,000 RUB

18. Sofiya

Property type Mass-market residential

Address Plots 3, 8, 12, 5, 7, 3*, 13, 8*, 1, Lit ǻ, 49, 6, Yuzhnoe Hwy, St Petersburg

Location

The Property is located in Frunzensky District, in the south of St Petersburg, in the block formed by Sofiyskaya St., Dimitrova St., Bukharestskaya St. and Yuzhnoye Highway. Bukharestskaya St. provides direct access to the city centre via Ligovsky Ave, and Sofyskaya St. provides direct access to the St Petersburg's Ring Road (KAD) in circa 3.3 km from the Property. The nearest metro station, Mezhdunarodnaya, is located in a 5 minute distance by public transport. Another metro station, Prospect Slavy, located within a short walking distance from the Property, is planned for completion at 2018. There are vast green areas with large ponds along the northern and southern borders of the Property. The surrounding buildings to the west, north and south (beyond the green zones) are mostly mass market residential with accompanying amenities. A large industrial zone lies to the east of the Property. There are two modern retail subjects in the neighborhood – Yuzhny Polus shopping centre and Lenta hypermarket.

Image 30 Image 31 Description The residential complex comprising several residential buildings of 20 - 25 floors with integrated commercial space, multilevel above ground ventilated parking and a guest parking zone. The complex comprises commercial buildings, social infrastructure, sport outside facilities, children playgrounds, promenades and green zones as a fully fitted- out residential accommodation. The construction of the residential complex is divided into 5 phases. At the valuation date two of them are completed, other phases are being constructed.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 466,416 sq m; Ɣ NSA (excluding parking)– 313,024.1 sq m; Ɣ Residential premises area – 307,975 sq m; Ɣ Commercial premises area – 5,050 sq m; Ɣ Parking – 1,698 parking lots/ 21,225.0 sq m; Ɣ Available residential premises area – 48,053 sq m; Ɣ Available commercial premises area – 1,521 sq m; Ɣ Available parking lots – 1,483 parking lots. Ɣ Land plots – 21.90 hectares

Tenure Ɣ Land plots – freehold (ownership certificates: 78-ǧǭ 854249 dated February 14, 2013; 78-ǧǭ 897211 dated March 28, 2013; 78-ǧǭ 854623 dated February 15, 2013; 78-ǧǭ 897209 dated March 28, 2013; 78-ǧǭ 854235 dated February 14, 2013; 78-ǧǭ 897212 dated March 28, 2013; 78-ǧǭ 897210 dated March 28, 2013; 78-ǧǭ 854234 dated February 14, 2013; 78-ǧǭ 854250 dated February 15, 2013; 78-ǧǭ 854233 dated February 14, 2013; 78-ǧǭ 854237 dated February 14, 2013; 78-ǧǭ 854645 dated February 18, 2013; 78-ǧǭ 854244 dated February 14, 2013; 78-ǧǭ 854232 dated February 14, 2013; 78-ǧǭ 854642 dated February 18, 2013; 78-ǧǭ 854643 dated February 18, 2013; 78-ǧǭ 854242 dated February 14, 2013; 78-ǧǭ 854638 dated February 18, 2013; 78-ǧǭ 854240 dated February 14, 2013; 78-ǧǭ 854239 dated February 14, 2013; 78-ǧǭ 854241 dated February 14, 2013; 78-ǧǭ 897206 dated March 28, 2013; 78-ǧǭ 854243 dated February 14, 2013)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: March 2013/March 2018; Ɣ Sales start/completion dates: June 2013/December 2017; Ɣ Number of phases: 5; Ɣ Estimated costs after the valuation date: 5,170,626,000 RUB Ɣ Prices per sq m or parking unit: residential (econom): 87,465 RUB; commercial: 133,548 RUB, parking: 547,978 RUB) Ɣ Estimated Revenue (in current prices): 9,464,298,000 RUB (including

4,245,541,000 RUB for bargains before December 31, 2015); Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 3,973,981,000 RUB

19. Kalina-Park

Property type Mass-market residential

Address 12, Marshala Blukhera, St Petersburg

Location

The Property is situated in Kalininsky District of St Petersburg, in the block bordered by Marshala Blyukhera Ave, Laboratorniy Ave, Bestuzhevskaya St. and railroad. The neighborhood is represented by new developed residential area with associated social and commercial infrastructure. The Property has good accessibility. All types of public transport are good developed in the subject district. The metro stations Lesnaya and Ploshad Muzhestva are located in 3 and 5 km from the Property respectively.

Image 32 Image 33 Description The residential complex consisting of several buildings of 9 - 25 floors with integrated commercial premises and multilevel above ground parking. Fully fitted-out residential accommodation is to include children playgrounds, boulevard, green zones and sport outside facilities. The housing complex is divided into 4 phases (1-3 phases are named “Kalina Park”, the

4th phase has the name of “Cinema”). At the valuation date the first phase is completed and commissioned, other phases are being constructed.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 544,700 sq m; Ɣ NSA (excluding parking)– 342,657 sq m; Ɣ Residential premises area – 336,460 sq m; Ɣ Commercial premises area – 6,197 sq m; Ɣ Parking – 1,416 parking lots/ 17,700 sq m; Ɣ Available residential premises area – 194,147 sq m; Ɣ Available commercial premises area – 3,204 sq m; Ɣ Available parking lots – 1,013 parking lots. Ɣ Land plots – 34.45 hectares

Tenure Ɣ Land plots – freehold (ownership certificates: 78-ǧǮH 835679 dated February 21, 2013; 78-ǧǮ 111932 dated October 15, 2013; 78-ǧǮH 976434 dated March 15, 2013; 78-ǧǮ 166099 dated November 20, 2013; 78-ǧǮ 338382 dated April 24, 2014; 78-ǧǮ 111930 dated October 15, 2013; 78-ǧǮH 932559 dated 23.04.2013; 78-ǧǮ 338381 dated April 24, 2014; 78-ǧǮ 111928 dated October 15, 2013; 78-ǧǮ 111929 dated October 15, 2013; 78-ǧǮ 111927 dated October 15, 2013; 78-ǧǮ 111926 dated October 15, 2013; 78-ǧǮ 111925 dated October 15, 2013)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: February 2012/December 2019; Ɣ Sales start/completion dates: February 2013/December 2019; Ɣ Development strategy: Build and Sell; Ɣ Stage of development: construction; Ɣ Number of phases: 4; Ɣ Estimated costs after the valuation date: 7,870,458,000 RUB Ɣ Prices per sq m or parking unit: residential: 81,023 RUB; commercial: 120,000 RUB, parking: 500,000 RUB) Ɣ Estimated Revenue (in current prices): 19,023,042,000 RUB (including 2,401,734,000 RUB for bargains before December 31, 2015); Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 7,790,894,000 RUB

20. VIVA

Property type Mass-market residential

Address 3, Moskovskoye Highway, St Petersburg

Location

The Property is located in Moskovsky District of St Petersburg, at the crossroads of Moskovskoye Highway and Dunaisky Ave. "Viva" is located in 15 minutes’ walk from Zvezdnaya metro station. Moskovskoye and Pulkovskoye Highways provides easy and direct access both to the city center and to the areas beyond the St Petersburg ring road and to Pulkovo Airport also. Dunaysky Ave is also important thoroughfare connecting south districts of the city. The commercial infrastructure of the neighborhood is represented by hypermarkets (Lenta, O'Key, METRO Cash & Carry, OBI, Castorama). In the proximity to the Property two new shopping and entertainment centers are located – Kontinent and Torgovy Dvor. Park Gorodov Geroyev, a large green area with pond, is only 100 m from the Property.

Image 34 Image 35

Description The residential comfort-class complex consisting of several residential buildings of 18 - 25 floors including 2067 apartments, commercial premises on the ground floor and multilevel above ground parking. The construction of the residential complex was divided into 3 phases. At the valuation date all the phases are completed.

Stage of Completed development

Development Sell strategy

Areas Ɣ Total buildings area – 135,029 sq m; Ɣ NSA (excluding parking)– 93,558 sq m; Ɣ Residential premises area – 92,479 sq m; Ɣ Commercial premises area – 1,079 sq m; Ɣ Parking – 499 parking lots/ 6,238 sq m; Ɣ Available residential premises area – 960 sq m; Ɣ Available commercial premises area – 166 sq m; Ɣ Available parking lots – 104 parking lots. Ɣ Land plots – 9.15 hectares

Tenure Ɣ Land plots – freehold (ownership certificates 78-ǧǯ 061948 dated October 30, 2015; 78-ǧǯ 061953 dated October 30, 2015; 78-ǧǯ 061947 dated October 30, 2015; 78- ǧǯ 061946 dated October 30, 2015; 78-ǧǯ 061943 dated October 30, 2015; 78-ǧǯ 061952 dated October 30, 2015; 78-ǧǯ 061950 dated October 30, 2015; 78-ǧǯ 061945 dated October 30, 2015; 78-ǧǯ 061944 dated October 30, 2015; 78-ǧǯ 061942 dated October 30, 2015; 78-ǧǯ 061941 dated October 30, 2015; 78-ǧǯ 061951 dated October 30, 2015; 78-ǧǯ 061949 dated October 30, 2015)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: May 2012/June 2015; Ɣ Sales start/completion dates: February 2013/December 2016; Ɣ Number of phases: 3; Ɣ Estimated costs after the valuation date: 0 RUB Ɣ Prices per sq m or parking unit: residential: 120,000 RUB; commercial: 120,000 RUB, parking: 500,000 RUB) Ɣ Estimated Revenue (in current prices): 218,411,000 RUB (including 31,315,000 RUB for bargains before December 31, 2015); Discount Rate: 19.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 202,431,000 RUB

21. Kvartet

Property type Mass-market residential

Address Lit Ǫ1, Bldg 2, 27, Dunaysky Av, St Petersburg

Location

The Property is located in Moskovsky District of St Petersburg, to the southwest from crossroad of Dunaysky Ave and Vitebsky Ave. The Property is located within a 5 minute walk from Kupchino metro station. The land plot is located in close proximity to 3 important thoroughfares of the city: Vitebsky Ave, Dunaysky Ave and Kosmonavtov Ave. Moskovskoye Highway and St Petersburg ring road (the KAD) are located at a distance of 5 minutes’ drive from the Property, which provides easy and direct access both to the city centre and to suburban areas. The Property is located on the former industrial land plot. The complex development of the territory implies the creation of associated social and commercial infrastructure within the block. The Property benefits from the well-developed business, retail and social infrastructure in the zones of metro stations Zvezdnaya and Kupchino. Park Gorodov Geroyev, a large green area with a pond, is located in 2 km from the Property.

Image 36 Image 37 Description The residential complex consisting of 4 residential buildings of 25 floors including 2,049 apartments with integrated commercial space and multilevel above ground ventilated parking. The residential buildings are to be of reinforced concrete construction and provide fully fitted-out residential accommodation.

Areas Ɣ Total buildings area – 155,863 sq m; Ɣ NSA (excluding parking)– 109,570 sq m; Ɣ Residential premises area – 108,450 sq m; Ɣ Commercial premises area – 1,121 sq m; Ɣ Parking – 583parking lots/ 7,287.5 sq m; Ɣ Available residential premises area – 10,086 sq m; Ɣ Available commercial premises area – 0 sq m; Ɣ Available parking lots – 440 parking lots. Ɣ Land plots – 6.17 hectares

Stage of Construction development

Development Build and sell strategy

Tenure Ɣ Land plots – freehold (ownership certificates: 78-ǧǭ 910246 dated March 25, 2013; 78-ǧǭ 910243 dated March 25, 2013; 78-ǧǭ 865240 dated 12.02.2013; 78-ǧǭ 910244 dated March 25, 2013; 78-ǧǭ 910240 dated March 25, 2013; 78-ǧǭ 910245 dated March 25, 2013)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: November 2012/December 2016; Ɣ Sales start/completion dates: April 2013/December 2017 (Valuer’s forecast); Ɣ Development strategy: Build and Sell; Ɣ Stage of development: construction; Ɣ Number of phases: 4; Ɣ Estimated costs after the valuation date: 1,132.532,000 RUB Ɣ Prices per sq m or parking unit: residential: 85,000 RUB; parking: 500,000 RUB) Ɣ Estimated Revenue (in current prices): 1,681,381,000 RUB (including 604,046,000 RUB for bargains before December 31, 2015);

Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 485,599,000 RUB

22. Shuvalovsky

Property type Mass market residential

Address plot 208 (Kamenka), Prigorodny, St Petersburg

Location

The Property is situated in Primorsky District of St-Petersburg. The Property is located within 10 min drive from Pionerskaya and Komendantskiy Prospekt metro stations. The Property is located close to the main thoroughfares of the district. The neighborhood benefits from the number of nearby leisure, retail and social amenities. There is Novoorlovsky forest and a nature reserve, Yuntolovskaya Dacha, in close proximity to the Property which features an artificial lake, playgrounds and walking paths.

Image 38 Image 39 Description The building is under construction, works are currently in progress. It is intended to be developed for a mass-market residential complex. The complex will comprise several residential buildings of 16-25 floors with supportive commercial premises on ground floors, and multi-level aboveground parking. The construction of the residential is divided into 5 phases.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 680,716 sq m; Ɣ NSA (excluding parking)– 423,640 sq m; Ɣ Residential premises area – 419,325 sq m; Ɣ Commercial premises area – 3,504 sq m; Ɣ Self-storage premises area – 811 sq m; Ɣ Parking – 2,506 parking lots/ 31,325 sq m; Ɣ Available residential premises area – 293,718 sq m; Ɣ Available commercial premises area – 2,448 sq m; Ɣ Available self-storage premises area – 811 sq m; Ɣ Available parking lots – 2,344 parking lots. Ɣ Land plots – 30.9 hectares

Tenure Land plots – freehold (ownership certificates: 78-ǧǮ 429741 dated July 03, 2014; 78- ǧǮ 419547 dated June 16, 2014; 78-ǧǮ 419548 dated June 16, 2014; 78-ǧǮ 419545 dated June 16, 2014; 78-ǧǮ 418929 dated June 10, 2014; 78-ǧǮ 419392 dated June 10, 2014; 78-ǧǮ 419398 dated June 10, 2014; 78-ǧǮ 481971 dated August 28, 2014; 78-ǧǮ 481973 dated August 28, 2014; 78-ǧǮ 419395 dated June 10, 2014; 78-ǧǮ 419396 dated June 10, 2014; 78-ǧǮ 419397 dated June 10, 2014; 78-ǧǮ 419391 dated June 10, 2014; 78-ǧǮ 418931 dated June 10, 2014; 78-ǧǮ 419394 dated June 10, 2014)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: July 2014/December 2020; Ɣ Sales start/completion dates: July 2014/ December 2020; Ɣ Number of phases: 5; Ɣ Estimated costs after the valuation date: 22,602,230,000 RUB Ɣ Prices per sq m or parking unit: residential: 79,808 RUB; commercial: 120,000; self- storage: 80,000 sq m; parking: 400,000 RUB) Ɣ Estimated Revenue (in current prices): 27,263,048,000 RUB (including 3,143,725,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 2,515,077,000 RUB

23. Ruchyi/Novaya Okhta

Property type Mass market residential

Address Murinskaya road, St Petersburg

Location

The Property is located along Murinskaya Road, near St Petersburg Ring Road ( KAD), in Krasnogvardeysky District of St- Petersburg. The proximity to KAD provides access to diferrent parts of the city. The nearest metro stations are Devyatkino and Grazhdansky Prospect (5 min drive from the Property). The Property is surrounded by agricultural land, parkland and Okhta River and Tsvetnoy Gorod development projects.

Image 40 Image 41 Description The Property is a residential complex under construction, a part of the project of complex development. The residential complex will consist of several residential buildings of different number of floors with integrated commercial premises and multilevel above ground parking. Also the subjects of social infrastructure are planned to build within the development process: 3 schools, 5 kindergartens and 2 clinics.

Stage of Construction

development

Development Build and sell strategy

Areas Ɣ Total buildings area – 1,241,545 sq m; Ɣ NSA (excluding parking)– 780,501 sq m; Ɣ Residential premises area – 761,321 sq m; Ɣ Commercial premises area – 19,180 sq m; Ɣ Parking – 6,163 parking lots/77,037.5 sq m; Ɣ Available residential premises area – 325,086 sq m; Ɣ Available commercial premises area – 8,848 sq m; Ɣ Available parking lots – 5,926 parking lots. Ɣ Land plots – 104.74 hectares Ɣ TenureƔ Ɣ Land plots - freehold (ownership certificates: 78-ǧǭ 905259 dated April 5, 2013; 78-ǧǭ 905267 dated April 5, 2013; 78-ǧǮ 604988 dated December 10, 2014; 78-ǧǮ 604989 dated December 10, 2014 Ȋ, 78-ǧǮ 735321 dated April 6, 2015, 78-ǧǮ 735322 dated April 6, 2015; 78-ǧǭ 868640 dated February 19, 2013; 78-ǧǮ 455203 dated August 20, 2014; 78-ǧǮ 455204 dated August 20, 2014; 78-ǧǮ 455206 dated August 20, 2014; 78-ǧǭ 868590 dated February 19, 2013; 78-ǧǭ 868639 dated February 19, 2013; 78-ǧǮ 602322 dated October 31, 2014; 78-ǧǮ 602320 dated October 31, 2014; 78-ǧǮ 602321 dated October 31, 2014; 78-ǧǮ 698172 dated February 12, 2015; 78-ǧǮ 698165 dated February 12, 2015; 78-ǧǮ 673998 dated February 12, 2015; 78-ǧǮ 673999 dated February 12, 2015; 78-ǧǮ 674000 dated February 12, 2015; 78-ǧǮ 698157 dated February 12, 2015; 78-ǧǮ 698198 dated February 12, 2015; 78-ǧǮ 698180 dated February 12, 2015; 78-ǧǮ 698179 dated February 12, 2015; 78-ǧǮ 698178 dated February 12, 2015; 78-ǧǮ 698160 dated February 12, 2015; 78-ǧǮ 698159 dated February 12, 2015; 78-ǧǮ 698158 dated February 12, 2015; 78-ǧǮ 698170 dated February 12, 2015; 78-ǧǮ 698169 dated February 12, 2015; 78-ǧǮ 698168 dated February 12, 2015; 78-ǧǮ 698161 dated February 12, 2015; 78-ǧǮ 698162 dated February 12, 2015; 78-ǧǮ 698163 dated February 12, 2015; 78-ǧǮ 698166 dated February 12, 2015; 78-ǧǮ 698175 dated February 12, 2015; 78-ǧǮ 698174 dated February 12, 2015; 78-ǧǮ 698171 dated February 12, 2015; 78-ǧǮ 698167 dated February 12, 2015; 78-ǧǮ 698164 dated February 12, 2015; 78-ǧǮ 698177 dated February 12, 2015; 78-ǧǮ 698176 dated February 12, 2015; 78-ǧǮ 673997 dated February 12, 2015; 78-ǧǮ 455205 dated August 20, 2014; 78-ǧǭ 869977 dated March 15, 2013; 78-ǧǭ 905260 dated April 5, 2013; 78-ǧǭ 905261 dated April 5, 2013; 78-ǧǭ 905262 dated April 5, 2013; 78-ǧǭ 905263 dated April 5, 2013; 78-ǧǭ 905264 dated April 5, 2013; 78-ǧǭ 905265 dated April 5, 2013; 78-ǧǭ 905266 dated April 5, 2013)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: September2012/December 2022; Ɣ Sales start/completion dates: May 2013/ March 2021; Ɣ Number of phases: 7; Ɣ Estimated costs after the valuation date: 19,725,377,000 RUB Ɣ Prices per sq m or parking unit: residential: 60,000 RUB; commercial: 118,885; parking: 400,000 RUB)

Ɣ Estimated Revenue (in current prices): 26,341,941,000 RUB (including 3,414,437,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 24, 2015

Market value 4,111,896,000 RUB

24. Ruchyi-7

Property type Mass market residential

Address 145, Piskarevsky Av., St Petersburg

Location

Image 42 Image 43 Description The construction is planned to set up in 2017. At the valuation date the projecting

stage is on. The residential complex will consist of several residential blocks of variable storeys with built-in commercial premises, multilevel parking and detached objects of social infrastructure: a school and 2 kindergartens.

Stage of Design development

Development Build and sell strategy

Areas Ɣ Total buildings area – 282,321 sq m; Ɣ NSA (excluding parking)– 211,421 sq m; Ɣ Residential premises area – 209,435 sq m; Ɣ Commercial premises area – 1,986 sq m; Ɣ Parking – 2,546 parking lots/31,825 sq m; Ɣ Available residential premises area – 209,435 sq m; Ɣ Available commercial premises area – 1,986 sq m; Ɣ Available parking lots – 2,546 parking lots. Ɣ Land plots – 23.66 hectares

Tenure Ɣ Land plots - freehold (ownership certificates: 78-ǧǭ 868775 dated February 20, 2013; 78-ǧǭ 904413 dated March 25, 2013; 78-ǧǭ 868584 dated February 19, 2013; 78-ǧǭ 868583 dated February 19, 2013; 78-ǧǭ 868585 dated February 19, 2013)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: January 2018/December 2020; Ɣ Sales start/completion dates: June 2019/ December 2021; Ɣ Number of phases: 2 (Valuer’s forecast); Ɣ Estimated costs after the valuation date: 11,324,568,000 RUB Ɣ Prices per sq m or parking unit: residential: 60,000 RUB; commercial: 80,000; parking: 350,000 RUB) Ɣ Estimated Revenue (in current prices): 13,616,080,000 RUB; Ɣ Discount Rate: 25.66%

Valuation date December 31, 2015

Inspection date December 24, 2015

Market value 1,856,362,000 RUB

25. Tsivilizatsiya

Property type Mass market residential

Address 42, Oktyabrskaya Emb., St Petersburg

Location

The Property is located in Nevsky District of St Petersburg within a 20-40 min walk of Ulitsa Dybenko metro station. The Property is conveniently accessible from Oktyabrskaya Embankment, which allows to easily reach all city districts and KAD. The following subjects are situated in the neighborhood and surroundings: Park Stroiteley, sporting and cultural centers - Ledovy Dvoretz sports center, stadium of watersports Nevskaya Volna, retail and entertainment center London Mall, variety of supermarkets - Karusel, Lenta, Castorama, Leroy Merlin, and also fitness center Olympic and Gazprom sports club.

Image 44 Image 45 Description At the valuation date the land plots are occupied with factories. The Project implies the demolition of current improvements located on the land plots and re-development of

the territory for residential use (Tsivilizatsia residential complex). The project development scheme consists of 8 phases. The buildings will be made of monolith- and-brick or prefabricated concrete panels, and will provide fitted-out or Shell&Core residential accommodation.

Stage of Design/Concept development development

Development Build and sell strategy

Areas Ɣ Total buildings area – 1,329,981 sq m; Ɣ NSA (excluding parking)– 823,524 sq m; Ɣ Residential premises area – 800,827 sq m; Ɣ Commercial premises area – 22,697 sq m; Ɣ Parking – 4,478 parking lots/55,975 sq m; Ɣ Land plots – 59.53 hectares

Tenure Ɣ Land plots - freehold (ownership certificates: 78-ǧǮH 923942 dated April 30, 2013; 78-ǧǮ 659643 dated December 27, 2014: 78-ǧǮ 659642 dated December 27, 2014: 78-ǧǮ 659644 dated December 27, 2014: 78-ǧǮ 659645 dated December 27, 2014: 78-ǧǮ 000463 dated July 4, 2013; 78-ǧǮ 256015 dated February 14, 2014; 78-ǧǮ 256014 dated February 14, 2014;78-ǧǮ 256016 dated February 14, 2014; 78-ǧǮ 252233 dated December 05, 2013; 78-ǧǮ 252231 dated December 05, 2013)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: March 2016/December 2025; Ɣ Sales start/completion dates: March 2016/ March 2026; Ɣ Number of phases: 10 (Valuer’s forecast); Ɣ Estimated costs after the valuation date: 52,760,317,000 RUB Ɣ Prices per sq m or parking unit: residential: 89,490-95,000 RUB; commercial: 120,000; parking: 350,000-500,000 RUB) Ɣ Estimated Revenue (in current prices): 78,483,133,000 RUB; Ɣ Discount Rate: 22.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 4,546,611,000 RUB

26. Zapovednaya

Property type Mass market residential

Address plot 3, Zapovednaya St, St Petersburg

Location

The object is located in Primorsky district of St Petersburg, between Suzdalsky Ave and Zapovednaya St., 7 km from the metro station "Prospect Prosvescheniya" 3.5 km from Vyborgskoe Ave, 3 km from the Parachutnaya St, 7 km from the Ring Road (KAD). 2 new metro stations "Kamenka" and "Shuvalovskiy Prospect" are scheduled for opening in 2025. Novoorlovsky forest park is located at a distance of 1-2 km from the Property. Objects of social and commercial infrastructure are available in nearby neighborhood, at a distance 2 km from the property. At a distance of 4-5 km from the facilities there are hypermarkets "Lenta", "K-RAUTA», "Okay".

Image 46 Image 47 Description At the valuation date the land plot is vacant. The project implies the construction of residential complex. It is planned to build circa 150 thousand sq m of real estate, of which 86,687 sq m will be residential and the rest refers to where commercial premises

and parking for 744 cars will take place.

Stage of Concept development development

Development Build and sell strategy

Areas Ɣ Total buildings area – 146,664 sq m; Ɣ NSA (excluding parking)– 88,667 sq m; Ɣ Residential premises area – 86,687 sq m; Ɣ Commercial premises area – 1,980 sq m; Ɣ Parking – 744 parking lots/9,300 sq m; Ɣ Land plots – 5.92 hectares

Tenure Ɣ Land plots - freehold (ownership certificates : 78-ǧǮ 732571 dated April 3, 2015, 78-ǧǮ 731751 dated April 3, 2015)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: January 2017/August 2019; Ɣ Sales start/completion dates: March 2016/ December 2020; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 4,742,832,000 RUB Ɣ Prices per sq m or parking unit: residential: 70,000 RUB; commercial: 100,000; parking: 300,000 RUB) Ɣ Estimated Revenue (in current prices): 6,489,290,000 RUB; Ɣ Discount Rate: 21.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 2,503,789,000 RUB

27. Aeroport Rzhevka

Property type Mass market residential

Address Aeroport Rzhevka, Kovalevo village, Vsevolozhskiy district, Leningradskaya Oblast’

Location

The Property is located in Vsevolozhsky district of Leningradskaya Oblast’, 8 km from St Petersburg's border. It is 4 km distance from Ryabovsky Ave., 4 km from the Ring Road (KAD). The closest metro station Ladozhskaya is at 12 km distance. The object is bordered on the North-East by the Kovalevo village. Kovalevo with the rest side of the object is surrounded by forest. The infrastructure in the neighborhood is poorly developed; the nearest social and commercial facilities are located at a distance of 7-8 km from the Property.

Image 48 Image 49 Description The land plot is vacant at the valuation date. The Project is at the designing and projecting stage. The future residential complex is to comprise buildings of different height, multi-storey car parkings and appropriate commercial and social infrastructure.

Stage of Concept development development

Development Build and sell strategy

Areas Ɣ Total buildings area – 1,637,974 sq m; Ɣ NSA (excluding parking)– 1,025,000 sq m; Ɣ Residential premises area – 1,000,000 sq m; Ɣ Commercial premises area – 25,000 sq m; Ɣ Parking – 12,462 parking lots/155,775 sq m; Ɣ Land plots – 175 hectares

Tenure Land plots - freehold (ownership certificates: 47-ǧǩ 380711 dated April 21, 2014, 47-ǧǩ 380712 dated April 21, 2014)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: July 2017/December 2026 (Valuer’s forecast); Ɣ Sales start/completion dates: July 2016/ December 2027 (Valuer’s forecast); Ɣ Number of phases: 8; Ɣ Estimated costs after the valuation date: 60,474,566,000 RUB Ɣ Prices per sq m or parking unit: residential: 65,000 RUB; commercial: 90,000; parking: 200,000 RUB) Ɣ Estimated Revenue (in current prices): 69,742,400,000 RUB; Ɣ Discount Rate: 24.66%

Valuation date December 31, 2015

Inspection date December 24, 2015

Market value 2,172,110,000 RUB

28. Kosmonavtov

Property type Mass market residential

Address 1,2 plots, Kosmonavtov Av., St Petersburg

Location

Kosmonavto

The Property is located in Moskovskiy district of St Petersburg. This vacant land plot is located to the South-East of crossroads of Kosmonavtov Ave. and Svirskaya St. However, the location is rather close to metro station "Zvezdnaya" (9 min walk) and "Kupchino" (4 min drive by car). Also Moskovskoye Highway is at the distance of less than 1 km that provides the Property with easy access to different districts of the city. Pulkovskoye highway is also in convenient distance from the Property that provides access to the airport of St Petersburg (it takes about 15 min driving). The infrastructure in the neighbourhood is not formed completely yet, but within the process of complex development of the territory the situation will be improved. Also there are several malls with all kinds of shops, supermarkets, sports facilities etc. in this part of Moskovsky district. They are basically located near "Kupchino" and "Zvezdnaya" metro stations.

Image 50 Image 51 Description The project implies the construction of residential complex. At the valuation date the land plot is vacant, the project is on the stage of the conception working out. The Property is located on the neighbor land plot with the site of Kvartet residential complex.

Stage of Concept development development

Development Build and sell strategy

Areas Ɣ Total buildings area – 64,317 sq m; Ɣ NSA (excluding parking)– 45,900 sq m; Ɣ Residential premises area – 45,400 sq m; Ɣ Commercial premises area – 500 sq m; Ɣ Parking – 255 parking lots/3,187.5 sq m; Ɣ Land plots – 2.43 hectares

Tenure Ɣ Land plots – leasehold (Lease agreement 12/ǮǱǸ-10017 dated November 16, 2015; and 12/ǮǱǸ-10018 dated November 16, 2015)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: September 2018/December 2020; Ɣ Sales start/completion dates: June 2018/ December 2020; Ɣ Development strategy: Build and Sell; Ɣ Stage of development: working out of the concept; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 2,918,984,000 RUB Ɣ Prices per sq m or parking unit: residential: 90,000 RUB; commercial: 115,000; parking: 500,000 RUB) Ɣ Estimated Revenue (in current prices): 4,271,000,000 RUB; Ɣ Discount Rate: 20.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 547,150,000 RUB

29. Paradny Kvartal

Property type Commercial

Address 1-3, Paradnaya St, St Petersburg

Location

The office center is located in Central District of St Petersburg, it takes 15 minutes to walk from Chernyshevskaya metro station. The access to the Property is provides from Vilensky Lane. The proximity of main thoroughfares such as Suvorovskiy Ave, Nevsky Ave, Ligovsky Ave, Voskresenskaya and Smolnaya Embankments provides easy access the Property from various parts of the city. The following landmarks are situated in the neighborhood: Tavrichesky Garden and Palace, Smolny Cathedral, Suvorov Museum. Paradny Kvatal is a mixed-use complex. It is implied the residents will access the diverse infrastructure of this residential complex consisting of stores, supermarkets, educational facilities and a fitness center nearby.

Image 52 Image 53 Description The Property is the office building, completed in May 2014. The office building comprises 4 floors and an underground parking for 60 cars. The office premises in the building can be classified as A-class offices. All the office premises are in shell & core fit-out.

Stage of Completed development

Development Sell strategy

Areas Ɣ Total building area – 155,863 sq m Ɣ NSA/GLA – 12,074 sq m Ɣ Land plot – 9.57 hectares (the part of the land plot related to the Property is not isolated)

Tenure Building – freehold (ownership certificate 78-ǧǮ 558886 dated October 7, 2014)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF) (for rent strategy and for sales considerations strategy) and Comparative Method; Residual method considerations (for sales strategy) Ɣ Construction start/completion dates: October 2012/May 2014; Ɣ Sales start/completion dates: January 2013/ December 2018 (Valuer’s forecast); Ɣ Prices per sq m: 128,378 RUB Ɣ Estimated Revenue (in current prices): 1,550,000,000 RUB; Ɣ Discount Rate: 19.66% Residual method considerations (for sales strategy) Ɣ Rental rate RUB per sq m p.a.: 16,872; Ɣ OpEx, rubles per sq m p.a.: 4,430; Ɣ Capitalization rate: 11,5%; Ɣ Discount rate: 19,66%; Comparative Method considerations: Comparative method was based on the data of offers of comparable subjects. The regression model was used to determine the Value.

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 1,198,289,000 RUB

30. Nevsky 1

Property type Commercial

Address 1, Nevsky Av, St Petersburg

Location

The Property is located in Central District of St Petersburg within a 10-minute walk of Nevsky Prospekt and Gostinyi Dvor metro stations. The following landmarks are situated in close proximity to the Property: Hermitage Museum, Palace Square, The Admiralty, Senatskaya Square, St. Isaac's Cathedral. A great amount of restaurants, bars, boutiques and stores are located on Nevsky Ave. Bolshoy Gostiny Dvor Shopping Center is located within a 15-minute walk of the Property.

Image 54 Image 55 Description The Property comprises a building being a monument of a historical interest. According to the project development scheme it is planned to internally refurbish the premises only and renovate the facade. It is forbidden to demolish the building due to its'

historical interest. The redeveloped brick / monolith-concrete building will comprise apartments, retail premises on the ground floor and parking for 21 cars.

Stage of Concept development development

Development Build and sell strategy

Areas Ɣ Total building area – 9,709 sq m; Ɣ NSA (excluding parking)– 7,181 sq m; Ɣ Apartments area – 4,949 sq m; Ɣ Commercial premises area – 2,109 sq m; Ɣ Parking – 21 parking lots/240 sq m; Ɣ Land plots – 2,503 sq m (0.25 hectares)

Tenure Ɣ Building - – freehold (ownership certificates 78-ǧǭ 807894 dated January 12, 2013; 78-ǩǲ 955118 dated January 30, 2004; 78-ǩǲ 955124 dated January 30, 2004; 78- ǩǲ 955103 dated January 30, 2004; 78-ǩǲ 955109 dated January 30, 2004; 78-ǩǲ 955104 dated January 30, 2004; 78-ǩǲ 955108 dated January 30, 2004; 78-ǩǲ 955105 dated January 30, 2004; 78-ǩǲ 955101 dated January 30, 2004; 78-ǩǲ 955110 dated January 30, 2004; 78-ǧǪ 517007 dated July 22, 2008; 78-ǧǪ 308928 dated March 11, 2008; 78-ǩǲ 953038 dated January 30, 2004; 78-ǩǲ 953123 dated January 30, 2004; 78-ǧǧ 720253 dated February 17, 2006; 78-ǩǲ 953034 dated January 30, 2004; 78-ǩǲ 955107 dated January 30, 2004; 78-ǩǲ 953035 dated January 30, 2004; 78-ǧǩ 551995 dated June 6, 2006; 78-ǩǲ 953037 dated January 30, 2004; 78-ǧǩ 551996 dated June 6, 2006; 78-ǧǩ 551997 dated June 6, 2006; 78- ǧǩ 859514 dated September 27, 2007; 78-ǧǩ 551998 dated June 6, 2006; 78-ǩǲ 955114 dated January 30, 2004; 78-ǩǲ 955106 dated January 30, 2004; 78-ǧǪ 308926 dated March 11, 2008; 78-ǩǲ 955130 dated January 30, 2004; 78-ǩǲ 955128 dated January 30, 2004; 78-ǧǩ 552001 dated June 6, 2006; 78-ǧǩ 552002 dated June 6, 2006; 78-ǧǩ 552003 dated June 6, 2006; 78-ǩǲ 955127 dated January 30, 2004; 78-ǧǩ 572822 dated March 13, 2007).

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: September 2018/December 2020; Ɣ Sales start/completion dates: June 2018/ December 2020; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 1,495,497,000 RUB Ɣ Prices per sq m or parking unit: residential: 597,667 RUB; commercial: 450,000; parking: 3,000,000 RUB) Ɣ Estimated Revenue (in current prices): 3,696,902,000 RUB; Ɣ Discount Rate: 22.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 1,696,734,000 RUB

31. Fontanka 3

Property type Commercial

Address 3, Fontanka River Emb, St Petersburg

Location

The commercial property "Fontanka 3" is located in Central district of St Petersburg, on the riv. Fontanka embankment. The property is 0.7 km far from the metro station "Gostiny Dvor", and also at a distance of 0.4 km from Nevsky Ave., which is considered the main St. of St Petersburg. The object is at 2 km distance from Palace Square (ultimate city center) and 20 km from Pulkovo airport. Therefore, the building is located in the historical part of the city. The facility is located in a zone of "Golden Triangle" in the neighborhood are business centres, highest class hotels, landmarks such as Mikhailovsky Castle, Hermitage museum, Summer Garden, Mikhailovsky Garden, Russian Museum. In the immediate neighborhood there are various restaurants, cafes, shops as well.

Image 56

Description The project of reconstruction of the building implies creating of apartments, integrated commercial and service premises and parking for 45 cars. At the valuation date there is a permit for construction, but also there are some difficulties with city-heritage preserving organisations. The valuation was based on the assumption that the construction is legally permissible.

Stage of Concept development development

Development Build and sell strategy

Areas Ɣ Total building area – 8,772 sq m; Ɣ NSA (excluding parking)– 5,316 sq m; Ɣ Apartments area – 4,620 sq m; Ɣ Commercial premises area – 697 sq m; Ɣ Parking – 45 parking lots/563 sq m; Ɣ Land plots – 0.19 hectares

Tenure Ɣ Land plots - freehold (ownership certificates)

Encumbrances The monument of historical importance.

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: January 2016/December 2018; Ɣ Sales start/completion dates: April 2016/ December 2018; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 1,161,644,000 RUB Ɣ Prices per sq m or parking unit: residential: 500,000 RUB; commercial: 250,000; parking: 3,000,000 RUB) Ɣ Estimated Revenue (in current prices): 2,619,190,000 RUB; Ɣ Discount Rate: 22.66%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 970,308,000 RUB

32. Nevsky 68

Property type Commercial

Address liter B, building 40/68, riv. Fontanka Emb., St Petersburg

Location

The Property is located in Central District of St Petersburg within a 5-minute walk of Mayakovskaya and Gostiny Dvor metro stations. The Property is located at the main throughfare of St Petersburg – Nevsky Ave. The following landmarks are situated in the neighborhood: Kazansky Cathedral, Vosstaniya Square, Aleksandrinsky theatre, Anichkov bridge. A huge amount of restaurants, bars, boutiques and stores are located on Nevsky Ave. The following retail centres are located in close proximity to the Property: Nevsky Centre, Galereya, Nevsky Atrium, Gostiny Dvor and Passage.

Image 57 Description According to the project development scheme, the building comprises apartments,

retail premises on the ground and first floors and underground parking for 26 cars. The project was completely finished in 2013.

Stage of Completed development

Development Sell strategy

Areas Ɣ Total building area – 8,400 sq m; Ɣ NSA (excluding parking)– 5,961.8 sq m; Ɣ Apartments area – 3,676.8 sq m; Ɣ Commercial premises area – 2,285 sq m; Ɣ Parking – 26 parking lots/325 sq m; Ɣ Land plots – 0.15 hectares

Tenure Ɣ Building – – freehold (ownership certificate 78-ǧǮ 688901 dated March 3, 2015) Ɣ Land plot - – freehold (ownership certificate 78-ǧǮ 688900 dated March 3, 2015)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Sales start/completion dates: May 2015/ December 2020; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 0 RUB Ɣ Prices per sq m or parking unit: residential: 594,789 RUB; commercial: 450,000; parking: 4,000,000 RUB) Ɣ Estimated Revenue (in current prices): 2,290,920,000 RUB; Ɣ Discount Rate: 17.79%

Valuation date December 31, 2015

Inspection date December 23, 2015

Market value 2,795,754,000 RUB

33. Leningradskoye Shosse 58

Property type Business class residential

Address Bldg 14, 21, 58 Leningradskoye Hwy, Moscow

Location

Leningradskoye Shosse

Residential complex is located in North district of Moscow on the second line close to Leningradsky Ave. The development project is located at the Research Institute of Mechanical Engineering (OAO «NIMI»). The subject property has beneficial location in terms of convenient pedestrian and transport access. “Vodniy stadion” metro station is located at the distance of 400 m from the Property, an access to the Property is provided by Leningradsky Ave. It is necessary to note a proximity to Sheremet'yevo International Airport – 15 km and center of Moscow – 12 km. The surrounding area has a mix of administrative and business properties and residential area. There is construction of a new Business Centre with an apartments section.

Image 58 Image 59 Description The Subject Property is a multifunctional residential development complex located on a 1.77 ha fenced land plot. Residential complex with 40 stores, 4 level underground parking and commercial premises.

Stage of Concept development development

Development Build and sell strategy

Areas Ɣ Total buildings area – 93,000 sq m; Ɣ NSA (excluding parking)– 57,500 sq m; Ɣ Residential premises area – 55,000 sq m; Ɣ Commercial premises area – 2,500 sq m; Ɣ Parking – 500 parking lots/7,500 sq m; Ɣ Land plots – 1.77 hectares

Tenure Ɣ Land plot with total area of 17,656 sq m– freehold (ownership certificate freehold (ownership certificate 77 ǧǸȶ389 417 dated July, 15, 2015) Ɣ Non-residential building with total area of 2,682.6 sq m freehold (ownership certificate 77 ǧǸȶ389420 dated July, 15, 2015); Ɣ Non-residential building with total area of 640 sq m freehold (ownership certificate 77 ǧǸȶ389419 dated July, 15, 2015).

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: June 2016/November 2018; Ɣ Sales start/completion dates: September 2016/ December 2019; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 5,324,958,000 RUB Ɣ Prices per sq m or parking unit: residential: 178,047 RUB; commercial: 166,107; parking: 1,400,750 RUB) Ɣ Estimated Revenue (in current prices): 10,908,216,000 RUB; Ɣ Discount Rate: 21.65%

Valuation date December 31, 2015.

Inspection date December 28, 2015.

Market value 3,458,946,000 RUB

34. Donskoy Olimp

Property type Business class residential

Address Bldg 19, 21, Serpukhovsky Val St, Moscow

Location

Donskoy Olimp

The residential complex development scheme will be developed on the land plot located at 22, Serpukhovskoy Val St., Danilovsky sub-district, South Administrative District. The sub-district has a well-developed social, transport and engineering infrastructure. It benefits from good transport accessibility through Leninsky Ave. and Varshavskoe Highway which lead to the Third Transport Road and Moscow Ring Road (MKAD). The residential complex is located in ȇ 5-minute walk from Shabolovskaya metro station. In the nearest surroundings there are residential buildings, offices, government agencies and industrial enterprises.

Image 60 Image 61

Description A business class residential complex Donskoy Olimp is being constructed in the South- of Moscow. The design and construction of the complex involves several stages. According to the architectural concept of the project in addition to residential buildings, the complex includes commercial areas and an underground parking lot.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 239,050 sq m; Ɣ NSA (excluding parking)– 85,459 sq m; Ɣ Residential premises area – 75,542 sq m; Ɣ Commercial premises area – 6,216 sq m; Ɣ Other premises area – 3,701 sq m; Ɣ Parking – 1,300 parking lots/18,356 sq m; Ɣ Available residential premises area – 31,422 sq m; Ɣ Available commercial premises area – 4,149 sq m; Ɣ Available other premises area – 2,845 sq m; Ɣ Available parking lots – 960 parking lots. Ɣ Land plots – 4.72 hectares

Tenure Ɣ Land plot with total area of 47,200 sq m – short term lease agreement ȶ Ǳǫǳ 01- 09/2013 dated September, 4, 2013);

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: May 2013/March 2017; Ɣ Sales start/completion dates: November 2013/ November 2018; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 6,162,746,000 RUB Ɣ Prices per sq m or parking unit: residential: 225,500 RUB; commercial: 280,000; other: 82,600; parking: 1,900,000 RUB) Ɣ Estimated Revenue (in current prices): 12,865,984,000 RUB (including 1,616,961,000 RUB for bargains before December 31,2015); Ɣ Discount Rate: 20.65%

Valuation date December 31, 2015.

Inspection date December 28, 2015.

Market value 6,681,489,000 RUB

35. Grunvald

Property type Business class residential

Address Zarechye Settlement, Odintsovo District, Moscovskaya Oblast'

Location

Grunvald

The Grunvald residential complex, surrounded by a park, is situated in an environment- friendly part of the Moscow region, a short way from the western boundaries of Moscow. The complex has a good link with Moscow’s centre via Skolkovskoye Shosse. The neighbourhood has a well-developed infrastructure – elite gymnasiums, schools and kindergartens together with tennis courts and golf courses are located just a short distance away. A close vicinity of the future Silicon Valley in Skolkovo will add to the project’s attractiveness.

Image 62 Image 63

Description New residential complex consists of 13 detached six-storey buildings with up to 20 residential premises in each one, providing a limited number of neighbors for comfort living conditions. The complex will include commercial properties and an underground parking as well as a large fitness center with a sports pool. Each house of the Grunwald residential complex has its own distinguishing features but together they form a unique architectural solution.

Stage of Completed development

Development Sell strategy

Areas Ɣ Total buildings area – 58,331 sq m; Ɣ NSA (excluding parking)– 27,260 sq m; Ɣ Residential premises area – 25,011 sq m; Ɣ Commercial premises area – 744 sq m; Ɣ Other premises area – 1,505 sq m; Ɣ Parking – 270 parking lots; Ɣ Available residential premises area – 166 sq m; Ɣ Available commercial premises area – 593 sq m; Ɣ Available other premises area – 968 sq m; Ɣ Available parking lots – 101 parking lots. Ɣ Land plots – 4.1 hectares

Tenure Freehold

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: March 2005/January 2011; Ɣ Sales start/completion dates: September 2005/ December 2017; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 21,345,000 RUB Ɣ Prices per sq m or parking unit: residential: 215,700 RUB; commercial: 130,000; other: 69,260; parking: 1,775,000 RUB) Ɣ Estimated Revenue (in current prices): 402,930,000 RUB (including 43,759,000 RUB for bargains before December 31,2015); Ɣ Discount Rate: 19.65%

Valuation date December 31, 2015.

Inspection date December 28, 2015.

Market value 334,634,000 RUB

36. ZILART

Property type Business class residential

Address 23, Avtozavodskaya St, Moscow

Location

ZILART

Development project is located in South district at Avtozavodskaya St. The site is located in 5 minutes by the car from Tulskaya and Avtozavodskaya subway stations. Railway station “ZIL” is situated close to the property. From the North side the property is boarded by the Third Transport Ring. From the East side of the land plot is Railway Small Ring. The sub-district has a well-developed social, transport and engineering infrastructure. It benefits from good transport accessibility through Third Transport Ring.

Image 64 Image 65 Description The subject property is a multifunctional residential development complex located on a

65.087 hectares of land plots. Under the proposed development the project will comprise a business class residential complex with parking lot and commercial premises. The whole street will be pedestrian with limited public transport. The future residential building will consist of variable storey from 6 to 15. Furthermore concept of development scheme plans call for open spaces, park, schools other social facilities.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 1,215,040 sq m; Ɣ NSA (excluding parking)– 979,127 sq m; Ɣ Residential premises area – 761,725 sq m; Ɣ Commercial premises area – 217,402 sq m; Ɣ Parking – 10,916 parking lots/76,224 sq m; Ɣ Available residential premises area – 746,494 sq m; Ɣ Available commercial premises area – 217,402 sq m; Ɣ Available parking lots – 10,916 parking lots; Ɣ Land plots – 68 hectares

Tenure Ɣ Land plot with total area of 22,907 sq m – long term lease agreement ȶǳ - 05- 045473 dated October, 7, 2014); Ɣ Land plot with total area of 6,500 sq m – long term lease agreement ȶǳ – 05- 045499 dated October, 15, 2014); Ɣ Land plot with total area of 17,072 sq m – long term lease agreement ȶǳ – 05- 045500 dated October, 15, 2014); Ɣ Land plot with total area of 14738 sq m – long term lease agreement ȶǳ-05- 045501 dated October, 15, 2014); Ɣ Land plot with total area of 8,927 sq m – long term lease agreement ȶǳ-05- 045502 dated October, 15, 2014); Ɣ Land plot with total area of 16,682 sq m – long term lease agreement ȶǳ-05- 045503 dated October, 15, 2014); Ɣ Land plot with total area of 17071 sq m – long term lease agreement ȶǳ-05- 045504 dated October, 15, 2014); Ɣ Land plot with total area of 4,808 sq m – long term lease agreement ȶǳ-05- 045505 dated October, 15, 2014); Ɣ Land plot with total area of 31,420 sq m – long term lease agreement ȶǳ-05- 045506 dated October, 15, 2014); Ɣ Land plot with total area of 30,741 sq m – long term lease agreement ȶǳ-05- 045536 dated October, 23, 2014); Ɣ Land plot with total area of 51,529 sq m – long term lease agreement ȶǳ-05- 045537 dated October, 23, 2014);

Ɣ Land plot with total area of 54,587 sq m – long term lease agreement ȶǳ-05- 045538 dated October, 23, 2014); Ɣ Land plot with total area of 31,353 sq m – long term lease agreement ȶǳ-05- 045541 dated October, 23, 2014); Ɣ Land plot with total area of 48,363 sq m – long term lease agreement ȶǳ-05- 045544 dated October, 23, 2014); Ɣ Land plot with total area of 16,628 sq m – long term lease agreement ȶǳ-05- 045546 dated October, 23, 2014); Ɣ Land plot with total area of 16,177 sq m – long term lease agreement ȶǳ-05- 045547 dated October, 23, 2014); Ɣ Land plot with total area of 13,142 sq m – long term lease agreement ȶǳ-05- 045549 dated October, 23, 2014); Ɣ Land plots with total area of 96,233 sq m – long term lease agreement ȶǳ-05- 045552 dated October, 23, 2014); Ɣ Land plot with total area of 19,913 sq m – long term lease agreement ȶǳ-05- 047612 dated August, 31, 2015); Ɣ Land plot with total area of 9,947 sq m – long term lease agreement ȶǳ-05- 044956 dated May, 30, 2014).

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: August 2015/ December 2024; Ɣ Sales start/completion dates: September 2015/ December 2025; Ɣ Number of phases: 9; Ɣ Estimated costs after the valuation date: 143,796,284,000 RUB Ɣ Prices per sq m or parking unit: residential: 219,287 RUB; commercial: 208,164; parking: 1,752,766 RUB) Ɣ Estimated Revenue (in current prices): 229,864,141,000 RUB (including 1,779,300,000 RUB for bargains before December 31,2015); Ɣ Discount Rate: 25.65%

Valuation date December 31, 2015.

Inspection date December 28, 2015.

Market value 22,121,905,000 RUB

37. Luchi

Property type Mass market residential

Address Bldg 6, Proizvodstvennaya St, Moscow

Location

Luchi

“Luchi” is a mass market (comfort class) residential complex, located in the Siltsevo district of Moscow. The development is within a 7-10 minute drive from Salarevo metro station and in reasonable proximity to a railway station Novoperedelkino. The area also benefits from its proximity to several parks, such as Balkovsky and Ulyanivsky parks. The transport system is well developed and allows easy access to the city centre. The site close to the development in the end of 2017 plans call for opening metro station Solncevo.

Image 66 Image 67

Description “Luchi” is a mass market (comfort class) residential complex. The design and construction of the complex involves five stages with an underground parking area. Construction use poured concrete technology with brick elements and ventilated facades. Furthermore concept of development scheme plans call for open spaces, park, schools other social facilities.

Stage of Design development

Development Build and sell strategy

Areas Ɣ Total buildings area – 1,000,000 sq m; Ɣ NSA (excluding parking)– 476,359 sq m; Ɣ Residential premises area – 344,132 sq m; Ɣ Commercial premises area – 132,277 sq m; Ɣ Parking – 4,827 parking lots/69,026 sq m; Ɣ Land plots – 39 hectares

Tenure Ɣ Land plot with total area of 36,167 sq m freehold (ownership certificate 77 ǧǷȶ 701352 dated October, 10, 2014); Ɣ Land plot with total area of 6,868 sq m – long term lease agreement ȶ ǳ - 07- 047971 dated November, 3, 2015); Ɣ Land plot with total area of 57,072 sq m – long term lease agreement ȶ ǳ - 07- 047972 dated November, 3, 2015); Ɣ Land plot with total area of 17,706 sq m – long term lease agreement ȶ ǳ - 07- 047973 dated November, 3, 2015); Ɣ Land plot with total area of 15,360 sq m – long term lease agreement ȶ ǳ - 07- 047974 dated November, 3, 2015); Ɣ Land plot with total area of 65,708 sq m – long term lease agreement ȶ ǳ - 07- 047975 dated November, 3, 2015); Ɣ Land plot with total area of 56,602 sq m – long term lease agreement ȶ ǳ - 07- 047976 dated November, 3, 2015); Ɣ Land plot with total area of 6,337 sq m – long term lease agreement ȶ ǳ - 07- 047977 dated November, 3, 2015); Ɣ Land plot with total area of 58,614 sq m – long term lease agreement ȶ ǳ - 07- 047978 dated November, 3, 2015); Ɣ Land plot with total area of 1,257 sq m – long term lease agreement ȶǳ - 07- 047979 dated November, 3, 2015); Ɣ Land plot with total area of 24,609 sq m – long term lease agreement ȶ ǳ - 07- 047980 dated November, 3, 2015); Ɣ Land plot with total area of 7,272 sq m – long term lease agreement ȶ ǳ - 07- 047981 dated November, 3, 2015); Ɣ Land plot with total area of 7,825 sq m – long term lease agreement ȶ ǳ - 07-

047982 dated November, 3, 2015);

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: December 2015/ September 2021; Ɣ Sales start/completion dates: March 2016/ June 2022; Ɣ Number of phases: 5; Ɣ Estimated costs after the valuation date: 39,546,620,000 RUB Ɣ Prices per sq m or parking unit: residential: 119,818 RUB; commercial: 133,344; parking: 801,019 RUB) Ɣ Estimated Revenue (in current prices): 62,731,455,000 RUB; Ɣ Discount Rate: 25.65%

Valuation date December 31, 2015.

Inspection date December 24, 2015.

Market value 7,454,796,000 RUB

38. iBitsa

Property type Mass market residential

Address No Bachurino Village, Sosenskoye settlement, Novomoskovsky AD, Moscow

Location

iBitsa

The site is located in Novomoskovsky District close to MKAD, and has good transport accessibility, meaning that it is possible to reach the center of Moscow by car in approximately 20 minutes. Public transport to the central part of the city can also be taken from a number of bus stops within walking distance of the site. An access to the Property is available from MKAD. The area also benefits from its proximity to several parks.

Image 68 Image 69 Description The complex consists of thirteen residential towers with up to 6 floors constructed from brick and poured concrete with ventilated facades. The residential area is protected

from traffic noise by shopping center and parking lot. The ground floors will occupied by consumer-oriented commercial premises and social facilities. The design and construction of the complex involves five stages with an aboveground parking area and shopping center. The complex features children playgrounds, recreational areas and consumer-oriented infrastructure, including a shopping mall, a kindergarten and other facilities.

Stage of Design/concept development development

Development Build and sell strategy

Areas Ɣ Total buildings area – 571,363 sq m; Ɣ NSA (excluding parking)– 280,766 sq m; Ɣ Residential premises area – 208,705 sq m; Ɣ Shopping Centre premises area – 68,000 sq m; Ɣ Other premises area – 4,061 sq m; Ɣ Parking – 3,086 parking lots/41,266 sq m; Ɣ Land plots – 59.85 hectares

Tenure Ɣ Leashold

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: September 2016/ November 2021; Ɣ Sales start/completion dates: September 2016/December 2021; Ɣ Number of phases: 4; Ɣ Estimated costs after the valuation date: 19,768,804,000 RUB Ɣ Prices per sq m or parking unit: residential: 117,000 RUB; shopping center: 160,000 RUB; other: 130,000 RUB; parking: 600,000 RUB Ɣ Estimated Revenue (in current prices): 37,677,714,000 RUB; Ɣ Discount Rate: 25.65%

Valuation date December 31, 2015.

Inspection date December 23, 2015.

Market value 6,111,779,000 RUB

39. Podolsk-Erino

Property type Mass market residential

Address Near Sal'kovo Village, Ryazanovskoye Settlement, Novomoskovsky AD, Moscow

Location

Podolsk-Erino

The Residential complex is located in a 15 km distance from Moscow Ring Road (MKAD) on Warshawskoe highway and 28 km on te Simpferopolskoe Highway. The access to the property by private transport is complicated by long distance – way time is 50 minutes. Railway stations Silikatnaya and Podolsk are served approximately 4 km away from the subject property.

Image 70 Image 71 Description The subject property is a multifunctional residential development complex located on land plots with total amount of 87.7 hectares. Under the proposed development the project will comprise a comfort class residential complex with parking lot and commercial premises

Stage of Concept development development

Development Build and sell strategy

Areas Ɣ Total buildings area – 900,720 sq m; Ɣ NSA (excluding parking)– 358,800 sq m; Ɣ Residential premises area – 303,600 sq m; Ɣ Commercial premises area – 6,900 sq m; Ɣ Retail premises area – 48,300 sq m; Ɣ Parking – 4,112 parking lots/52,921 sq m; Ɣ Land plots – 87.7 hectares

Tenure Ɣ Land plot with total area of 443,602 sq m freehold (ownership certificate 77 ǧǷȶ 138511 dated November, 15, 2015); Ɣ Land plot with total area of 100,000 sq m freehold (ownership certificate 78 ǧǷȶ 138510 dated November, 15, 2015); Ɣ Land plot with total area of 443,460 sq m freehold (ownership certificate 501 ǧǪȶ 270512 dated December, 19, 2011);

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: August 2017/ September 2023; Ɣ Sales start/completion dates: August 2017/December 2023; Ɣ Number of phases: 7; Ɣ Estimated costs after the valuation date: 23,023,493,000 RUB Ɣ Prices per sq m or parking unit: residential: 70,000 RUB; commercial: 75,000 RUB; retail: 75,000 RUB; parking: 448,000 RUB Ɣ Estimated Revenue (in current prices): 27,234,176,000 RUB; Ɣ Discount Rate: 22.65%

Valuation date December 31, 2015.

Inspection date December 23, 2015.

Market value 1,849,725,000 RUB

40. Novoe Domodedovo

Property type Mass market residential

Address Zapadny Neighbourhood, Domodedovo, Moscovskaya Oblast'

Location

Novoe Domodedovo

The Residential complex is located in a 22 km from Moscow Ring Road (MKAD) on the frontage line of highway M-4 "Don" which provides good transport accessibility to airport Domodedovo – 10 km and railway stations Vostryakovo and Vzletnaya – 3 km. The site is situated at environmentally pristine without any industrial plants. At the moment it benefits from good transport accessibility by the car but after completion plans call for arranging traffic of public transport from railway stations Vostryakovo and Vzletnaya to the residential district.

Image 72 Image 73

Description According to the concept provided by the Client a residential complex is to be built on the land plot with a total area of 39.3345 ha. The residential building consists of variable number of storeys (from 9 to 17). Development project comprised 26 blocks of residential premises, 2 schools, 2 kindergartens, multilevel parking lot, stadium and open spaces.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 567,063 sq m; Ɣ NSA (excluding parking)– 318,274 sq m; Ɣ Residential premises area – 303,427 sq m; Ɣ Commercial premises area – 14,847 sq m; Ɣ Parking – 458 parking lots/5,894 sq m; Ɣ Available residential premises area – 2,792 sq m; Ɣ Available commercial premises area – 5,103 sq m; Ɣ Available parking lots – 458 parking lots; Ɣ Land plots – 39.3345 hectares

Tenure Ɣ Land plot with total area of 89,544 sq m– freehold (ownership certificate 50-ǧǫȶ 689680 dated December, 21, 2012 Ɣ Land plots with total area of 303,801 sq m– short term lease agreement ȶ n/a dated October, 16, 2012

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: August 2011/ December 2016; Ɣ Sales start/completion dates: October 2011/November 2018; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 1,539,459,000 RUB Ɣ Prices per sq m or parking unit: residential: 64,500 RUB; commercial: 85,000 RUB; parking: 350,000 RUB Ɣ Estimated Revenue (in current prices): 1,254,988,000 RUB (including income in amount of 641,171,000 RUB from bargains before December 31, 2015); Ɣ Discount Rate: 18.65%

Valuation date December 31, 2015.

Inspection date December 23, 2015.

Market value 52,333,000 RUB

41. Nakhabino Yasnoe

Property type Mass market residential

Address near Chernaya Village, Pavlo-Slobodskoye Settlement, Istrinsky District, Moscovskaya Oblast'

Location

Nakhabino Yasnoe

Nakhabino Yasnoe has well-developed transport and social infrastructure. The district is connected with the centre of Moscow via two motorways – Volokolamskoye Highway and Novorizhskoye Highway. Since the new road interchange has been opened, now it takes only 30-35 minutes to get to Moscow from the neighborhood even during the rush-hour. Besides, the neighborhood lies near Nakhabino railway station, where trains run every 10-15 minutes. A short distance away there are public and private schools, a supermarket, a bowling center, restaurants, a fitness center, etc. The Property is located in the area surrounded by forestry, and there is a picturesque valley with a river in the north-west.

Image 74 Image 75

Description The Property is a multifunctional residential development complex located on land plots with total amount of 87.7 hectares. Under the proposed development the project will comprise a comfort class residential complex with parking lot and commercial premises. The Property comprises 66 two- and three-storey EURO-houses for 8 and 12 apartments respectively. Unique facade fit-out seamless technology improves buildings’ exterior and guarantees high insulation.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 243,461 sq m; Ɣ NSA (excluding parking)– 147,464 sq m; Ɣ Residential premises area – 141,951 sq m; Ɣ Commercial premises area – 4,228 sq m; Ɣ Other premises area (self-storage) – 1,285 sq m; Ɣ Parking – 300 parking lots/3,861 sq m; Ɣ Available residential premises area – 2,792 sq m; Ɣ Available commercial premises area – 5,103 sq m; Ɣ Available parking lots – 458 parking lots; Ɣ Land plots – 30.01 hectares

Tenure Ɣ Land plot with total area of 1,750 sq m freehold (ownership certificate 77 ǧǫȶ 712897 dated November, 29, 2012); Ɣ Land plot with total area of 1,340 sq m freehold (ownership certificate 77 ǧǫȶ 712898 dated November, 29, 2012); Ɣ Land plot with total area of 6,430 sq m freehold (ownership certificate 77 ǧǫȶ 712899 dated November, 29, 2012); Ɣ Land plot with total area of 18,667 sq m freehold (ownership certificate 77 ǧǫȶ 712900 dated November, 29, 2012); Ɣ Land plot with total area of 100,149 sq m freehold (ownership certificate 77 ǧǫȶ 712901 dated November, 29, 2012); Ɣ Land plot with total area of 142,169 sq m freehold (ownership certificate 77 ǧǫȶ 712902 dated November, 29, 2012); Ɣ Land plot with total area of 19,956 sq m freehold (ownership certificate 77 ǧǫȶ 712903 dated November, 29, 2012); Ɣ Land plot with total area of 148,040 sq m freehold (ownership certificate 77 ǧǫȶ 75045 dated May, 26, 2012); Ɣ Land plot with total area of 2,970 sq m freehold (ownership certificate 77 ǧǫȶ 746976 dated May, 26, 2012); Ɣ Land plot with total area of 2,000 sq m freehold (ownership certificate 77 ǧǫȶ 752788 dated May, 26, 2012);

Ɣ Land plot with total area of 1,022 sq m freehold (ownership certificate 50 ǧǬȶ 832626 dated November, 1, 2013); Ɣ Land plot with total area of 154 sq m freehold (ownership certificate 50 ǧǬȶ 835450 dated November, 1, 2013); Ɣ Land plot with total area of 321 sq m freehold (ownership certificate 50 ǧǬȶ 832617 dated November, 1, 2013); Ɣ Land plot with total area of 9,244 sq m freehold (ownership certificate 50 ǧǬȶ 832624 dated November, 1, 2013); Ɣ Land plot with total area of 7,048 sq m freehold (ownership certificate 50 ǧǬȶ 832612 dated November, 1, 2013); Ɣ Land plot with total area of 13,894 sq m freehold (ownership certificate 50 ǧǬȶ 832622 dated November, 1, 2013); Ɣ Land plot with total area of 7,593 sq m freehold (ownership certificate 50 ǧǬȶ 832616 dated November, 1, 2013); Ɣ Land plot with total area of 11,685 sq m freehold (ownership certificate 50 ǧǬȶ 832607 dated November, 1, 2013); Ɣ Land plot with total area of 2,560 sq m freehold (ownership certificate 50 ǧǬȶ 835452 dated November, 1, 2013); Ɣ Land plot with total area of 9,052 sq m freehold (ownership certificate 50 ǧǬȶ 835448 dated November, 1, 2013); Ɣ Land plot with total area of 14,973 sq m freehold (ownership certificate 50 ǧǬȶ 832606 dated November, 1, 2013); Ɣ Land plot with total area of 4,019 sq m freehold (ownership certificate 50 ǧǬȶ 832614 dated November, 1, 2013); Ɣ Land plot with total area of 22,806 sq m freehold (ownership certificate 50 ǧǬȶ 832604 dated November, 1, 2013); Ɣ Land plot with total area of 11,874 sq m freehold (ownership certificate 50 ǧǬȶ 835446 dated November, 1, 2013); Ɣ Land plot with total area of 15,587 sq m freehold (ownership certificate 50 ǧǬȶ 832609 dated November, 1, 2013); Ɣ Land plot with total area of 26,062 sq m freehold (ownership certificate 50 ǧǬȶ 832611 dated November, 1, 2013); Ɣ Land plot with total area of 409 sq m freehold (ownership certificate 50 ǧǬȶ 832601 dated November, 1, 2013); Ɣ Land plot with total area of 2,742 sq m freehold (ownership certificate 50 ǧǬȶ 832608 dated November, 1, 2013); Ɣ Land plot with total area of 10,004 sq m freehold (ownership certificate 50 ǧǬȶ 832635 dated November, 1, 2013); Ɣ Land plot with total area of 9,631 sq m freehold (ownership certificate 50 ǧǬȶ 832605 dated November, 1, 2013); Ɣ Land plot with total area of 5,382 sq m freehold (ownership certificate 50 ǧǬȶ 835451 dated November, 1, 2013);

Ɣ Land plot with total area of 3,968 sq m freehold (ownership certificate 50 ǧǬȶ 832610 dated November, 1, 2013); Ɣ Land plot with total area of 10,425 sq m freehold (ownership certificate 50 ǧǬȶ 832618 dated November, 1, 2013); Ɣ Land plot with total area of 5,436 sq m freehold (ownership certificate 50 ǧǬȶ 835449 dated November, 1, 2013); Ɣ Land plot with total area of 4,950 sq m freehold (ownership certificate 50 ǧǬȶ 832619 dated November, 1, 2013); Ɣ Land plot with total area of 6,198 sq m freehold (ownership certificate 50 ǧǬȶ 835444 dated November, 1, 2013); Ɣ Land plot with total area of 955 sq m freehold (ownership certificate 50 ǧǬȶ 835447 dated November, 1, 2013); Ɣ Land plot with total area of 638 sq m freehold (ownership certificate 50 ǧǬȶ 832620 dated November, 1, 2013); Ɣ Land plot with total area of 7,272 sq m freehold (ownership certificate 50 ǧǬȶ 832615 dated November, 1, 2013); Ɣ Land plot with total area of 10,087 sq m freehold (ownership certificate 50 ǧǬȶ 835443 dated November, 1, 2013); Ɣ Land plot with total area of 10,201 sq m freehold (ownership certificate 50 ǧǬȶ 835445 dated November, 1, 2013); Ɣ Land plot with total area of 5,102 sq m freehold (ownership certificate 50 ǧǬȶ 832621 dated November, 1, 2013); Ɣ Land plot with total area of 6,868 sq m freehold (ownership certificate 50 ǧǬȶ 832623 dated November, 1, 2013); Ɣ Land plot with total area of 13,263 sq m freehold (ownership certificate 50 ǧǬȶ 832600 dated November, 1, 2013); Ɣ Land plot with total area of 5,016 sq m freehold (ownership certificate 50 ǧǬȶ 832613 dated November, 1, 2013); Ɣ Land plot with total area of 4,192 sq m freehold (ownership certificate 50 ǧǬȶ 665031 dated January, 17, 2014); Ɣ Land plot with total area of 9,829 sq m freehold (ownership certificate 50 ǧǬȶ 832602 dated November, 1, 2013); Ɣ Land plot with total area of 9,826 sq m freehold (ownership certificate 50 ǧǬȶ 832603 dated November, 1, 2013);

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: December 2012/ December 2017; Ɣ Sales start/completion dates: April 2013/March 2019; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 4,270,466,000 RUB Ɣ Prices per sq m or parking unit: residential: 70,000 RUB; commercial: 84,225 RUB; other: 30,000 RUB; parking: 350,000 RUB

Ɣ Estimated Revenue (in current prices): 6,492,455,000 RUB (including income in amount of 344,431,000 RUB from bargains before December 31, 2015); Ɣ Discount Rate: 21.15%

Valuation date December 31, 2015.

Inspection date December 24, 2015.

Market value 3,284,210,000 RUB

42. Noviy Balchug

Property type Commercial

Address Bldgs. 1, 2, 3, 9, Sadovnicheskaya St, Moscow

Location

Noviy Balchug

The site is located in Central District. The proximity of the Zamoskvorechie sub-district to the city center makes it a prestigious location for both living and business. The site is located on the frontage line of Sadovnicheskaya St., which stretches along Sadovnicheskaya and Kosmodiamnskaya Embankments. It is also within a five minute walk from Novokuznetskaya metro station. The complex is well located in a pleasant environment, with the established infrastructure including large shopping centers, food stores, cinemas, hospitals and schools.

Image 76 Image 77

Description The complex comprises a single residential building with four 5-6 storey sections, two of which are commercial, with underground parking; constructed using poured concrete technology with brick elements. The ground floors will be occupied by consumer-oriented commercial premises. The development also features atrium at the courtyard.

Stage of Design development

Development Build and sell strategy

Areas Ɣ Total building area – 24,815 sq m; Ɣ NSA (excluding parking)– 11,222 sq m; Ɣ Apartments area – 8,527 sq m; Ɣ Commercial premises area – 2,695 sq m; Ɣ Parking – 170 parking lots; Ɣ Land plots – 0.40 hectares

Tenure Ɣ Land plot with total area of 4,000 sq m – long term lease agreement ȶǳ - 01- 044921 May, 20, 2014).

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: April 2016/ August 2018; Ɣ Sales start/completion dates: April 2016/June 2020; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 2,451,242,000 RUB Ɣ Prices per sq m or parking unit: apartments: 511,716 RUB; commercial: 447,167 RUB; parking: 3,691,176 RUB; Ɣ Estimated Revenue (in current prices): 6,196,140,000 RUB; Ɣ Discount Rate: 20.65%

Valuation date December 31, 2015.

Inspection date December 28, 2015.

Market value 2,076,886,000 RUB

43. Avtozavodskaya

Property type Operating office

Address 22, Avtozavodskaya St, Moscow

Location

Avtozavodskaya

The site is located in 5 minutes drive from Tulskaya and Avtozavodskaya subway stations. Railway station “ZIL” is situated close to the property. From the South side the property is boarded by the Third Transport Ring. From the North side of the land plot where property is situated there is former sports area of the Dynamo manufactory and embankment of the Moscow river. An access available from Third Transport Ring. The surrounding area has a mix of administrative and business properties. The property is located opposite to under development territory of the ZIL manufactory. Development project is comprised residential and commercial properties.

Image 78 Image 79

Description The subject property is three-floor office complex. An access in the building is carried via check-point. The main entrance is located on Third Transport Ring. The complex was built in 1973. Building’s walls are made from the glass, the foundation is reinforced concrete, façade is plastered and painted, the roof is metal. The building has a cabinet- type layout. The ceiling height in cellar is 1st – 5.2 – 3.98, 2nd – 2.98 and the 3rd floors – 3.60 m.

Stage of Completed development

Development Hold strategy

Areas Ɣ Total building area –7,767 sq m; Ɣ GLA – 7,767 sq m; Ɣ Land plot – 0.635 hectares

Tenure Ɣ Office complex – freehold (ownership certificate 77 ǧǸȶ 369944 dated June 05, 2015) Ɣ Land plot – long term leasehold (lease agreement ȶǳ - 05-018462 dated April, 18, 2002)

Valuation Direct Capitalization Method and Comparative Method were applied. considerations Direct Capitalization Method considerations: Average rental rate (triple net), rubles per sq m p.a.: 22,420; Caprate: 11%; Comparative Method considerations: Comparative method was based on the data of offers of comparable subjects. The adjustment based on the market data were used to determine the Value.

Valuation date December 31, 2015.

Inspection date December 24, 2015.

Market value 1,148,208,000 RUB

44. Davydkovskaya

Property type Operating office

Address 16, Davidkovskaya St., Moscow

Location

Davydkovskaya

The Subject property is located in Fili-Davydkovo, Western Administrative district. The property has beneficial location in terms of convenient pedestrian and transport access. “Slavyansky boulevard ” metro station is located at the distance of 0,5 km from the property, an access to the property is provided by Davidkovskaya street from Kutuzovsky Avenue. The surrounding area has a mix of administrative and business properties and residential area. The site is situated at environmentally pristine without any industrial plants. In view the whole advantages listed above, the location of the subject property can be classified as fair.

Image 80 Image 81

Description Office premises are located at the first floor and the basement of the residential complex. The premises have a cabinet-type layout. The site is fully fit out and serviced with requisite equipment for office premises – climate control, safety control system, uninterruptable power and etc. The territory near the Property is fenced; there is an above ground parking lot. Building’s walls are made from reinforced concrete and bricks, façade is stone facing and painting, window frame is plastic extrusions, floor – linoleum, parquet.

Stage of Completed development

Development Hold strategy

Areas Ɣ Total area of the building – 41,819 sq m; Ɣ Leasable commercial premises – 1,737.2 sq m; Ɣ Underground parking – 6 parking spaces; Ɣ Land plot – 0.635 hectares

Tenure Ɣ Part of the total area of the property is 3.7 - freehold (ownership certificate 77 ǧǷ 619732 dated June, 25, 2014); Ɣ Part of the total area of the property is 406.1 - freehold (ownership certificate 77 ǧǷ 619733 dated June 25, 2014); Ɣ Part of the total area of the property is 342.2 - freehold (ownership certificate 77 ǧǷ 619734 dated June 25, 2014); Ɣ Part of the total area of the property is 273.3 - freehold (ownership certificate 77 ǧǷ 619735 dated June 25, 2014); Ɣ Part of the total area of the property is 308.4 - freehold (ownership certificate 77 ǧǷ 619736 dated June 25, 2014); Ɣ Part of the total area of the property is 403.5 - freehold (ownership certificate 77 ǧǷ 619737 dated June 25, 2014); Ɣ Underground parking space ȶ 136 - freehold (ownership certificate 77 ǧǷ 619727 dated June 25, 2014); Ɣ Underground parking space ȶ 134 - freehold (ownership certificate 77 ǧǷ 619728 dated June 18, 2014); Ɣ Underground parking space ȶ 133 - freehold (ownership certificate 77 ǧǷ 619729 dated June 18, 2014); Ɣ Underground parking space ȶ 132 - freehold (ownership certificate 77 ǧǷ 619730 dated June 18, 2014); Ɣ Underground parking space ȶ 135 - freehold (ownership certificate 77 ǧǷ 619731 dated June 18, 2014); Ɣ Underground parking space ȶ 23 - freehold (ownership certificate 78 ǧǷ 619738 dated June 25, 2014).

Tenancies At the valuation date all the premises of the Property are leased by the companies affiliated with LSR Group.

Valuation Direct Capitalization Method and Comparative Method were applied. considerations Direct Capitalization Method considerations: Average rental rate (triple net), rubles per sq m p.a.: 15,417; Caprate: 11.5%; Comparative Method considerations: Comparative method was based on the data of offers of comparable subjects. The adjustment based on the market data were used to determine the Value.

Valuation date December 31, 2015.

Inspection date December 24, 2015.

Market value 262,475,000 RUB

45. Tverskoy Blvd

Property type Operating office

Address 16, Tverskoy blvd., Moscow

Location

Tverskoy Blvd

The Subject Property is located in Central Administrative district of Moscow, in Presnensky sub-district, on Tverskoy blvd in 500 m from “Pushkinskaya” metro station on the front line of the Boulevard Ring. Close to the property is located Pushkin Square and Tverskaya Street, one of the busiest places in Moscow. An access available from the Tverskoy blvd there are some bus stops slightly off the Subject. Thus, the Subject Property has good transport and pedestrian accessibility. The subject’s surroundings include social, commercial and residential estate as well as rest zones and cultural monuments. The most famous office centres in the district are the following: Class A «Usadba Center» located at 22, Voznesensky lane, Moscow; Class B «Nikitsky Passage» located at 5, bld. 6 Nikitsky lane, Moscow;

Image 82 Image 83 Description The property is newly discovered sample of architecture of 19 century – Maikov’s town mansion. The building is fully redeveloped in 2004 – 2005 with preservation of façade and cast iron stairs. The four floor building is comprised class ǩ office accommodation which is fully fitted out. There is two level underground parking lot for 30 parking spaces.

Stage of Completed development

Development Hold strategy

Areas Ɣ Buildings – 4,903.8sq m Ɣ Land plots – 0.1405 hectares

Tenure Ɣ Part of the total area of the property is 1,176.8 sq m – freehold (ownership certificate ȶ 77 ǧǫȶ078696 dated ǳȇȗș 02, 2007; 77 ǧǸȶ537313 ȆȔȉȇȗȣ 11, 2015) Ɣ Part of the total area of the property is 338.5 sq m – freehold (ownership certificate 77 ǧǫȶ 076823 dated December 26, 2006) Ɣ Part of the total area of the property is 690.6 sq m – freehold (ownership certificate 77 ǧǷȶ 804839 dated October 06, 2014) Ɣ Part of the total area of the property is 1,016 sq m – freehold (ownership certificate ȶ 77 ǧǸȶ537314 ȆȔȉȇȗȣ 11, 2016; 77 ǧǫȶ078697 ǳȇȗș 02, 2007) Ɣ Part of the total area of the property is 1,621.9 sq m – freehold (ownership certificate 77 ǧǫȶ 076822 dated December 26, 2006) Ɣ Underground parking space ȶ 18 – freehold (ownership certificate 77 ǧǸȶ 055635 dated April 20, 2015) Ɣ Underground parking space ȶ 19 – freehold (ownership certificate 77 ǧǸȶ 055480 dated April 24, 2015) Ɣ Underground parking space ȶ 20 – freehold (ownership certificate 77 ǧǸȶ 056246 dated April 24, 2015) Ɣ Underground parking space ȶ 21 – freehold (ownership certificate 77 ǧǸȶ 055306 dated April 24, 2015) Ɣ Underground parking space ȶ 22 – freehold (ownership certificate 77 ǧǸȶ 055307 dated April 24, 2015) Ɣ Land plot – long-term lease (ȶǳ - 01-039326 dated December 14, 2012 )

Tenancies At the valuation date all the premises of the Property are leased by the companies affiliated with LSR Group.

Valuation Terms and Reversion Method and Comparative Method were applied.

considerations Terms and Reversion Method considerations: Average rental rate (Terms /Reversion period), rubles per sq m p.a.: 25,848/28,000; Caprate (Terms /Reversion period): 8.8%/9%; Comparative Method considerations: Comparative method was based on the data of offers of comparable subjects. The adjustment based on the market data were used to determine the Value.

Valuation date December 31, 2015.

Inspection date December 28, 2015.

Market value 1,101,112,000 RUB

46. Rassvetniy

Property type Mass market residential

Address 2B, 40-Letiya Komsomola Street, Kirovskiy administrative district, Yekaterinburg

Location

The subject property is located near the center of Yekaterinburg city at the JBI sub district, on the corner of Siromolotova and Rassvetnaya streets. The ecological situation in the district is assumed to be good. There is a forest park “Kamennye palatki” near the area, Lake “Shartash” only in 1 km from the property. The area has a developed infrastructure: schools, clinic, food-markets, post office, shopping centers, banks and pharmacy. The distance to the city center is approximately 5.1 km. Developed transport system connects the area with the city through 4 highways (Malysheva, Komsomol’skaya, Shefskaya streets and Sibirskiy Trakt). The main highway of the district is Siromolotova street which provides residents with public transport (buses, trams, taxis). Surroundings are mainly presented by parking, supermarkets, tram deport, stadium at the distance of 300 meters and a big supermarket and shopping center in 750 meters.

Image 84 Image 85 Description Economy class residential complex of 5 residential buildings (precast concrete) that are 25/26 floors in height. The residential complex area includes green zones, playgrounds and kindergarten. Residential complex consists of 2 460 residential premises that are fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic, MDF interior doors, safe entrance door). The beginning of the construction – 2014 year. Scheduled completion date – 2018 year. Current condition: Ɣ Houses 3ǧǨ, 2ǧǨ, 2ǩ – put into operation; Ɣ Houses 1ǧ, 1Ǩǩ – facade works, interior finishing; Ɣ House 4 – construction; Ɣ House 5 – designing.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 206,884.46 sq m Ɣ Residential premises area – 143,436.59 sq m Ɣ Available residential premises area – 71,282.32 sq m Ɣ Land plot – 8.74 hectares (~ 6 contiguous land plots with a total area of 87,492 sq m)

Tenure Freehold on the land plots: Ɣ Land plot of 11,537 sq m, ownership certificate 66ǧǭ 407691 dated April 16, 2014; Ɣ Land plot of 23,832 sq m, ownership certificate 66ǧǭ 501070 dated June 06, 2014; Ɣ Land plot of 13,313 sq m, ownership certificate 66ǧǭ 500975 dated June 06, 2014; Ɣ Land plot of 5,774 sq m, ownership certificate 66ǧǭ 503212 dated August 06, 2014; Ɣ Land plot of 50 sq m, ownership certificate 66-66/001-66/001/459/2015-800/1 dated December 15, 2015; Ɣ Land plot of 32,986 sq m, ownership certificate 66-66/001-66/001/459/2015-801/1 dated December 15, 2015.

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: February 2014/ September 2018; Ɣ Sales start/completion dates: June 2014/ December 2018; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 2,349,187,000 RUB Ɣ Prices per sq m or parking unit: residential: 63,611 RUB Ɣ Estimated Revenue (in current prices): 5,461,917,000 RUB (including 1,124,927,000 RUB for bargains before December 31, 2015);

Ɣ Discount Rate: 20.77%

Valuation date December 31, 2015.

Inspection date December 18, 2015.

Market value 2,395,317,000 RUB

47. Khrustalniye Klyuchi

Property type Mass market residential

Address Latviyskaya St, Yekaterinburg

Location

The subject property is located in the east of Yekaterinburg at the Kompressornyi sub district at Latviiskaya street, near the Ring Road (EKAD). The distance to the city center is about 11,7 km. The ecological situation in the district is close to perfect, there is a big forest on the one side of the area. The district has a developed infrastructure: schools, clinic, food- markets, post-office, shopping centers, banks and pharmacy. The district is connected with the center of the city through three roads (Sibirskiy trakt, Kolcovskiy trakt, Dubler of Sibirskiy trakt). The Latviiskaya street is connected with one of the main highways which provides residents with a good transport accessibility. Moreover, aeroexpress can be used to reach the center of the city from the district. Surroundings are mainly presented by forest on the south, shops, clinic and police department at the distance of few hundred meters.

Image 86 Image 87 Description Economy class residential complex of 6 residential buildings (precast concrete) that are 12/25 floors in height. The residential complex area includes green zones, playgrounds and kindergarten. There are cafes, shops and banks on the ground floor of the subject property. Residential complex consists of 3 400 residential premises that are fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic, MDF interior doors, safe entrance door) and office premises. The beginning of the construction – 2014 year. Scheduled completion date – 2021 year. Current condition: Ɣ House 1 – put into operation; Ɣ House 4ǧ – construction works; Ɣ House 4Ǩ – construction works; Ɣ Other houses – designing.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 309,380.37 sq m Ɣ Total NSA– 217,200.15 sq m Ɣ Residential premises area – 216 303,35 sq m Ɣ Office area – 896.8 sq m Ɣ Available residential premises area – 191,522.58 sq m Ɣ Available office area – 386,40 sq m Ɣ Land plot – 11 hectares (~ land plot with a total area of 110,197 sq m)

Tenure Leasehold for the land plot until the May 25, 2022 (Lease Agreement # 6-1307-T dated May 25, 2012 as amended by Addendum dated October 29, 2014).

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: April 2014/ October 2021; Ɣ Sales start/completion dates: September 2014/ October 2021; Ɣ Number of phases: 3; Ɣ Estimated costs after the valuation date: 7,710,526,000 RUB Ɣ Prices per sq m or parking unit: residential: 50,161 RUB; commercial: 46,751 RUB.

Ɣ Estimated Revenue (in current prices): 9,950,753,000 RUB (including 252,844,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 19.74%

Valuation date December 31, 2015.

Inspection date December 18, 2015.

Market value 614,742,000 rubles

48. Michurinskiy

Property type Mass market residential

Address Between Landay, Ekaterininskaya, Vavilova (Syhodol’skaya) streets, Verh-Isetskiy administrative district, Yekaterinburg

Location

The subject property is located in the west of Yekaterinburg city at the Shirokaya Rechka sub district between Landay, Ekaterininskaya, Vavilova (Syhodol’skaya) streets near the EKAD. The ecological situation in the district is close to perfect (forest and lake near the area). There are shopping malls such as OBI, IKEA, Ashan, METRO nearby. The transport accessibility of the subject property is satisfactory. The distance to the city center is approximately 10 km, to the Ring Road (EKAD) about 4 km. Now the project of improvement of the transport accessibility of the district is developed. This will help to connect the area with EKAD and sub district “Academicheskiy” which is one of the most dynamic growing districts of the city. Surroundings are mainly presented by green zone (mainly forests).

Image 88 Image 89 Description Comfort class residential complex of 70 residential buildings (precast concrete) that are 3/4 floors in height. The residential complex area includes green zones, playgrounds, kindergarten, office rooms and three-level parking (594 parking lots). Residential premises of residential complex are fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic, MDF interior doors, safe entrance door). The beginning of the construction – 2012 year. Scheduled completion date – 2019 year. Current condition: Ɣ First stage of the construction (36 houses) – 29 houses are put into operation, 7 – construction and designing; Ɣ Second stage of construction – designing.

Areas Ɣ Total buildings area – 315,590.29 sq m Ɣ Total NSA– 250,967.47 sq m; Ɣ Residential premises area – 249,508.47 sq m; Ɣ Office area – 1,459 sq m Ɣ Parking – 594 parking lots (ground level parking) Ɣ Available residential premises area – 146,656.18 sq m Ɣ Available office area – 1,162.30 sq m Ɣ Available parking lots – 594 Ɣ Land plots – 468,519 sq m Ɣ Land plot – 46.9 hectares

Tenure Freehold on the land plots: Ɣ Land plot of 2,756 sq m, ownership certificate 66ǧǭ 880745 dated December 31, 2014; Ɣ Land plot of 30,336 sq m, ownership certificate 66ǧǭ 880746 dated December 31, 2014; Ɣ Land plot of 34,035 sq m, ownership certificate 66ǧǭ 880747 dated December 31, 2014; Ɣ Land plot of 5,652 sq m, ownership certificate 66ǧǭ 880748 dated December 31, 2014; Ɣ Land plot of 204 sq m, ownership certificate 66ǧǭ 880749 dated December 31, 2014; Ɣ Land plot of 401 sq m, ownership certificate 66ǧǭ 880750 dated December 31, 2014; Ɣ Land plot of 29,100 sq m, ownership certificate 66ǧǭ 880751 dated December 31, 2014; Ɣ Land plot of 11,946 sq m, ownership certificate 66ǧǭ 880752 dated December 31, 2014; Ɣ Land plot of 17,986 sq m, ownership certificate 66ǧǭ 880753 dated December 31, 2014;

Ɣ Land plot of 2,262 sq m, ownership certificate 66ǧǭ 880754 dated December 31, 2014; Ɣ Land plot of 18,864 sq m, ownership certificate 66ǧǭ 880755 dated December 31, 2014; Ɣ Land plot of 22,227 sq m, ownership certificate 66ǧǭ 880756 dated December 31, 2014; Ɣ Land plot of 3,208 sq m, ownership certificate 66ǧǭ 880757 dated December 31, 2014; Ɣ Land plot of 47,177 sq m, ownership certificate 66ǧǭ 880758 dated December 31, 2014; Ɣ Land plot of 1,797 sq m, ownership certificate 66ǧǭ 880759 dated December 31, 2014; Ɣ Land plot of 3,142 sq m, ownership certificate 66ǧǭ 875257 dated February 10, 2015; Ɣ Land plot of 3,632 sq m, ownership certificate 66ǧǭ 875258 dated February 10, 2015; Ɣ Land plot of 1,744 sq m, ownership certificate 66ǧǭ 875259 dated February 10, 2015; Ɣ Land plot of 2,366 sq m, ownership certificate 66ǧǭ 875260 dated February 10, 2015; Ɣ Land plot of 21,590 sq m, ownership certificate 66ǧǭ 875261 dated February 10, 2015; Ɣ Land plot of 4,580 sq m, ownership certificate 66ǧǬ 576211 dated October 08, 2012; Ɣ Land plot of 24,958 sq m, ownership certificate 66ǧǬ 907355 dated May 13, 2013; Ɣ Land plot of 52 sq m, ownership certificate 66ǧǬ 907356 dated May 13, 2013; Ɣ Land plot of 25,415 sq m, ownership certificate 66ǧǬ 907359 dated May 13, 2013; Ɣ Land plot of 18,328 sq m, ownership certificate 66ǧǭ 138385 dated September 26, 2013; Ɣ Land plot of 1,445 sq m, ownership certificate 66ǧǭ 138403 dated September 26, 2013; Ɣ Land plot of 21,621 sq m, ownership certificate 66ǧǭ 138468 dated September 26, 2013; Ɣ Land plot of 11,373 sq m, ownership certificate 66ǧǭ 138439 dated September 26, 2013; Ɣ Land plot of 2,542 sq m, ownership certificate 66ǧǭ 138458 dated September 26, 2013; Ɣ Land plot of 205 sq m, ownership certificate 66ǧǭ 138245 dated September 26, 2013; Ɣ Land plot of 328 sq m, ownership certificate 66ǧǭ 138386 dated September 26, 2013; Ɣ Land plot of 8,651 sq m, ownership certificate 66ǧǭ 138387 dated September 26, 2013;

Ɣ Land plot of 5,774 sq m, ownership certificate 66ǧǭ 138404 dated September 26, 2013; Ɣ Land plot of 8,046 sq m, ownership certificate 66ǧǭ 410749 dated March 24, 2014; Ɣ Land plot of 6,134 sq m, ownership certificate 66ǧǭ 410748 dated March 24, 2014; Ɣ Land plot of 7,046 sq m, ownership certificate 66ǧǭ 596373 dated June 27, 2014; Ɣ Land plot of 34,480 sq m, ownership certificate 66ǧǭ 596374 dated June 27, 2014; Ɣ Land plot of 125 sq m, ownership certificate 66ǧǭ 502980 dated August 01, 2014; Ɣ Land plot of 12,142 sq m, ownership certificate 66ǧǭ 503063 dated August 01, 2014; Ɣ Land plot of 407sq m, ownership certificate 66-66/001-66/001/396/2015-294/1 dated July 14, 2015; Ɣ Land plot of 406 sq m, ownership certificate 66-66/001-66/001/396/2015-295/1 dated July 14, 2015; Ɣ Land plot of 239 sq m, ownership certificate 66-66/001-66/001/396/2015-296/1 dated July 14, 2015; Ɣ Land plot of 200 sq m, ownership certificate 66-66/001-66/001/396/2015-297/1 dated July 14, 2015; Ɣ Land plot of 311 sq m, ownership certificate 66-66/001-66/001/396/2015-298/1 dated July 14, 2015; Ɣ Land plot of 208 sq m, ownership certificate 66-66/001-66/001/396/2015-299/1 dated July 14, 2015; Ɣ Land plot of 221 sq m, ownership certificate 66-66/001-66/001/396/2015-300/1 dated July 14, 2015; Ɣ Land plot of 228 sq m, ownership certificate 66-66/001-66/001/396/2015-301/1 dated July 14, 2015; Ɣ Land plot of 214 sq m, ownership certificate 66-66/001-66/001/396/2015-302/1 dated July 14, 2015; Ɣ Land plot of 203 sq m, ownership certificate 66-66/001-66/001/396/2015-303/1 dated July 14, 2015; Ɣ Land plot of 6,344 sq m, ownership certificate 66ǧǭ 650028 dated September 24, 2014; Ɣ Land plot of 147 sq m, ownership certificate 66-66/001-66/001/472/2015-680/1 dated December 15, 2015; Ɣ Land plot of 5,720 sq m, ownership certificate 66-66/001-66/001/472/2015-679/1 dated December 15, 2015.

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: November 2012/ December 2019; Ɣ Sales start/completion dates: March 2013/ December 2019; Ɣ Number of phases: 2; Ɣ Estimated costs after the valuation date: 6,677,616,000 RUB Ɣ Prices per sq m or parking unit: residential Ph.1: 55,300 RUB; residential Ph.2:

54,500 RUB; commercial: 65,000 RUB; parking: 300,000 RUB. Ɣ Estimated Revenue (in current prices): 8,555,260,000 RUB (including 298,770,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 18.66%/21.66%

Valuation date December 31, 2015.

Inspection date December 18, 2015.

Market value 1,701,989,000 RUB

49. Rastochnaya

Property type Mass market residential

Address 31a, Rastochnaya Street, Zheleznodorozhniy administrative district, Yekaterinburg

Location

The subject property is located in the Yekaterinburg city at the Staraya Sortirovka sub district between Rastochnaya, Kynarskaya, Kishinevskaya and Bilimbaevskaya streets. The ecological situation in the district is formed by the near railways and sort facilities. The distance to the city center is approximately 7 km. The subject property is mainly surrounded by the old houses of 2-5 floors in height But currently the area of the district is dynamically developing. New residential complexes are constructing nearby. There are schools, kindergartens, stadium, fitness center and shops as well as public parking, car showroom near the subject property. Transport system is well developed and provides citizens with good services of public transport (buses, trams, taxis, bus stop in 120 meters).

Image 90 Image 91 Description Economy class residential complex of 1 residential building (precast concrete) that is 18 floors in height. The residential complex area includes residential premises , office premises and car parking (70 parking lots). Residential premises of the residential complex will be fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic, MDF interior doors, safe entrance door). The beginning of the construction – 2016 year. Scheduled completion date – 2017 year. Current condition: designing.

Stage of Design development

Development Build and sell strategy

Areas Ɣ Total buildings area – 16,561.7 sq m Ɣ Total NSA– 10,373.48 sq m Ɣ Residential premises area – 10,154.48 sq m Ɣ Office area – 219 sq m Ɣ Parking – 70 parking lots (underground parking) Ɣ Available residential premises area – 10,154.48 sq m Ɣ Available office area – 219 sq m Ɣ Available parking lots – 70 Ɣ Land plot – 0.5 hectares

Tenure Freehold on the land plot according to the Ownership certificate number 66ǧǭ 274963 dated December 16, 2013

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: January 2016/ December 2017; Ɣ Sales start/completion dates: June 2016/ June 2018; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 455,211,000 RUB Ɣ Prices per sq m or parking unit: residential: 58,525 RUB; commercial: 40,023 RUB; parking: 350,000 RUB. Ɣ Estimated Revenue (in current prices): 627,552,000 RUB;

Ɣ Discount Rate: 20,24%

Valuation date December 31, 2015.

Inspection date December 18, 2015.

Market value 97,980,000 RUB

50. Academicheskiy

Property type Mass market residential

Address Verkhneuphaleyskaya St, Yekaterinburg

Location

The subject property is located in the west of Ekaterinburg city at the Shirokaya Rechka sub district, near the intersection of Evgeniya Savkova, Syhodol’skaya and Rucheinaya streets. The ecological situation in the district is close to perfect (forest and lake near the area). There are shopping malls such as OBI, IKEA, Ashan, METRO nearby. The transport accessibility of the subject property is satisfactory. The distance to the city center is approximately 9 km, to the Ring Road (EKAD) about 3.5 km. Now the project of improvement of the transport accessibility of the district is developed. This will help to connect the area with EKAD and sub district “Academicheskiy” which is one of the most dynamic growing districts of the city. Surroundings are presented by green zone and houses of “Academicheskiy” residential area that are 10 floors and more in height. There are warehouse complex “Malahit”, residential complexes “Khrustal’nogorskiy” and “Suhodolskiy kvartal” near the subject property.

Image 92 Image 93 Description Economy class residential complex of residential buildings (precast concrete) that are 18-25 floors in height. The residential complex area includes green zones, playgrounds and parking (600 parking lots). Flats of residential complex are fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic, MDF interior doors, safe entrance door). The projected beginning of the construction – 2015 year. Scheduled completion date – 2020 year.

Stage of Initial concept & planning development

Development Build and sell strategy

Areas Ɣ Total buildings area – 161,651 sq m Ɣ Total NSA – 109,967 sq m Ɣ Residential premises area – 99,647 sq m Ɣ Parking – 600 parking lots Ɣ Available flats area – 109,967 sq m Ɣ Available parking lots – 600 Ɣ Land plot – 2.6 hectares

Tenure The Client hasn’t provided us with any Title Documents. In accordance with the information of the Client rights on the land plots are registering now, type of the tenure – freehold.

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: November 2016/ December 2020; Ɣ Sales start/completion dates: January 2017/ December 2020; Ɣ Number of phases: 2; Ɣ Estimated costs after the valuation date: 4,543,620,000 RUB Ɣ Prices per sq m or parking unit: residential: 56,230 RUB; parking: 300,000 RUB. Ɣ Estimated Revenue (in current prices): 5,783,123,000 RUB; Ɣ Discount Rate: 22.15%

Valuation date December 31, 2015.

Inspection date December 18, 2015.

Market value 212,459,000 RUB

51. Flagman

Property type Mass market residential

Address between Repina, N.Vasil’eva, Zavodskaya streets, Verh-Isetskiy administrative district, Yekaterinburg

Location

The subject property is located in the Yekaterinburg at the VIZ sub district between Repina, N.Vasil’eva and Zavodskaya streets. The distance to the city center is approximately 3 km. The ecological situation in the district is deemed to be good. There is no big factories in the nearest area. The subject property is mainly surrounded by roads. It is situated near the crossroads of Gurzufskaya, Repina and Metallurgov streets – the main highways of the districts which connect west and south of the city with the center. So the transport system is well developed and provides residents with good services of private and public transport (mainly buses, but also trams at some distance). Surroundings are mainly presented by houses that are 5 floors in height, food-shops, schools, pharmacies. There are schools, kindergartens, hospital, parks, cafes, restaurants and shopping mall close to the area.

Image 94 Image 95 Description Comfort class residential complex of 4 residential buildings (precast concrete) that are 10-25 floors in height (with commercial premises at the ground floor). The residential complex area includes 1 100 residential premises , commercial premises and underground parking (515 parking lots). Residential premises of residential complex will be fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic, MDF interior doors, safe entrance door). The beginning of the construction – 2015 year. Scheduled completion date – 2019 year. Current condition: Ɣ House 1 – construction works at the level of 14th floor; Ɣ Houses 3 ǧǨǩ – construction works at the level of 1st floor; Ɣ Parking – construction works.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 99,129.73 sq m Ɣ Total NSA– 71,522.68 sq m Ɣ Residential premises area – 66,588.68 sq m Ɣ Office area – 4,934 sq m Ɣ Parking – 515 parking lots (underground parking) Ɣ Available residential premises area – 54,476.46 sq m Ɣ Available office area – 4,829.99 sq m Ɣ Available parking lots – 515 Ɣ Land plot – 3.4 hectares (~ 3 contiguous land plots with a total area of 33,884 sq m)

Tenure Freehold on the land plots: Ɣ Land plot of 23,261 sq m, ownership certificate number 66-66/001- 66/001/413/2015-58/1 dated February 22, 2015 Ɣ Land plot of 48.42 sq m, ownership certificate number 66-66/001-66/001/413/2015- 59/1 dated February 22, 2015 Ɣ Land plot of 48 sq m, ownership certificate number 66-66/001-66/001/413/2015- 60/1 dated February 22, 2015

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: April 2015/ December 2019; Ɣ Sales start/completion dates: April 2015/ December 2019; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 3,398,732,000 RUB Ɣ Prices per sq m or parking unit: residential: 69,724 RUB; commercial: 67,972 RUB; parking: 500,000 RUB. Ɣ Estimated Revenue (in current prices): 4,919,510,000 RUB (including 491,108,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 20.15%

Valuation date December 31, 2015.

Inspection date December 18, 2015.

Market value 698,959,000 RUB

52. Shefskaya

Property type Mass market residential

Address 11, Shefskaya St, Yekaterinburg

Location

Shefskaya

The subject property is located in the north of the Yekaterinburg city at the Elmash sub district near the 108, Shefskaya street. The distance to the city center is approximately 6 km. The ecological situation in the district is assumed to be good: “Kalinovskie rezrezy”, forest and parks are close to the area. There are schools, kindergartens, hospital, parks, cafes, restaurants and shopping malls near the subject property. However there are small industry zone at the distance of approximately 0,5 km and big industry zone (turbine plant, electric locomotive plant) at the distance of approximately 2,5 km from the subject property. The surroundings are mainly presented by new residential complexes such as Kalinovskiy, Oasis and etc., shopping centers, schools, pharmacies. The transport system is perfectly developed and provides residents with good services of public transport (few minutes to bus-stop, taxis, subway and trams (in the future)) and many road junctions that provide comfortable way to the EKAD, city-center and suburbs. The main road of the district is Prospect Kosmonavtov which is at the distance of about 500 m from the subject property.

Image 96 Image 97 Description Economy class residential complex of 2 residential buildings (precast concrete) that are 15-21 floors in height. The residential complex area includes 210 residential premises , office premises and parking (153 parking lots). Residential premises of residential complex will be fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic, MDF interior doors, safe entrance door). The beginning of the construction – 2015 year. Scheduled completion date – 2017 year. Current condition: Ɣ Houses 1,2 – foundation works; Ɣ Parking – designing.

Stage of Construction development

Development Build and sell strategy

Areas Ɣ Total buildings area – 30,662.01 sq m Ɣ Total NSA– 20,081.11 sq m Ɣ Residential premises area – 19,872.11 sq m Ɣ Office area – 209 sq m Ɣ Parking – 153 parking lots Ɣ Available residential premises area – 12,012.33sq m Ɣ Available office area – 188.12 sq m Ɣ Available parking lots – 136 Ɣ Land plot – 1.76 hectares

Tenure Freehold on the land plot (ownership certificate number 66-66/001-66/001/400/2015- 21/1 dated February 25, 2015)

Valuation Ɣ Applied method(-s) of valuation: Residual (DCF); considerations Ɣ Construction start/completion dates: November 2015/ March 2018; Ɣ Sales start/completion dates: November 2015/ June 2018; Ɣ Number of phases: 1; Ɣ Estimated costs after the valuation date: 842,782,000 RUB Ɣ Prices per sq m or parking unit: residential: 60,000 RUB; commercial: 25,000 RUB; parking: 450,000 RUB.

Ɣ Estimated Revenue (in current prices): 1,114,239,000 RUB (including 343,615,000 RUB for bargains before December 31, 2015); Ɣ Discount Rate: 19.34%

Valuation date December 31, 2015.

Inspection date December 18, 2015.

Market value 242,835,000 RUB

Appendix 3 Market overview

Office market overview of St. Petersburg

Market segmentation according to the regular modern classification

Saint Petersburg’s office market is more developed than other segments of the city’s commercial real estate market.

The new developing projects or reconstructed office premises of high quality, which are suitable for western standard specifications, are the main objects of classes A and B. While analyzing the office market of St. Petersburg, we focus primarily on the premises of class A and B - high-quality office real estate (for more details on the classification of office centers see table below).

Class B office centers dominate in the market structure of quality office properties: they have 67% share by total stock of GLA, and 77% share by the number of office properties.

Chart 1. Saint-Petersburg office real estate market structure by class, total stock of GLA, % - (1), number of office properties % - (2), 2015 Q4

(1) (2)

Source: Knight Frank St Petersburg, 2016

Supply analysis

Supply volume dynamics

The total supply of high-quality office space amounted to 2,338.7 thousand sq m as of 2015 Q4.

Table 4. Key supply indicators of office market as of 2015 Q4

Total stock of GLA, Class Number of office properties thousand sq m ǧ 767.1 67 ǩ 1,571.6 226 Total 2,338.7 293

Source: Knight Frank St Petersburg, 2016

Supply dynamics

The chart bellows show commissioning of class A and class B new office space from 2002 to 2015

Chart 2. Commissioning of class A and B new office space, 2002 – 2015, thousand sq m

Source: Knight Frank St Petersburg, 2016

In 2009 the maximum commissioning volume of high-quality office space was achieved. The total volume of the commissioning reached 319.9 thousand sq m, with 206.7 thousand sq m of Class B office space – the maximum amount of commissioning in this segment.

Table 5. Commissioning of new office space and total accumulated areas by classes, thousand sq m

Years 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Class ǧ - 15.8 40.5 106.4 113.2 112.9 60.6 60.1 127.9 65.7 81.9

Accumulated area 19.1 34.9 44.4 181.8 295.0 359.9 436.2 491.7 619.6 685.2 767.1

Class B 169.5 81.3 188.0 191.7 206.7 114.3 87.6 96.1 133.7 62.6 79.7

Accumulated area 375.1 456.4 641.0 832.7 1,016.9 1,128.7 1,200.3 1,295.7 1,429.3 1,491.9 1,571.6

Totally A and B 169.5 97.1 228.6 298.1 319.9 227.2 148.3 156.1 261.6 128.3 161.6 classes

Accumulated area 394.2 491.3 685.4 1,014.5 1,311.9 1,488.7 1,636.5 1,787.3 2,048.9 2,177.2 2,338.7

Source: Knight Frank St Petersburg, 2016

It should be also noted that the accumulated amount of areas in the table above is not just a sum of office areas, accumulated in the previous year and commissioning of the current year, but it also excludes properties which had left the market (i.e. were demolished or purchased by a company for own needs).

During 2015 22 office buildings with total leasable area of 161.6 thousand sq m. entered to the office real estate market. The supply increase amounted to 7% since the end of 2014.

Table 6. Main office centers commissioned in 2015

Total GLA, Name Address thousand sq m Class ǧ Flandria Plaza 3, Tashkentskaya, St 29.1 Zeppelin 6b, Startovaya St 12.3 Separate building of Gazprom Export 2a, Ostrovskogo Sq 11.7 Senator 1, Kropotkina St 6.7 Senator 60, Moskovsky Ave 12 Au Pont Rouge (2 phase) 73-79, Moyki river Emb 4.2 Au Pont Rouge (3 phase) 73-79, Moyki river Emb 2 Class B MEZON PLAZA 28, Bol'shoj Sampsonievskij Ave 22.6 SOVA 22, Marshala Tuhachevskogo Ave 9 Formida 3b, Jenergetikov Ave 8.2 Kushelevskaja, 13 13, Kushelevskaja Ave 5.8 Serebrjanye zerkala 2, Malaja Monetnaja St 4.7 Senator 60, Moskovsky Ave 4.5 Morskoj dom 161, Fontanki river Emb 3.6 Krummelhouse 12, Bol'shaja Posadskaja St 3.5 BUSINESS PALAZZO 29, Ligovskij Ave 2.8 Assembly 12, Majakovskogo St 1.8 Kersten House 25, Krasnogo Kursanta St 1.5

Source: Knight Frank St Petersburg, 2016

Vacancy rates

A successful move of Gazprom structures from Moscow exerted the most noticeable impact on the St. Petersburg office real estate market, it began seven years ago. Transactions were concluded most actively during 2015, which resulted in decrease of the vacancy rate in Class A office centres by 6.8 p. p. in comparison with the end of 2014. 9.4% of Class A office space is vacant according to the beginning of 2016. The rotation of tenants from office buildings of lower class also contributed to the reduction of the volume of Class A vacant space. These tenants were able to improve their conditions due to a drop in rental rates in modern quality projects.

The reverse situation occurred in Class B office centres, where the vacancy rate increased if compared to the end of 2014 by 2.8 p. p. and reached 11.6%. There were by 57 thousand sq m more office space vacant for lease at the end of 2015 if compared to the previous year. The increase of the indicator is due to the desire of certain tenants to reduce rental costs in connection with the general economic instability, so they chose less expensive premises of poor-quality office buildings.

Circa 254 thousand sq m of office space in the current business centers of Saint Petersburg were vacant by the end of the year, where a large share of the business centres are of Class B - 72%.

Chart 3. Dynamics of vacancy rates, Q1 2007 – Q4 2015

Source: Knight Frank St Petersburg, 2016

Geographical spread trends

Knight Frank St Petersburg has developed a scheme of the St. Petersburg office market division into 14 business areas depending on the location and preferences of potential tenants. It is assumed that locating in similar facilities within the business area has at the same level of attractiveness for potential tenants.

Map 1. Map of the office real estate development zones

Source: Knight Frank St Petersburg, 2016

Main trends of supply geographical structure are:

i Most of the new office space in the last 6-7 years was developed in central areas of St. Petersburg (business districts Central-1 and Central-2 and Admiralteysky). The development of the city center as a business area is caused by prestigiousness and convenient transport accessibility from all parts of the city. A striking example of new development in this zone is a administrative and office project

‘Nevskaya Ratusha’, which is under construction. Its first phase includes the headquarters of St. Petersburg city administration and two class A office buildings

i Construction of new office buildings on the embankments with views located outside the historic center (Vyborgskaya, Pirogovskaya, Petrogradskaya, Ushakovskaya, Malookhtinskaya, Sverdlovskaya, etc.). One of the largest projects in St. Petersburg is a new office development of Class A ‘Saint Petersburg Plaza’ on 64, Malookhtinsky Ave.

i Petrogradsky business area has also emerged into a prestigious business area during the last 6-7 years. As well as Centralny-1 and Centralny-2, business districts it has advantageous location, convenient access from all parts of the city that attracts potential tenants. The best examples of office buildings in the Petrogradsky district are: Langenzipen, Apollo, Tolstoy Skver, Light House, etc.

i In Vasileostrovsky-1 and Vasileostrovsky-2 business areas real estate development grew rapidly till the crisis of 2008-2009. There are modern office centers that are not inferior by quality to those located in central areas: Sovereign, Magnus, Gustaf, Senators, Baltis Plaza and others. Popularity of the area, in spite of the proximity to the city center, falls to the central areas and Petrogradsky district, due to the low transport accessibility.

i Moskovsky district also has been developed. Business activity development in Moskovsky district is encouraged by its strategic location – the proximity of the airport, convenient access to the city center, convenient exit from the city. A new office area was formed near the Pulkovo airport: there are office centers ‘Pulkovo Sky’ of the EKE Group development company, business developments Upiter- 1 and Upiter-2 of the Avielen AG development company, office building ‘Tecnopolis Pulkovo’ of the Tecnopolis company.

i Areas of the city, distant from the city center – peripheral, now have a low supply of high-quality office space. Construction of social and office complex ‘Lakhta center’ in Primorsky district will give a new impetus to decentralization of office real estate in St. Petersburg. In the whole, the area of properties in non-central districts of the city is greater than the area of properties located in the central districts. Future office development in non-central areas (previously less popular) will be possible due to planned city’s transport infrastructure improvement; for instance:

i Construction of Western High-Speed Diameter, the central portion;

i Development of the Central and Inner Circular Highway; Distribution of the total leasable area of quality office real estate by business districts of St. Petersburg is presented in the diagram below:

Chart 4. Distribution of total leasable area of quality office real estate of St Petersburg by business districts, 2015 Q4.

Source: Knight Frank St Petersburg, 2016

Demand analysis

Types and sources of demand

The total volume of lease transactions completed in 2015 was 182 thousand sq m, which is the highest level since 2009. However, 59% of all transactions were signed by the companies of raw materials sector of the economy, without them the sum of transactions was much lower - 74 thousand sq m.

The analysis of transactions, closed in 2015 inclusively showed that the most tenants operate in the following business areas:

i Gas and oil companies, extracting companies (59%);

i IT / telecommunication (12%);

i Construction / development / engineering (9%);

i Banking and financial service companies (4%);

i Industrial companies (4%), etc.

Chart 5. Tenants’ structure by business profile (based on leased areas occupied by tenant), 2015

Source: Knight Frank St Petersburg, 2016

Volume and take-up dynamics

Net take-up amounted to 125 thousand sq m of quality office space in 2015, which was mainly concentrated in Class A - 77.5 thousand sq m or 62%.

Annual take-up was 3% lower than in 2014. Moskovsky Ave business district is still in great demand among tenants where a lot of new supply is concentrated. The popularity of Central-1, Admiralteysky and Embankments with views Business Districts has grown. This fact is explained by a large number of new projects focused in these districts where there are large office units with rents not exceeding the market average.

Charts and table below show take-up dynamics in the market of Saint Petersburg.

Chart 6. Take-up dynamics, 2002-2015, thousand sq m

Source: Knight Frank St Petersburg, 2016

Chart 7. Take-up structure, 2002-2015, %

Source: Knight Frank St Petersburg, 2016

Table 7. Take-up structure, 2002-2015, thousand sq m

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Class A 0.5 6.1 9.8 0.3 12.2 47.1 73.3 36.4 56.8 49.3 89.6 47.1 84.1 77.5 Class B 22.3 40.6 43.7 167.6 133.4 158.8 144.8 74.5 158.3 103.5 83.6 62.2 44.6 47.5

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total 22.8 46.7 53.5 167.9 145.6 205.8 218.1 110.9 215.0 152.8 173.3 109.3 128.7 125.1

Source: Knight Frank St Petersburg, 2016

Table below shows lease transactions exceeding 1.5 thousand sq m, closed in 2015.

Table 8. Largest lease transactions, 2015

Office area, sq Company name Office centre Address Class m Victoria Plaza Gazprom 45.800 (under construction) 2, Pobedy Sq A Gazprom 28.000 Victoria Plaza 2, Pobedy Sq B Gazprom 20.100 Eightedges 45, Malookhtinsky Ave A Gazprom 7411 Fabrika 140, Moskovsky Ave B ViPS Group 7000 Nevskaya Ratusha 11, Degtjarnyj line A Baltiyskiy Bank 5000 Senator 37, Professora Popova Ave A Gazprom 3115 Sinop 22, Sinopskaya Emb A Sperasoft 3000 Jenergija 5, Kievskaya B Confidential 2317 Hanin Plaza 6-8, Drovjanaja Ave B Avito 2300 Saint Petersburg Plaza 64, Malookhtinsky Ave A SAP 2118 White Nights 23, M. Morskaja St B N/a (IT company) 2026 Leto 44, Sverdlovskaya Emb. A Werfau 1937 Chajkovskogo, 29 29, Chajkovskogo St B NSN 1719 ǹ4 12, Sedova B Confidential 1529 Kersten House 25, Krasnogo Kursanta St B Geropharm 1500 Nevskaya Ratusha 11, Degtjarnyj line A IT company 1500 Leto 44, Sverdlovskaja Emb A

Source: Knight Frank St Petersburg, 2016

Dynamics of rental rates

There was a gradual reduction in asking rental rates both in Class A and B during the year. The average decline amounted to 6% in properties of each class. The unstable economic situation, reduction of activity in the office market and a fairly high level of vacant space prompted landlords to make concessions to potential customers in the form of various discounts and bonuses. This, in turn, resulted in erosion of relatively inexpensive supply from the market, especially in Class B.

Rental rates in operating class A premises range from 890 to 2000 rub/sq m/month (including VAT and OPEX). The range for class B premises is 650-2100 rub/sq m/month (including VAT and OPEX).

The average asking rental rates for Class A office centres reached 1,513 rub./sq m/month, while for Class B office centres – 1,100 rub./sq m/month by the end of 2015 (incl. VAT and Operating Expenses).

Chart 8. Dynamics of average rental rates (including OPEX and VAT), rub / sq m /month, Q1 2007-Q4 2015

Source: Knight Frank St Petersburg, 2016

Factors, influencing rental rates

Besides the characteristics, defining the class of an office center, the following factors influencing the rental rate should be noted:

i Location. High-priority influence factor. Office location prestige still plays the most important role for potential tenants. Sometimes a concrete area, where the companies’ activities are focused, is important;

i Access convenience. In determining the location of the future office availability of transport routes and main highways is important for a consumer. Proximity to the metro stations is significant;

i Property quality. Combination of technical, functional and architectural features of the building;

i The building infrastructure. Additional opportunities for tenants, availability of meeting rooms, a bank branch, a cafe / restaurant, fitness center, beauty salon and so on;

i The storey, where the placement of an office is assumed. As a rule, the higher the floor the better the view, and therefore the rental rate is slightly higher. Rate may also be higher for rooms on the first floor (in case of the presence of large traffic and pedestrian flows around the building);

i Availability of parking. Due to the intense traffic situation in St. Petersburg, especially in the city center, the availability of sufficient secure parking became important;

i Leasable area. Rental price has inverse relation with a size of rental block (hold for the area of more than 1000 sq m);

i Tenant status. Owners of high-quality buildings are often willing to provide a discount for a well- known company, which will attract other prestigious tenants. With the current relation of supply and demand the amount of discounts can be quite large (especially for new properties);

Operating expenses

The most vilely spread approach in the office real estate market in St. Petersburg is the approach of all-inclusive rental rates, where OPEX and VAT are not sorted out from rental rates. This means that rental rate includes a basic rental rate, OPEX and VAT.

Operating expenses include maintenance and utility costs. Maintenance means: cleaning common areas and the territory adjacent to the building, maintenance of a building, (care of the facade, cleaning roofs, etc.), garbage and snow disposal, security of engineering services and so on. A set of utilities includes heating, water supply, sewerage, etc.

A tenant separately pays for electric power using a counter, according to the current rates.

Foreign developers/owners/managers of office centers rarely use the approach when rental rates, operating expenses and utility costs are paid separately. Moreover, in this case the amount of operating expenses can be changed due to changes in the applicable laws, inflation, rates for heating, cold water supply, garbage disposal, etc. but no more than once a year.

Rent a parking space in a business center

The cost of renting a parking space depends on the class of a building, total number of cars in the car park office center, type of parking (indoor parking is always more expensive than outdoor secured parking lot), the distance from the business center of the city center. Range of asking rental rates of one parking space in outdoor secured parking lot is wide enough – 1000 to 11 200 rub per month, including VAT (average – 5000 rub). Rental rates in indoor multi-level or underground parking are higher – from 4 000 to 20 000 rub per month, including VAT (an average - 8700 rub). For business centers located in the city center with a limited number of parking spaces a cost of renting a parking space can reach 5000-20 000 rub per month.

Currency of the contracts and escalation

The most common currency for the contract in the office market of St. Petersburg is rubles. There are few examples of nominating rental rates in foreign currency (U.S. dollars or euros), mainly in objects owned by foreign companies. For example: offices centers of Turkish development company Renaissance Development, office center Airport City of Russian-Austrian Avielen A.G., office center Zinger House, owned by the Russian company PAN etc.

But in 2015, due to the instability of the ruble, the owners of office buildings, who claimed rental rates in currency change rates on ruble terms.

Escalation terms are negotiated with each tenant individually or may not apply at all. Typical conditions for rental rates escalation in St. Petersburg are:

i Escalation in ruble rental rates happen not more often than once a year, at a level not higher than inflation, according to the Federal Statistics Service data on the previos year, or in the range of 8-10%

i Annual rent escalation nominated in the foreign currency does not exceed 5%.

Professional opinion regarding market development perspectives

The main office market trends

Last several years Saint Petersburg’s office property market has been booming under the influence of the following key factors: variation of economic situation in Russia and the region; dynamic of investment; changes in the city’s economic structure; growth/fall of demand as consequence of employment changes. During the crisis period most of market indicators have decreased except market supply which has grown because of completion begun projects.

Key office market trends

Supply

i During the 2015 year the amount of office space increased by 161.6 thousands sq. m and equals 2, 135.8 thousands sq. m. Increase of new quality supply amounted to 7% for 2014.

i The important tendency is market decentralization. Office properties appeared outside the city centre – Class A premises have delivered in attractive industrial areas and even near the airport; Class B buildings have appeared out of city border and a lot in the peripheral districts. Demand

i During 2015 there was a decrease of demand for office buildings in the market due to the high expectations of landlords relatively rental rates, which was especially evident in the segment of Class A office centers with long term exposure in the market.

i For 2015 the market took up 125 thousand sq m. This is 3% less last year.

i Vacancy rate in class A business centers amounted to 9.4%, in class B – 11.6% according to the data as of 2015 Q4.

i Most deals in the office market from 2009 to 2015 were concluded by companies engaged in the field: oil and gas sector, information technology and construction/development companies. Commercial terms

i The average asking rental rate for Class A office premises at the end of 2015 Q4 amounted to 1513 RUB / sq m / month, including OPEX and excluding VAT, in Class B – 1100 RUB / sq m / month, including OPEX and VAT.

i The office buildings sales market is not clear, usually landlords try to find purchasers on their own and often conceal the transfer of ownership. Amount of actual deals also remains confidential information.

Market supply forecast

Supply

At present, a large number of Class A and B projects are slated to go on the market. If this happens, then by the end of 2017:

i The volume in Class A will increase to 968.3 thousand sq. m (less than 1.4 times as much);

i The volume in Class B will be more than 1,826.3 thousand sq. m (1.2 times as much).

Chart 9. A forecast for the growth in the total volume of Class A and B business centers (sq. m), 2002- 2017F, thousand sq m

Source: Knight Frank St Petersburg, 2016

Significant increase in high-quality market supply is expected in 2016. The total volume of high-quality office space supply at the end of 2016 will amount to 2.6 million sq m, if the buildings under construction will be commissioned in time. Thus, the total leasable area will increase by 13% in comparison to 2015.

Forecasted commissioning in 2016 will amount to approximately 300 thousand sq m, but will be offered for rent 177 sq. m.The largest projects are:

i Victoria Plaza (2 phase) - business center of Adamant development company with total leasable area of 30 thousand sq m. The office center is located in the business district Moskovsky Ave.

i Renaissance business park - business center of Turkish development company Renaisance development with total leasable area of 21 thousand sq m. The office center is located in the business district Embankments with view.

i FORT TOWER- bisiness center of FORT GROUP development company with total leasable area of 20 thousand sq m. The future office center (class A) is located in the business district Moskovsky Ave.

i Senator (2 phase, Chapaeva Street) - business center of Imperia holding development company with total leasable area of 17 thousand sq m. The office center is located in the business district Petrogradsky. In 2017 will be commissioning – 153 thousand sq m. The long-term forecast (for after 2017) is less accurate, as it is possible that some projects may come on or out of the market. In our calculations, we used adjustment factors to compensate for this effect.

It should be noted that some investors refuse to real estate commercial projects with one function in favor of residential projects with various components and / or mixed-use complexes, since such projects are less risky and safe for the developer, and its smarter and more efficient in terms of the urban environment.

In the future it would be correct to speak about cooperation future tenants with the developers till the beginning of project development, because in this case all sides are winners: a tenant gets the necessary office space, consistent with its requirements, and the investor has ready business, not an empty building.

As a result of the analysis and prediction of office segments in St. Petersburg we calculated the predicted values in terms of supply of the market in general.

Chart 10. Dynamics of actual and forecasted high-quality office space delivery, take-up and vacancy rates, 2002- 2017 F, thousand sq m

Source: Knight Frank St Petersburg, 2016

Territory development forecast

In 2016 the business district Moskovsky Avenue will receive active development; over a third of the declared areas will be located in this business district of St. Petersburg.

Besides, in the mid-term (3-5 years) central districts of St. Petersburg and the adjoining embankments with views will continue to be popular for office development and redevelopment, due to the prestige and convenience of transportation from all parts of the city. But at the same time these areas are highly competitive and the presence of land plots for new construction in this location is limited, in contrast to the peripheral areas.

The main development potential has the territory of the first industrial zone11 of Saint Petersburg, which has big opportunities for the reconstruction of existing facilities and for new construction in redevelopment areas.

11 Areas of St. Petersburg, that were developing for industrial use from the 18th century until the first half of the 20th century: the Narvskaya part of Kirovsky district (Sea Port), area along Obvodny Canal on the both sides, the northern left bank of Nevsky district, the territory of Sinopskaya Emb, Sverdlovskskaya Emb , area along the river banks of Bolshaya Nevka and Malenkaya Nevka, area along river Smolenka, southern part of Vasilievsky Island (Harbour).

More and more objects will appear in the peripheral areas but the opportunities for development of such areas will depend on development of the other segments of real estate and transport infrastructure in these areas.

Take-up

In the next year take-up will amount to 110-120 thousand sq m. In a stable economic situation in 2016-2017 take-up is expected to remain at the level of 120-150 thousand sq m per annum.

Vacancy and rental rates

We expect that in 2016 due to the commissioning of significant volume of new office space, which should enter the market, the vacancy rate could exceed 12%. In case of a stable economic situation in the country, vacancy rate in office centers of the both classes could be at the level of 10-14% in 2016-2017.

Taking into account the current situation in the office market and forecast authorities’ forecast of the future economic development of the country, we don’t expect growth in rental rates in 2016-2017.

Rival projects in the proximate site neighborhood. Analysis of competitive landscape changing perspectives. Kazanskaya Street

Existing competition analysis

For competitive environment analysis there was chosen the zone of Central-1 and part of Admiralteysky business district. Office centers located in the close were studied in the Kazanskaya Street.

Taking into account a possible office buildings class, objects environments and location descriptions, the following A, B and C class business centers are considered as the competitors.

In this zone 14 operating office centers are located, which are estimated for potential tenants as equivalent. The total leasable office space in this area is 77.5 thousand sq m. More than a half of business centers in the area of the competitive environment have occupancy over 90%. Not filled with tenants business centers at the Au Pont Rouge (2 and 3 phase) due to high rents. Also a high vacancy rate for the same reason in the office center Atrium.

Rental rates in the competitive zone are in the range from 735 to 1850 RUB / sq m per month (including VAT and OPEX). Average rental rate are:

i Class A - 1850 RUB / sq m per month (including VAT and OPEX). i Class B – 1485 RUB / sq m per month (including VAT and OPEX). i Class C – 881 RUB / sq m per month (including VAT and OPEX).

The vacancy rate in the area of competitive environment is 15%. In absolute terms, the vacant 11.3 thousand sq. m:

i Class A – 31% (7.2 thousand sq. m). High vacancy rates associated with the empty tenant office center have Au Pont Rouge, where shopping and apartment areas were redeveloped into office i Class B – 11% (1.7 thousand sq. m) - The average for the city i Class C – 6% (2.6 thousand sq. m) - The average for the city

Table 9. The list of existing competitors in the zone of influence of the property, Q4 2015

Rates,RUB/sq. The ȶ Leasable m p.m. total Occupancy on Property Name Address Class area, sq. Vacancy (including area, sq. rate, % map m VAT, and m

OPEX) Au Pont Rouge 75-79, Moyki river 1 15,000 9280 - 100% 1850 Emb A Au Pont Rouge 73, Moyki river 2 5598 4199 4199 0% 1850 (2 phase) Emb A Au Pont Rouge 75-79, Moyki river 3 2303 1957 1877 0% 1850 (3 phase) Emb A 4 Bolloev Center 4, Grivcova lane A 9040 8150 1160 86% 1850 23, Malaja 5 7333 5500 - 100% 1800 White night Morskaja St B 6 Atrium 1/25, Kazanskaja St B 5300 4240 1523 64% 1500 NOVO- 7 3900 3198 - 100% 1400 ISAAKIEVSKIJ 24, Jakubovicha B 3, Konnogvardejskij 8 2500 2000 125 94% 1300 Admiralty House St B 59, Fontanki river 9 12,800 9600 1166 88% 735 Lenizdat Emb C 10 Na Sennoy 14/35, Spasskij lane C 11,000 8250 115 99% 1200 11 Trezubec / Mir ǧ, Efimova St C 9000 8000 180 98% 1239 12 Kazanskij 7, Kazanskaja St C 8335 6251 413 93% 739 58, Moyki river 13 6133 4600 393 91% 1176 Mariinskij Emb C 14 Alva 8, Apraksin lane C 2919 2296 103 96% 1000

Source: Knight Frank St Petersburg, 2016

Office centers in the zone of the competitive environment are presented in the map below.

Map 2. The existing competitors in the zone of influence

Source: Knight Frank St Petersburg, 2016

Currently being built business centers in the environment area is not competitive.

Project recommendations

Based on the market researches and competitive environment analysis the most probable rental rates for the Properties within the portfolio are:

i Kazanskaya 36 – 1,000-1,100 RUB/sq. m p.m. (including VAT, and OPEX)

i Zolotaya Kazanskaya – 800-900 RUB/sq. m p.m. (including VAT, and OPEX)

i Kazanskaya 60 – 900-1,000 RUB/sq. m p.m. (including VAT, and OPEX)

These rental rates consider buildings’ quality, location and transport accessibility.

Rival projects in the proximate site neighborhood. Analysis of competitive landscape changing perspectives. Paradny Kvartal

Existing competition analysis

For competitive environment analysis there was chosen the part zone of Central-2 (excluding street located near Nevsky Avenue).

Taking into account a possible office buildings class, objects environments and location descriptions, the following A, B and C class business centers are considered as the competitors.

In this zone 21 operating office centers are located, which are estimated for potential tenants as equivalent. The total leasable office space in this area is 123 thousand sq m. More than a half of business centers in the area of the competitive environment have occupancy over 90%. Not filled with tenants business center Ligovskij, 6 (bad premises plan) and low occupancy at Nekrasova, 14 due to high rental rents.

Rental rates in the competitive zone are in the range from 900 to 2000 RUB / sq m per month (including VAT and OPEX). Average rental rate are:

i Class A - 1528 RUB / sq m per month (including VAT and OPEX). i Class B – 1294 RUB / sq m per month (including VAT and OPEX).

The vacancy rate in the area of competitive environment is 12%. In absolute terms, the vacant 14.5 thousand sq. m:

i Class A – 9% (6.9 thousand sq. m). High vacancy rates associated with the empty tenant office center have Ligovskij, 6 and multifunctional building Preobrazhenskij dvor due to bad premises plan. i Class B – 15% (1.7 thousand sq. m)/ High vacancy rates associated with the empty tenant office center have Nekrasova, 14 and Vosstanija, 18 Nevskaja Ratusha due to high rental rents.

Table 10. The list of existing competitors in the zone of influence of the property, Q4 2015

Rates,RU B/sq. m The Occup ȶ Leasable p.m. total Vaca ancy on Property Name Address Class area, sq. (includin area, sq. ncy rate, map m g VAT, m % and

OPEX) Nevskaja Ratusha 11, Degtjarnyj lane 1 A 27 182 23 423 - 100% - (building 2) Nevskaja Ratusha 11, Degtjarnyj lane 2 A 18 300 15 234 535 96% 1 974 (building 3) 3 Sinop 22, Sinopskaja Emb A 21 192 12 020 1 732 86% 1 958 Preobrazhenskij 4 A 15 000 11 500 2 854 75% 1 200 dvor 26, Litejnyj Ave 5 Grecheskij 13-15, Ligovskij Ave A 4 500 3 400 - 100% 1750 6 Trubeckoj 9, Paradnaja St A 5 075 3 318 - 100% 1500 7 Orlov 7, Paradnaja St A 4 877 3 184 - 100% 1500 8 Ligovskij, 6 6, Ligovskij Ave A 3 565 1 824 1 823 0% 1 500 Zolotaja 9 B 14 000 7 500 - 100% 900 Shpalernaja 54, Shpalernaja St 10 Goldex 36, Shpalernaja St B 11 009 7 400 - 100% 1400-

Rates,RU B/sq. m The Occup ȶ Leasable p.m. total Vaca ancy on Property Name Address Class area, sq. (includin area, sq. ncy rate, map m g VAT, m % and

OPEX) 1500 11 Nekrasova, 14 14, Nekrasova St B 7 000 5 600 3 985 29% 1300 12 Vosstanija, 18 18, Vosstanija St B 6 350 5 400 2 061 62% 1350 13 Kovenskij, 5 5, Kovenskij lane B 6 490 4 868 - 100% 1200 14 Bashkirov 52, Sinopskaja Emb B 4 600 3 800 749 80% 1100 15 B&D 50, Sinopskaja Emb B 3 500 2 800 611 78% 1 291 16 NRK 3, Kaluzhskij lane B 3 800 2 700 - 100% 1500 17 Kacus 8, Tverskaja St B 3 576 2 682 70 97% 1350 18 Chajkovskogo, 44 44, Chajkovskogo St B 2 373 1 898 89 95% 1300 13, Novgorodskaja 19 B 2 551 1 855 - 100% 900 Novgorodskaja,13 Ave 68-70, Sinopskaja 20 B 1 584 1 584 - 100% - Sinopskaja 68-70 Emb 21 Moiseenko 24 24, Moiseenko Ave B 1 512 1 210 - 100% -

Source: Knight Frank St Petersburg, 2016

Office centers in the zone of the competitive environment are presented in the map below.

Map 3. The existing competitors in the zone of influence

Source: Knight Frank St Petersburg, 2016

Currently being built business centers in the environment area is not competitive.

Project recommendations

Based on the market researches and competitive environment analysis for the Properties (Paradny Kvartal BC 11 and Paradny Kvartal Phase 5, bldgs. 17, 18) within the portfolio:

i The most probable rental rate is – 1,100 RUB/sq. m p.m. (including VAT, and OPEX). This rental rate considers the absence of conditioning and finishing in the buildings.

i Installing central air conditioning and interior finishing mar increase rental rate up to 1,500 RUB/sq. m p.m. (including VAT, and OPEX).

These rental rates consider buildings’ quality, location and transport accessibility.

Office market overview of Moscow

Key indicators

Key indicators. Dynamics* Class A Class B Total stock, thousand sq m 15,227

including, thousand sq m 3,712 11,515

Delivered in Q1-Q3 2015, thousand sq m 464 including, thousand sq m 296 168 25.5 17.2 Vacancy rate, % (-4.1 p. p) (-0.1 p. p) 506 294 Average weighed asking rental rate**, $/sq m/year (-14.2%) (-6.7%) 26,670 15,452 Average weighed asking rental rate**, rub./sq m/year (-11.5%) (-10.3%) Rental rates range** $/sq m/year 350-1,200 250-650 rub./sq m/year 14,000-45,000 8,000-35,000 Average OPEX rate, rub./sq m/year 4,000-7,500 2,500-4,500 * Compared to Q4 2014

** Excluding operational expenses utility bills and VAT (18%) Source: Knight Frank Research, 2016

Supply

The supply volume of delivered quality office space in Moscow amounted to 15.2 million sq m as for the end of Q3 2015 with 24% accounted for Class A office space.

The decline in demand and limited opportunities to attract available financing led to a marked reduction in development activity: only several projects were announced throughout the year and the estimated delivery dates of facilities already under construction were postponed in most cases. The delivery volume of office space totaled 464 thousand sq m for 9 months of 2015, which is 55% less than the same period last year.

Chart 11. New delivery volume dynamics for Class A and B offices

Source: Knight Frank Research, 2016

The imbalance of supply and demand is illustrative of the current state of the office market: the vacancy rate of Class A offices is 25.5%, while in Class B - 17%. Class A office market experienced a decrease in the vacancy rate within 9 months of 2015: optimization of office space was performed by tenants together with withdrawal from the market of the large office units or whole buildings, which is due to a number of already closed transactions or with the large ones that are currently under negotiation, resulting from asking commercial terms level decline.

Chart 12. Dynamics of delivery, take-up and vacancy rates of Class A and B offices

Source: Knight Frank Research, 2016

If we compare the current market situation with the crisis period of 2008-2009, when the vacancy rate was at record maximum at the end of 2009, it is worth noting that today the volume of vacant space is more than 1.5 times higher in the absolute values than the last crisis level. The total stock of available office space in delivered

Class A and B buildings is 3 million sq m available today for tenants and end-user buyers.

Demand

The net take-up of quality office space fell by almost 60% year-on-year for the period from January to September and amounted to 166 thousand sq m. The activity in the office real estate market over the first 9 months of 2015 was largely due to the high volatility of the Russian national currency. So, in 2015 the first quarter faced the minimum value of the volume of lease and purchase transactions of high-quality office space amid an extremely high degree of uncertainty in the economy. But by the end of the quarter after the stabilization of the ruble the companies returned to negotiation process, resulting in an increase in the volume of transactions in Q2 2015. In turn, Q3 2015 was the most active: the intentions for relocation were announced and lease and purchase transactions of office space were completed, these transactions were the largest ones from the beginning of the year. It shall be emphasized that tenants were actively involved in negotiations on the revision of the lease terms: the share of such transactions increased, reaching a total of 63% of all transactions for the first 9 months of 2015 amid falling rates and weakening ruble from Q4 2014.

The transaction structure in terms of its sector distribution of the companies was influenced by several large transactions of the first three quarters. Adidas leased circa 20 thousand sq m of office space in Krylatsky Hills business park, thus the share of companies of the retail sector increased to 12%, but in the same period of 2014 it was insignificant. The increased share of state authorities in the structure of demand for quality office space is due to the lease of about 20 thousand sq m of office space by the Government of the Moscow region in Orbita business center (phase II).

Map 4. Key office space lease and purchase transactions closed in Q1-Q3 2015

Source: Knight Frank Research, 2016

The share of companies of the financial and banking sectors continue to decline, which was largely influenced by the imposure of sectoral sanctions from 2014 and the credit and financial constraints: the index reached its minimum value of historical significance for the first three quarters - 3% of total transactions.

Chart 13. Tenant mix

Source: Knight Frank Research, 2016

The largest volume of lease and purchase office transactions in the first three quarters of 2015 were located in the facilities located near the Moscow Ring Road (34%) due to three major transactions with the total volume of more than 50 thousand sq m in the office centers of this area. However, companies still have the opportunity to lease an office in more developed areas closer to the center of Moscow on rental rates comparable to the rates in the outer areas.

The companies that leased offices within the Garden Ring were the most active in the renegotiation of commercial terms: its share increased from 30% to 40% for the first 9 months of 2015 compared with the same period of 2014. The companies that had dollar lease agreements paid 30-40% more than the current rental rates, today they are forced to revise the terms of the lease.

Chart 14. Distribution of deals by location

Source: Knight Frank Research, 2016

Commercial terms

The average asking rental rates for quality office space in Moscow were going down over the three quarters of this year. The average rental rates in Class A offices denominated in US dollars dropped below historical lows and reached 506 $/sq m/year and at the offices of the Class B - 294 $/sq m/year, falling by 14% and 7%, respectively, for the first 9 months of 2015.

In the third quarter of the year the weighted average asking rental rates in ruble terms reached the level of 26,670 rub./sq m/year in Class A offices and 15,452 rub./sq m/year in the offices of Class B.

Chart 15. Average asking rental rates dynamics for Class A and B offices denominated in USD

Source: Knight Frank Research, 2016

Chart 16. Average asking rental rates dynamics for Class A and B offices denominated in RUB

Source: Knight Frank Research, 2016

We are now witnessing a situation when the landlords of vacant office space are still trying to reduce the asking rental rates after an active reduction of the asking commercial terms in Q4 2014 – Q1 2015, resulting in a slight correction of the indicator. Therefore, the smallest decline in the weighted average indicator in 2015 was observed in the third quarter: compared with Q2 2015 the rental rates declined by less than 1% in dollar terms in the offices of Class A and by 1.3% in Class B, the decline in ruble terms was about 2% both in the offices of Class A and Class B.

The development of ruble-denominated market which had started at the end of 2014 was continued during Q3 2015. Today a growing number of landlords are willing to sign long-term ruble agreements in contrast to H1 2015, when the terms of exchange rate fixation or exchange rate band were available only for 1-2 year of the lease term.

Forecast

The current year will show a decline of the volume of office space delivered by 56% after the record high value of 2014 over the last 5 years. Last year's forecasts of the volume of office space, scheduled to be commissioned before the end of 2015 were at the level of 1 million sq m, but according to the adjusted plans of developers the volume of new space to be delivered will be 620 thousand sq m.

The implementation of faciliites under design stage or at the initial construction stage was rescheduled in 2014- 2015. Thus, we expect that the delivery volume of Class A and B offices in 2016 will be at the level of 2015 and will amount to 600-650 thousand sq m.

In contrast to the 2008-2009 crisis the country's economy and, consequently, the office real estate market expects a lengthy recovery period. According to the conservative forecast scenario of the Ministry of Economic Development the Russian economy will demonstrate growth not earlier than in 2017. The volatility in the oil markets and an unfavorable geopolitical background will continue to contribute to the instability of the ruble. However, the market has adapted to changing conditions: we do not expect a substantial reduction of asking rental rates in the current environment and the decrease of the vacancy rate towards the end of 2016 is

possible amid the reduction of new supply. We believe that the market activity will be motivated by a desire of the tenants to optimize the lease terms and upgrade the class of the leased premises.

Table 11. Moscow submarket data. Key indicators

Source: Knight Frank Research, 2016

Rival projects in the site immediate neighborhood

Table 12. The list of existing competitors in the zone of influence of the property located at 16, Tverskoy bulvar, Moscow

Name Comparable 1 Comparable 2 Comparable 3 Comparable 4 Comparable 5

Picture

18, Staropimenovskiy bld. 4, 32, Dmitrovka street, 17, Chistoprudniy bulvar, 20, Sadovaya-Kudrinskaya Location 9, Tverskaya street, Moscow pereulok, Moscow Moscow Moscow street, Moscow

http://realty.dmir.ru/sale/ofis- http://realty.dmir.ru/sale/ofis- Source of http://www.cian.ru/sale/comm http://www.slrealty.ru/comme http://www.cian.ru/sale/comm moskva-staropimenovskiy- moskva-bolshaya-dmitrovka- information ercial/14025557/ rce/sale/osz/cao/lot10251/ ercial/13882892/ pereulok-110118320/ ulica-114212936/

Asking price, rubles, incl. 1,934,250,000 1,500,000,000 1,650,000,000 2,585,000,000 2,158,550,460 VAT Asking price, rubles per sq 249,375 265,027 324,995 314,630 317,434 m, incl. VAT

Table 13. The list of existing competitors in the zone of influence of the property located at 22, Avtozavodskaya street, Moscow

Name Comparable 1 Comparable 2 Comparable 3

Picture

Location bld. 2, 16, Avtozavodskaya street, Moscow bld. 1, 5, 2nd Paveletskiy proezd, Moscow bld. 1, 21, Avozavodskaya street, Moscow Source of http://www.cian.ru/sale/commercial/13945447/ http://www.cian.ru/sale/commercial/6538752/ http://www.cian.ru/sale/commercial/6540678/ information Asking price, rubles, incl. 396,952,000 965,000,000 1,193,200,000 VAT Asking price, rubles per sq 164,779 193,000 200,000 m, incl. VAT Land plot, ares 0,209778 0,6477 0,5321

Table 14. The list of existing competitors in the zone of influence of the property located at 16, Davydkovskaya street, Moscow

Name Comparable 1 Comparable 2 Comparable 3 Comparable 4

Picture

bld. 1, 15, Starovolynskaya street, bld. 1, 1, Nezhinskaya street, Location 80, Michurinskiy prospect, Moscow bld. 2, 1, Minskaya street, Moscow Moscow Moscow Source of http://www.cian.ru/sale/commercial/ http://www.cian.ru/sale/commercial/ http://realty.dmir.ru/sale/ofis- http://realty.dmir.ru/sale/ofis- information 5098138/ 8441140/ moskva-minskaya-ulica-112972875/ moskva-minskaya-ulica-112972875/ Asking price, rubles, incl. 260,300,000 346,000,000ȗ. 27,000,000 140,769,090 VAT Asking price, rubles per sq 406,084 380,220 375,000 351,045 m, incl. VAT

Residential market overview of St. Petersburg and Leningradskaya Oblast’

In location description the following concepts and terms are used:

1. The city: the following administrative districts of St.Petersburg included: Admiralteisky, Vasileostrovsky, Vyborgsky, Kalininsky, Kirovsky, Krasnogvardeisky, Krasnoselsky, Moskovsky, Nevsky, Petrogradsky, Primorsky, Frunzensky, Central (Tsentralny). 2. ADS: suburban administrative districts subordinate to St. Petersburg: Kolpinsky, Kronshtadtsky, Kurortny (Resort), Petrodvortsovy, Pushkinsky. 3. Suburbs: settlements of Leningradskaya Oblast’ (LO) adjacent to St. Petersburg city borderline:

Vsevolozhsky: Bugry, Vartemyagi, Vsevolozhsk, Zanevka, Kal’tino, Koltushy, Kudrovo, Luppolovo, Mistolovo, Murino, Novoye Devyatkino, Romanovka, Sverdlova, Sertolovo, Toksovo, Scheglovo, Yukki, Yanino-1, Yanino-2

Gatchinsky: Taitsy Kirovsky: Otradnoye

Lomonosovsky: Gorbunki, Lagolovo, Nizino, Novogorelovo, Novosel’ye, Russko- Vysotskoye, Uzigonty

Tosnensky: Nikol’skoye, Fedorovskoye, Tel’mana

Supply12

Property market is subject to a certain cyclicity connected primarily with the economic situation. Administrative factors affect the market as well. E.g., a rather sharp reduction of housing under construction volumes took place during 2006-2007 due to previous changes in legal base, especially in order of providing land for development and in the costs of housing construction regulation by the government.

Many developers had their projects frozen on 2008 crisis arrival. That has been caused both by the reduced effective demand and by the outflow of credit funds from development. The reduction of demand in high-class segments has forced the developers to aim at customers with less income through projects downgrading and reconception. As a result, conceptual quality of the projects has degraded despite of the supply growth (which became possible due to reduced take-up and real property market general inertness), at exposure time grown up.

The market dynamics was positive in 2011: all residential segments active, transactions with plots of land for housing development have grown in number since 2010. 500 ha for residential developments were sold within the two years, only through tenders held by the city authority; in addition, buildings for demolition or reconstruction were sold, many deals on land plots held freehold completed.

Positive changes in every residential market segment of St. Petersburg and LO were observed in 2012 - 2014. Currently one can speak of stabilized construction volumes within the city borderline, largely due to a reduction of spots for development and construction expanded outside of St. Petersburg populated areas. The market

12 the amount of apartments available to a buyers at the moment

volume of St. Petersburg (not counting ADS) and its suburbs has counted 10.9 mn sq m in 2015 (by GBA13 of residential complexes offered for sale).

Suburban projects take the share of 39%, which is 4.2 mn sq m. The complex development of territories contributed in the considerable increase of residential construction volume, e.g. in such settlements as Kudrovo, Murino, Novoye Devyatkino, Bugry, Koltushy, etc. Construction in these locations has activated in 2012.

Chart 17. General building area of housing under construction in St. Petersburg and its suburbs, thous. sq m

Source: Knight Frank St Petersburg, 2016

At the moment the share of apartments unsold in the residential market takes 48% and 50% in ǧ and ǩ class respectively, 39% in Ǹ class. This share is 33% in the suburbs.

Market structure analysis by class reveals the following pattern: active A-class housing development has enhanced up to 2004, then its volume has stabilized. A drop in supply volume was registered in the market since 2006, within the overall trend of the market transition to new rules of providing plots for construction and of natural decrease in areas for development in the traditionally prestigious locations. It’s worth noting that the elite residential market segment remains very limited, its share in the volume that has oscillated between 9-10%, is now ca. 3%.

Business class share is 15%. Projects of former industrial zones redevelopment or of non-residential buildings reconstruction have essentially contributed in the segment progress. This trend was actual during the recent years, reflected in B-class supply changing structure: growing ‘comfort’ segment, more obtainable by price and differing from the ‘business’ segment by apartment types’ ratio and by other quality parameters.

13 GBA – gross building area

Mass housing market grew up to 2004-2005. Then a period of stagnation came, caused by the new mechanism of land for development portfolio formation having been introduced. 2008 was marked by an active build-up in mass segment construction volumes. Post crisis period is characterized by a visible shift in developers’ activity to suburbs and districts of Leningradskaya Oblast’ adjacent to the city border, due to exhaustion of so-called ‘sealing construction’ within developed blocks, and also to ȇ transition from single-building construction to block development of former industrial areas. At the time being the total area under construction in suburban zones is comparable to that within the city.

A sharp increase in new constructions number in urban sleeping areas, former industrial zones (e.g. Moskovskie Vorota residence, projects at Marshala Blyukhera Ave – or Prospect in local terms) and at the outskirts of existing residential areas (e.g., Lastochkino Gnezdo, Novaya Kamenka, Novoorlovsky, Yuntolovo et al.) is observed since 2013-2014..

The share of C class counted 43% within St. Petersburg and 39% in the suburbs in 2015.

Chart 18. Supply by class, %

Source: Knight Frank St Petersburg, 2016

The housing properties offered for sale totaled 2.86 mn sq m within St. Petersburg and 1.4 mn sq m in the suburbs in 2015.

Chart 19. Dynamics of the residential supply offered for sale by class, thous. sq m

Source: Knight Frank St Petersburg, 2016

The increase in supply was negligible during 2009-2010, the pace of constructions that have already started has slowed, and developers experienced a current liquidity crisis due to extremely low purchasing capacity, especially for projects at early stages of construction. For that reason the supply continued shrinking up to 2012, when several large block-development projects in ǩ and Ǹ classes entered the market. Actively enhancing supply (through new large-scale residential projects mostly of block development commissioned) was observed in the next few years, it finally slowed in 2015. Both the lowing number of available land plots for development, as well as huge stock of available units for sale are the reasons for this. Ca.2.3 mn sq m of residences within the city border and 1.5 mn sq m in the suburbs have entered the market in 2015.

Chart 20. New properties entering the market by class, thous. sq m

Source: Knight Frank St Petersburg, 2016

Project enlargement in parallel with their number reduced is a sharply expressed tendency of modern construction. The ‘seal construction’ is gradually giving way to sufficiently large territorial developments. The trend might be seen in every segment. Severnaya Dolina, Novaya Okhta, Solnechny Gorod (not taking the projects in LO suburban territories) can be considered the largest in mass segment. Tsarskaya Stolitsa, Graf Orlov, Riverside and ‘Leningrad’ projects are among the biggest in B class. Leontyevsky Mys, Privilege and Russky Dom play the same role in elite segment.

Purchasing a unit in a big residential complex is the only way to providing oneself a homogeneous social environment, from a customer’s point of view, which is particularly important for A and B classes, and is gaining popularity in Ǹ segment.

Setl City with its 10% share (due to suburban projects prevailing), LenSpetsSMU and ‘LSR. RE North-West’ taking 6% shares each of the housing under construction total supply, are the market leaders in St. Petersburg and Leningradskaya Oblast’. There are just several developers capable of constructing 5 projects and more simultaneously. The large companies have retained their leadership in the market, and their market share is growing every year. The total share of market leaders has grown by 2% in the period of 2013 - 2015.

Chart 21. Housing under development volume by developers, %

Source: Knight Frank St Petersburg, 2016

Petrogradsky and Central (Tsentralny) districts are the territorial leaders in high-price class new residential development, their share in the volume totals 46%, owing to several large-scale block-development and redevelopment projects situated there.

Chart 22. A and B class residential construction volume by district, sq m

Source: Knight Frank St Petersburg, 2016

Vsevolozhsky district of LO, with its 3.9 mn sq m of residences under construction is the undisputable leader of mass segment by offers’ number. Primorsky and Nevsky districts share the leadership within the city borderline.

Chart 23. Housing under construction volume in C class by district, sq m

Source: Knight Frank St Petersburg, 2016

In the residential market of Saint-Petersburg class A residential properties should be located only in prime locations of the historical city centre (and nowhere else but historical centre). If this requirement is fulfilled, a residential property relates to A class. In the map below we highlight prime residential real estate areas.

Map 5. Prime residential areas

Source: Knight Frank St Petersburg, 2016

Chart 24. Ratios and mean areas of 1-, 2-, 3-, 4-room and multiroom units in model projects, sq m and %

Class ǧ

Class ǩ

Class Ǹ

Class C Suburb

Source: Knight Frank St Petersburg, 2016

Typical ratio of different unit types in B class is represented by 1-room and 2-room flats, taking approximately equal shares of 32%. 3-room units’ percentage in the segment is also big, counting ca. 26%. ǩ class units are more comfortable compared to mass segment, thanks to spacious bedrooms and to auxiliary premises (dressing and storage rooms, etc.).

Principal supply in C class is presented by small single-room units, over 40% in the ratio. The recent trend in mass segment unit-type ratio is observed. 2-room units of modest footage are taking the leading place instead of studios that prevailed previously, due to the basic motive of property acquisition for the purpose of improving living conditions.

Demand

The real property market cyclicity, undergoing recovery, stabilization and decline phases is reflected differently in sales’ structure by property classes. E.g., mass market demonstrates violent swing in volume depending on the cycle phase. Elite segment is relatively constant, which is dependent mostly on concrete attractive offers present in the market. Business class takes the intermediate position between the two above-mentioned segments.

A sharp rise in demand in all segments occurred since the 2nd half of 2013 with the beginning of foreign currencies’ appreciation. The highest buying activity over the past few years was observed in the residential property market against a background of high volatility of the currency in 2014. The customers have begun regarding real estate as virtually the only reliable way of investing.

The demand level in 2015 was high, higher by some indicators, than that of stable 2013. Areas sold in the last year have totaled 42% less compared to the peak figures of 2014.

Chart 25. Demand dynamics by class, thous. sq m

Source: Knight Frank St Petersburg, 2016

Sales show tendencies, general for the market:

i Sales remained at high level not dependent of a project’s characteristics during active growth periods. i A developer should have offered better quality at competitive price to provide a good sales pace during 2009-2010. The pace of projects’ realization has decreased by 2-3 times, compared to the pre- crisis. i Sales volumes have grown significantly in 2011 and reached the 2007 level. i The current oscillation in demand and its volume moderation are caused by supply conditions and by shifting of a noticeable demand towards new low-budget developments in Leningradskaya Oblast’. Area of housing sold in the suburbs totals 42% of the whole St. Petersburg volume of the sold housing. Typical sales’ structure by unit types and their average areas in ǧ, ǩ and Ǹ residential segments, looks as follows.

A class

3-bedroom units take the leading position in the total volume of completed transactions. Due to the fact that improvement of living conditions and move to the appropriate district are the main objectives of luxury apartments purchase, with an increase of the object readiness the number of transactions in favor of a larger number of bedrooms increases.

The most demanded unit size by each unit type within A class is as follows:

i 1 bedroom – 11% – over 57 sq m and more;

i 2 bedroom – 31% - 74-78 sq m and over 103 sq m; i 3 bedroom –37% - 131-140 and over 151 sq m; i 4 bedroom –16% - 170-230 sq m; i 5 bedroom and more – 5% –280-320 sq m. Principal requirements:

1. Location

Petrogradsky (mainly Krestovsky Island) and Central (Tsentralny) districts retain their permanent leadership in territorial preferences of high-class housing buyers. Recently, increased the proportion of requests for luxury housing on Vasilevsky Island. The buyers, for which the district has not played a fundamental role, still exhibited the main interest in objects in Petrogradsky and Tsentralny district.

2. Requirements to apartments:

i Ceiling height 3 m, ideally 3.3 m; i Quality and convenient layouts; i Availability of dressing and storage rooms; i Availability of master bedroom; i The number of bathrooms in each apartment must correspond to the number of bedrooms, plus one guest. 3. Engineering

First of all buyers pay attention to the project quality, and to the materials of which it is erected. Modern engineering solutions are of particular importance – high quality elevators, water purification systems, telecommunication, ventilation and air conditioning systems.

4. Underground parking (over 1.1 parking space per unit). 5. Security systems: video surveillance and access control (fenced area, porches), separate entrances for residents and visitors of built-in premises.

B class

The main demand B class is for 1- and 2-rooms units, which share in sales’ volume totals 70%. 3-room units are also in good demand. Big-size units are demanded only in residential complexes with good views at water, greens and horizon.

i Studios – 5% - over 30 sq m; i 1-room – 35% – 42-52sq m; i 2-room – 33% – 64-78 sq m; i 3- room – 22% – 91-110 sq m; i 4- room – 4% – under 130 and 150-170 sq m; i 5 rooms and more – 1% - 160-200 sq m. Main requirements:

1. Location

Buyers pay attention to the parameters of commercial and social infrastructure, surrounding the residential complex. If there are units with views on water or historical center in the project (at least on the upper floors), the project can be classified in the higher market segment.

2. Requirements to apartments:

i Ceiling height over 2.8 m; i Quality and convenient layouts; i Availability of dressing and storage rooms; i 2 WCs (bathrooms) in large-size units. 3. Engineering

First of all buyers pay attention to the project quality, and to the materials of which it is erected. Utilities’ cost is of particular importance. Nevertheless, high-quality elevators, water purification systems and advanced telecommunications attract customers.

4. Underground parking (0.5 – 0.7 of parking places per unit).

Buyers of business class are less demanding to car parks compared to buyers of luxury housing. Typically, parking is in demand in the absence or limited space for free parking on the local area. Big footage units buyers are also more likely to buy parking places in business class residences.

5. Security systems: video surveillance and access control (fenced area, porches), separate entrances for residents and visitors of built-in premises.

C class (C class in the suburbs included)

Studios and 1-room units are sold faster in Ǹ class than other unit types. Such units’ share in the total sales volume may reach 80% in suburban locations. 2- ȏ 3-room units are sold at much lower pace. 4+-rooms unit is purchased in 1 deal per 100 only. This is largely due to the offer parameters in projects under construction.

The most popular unit size by each unit type within C class is as follows:

i Studios – 25% - under 29 sq m; i 1-room – 41% – 33-41 sq m; i 2- room – 25% – 53-63 sq m; i 3- room – 8% – 75-80 sq m; i 4- room – 1% – over 130 sq m. Main requirements:

1. Location

Ǹ class residential complexes are represented in all city districts, concentrating at periphery and in the suburbs (Shushary, Murino, Devyatkino, Kudrovo et al.).

2. Requirements to apartments:

i Ceiling height over 2.6 m;

i Convenient layouts; i Availability of basic finishing, lately gaining a growing popularity. 3. Engineering Over the past few years, requirements to engineering in C class buildings remained virtually unchanged. However, the developers in order to increase the attractiveness of their projects, have increasingly begun to use self-contained heating systems and water purification systems. 4. Car parks: most residential complexes are provided with onsite parking. In case the project is provided with underground parking, the availability of parking spaces must be at least one place per 3-5 apartments. 5. Security systems: preferably a fenced area, access control to the residential complex and to the parking.

Factors affecting demand:

External factors

Despite the rise in prices, there is an increase in demand in the housing market in recent years. Among the major factors of demand increase we highlight the following:

i Change of situation in financial market; i Available mortgages (reduced requirements to borrowers, reducing mortgage rates). i Subsidized mortgage. 1. Change of situation in financial market Modern trends in the currency market show that keeping money in rubles becomes unprofitable. At the same time, significant fluctuations in the official exchange rate against the Russian ruble make investing in foreign currency risky. Therefore, customers are increasingly looking at real estate purchase as an alternative source of capital preservation and growth. To Knight Frank research, in 2014-2015 the share of investment deals has grown and remained at 10-11%, while typical investment purchases fraction usually does not exceed 5%.

2. Available mortgages According to the Agency for Housing Mortgage Lending (AHML), mortgage interest rates have shown steady growth since 2011 in St. Petersburg. The most significant increase in this index has occurred in the Ist quarter of 2012. By the end of 2012 the rates returned to pre-crisis levels. The mortgage loans volume increased by 1.3 times during the first half of 2014, compared to the same period of 2013 By the end of 2014 there was a significant adjustment of interest rates, which was reflected in the reduction of mortgage lending. Realization of the state program of subsidizing interest rates on mortgage loans to buy housing in new buildings has had a significant support for the mortgage market, under which the borrower interest rate for the loan should not exceed 12%. As a result, lowered interest rates for mortgage loans within this program vary between 9.9% – 11.9% (9.9% – 10.9% under AHML standards and 11.4% – 11.9% according to the most active market participants).

To AHML official data, in 9 months of 2015 461.2 thous. mortgage loans totaling 761.8 billion rubles were issued, which is 38% lower in value and 35% lower in number than in Jan-Sept 2014. Recall that in the first 9 months of 2009 the rate of decline in the mortgage market were twice as high (-83% compared to 9 months of 2008).

The program of subsidizing mortgage loan interest rate has been prolonged until the end of 2016. Yet it is the subsidizing that has allowed cushioning the fall in demand in the real estate market.

Internal factors

Ways of stimulating demand most popular among developers of residential market are as follows:

i Payment by installments; i Postponed payment (e.g. a client pays a certain share of a unit value as an initial fee, the retainer is paid the object putting into operation); i Discounts for the lump sum payment if the customer pays 100% of the apartment cost; i Purchase of a unit in a new constructed house in exchange of existing apartment (developer sells real estate of a client, and the amount received is considered as payment for a new apartment); i Various mortgage programs in partner banks; i High quality finishing; i Parking space as a gift (hidden inclusion of parking space price in the apartment price). The list of different promotions and offers is quite wide and depends on the ideas and capabilities of developers. However, when deciding whether to purchase an apartment, the buyer pays attention to the developer’s reputation and to his completed projects. It is worth noting that customers become more demanding and the legal situation is improving in their favor. Developers have to receive necessary permissions for construction and must sell apartments in accordance with the Federal Law No. 214.

Conclusions

Currently one can state that the demand is at high levels in all segments. In general, the number of units sold during three quarters of 2015 is 26% higher than in 2013, though figures are below the peak of sales in 2014.

The decrease of sales volumes within St. Petersburg city is partly due to the demand shifting to suburban territories, where 42% of all units are sold. High demand in St. Petersburg suburbs is explained, at least in part, by more affordable prices. Thus the mean price of suburban residences is averagely 30% lower than of the analogous offers in the city.

In business segment the main demand is for one-bedroom and two-bedroom apartments of small areas and convenient layouts. The proportion of deals with 3-bedroom units is also high, since the improvement of living conditions is the principal motive to purchase an apartment.

In mass segment 80% of transactions accounted for a small one-bedroom apartments and studios.

Demand for affordable housing is partly due to a number of economic and political events, currency fluctuations, which led to an increase in the investment attractiveness of housing as the most reliable tool for investment and saving funds.

Commercial Terms

High demand for housing under construction in the pre-crisis years served as a prerequisite for raising prices (at the mean rate of 25-40% p.a.). Most of all, prices rose in 2006 (almost doubled). The number of people capable

of buying property at the new prices, fell sharply. Due to the unfavorable situation with sales, especially at the early stages of construction, in late 2008 - early 2009 developers have been forced to cut asking prices. Many companies had to offer discounts in order to stimulate demand.

Effective demand is limited and although provides higher sales at times of market growth, it is not able to sustain them for a long period. However, at the moment one can observe a tendency to active price growth in all residential property segments, which lasts from 2010. Various options of commercial conditions, banks intensification in the field of mortgage loans also have a positive impact on price dynamics.

Change in supply structure has a substantial impact on the elite market price dynamics, apart from economic conditions. Sharp fluctuations of mean price may occur in the periods of high-price segment objects entering / quitting the market, e.g. in mid-2014, when sales were suspended in one of the most expensive objects at that time.

Recent price dynamics in ǩ and Ǹ class is mainly positive stable without sharp fluctuations. The price in suburban areas is a distinctive feature, it has shown zero development, remaining unchanged during 2015.

Average prices in houses under construction in 2015 were as follows:

i in elite class - 330.6 thous. rub./sq m i in B class – 156.7 thous. rub./sq m i in C class – 96.3 thous. rub./sq m i in suburban C class – 65.2 thous. rub/sq m Chart 26. Average prices dynamics by class, rub./sq m

Source: Knight Frank St Petersburg, 2016

Price factor is determinant in mass market, strongly correlating with sales. This explains the numerous promotions and discounts from developers during the crisis or stagnation in the market. In addition, the supply

specificity, laying in exposing of large-scale residential complexes, determines the need for developers to maintain a high rate of apartments’ sales that also provides a moderate price dynamics.

Price fluctuations in business-class residential market are comparable mixedwith those in mass segment. However, unlike the C class, where the high level of competition is a major deterrent to the significant rise in prices, the business class has a great potential for pricing adjustments due to the variety of options and parameters of objects specific to high class housing (e.g. modern engineering, exclusive design and finishing of common areas et al.). At the same time, price fluctuations in C class correlate strongly with sales. This relationship is also present in business class, but to a lesser extent. There are examples of successful projects in B class, where the price relatively high for this class has no significant effect on the rate of sales. At the same time, business-class housing is more than other classes subject to risks during periods of general downturn in demand. This is due to typical buyer of business class housing, which is a "grown up" (in terms of career and income) mass market buyer. In times of crisis buyers’ demand shifts towards more affordable C class housing (because of falling income). As a result, many developers are forced to organize numerous promotions, discounts, which lower housing prices in this class more than in other segments.

Chart 27. Average price change by class, %

Source: Knight Frank St Petersburg, 2016

Typical payment terms in the primary market

Payment by installments. Sales practice shows that the installment has a positive effect on the pace of project implementation. With a small down payment, no payment for credit and flexible payment system, the range of potential buyers, and accordingly, sales increase sharply.

Terms and conditions for installment payments, provided by large developers, are:

i down payment – starting from 10%, i interest rate – 0%, i time – until the end of construction. It is worth noting that lately new installment payment systems profitable for the buyer and alternative to mortgage were spreading. The widest variety of such programs one can encounter in mass segment housing. Among the most interesting are such as: a down payment of 20%, the remaining amount - after the house completion (on average, 1.5 years after the first payment), without incurring any interest14.

Mortgage.

Currently standard terms are as follows:

i down payment – starting from 20%, i interest rate – ca. 11,5% (rub.) i time – up to 30 years. A loan in the amount of ca. 2 mn rub. for a term of 10 years is the most popular mortgage request, according to market participants.

The average value of the ruble mortgage in January-September 2015 amounted to 1.65 mn rub. (1.73 mn rub. in 2014, 2.1 mn rub. in 2013). This trend, combined with macroeconomic indicators, give the reason to believe that the loan amount will continue to shrink.

One-time payment. With this form of payment a system of discounts up to 10-15% of the value of the property is applied, at 100% payment within a month.

Conclusions

The price situation in the housing market is characterized by strong growth in all segments. Current average prices in national currency have reached pre-crisis levels in the mass market segment and in business class and elite – have even surpassed them. At the same time in C class price growth is hampered by high competition, while B class has a great potential for pricing adjustments due to the variety of options and parameters of objects.

Pricing in elite segment is largely due to national currency fluctuations in recent years. Materials of foreign production are used in construction of most elite projects. Growth in construction costs is forcing developers to make adjustments in pricing of their residential complexes.

14 Payment by installments is interest free only for the interest is not stated in a sales contract. In fact price differs in case of 100% one-time payment compared to payment by installments. In C class, e.g. the mean difference between the two prices is 20% (up to 30%), i.e. payment by installments is higher.

Professional opinion regarding market development perspectives

Active reduction of available spots for development in the city currently is forcing developers to go beyond the city limits and explore the suburban area. Besides that development of former industrial areas is gaining increasing popularity, and the number of announced projects of redevelopment throughout the city grows.

Due to the big scale of new residential projects the lack of social infrastructure availability which one can already observe, will only get worse further. Therefore, small-scale projects within the populated St. Petersburg areas will be in great demand and are to provide good growth in sales.

Against the backdrop of expanding the housing construction beyond St. Petersburg, interesting offers appearing in the city, in an area with social and commercial infrastructure already formed, within walking distance from a metro station, will be in high demand among potential buyers. However, a project should possess a specific set of quality parameters for successful implementation – thought-out ratio of different apartment types and areas, comfortable planning solutions, modern engineering of the house, rational infrastructure.

Rival projects in the immediate neighborhood (residential premises or flats). Analysis of competitive environment changing perspectives

A number of analyzed projects have a single competitive area, so for the purposes of this study they were grouped into the following competitive locations:

Table 15. Groups of the competitive locations

Location ȶ LSR Object Smolny Park Radischeva 39 Kovensky 5 I. Russky Dom Nevsky 1 Fontanki 3 Nevsky 68 Verona II. Dom na Dvoryanskoy Osobnyak Truvorova III. Europa City IV. Tri Vetra V. Bogemiya VI. Moskovskoe shosse 3 Shuvalovskiy VII. Zapovednaya 51 Sofiya VIII. VIVA Kvartet IX. Yuzhnaya Aquatoriya X. Kalina-park XI. Tsivilizatsiya XII. Novaya Okhta

Location ȶ LSR Object Ruch'i Tsvetnoi Gorod XIII. Rzhevka

Source: Knight Frank St Petersburg, 2016

Location I. Smolny Park, Radischeva 39, Kovensky 5, Russky Dom, Nevsky 1, Fontanki 3, Nevsky 68

Elite residential objects (of ǧ and ǧ+ segments) located in prestigious zones of Central and Admiralteisky districts were chosen as competing.

Map 6. The map of competition

Source: Knight Frank St Petersburg, 2016

There are 7 elite residences within the location, 2 of which are of aparthotel format (Gollandiya and Monferran). Nearly all the rival projects are already completed and buildings commissioned. Gollandiya is at the final stage of construction, commissioning planned for the 2nd quarter of 2016.

Table 16. Characteristics of the competitive projects

Non- Sellable Commissioni Residence Address Developer Class residenti area, Unit No. ng al status sq m elite Hovard Palace 19 Zagorodny Ave Hovard - commissioned 16,617 73 ǧ+ 10 B. Konyushennay elite B. Konyushennaya Private person - commissioned 2,413 12 a St., 10 ǧ+ St. 15 Admiralteisky / RGS Gollandiya elite ǧ + Q2 2016 7,376 102 40 Galernaya Nedvizhimost’

Non- Sellable Commissioni Residence Address Developer Class residenti area, Unit No. ng al status sq m Dvortsovaya 15 Stremyannaya Soyuzgenstroy elite ǧ - commissioned 3,824 32 Sloboda 5 elite Monferran Konnogvardeisky Inteko + commissioned 11,806 96 ǧ+ Bld. 11-15 Smolny Smolny Prospekt (historical YIT elite ǧ - commissioned 4,641 33 buildings) Osobnyak elite Kusheleva- 24 Kutuzova Dar - commissioned 6,310 29 ǧ+ Bezborodko Total: 52,987 377

Source: Knight Frank St Petersburg, 2016

Hovard Palace at 19 Zagorodny Ave, despite the peculiarities of its location, the lack of view characteristics in the apartments and common non-homogeneous environment, is a potential competitor, due to a variety of infrastructure and services for the future tenants. The residence has been commissioned in Q3 2015, but not yet completely ready. Works on common area finishing are still on in the complex.

Osobnyak Kusheleva-Bezborodko is a club house comprising 29 apartments, among which are several ones in the historic part of the building (at the façade along Kutuzova Emb.; in these units historical interiors will be restored). There are loft apartments with private car lifts, rising directly to the apartment, apartments with open terraces, winter gardens, panoramic windows and an apartment-townhouse with a separate entrance and a two-tiers-of-windows living room. The infrastructure of the house provides a wellness-center with a swimming pool, a lounge, a lobby, landscaped internal courtyards with small architectural forms, heated parking. The house has been commissioned in September 2015.

Monferran and Dvortsovaya Sloboda residential complexes were put into exploitation in 2013, at that ca. 50% of the units remain unsold at the time being.

Historical houses included in Smolny Prospekt and Gollandiya residential complexes are characterized by mostly inconvenient layouts due to the need to preserve the historic load-bearing structures of the buildings.

The house at 10 B. Konyushennaya Street is a reconstruction of a residential building and has a limited number of apartments (last apartments remain on sale). Since this house does not compete seriously with the analyzed projects, it should be considered optionally.

Table 17. Perspective projects

Non-residential Sellable Project Address Developer status area, sq m - 6 Aptekarsky Lane Intef + 2,982 - 32 Voskresenskaya Emb. BTK Development - 10,069 Opera Palace 4 Glinki St. Megahaus + 10,000 1 Marsovo Pole ǧ Marsovo pole Plaza Lotus Group + 22,000 Art View House 102 Moika river Emb. Okhta Group - 3,809 Chaikovsky 1/9 Mokhovaya St. Stanley + 5,100

Non-residential Sellable Project Address Developer status area, sq m Novaya Novaya Gollandiya Island (103 Novaya Gollandiya + 9,666 Gollandiya Moika riverEmb.) Development - 2 Potemkinskaya St. Petersburg Bank + 25,000 - Tavrichesky/ Orlovskaya Confidential + 7,000 Grossmeister 51 Shpalernaya St. Scavery - 24,632 - 56 Shpalernaya Vodokanal +/- 105,000 Total: 222,276

Source: Knight Frank St Petersburg, 2016

Among the future projects 11 complexes of 222.3 thous. sq m total living area are declared in the competitive zone; 63% of the projects will be presented in the aparthotel format. Art View House club house at 102 Moika river Emb. which is to begin sales in February 2016, and Opera Palace, which has begun active construction in 2015.

About half of the projects are at the stage of sale or co-investor search, so the prospect of their realization is stretched in time.

Table 18. Average prices and rate of sales of the competitive projects

Aver. price Aver. rate of Aver. price Aver. price, of Residence Address Finishing sales, 1 pkg sp., rub./sq m commerc., pcs/quarter mn rub. rub./sq m 19 Zagorodny Hovard Palace full 597,667 3.2 3.12 not on sale Ave 10 10 no B. Konyushennaya B. Konyushennaya none 371,630 0.6 no car park commerc. St. St. areas 15 Admiralteisky/ half- Gollandiya 336,141 4 not on sale not on sale 40 Galernaya finished Dvortsovaya Stremyannaya 15 none 270,222 1.3 6 n/a Sloboda 5 no Monferran Konnogvardeisky none 403,118 6 3.35 commerc. bld. areas 11-15 Smolny half- Smolny Prospekt 267,108 1.5 2.06 149,265 (historical bldgs.) finished Osobnyak Kusheleva- 24 Kutuzova mixed 477,570 2.0 3.4 190,00015 Bezborodko

Source: Knight Frank St Petersburg, 2016

The average price level in the competitive zone is in the range of 270 – 597 thous. rub./sq m not regarding a project phase.

15 Data of Q1 2016, the commercial areas in this property have not been on sale at the valuation date.

The differentiation of prices in the competitive zone objects is largely due to the pricing policy of each developer, as well as to a number of each object's specific features. E.g., relatively low price level of the house at 10 B. Konyushennaya St. is connected with the long period of the project (since 2012)

Hovard Palace residential complex appears to be the most expensive property in the competitive zone, despite of the lack either of exclusive location or of any view characteristics in apartments. The complex entered the market in the "closed" format of sales, the price of apartments made public only after checking the potential buyer. Developer focused on the status of the project as the exclusive, closed club house. Also, the higher price level is due to apartments fully finished and partially furnished.

The average price of competitive properties in the zone is 389 thous. rub./ sq m.

Terms of realization of elite residential complexes in analyzed locations vary due to a variety of the project's parameters. Objects having any deficiencies (in layouts, lack of parking et al.), are sold slowly. On average, the rate of sales of elite objects in the competitive area is 3 apartments quarterly.

Location II. Verona, Dom na Dvoryanskoy, Osobnyak Truvorova

Objects analyzed compete with elite residential complexes of elite A and elite A+ segments located in the same territory of Petrogradsky district, Petrogradsky, Krestovsky and Kamenny islands included.

Major part of competitors is situated in northern part of Petrogradsky district, along Malaya Nevka river and on Krestovsky island. Petrogradsky district share is maximal in the total supply and amounting 50%.

Map 7. The map of competition

Source: Knight Frank St Petersburg, 2016

Elite residences are not offered for sale in south-eastern part of Petrogradskaya storona, where the analyzed Dom na Dvoryanskoy is located. All the residential complexes currently under construction belong to B class and aim majorly at more mass demand.

The elite residential complexes on sale in the competitive zone are 10, 4 of them commissioned already, 2 planned to be commissioned in Q1 2016 and 4 to be commissioned during 2017.

Table 19. The competitive projects’ characteristics

Commissionin Sellable Residence Address Developer Class Unit No. g area, sq m Brilliant House 6a Dynamo Ave FORTGROUP elite ǧ+ commissioned 6,402 35 23-25 Diadema Club Konstantinovsky Kredo elite ǧ+ commissioned 14,484 73 House Ave Dom na 18 Pesochnaya York elite ǧ Q1 2016 5,891 59 Pesochnoy Emb. Imperatorsky 92 Martynova Morskoy Yacht Club elite ǧ+ Q3 2017 14,746 52 Yacht Club Emb. 12 Krestovsky Krestovsky 12 Etika Development elite ǧ commissioned 3,333 25 Ave Krestovsky De GPBI Development 44 Dynamo Ave elite ǧ Q3 2017 42,756 359 Luxe Severo-Zapada 45 Leontyevsky Mys Zhdanovskaya Leontyevsky Mys elite ǧ Q1 2016 57,226 392 St. Privilegiya 8 Vyazovaya St. Evrostroy elite ǧ Q1 2017 49,416 334 7A the 1st Rezidentsia na Berezovaya Ekoinvest elite ǧ+ Q1 2017 3,437 18 Kamennom Alley 64 Kamennoostrov Stroikomplekt elite ǧ commissioned 9,737 65

sky Ave Total: 207,428 1,412

Source: Knight Frank St Petersburg, 2016

The total living area of the properties on sale amounts 207.4 thous. sqm (1.4 thous. units). The three competitors, i.e. Leontyevsky Mys, Krestovsky De Luxe and Privilegiya are the block-development projects. 67% of offers for sale in the competitive location are concentrated within these projects.

Table 20. Perspective projects

Non- Sellable area, Project Address Developer residential sq m status Admirala Lazareva Emb. / Malaya Trinity Place GHP Group + 27,000 Zelenina St. - Bychy island Yavara-Neva + 7,000 Meltzer Hall 27 Karpovki Emb. NCC - 15,813 - Kamenny island Confidential + 4,000 - 9 Petrovsky Ave Leontyevsky Mys + 10,000 - 2 Petrovsky Ave Renova + 25,592 - Petrovsky island Confidential + 30,000 - 8 Esperova St. Yard + 5,000 - 16/23 Esperova St. Confidential - 7,000

Non- Sellable area, Project Address Developer residential sq m status Total: 131,405

Source: Knight Frank St Petersburg, 2016

9 perspective projects occupying in total 131.4 thous. sq m, 82% of which to be offered in aparthotel format, are declared in the location. In the near future the sale of the luxury residential complex by Renova company on Petrovsky Island is expected to start. The project with luxury apartments on Bychy Island was commissioned in the III quarter of 2015, but is not yet on open sale. So far the developer plans to implement the project in a "closed sales" format. Yet two other projects of the location are at an active projecting phase. Sales start of the remaining projects is expected after 2019-2020.

Table 21. Average price and average rate of sales of the competitive projects

Aver. rate of Aver. price Aver. price, Residence Address Finishing sales, pcs/ 1 pkg sp., mn rub./sq m quarter rub. Brilliant House 6a Dynamo Ave none 420,333 2.5 3 Diadema Club 23-25 Konstantinovsky none 451,696 2 not on sale House Ave Dom na Pesochnoy 18 Pesochnaya Emb. none 214,530 2.5 not on sale Imperatorsky Yacht 92 Martynova Emb. full 893,038 2.75 8 Club Krestovsky 12 Krestovsky 12 none 333,780 2 not on sale Krestovsky De Luxe 44 Dynamo Ave none 258,841 20 not on sale Leontyevsky Mys 45 Zhdanovskaya St. none 400,753 15 2.53 Privilegiya 8 Vyazovaya St. none 321,548 18.4 3.00 Rezidentsia na 7A 1st Berezovaya Alley mixed 1,254,000 0 not on sale Kamennom 64 Kamennoostrovsky none 316,561 1 3.5 Ave

Source: Knight Frank St Petersburg, 2016

Average price interval in the competitive location objects varies from 214.5 thous. rub./sq m to 1.25 mn rub./sq m. The highest prices are recorded in Rezidentsia na Kamennom (few-apartment) club house and in Imperatorsky Yacht Club elite aparthotel. At that there have been no sales in the first object, and one of the buildings in the second object was bought by a large company representatives.

The lowest price in the competitive location is recorded in ‘Dom na Pesochnoy’ complex, its 2nd phase located at 1-3 Grota St. The ratio of unit types and areas in this complex was changed in the sales process, as well as the commissioning term that has been shifted several times.

The average price in the zone is 486.5 thous. rub./ sq m. At the same time the indicator for relevant competitive properties is 30% lower and amounts 339.7 thous. rub./ sq m.

“Krestovsky De Luxe” and “Privilegiya” complexes are the most successful in the location regarding the sales volume. The two demonstrate high demand levels in conditions of rational pricing, thoughtful planning concepts and rapid pace of construction. Average quarterly sales rate for the two complexes is between 18-20

units. A bit lower sales rate of 15 units per quarter is recorded in Leontyevsky Mys residential complex. For all other projects of the competitive zone average sales rate is about 3 apartments per quarter.

Location III. Europa City

The B class residential complexes compete with the property under analysis in Petrogradsky district. Aparthotels of investment orientation are not considered in the analysis - such objects are rarely able to compete with new housing projects because of the specific planning solutions, as well as because of other range of customers.

Map 8. The map of competition

Source: Knight Frank St Petersburg, 2016

Skandi Klubb Residence, being erected by NCC, is the closest competitor of the analyzed Project. The first two phases of the project are currently on sale.

Intense construction goes on in south-eastern part of Petrogradsky island (Posadsky Okrug municipal unit), and in western part of the island, limited by Bolshaya Zelenina St., Bolshoy Ave of Petrogradskaya Storona and by Petrovsky island.

Petrogradsky district fraction takes 16% of general B class supply, which is the second after that of Central district.

Table 22. Characteristics of the competitive projects

Phase/ Sellable Commissio Residence Address building Developer Class area, Unit No. ning no. sq m 2 Remeslennaya Ostrov Stroitelny Trest comfort Q3 2017 36,156 404 St. 3 Ushakovskaya commissio Riverside k. ǧ, Ǩ, ǩ Setl City business 51,021 572 Emb. ned 3 Ushakovskaya Riverside k. Ǫ.4, Ǫ.5 Setl City business Q1 2016 23,719 313 Emb. 16 Aptekarsky Skandi Klubb k.11-18 NCC comfort Q2 2016 21,471 348 Ave 16 Aptekarsky Skandi Klubb k.21-28 NCC comfort Q1 2018 19,082 294 Ave 1 Malaya Baltiyskaya Aristokrat Zelenina /22ǧ business Q1 2016 17,204 208 Kommertsiya Korpusnaya St. Konnolakhtinsk Atlant 36A Mira St. comfort Q1 2017 4,075 57 y 55 10 Dom na Zhdanovskaya Ekoinvest comfort Q1 2016 4,899 74 Zhdanovke St. Mirozdanie 37 Mira St. Setl City business Q4 2016 13,769 191

16A Pionerskaya BFA- commissio Na Grebetskoy business 13,534 177 St. Development ned 8 Ofitsersky Ofitsersky PSK Ofitsersky comfort Q2 2016 7,571 89 Lane Petrovskaya 20 Petrovsky Severny Gorod comfort Q2 2018 15,389 249 Riviera Ave Petrogradets 8 L.Tolstogo St. Stroyimpul’s business Q1 2016 4,232 40

50 Pionerskaya Premier Palas k. 2-2, 3-2 L1 business Q3 2016 12,078 89 St. 50 Pionerskaya Premier Palas k. 4-2, 4-3 L1 business Q4 2017 22,391 278 St. 12 Bolshaya commissio Sobranie RBI business 21,560 264 Posadskaya St. ned Ofitsersky Lane / Spasskaya SPb commissio Krasnogo business 1,936 18 Bashnya Rekonstruktsiya ned Kursanta St. 16 Chapayeva commissio YIT comfort 9,308 130 St. ned Total: 299,395 3,795

Source: Knight Frank St Petersburg, 2016

15 residential objects of B class currently under construction, totaling 299.4 sq m of living area(3.8 thous. units), are located in the competitive zone.

The major part of competitive objects in the location (57%) is commissioned or declared to be commissioned by the end of 2016, 28% will be put in exploitation in 2017.

Table 23. Perspective projects

Non- Sellable area, Project Address Developer residential sq m status Skandi Klubb, 3 phase 16 Aptekarsky Ave NCC - 19,299 Marco Polo 34 Bolshaya Zelenina St. Petropol’ - 7,360 - 24 Bolshaya Zelenina St. Stroitelny Trest + 5,000 Bolshaya Raznochinnaya - - Confidential 3,423 St. Spasskaya Bashnya, 2nd - 9 Ofitsersky Lane SPb Rekonstruktsiya 1,400 phase - Petrovsky Setl City - 54,042 - ȇ Barochnaya St. Bazis - 22,706 - 53 Pionerskaya St. Baltiyskaya Kommertsiya - 11,380 - 3 Petrovskaya Kosa Lenstroimaterialy - 21,210 - Petrovskaya Kosa Nevsky Capital Partners - 300,000 - Petrovsky island Confidential - 30,216 - 9-11 Petrovsky Ave Hovard SPb - 145,530 - 17 Remeslennaya St. Hovard SPb +/- 136,600 - 28 Chapayeva St. Elite Tower - 4,196 Total: 762,362

Source: Knight Frank St Petersburg, 2016

14 perspective projects occupying in total 762.4 thous. sq mare declared in the location. Over 90% of the declared area belongs to Petrovsky island newly formed location. Part of the projects’ units is on sale, active projecting is on for the other part.

One can expect a start of sale in 24 and 34 B. Zelenina St. and in 28 Chapayeva St. in the nearest future.

Table 24. Average price, average rate of sales of the competitive projects

Aver. rate Phase / Aver. Aver. price Aver. price of sales, Residence Address buildin Finishing price, 1 pkg sp., of commerc., pcs/ g no. rub./sq m mn rub. rub./sq m quarter 2 Remeslennaya Ostrov none 159,000 24.5 n/a n/a St. Skandi Klubb 16 Aptekarsky Ave k.11-18 half-finished 149,346 38.0 1.61 n/a Skandi Klubb 16 Aptekarsky Ave k.21-28 half-finished 159,250 sales start not on sale not on sale 1 Aristokrat M. Zelenina /22ǧ half-finished 164,763 34 not on sale 150,000

Korpusnaya St. Atlant 36A Mira St. none 152,853 n/a not on sale not on sale

Dom na 10 Zhdanovskaya none 134,793 5 n/a n/a Zhdanovke St. Mirozdanie 37 Mira St. half-finished 177,642 28.2 2.50 228 000

16A Pionerskaya Na Grebetskoy half-finished 140,668 17.0 1.90 not on sale St. Ofitsersky 8 Ofitsersky Lane none 139,664 6.0 1.76 not on sale

Aver. rate Phase / Aver. Aver. price Aver. price of sales, Residence Address buildin Finishing price, 1 pkg sp., of commerc., pcs/ g no. rub./sq m mn rub. rub./sq m quarter Petrovskaya 20 Petrovsky Ave none 160,050 59.0 not on sale not on sale Riviera Petrogradets 8 L.Tolstogo St. half-finished 177,282 5.5 not on sale 154,996

k. 2-2, Premier Palas 50 Pionerskaya St. none 237,943 2.0 1.23 137,650 3-2 k. 4-2, Premier Palas 50 Pionerskaya St. none 138,286 6.0 not on sale 129,400 4-3 12 Bolshaya Sobranie none 232,549 15.5 3.10 237,328 Posadskaya St. Spasskaya Ofitsersky/ǱȗǱȚȗȘ none 149,551 0.5 not on sale not on sale Bashnya ȇȔșȇ 16 Chapayeva St. half-finished 197,901 9.5 2.09 135,000

Source: Knight Frank St Petersburg, 2016

Average price interval within the competitive zone varies from 134.7 to 238 thous. rub./sq m. The highest prices are recorded in “Premier Palas” residential complex, in the buildings facing Malaya Nevka river. The lowest prices in the location can be found in “ Dom na Zhdanovke”, due to disadvantages of the object (the developer not known in the market, a noisy thoroughfare under windows, a housing neighborhood not popular in the location).

The average price in the zone is 167 thous. rub./ sq m.

The highest sales rate is recorded in Petrovskaya Riviera residential complex, due to the period of waiting for the sales start in the object, the low prices at the start of sales, as well as to the specific ratio of unit types and areas (there is a considerable number of small 1-room and 2-room units in the complex).

Overall, the project's implementation pace depends on the developer's reputation. Projects from reliable known developers are implemented faster than projects from lesser-known companies or developers who have a negative reputation.

The average quarterly sales rate within the competitive location accounts 18 units, while the rate for the most successful projects in the market is much higher, at around 30 apartments in the quarter.

Location IV. Tri Vetra

Southern part of Primorsky district alongside Bolshaya Nevka river and the new blocks of the so-called ‘north Primorsky part’ (NPP), limited by Kamyshovaya, Mebel’naya, Planernaya streets and by Shuvalovsky Ave are forming the competitive zone for the analyzed project.

Objects with sales close to termination (remaining units either less than 10, or under 5% of a large-scale complex) are excluded. Typically, at this stage the remaining variants are illiquid premises with any disadvantages or their value is inadequate to the market situation.

Several residential complexes of C class, formally disparate with the Property, are nevertheless included in the competitive zone. That comes from a potential buyer’s standpoint – he or she might consider complexes already commissioned first, if there are available units in them. The competitive advantages, due to which a buyer might take the specified C class complexes into consideration, are as follows: full readiness (already put

into exploitation, one needs not to wait), social infrastructure ready in the micro-location north of the railroad (kindergartens, schools, clinics), beautiful views to Lakhtinsky Gulf / Gulf of Finland from upper floors of SenSpetsStroy objects and from LIFE-Primorsky residences, lack of WSD and huge road interchanges making noise in close vicinity to the residences. So, in our opinion, a buyer might take these projects for alternatives despite of their lower class and quality.

Map 9. The map of competition

Source: Knight Frank St Petersburg, 2016

10 housing complexes of ǩ and Ǹ class and an aparthotel (Lotos Tower) are put on sale in the competitive location. 4 complexes have view characteristics similar to the analyzed project (Lotos Tower, LIFE-Primorsky, Stockholm and Riverside).

LIFE-Primorsky Residence, the 2nd phase units of which were put on sale in Q4 2015 is a closest competitor of the analyzed project.

Table 25. Characteristics of the competitive projects

Sellable Phase /building Residence Address Developer Class Commissioning area, Units no. no. sq m LIFE-Primorsky 52 Primorsky Ave 1 Pioner medium commissioned 48,990 847 LIFE-Primorsky 52 Primorsky Ave 2 Pioner medium Q2 2017 18,195 280 Stockholm 46 Primorsky Ave k.1, 2 Setl City business Q3 2017 34,309 272 Lotos Tower 72 Primorsky Ave Moskovsky k.1, 2 business Q1 2016 10,390 70 aparthotel bldgs 1, 2 Dvor 30 Dibunovskaya Rich'art Club 2 Novy Gorod business Q1 2016 1,932 16 St. 3 Ushakovskaya Riverside k.ǧ, Ǩ, ǩ Setl City business commissioned 51,021 572 Emb.

Sellable Phase /building Residence Address Developer Class Commissioning area, Units no. no. sq m 3 Ushakovskaya Riverside Ǫ.4, Ǫ.5 Setl City comfort Q1 2016 23,719 313 Emb. Dom u Elagina 15 Lipovaya Alley RBI comfort Q4 2016 11,000 128 Ostrova Elagin Apart 104ǧ Savushkina St. Atlantic economy Q3 2017 12,926 377

- 43 Primorsky Ave SU-155 comfort commissioned 5,313 60

Total: 217,795 2,935

Source: Knight Frank St Petersburg, 2016

The total living area on sale amounts 217.8 thous. sq m (2.9 thous. units) in the location. 48% of that area is in the commissioned complexes, 22% in objects to be put into operation within 2016, and 30% in objects to be commissioned by the end of 2017.

Table 26. Perspective projects

Non- Sellable area, Project Address Developer residential sq m status - 114 Savushkina St. Torgovy Dom Astana + 53,000 Lakhtinsky Plaza 169 Primorsky Ave Concord + 21,840 Lotos Tower 72 Primorsky Ave Moskovsky Dvor + 131,172 - 34 Dibunovskaya St. Dibunovskaya St. - 3,000 Total: 209,012

Source: Knight Frank St Petersburg, 2016

4 new projects can emerge in the location in the near future, 3 of them in aparthotel format. A considerable part of the future projects is declared out of the analyzed location, primarily in the north of Primorsky district. The total sellable area of the future projects in Primorsky district accounts ca. 7 mn sq m.

Table 27. Average price, average rate of sales of the competitive projects

Aver. Aver. Phase rate of Aver. price Aver. price price, Residence Address /building Finishing sales, 1 pkg sp., of commerc., rub./sq no. pcs/ mn rub. rub./sq m m quarter LIFE-Primorsky 52 Primorsky Ave 1 mixed 178,070 119 0.98 174,333 LIFE-Primorsky 52 Primorsky Ave 2 none 111,805 17 not on sale not on sale Stockholm 46 Primorsky Ave k.1,2 none 209,660 20.6 2 120,000 Lotos Tower 72 Primorsky Ave k.1, 2 none 151,516 10.0 not on sale not on sale apartments bldgs 1, 2 30 Dibunovskaya half- Rich'art Club 2 203,600 0 not on sale not on sale St. finished 3 Ushakovskaya half- Riverside k.ǧ, Ǩ, ǩ 173,105 21.6 2.3 - Emb. finished 3 Ushakovskaya half- Riverside Ǫ.4, Ǫ.5 162,473 13.7 2.3 - Emb. finished Dom u Elagina 15 Lipovaya Alley none 146,506 9.8 not on sale not on sale Ostrova

Aver. Aver. Phase rate of Aver. price Aver. price price, Residence Address /building Finishing sales, 1 pkg sp., of commerc., rub./sq no. pcs/ mn rub. rub./sq m m quarter 104ǧ Savushkina Elagin Apart none 95,540 116 n/a n/a St. - 43 Primorsky Ave none 160,833 3.8 not on sale not on sale

Source: Knight Frank St Petersburg, 2016

The average price within the competitive zone varies from 95.5 to 209.6 thous. rub./sq m.

The lowest price is recorded in Elagin Apart, which is currently on the initial stage of construction and offering aparthotel units.

The highest price was observed in Stockholm residential complex, in which a considerable number of units with good views is on sale.

Prices do not directly depend form a type of finishing. Units with no finishing, as in Stockholm housing complex, can be offered at higher prices than units with half-finishing. In the 1st phase of LIFE-Primorsky complex both the units without any finishing and with half-finishing are on sale.

The average price in the competitive zone is 159.3 thous. rub./ sq m.

The average quarterly sales rate within the location accounts 33 units. However, there are objects where this figure is much higher, due to a lower price relative to other objects in the competitive zone (Elagin Apart), or due to a comfortable “price-quality” ratio in terms of the potential buyer (LIFE-Primorsky). Objects of low liquidity, having any disadvantages show sales rate below the average for the competitive zone.

Location V. Bogemiya

B class residential complexes located in neighborhoods along Moskovsky Prospect, north of Frunzenskaya subway station have been considered as comparable competitors to the analyzed project.

Map 10. The map of competition

Source: Knight Frank St Petersburg, 2016

Units of the 6 housing complexes are on sale in the competitive zone. “Time. Dom u Moskovskogo” residential complex of Severny Gorod Co. is the closest rival. “Imperial” housing complex located close to the Project is not a serious competitor, since the remaining apartments on sale are mainly of great footage.

Tapiola and Dom na Frunzenskoy residential complexes possess both advantages and shortcomings regarding the location. Proximity to the metro station from one side, and position within a newly formed housing block from the other side (construction of "Vremena Goda" large housing complex of C class is being completed next door). In general, these complexes are currently at terminal phases of sales, that’s why they are not the Project’s serious rivals.

The two other objects within the competitive zone (“Moskovskie Vorota” of LenSpetsSMU and “Moskovsky Kvartal” of SM-Development) are situated at considerable distances from the analyzed project. These complexes should be considered as potential competitors, because they have a wide assortment of units for sale and are built in several phases.

Table 28. Characteristics of the competitive projects

Phase Sellable Commissi Residence Address /buildi Developer Class area, Units no. oning ng no. sq m Time. Dom u 3 Zaozernaya St. Severny Gorod comfort Q4 2016 23,235 400 Moskovskogo 108ǭ Dom na Obvodnogo kan. AAG comfort Q1 2016 6,658 107 Frunzenskoy Emb. Moskovsky Ave commissio Imperial k. 1-6 L1 comfort 63,504 866 /Kievskaya St. ned Moskovskie 115 Moskovsky commissio k.2, 3 LenSpetsSMU comfort 85,780 917 Vorota Ave ned Moskovskie 115 Moskovsky k.1 LenSpetsSMU comfort Q2 2016 14,987 240 Vorota Ave Moskovskie 115 Moskovsky k.4 LenSpetsSMU comfort Q4 2016 30,233 489 Vorota Ave Moskovskie 115 Moskovsky k.5,6 LenSpetsSMU comfort Q2 2018 54,939 867 Vorota Ave Moskovsky Moskovsky Ave / Siloviye Mashiny 2 comfort Q2 2016 49,108 658 Kvartal Varshavskaya St. Development Moskovsky Moskovsky Ave / Siloviye Mashiny commissio 3 business 10,738 113 Kvartal Varshavskaya St. Development ned 108A commissio Tapiola Obvodnogo kan. 7-12 Lemminkainen comfort 26,097 431 ned Emb. Total: 365,279 5,088

Source: Knight Frank St Petersburg, 2016

The total sellable area amounts 365.3 thous. sq m (5.1 thous. units) in the zone. Nearly a half of this volume refers to a single “Moskovskie Vorota” housing complex. The residential area on sale accounts 119.4 thous. sq m in the immediate surroundings of the Project

Table 29. Perspective projects

Project Address Developer Sellable area, sq m - 5 Detsky Lane RBI 11,106 - Izmailovskaya perspective PIK 60,000 - 5 Kievskaya St. Elba 11,400 - 83 Moskovsky Ave Yunit 44,000 Obvodny Channel - Galaktika LenSpetsSMU 250,000 Blagodatnaya St. Total: 376,506

Source: Knight Frank St Petersburg, 2016

5 perspective projects totaling 376.5 thous. sq m sellable area are declared in the competitive zone. 66% of that area is linked to “Galaktika” complex by LenSpetsSMU, scheduled to launch in 2017.

In the short term, a small house at 5 Kievskaya St. is expected to appear, as well as an adjacent project of Dom na Frunzenskoy, to be built by Yunit (the developer of Vremena Goda residential complex).

Table 30. Average price, average rate of sales of the competitive projects

Aver. Aver. Aver. Aver. price Phase rate of price price, of Residence Address /buildi Finishing sales, 1 pkg rub./sq commerc., ng no. pcs/ sp., mn m rub./sq m ȑȉȇȗșȇȒ rub. Time. Dom u 3 Zaozernaya none 138,284 29 1.72 161,491 Moskovskogo St. 108ǭ Dom na not on Obvodnogo half-finished 142,667 13 137,000 Frunzenskoy sale kan. Emb. Moskovsky/ Imperial k. 1-6 none 134,329 9 1.62 133,550 Kievskaya St. Moskovskie 115 Moskovsky sales not on k.2, 3 full 114,244 not on sale Vorota Ave start sale Moskovskie 115 Moskovsky not on k.1 none 116,387 36 190,000 Vorota Ave sale Moskovskie 115 Moskovsky sales not on k.4 none 116,387 not on sale Vorota Ave start sale Moskovskie 115 Moskovsky sales not on k.5,6 none 116,387 not on sale Vorota Ave start sale Moskovsky Ave Moskovsky Kvartal / Varshavskaya 2 none 134,157 50 1.90 n/a St. Moskovsky Ave Moskovsky Kvartal / Varshavskaya 3 none 133,554 8 1.90 n/a St. 108A Tapiola Obvodnogo 7-12 half-finished 158,955 53 1.74 not on sale kan. Emb.

Source: Knight Frank St Petersburg, 2016

The average price within the competitive zone varies from 114.2 thous. rub./sq m in building 1 of “Moskovskie Vorota” to 159 thous. rub./sq m in the 2nd phase of “Tapiola”. Major part of units is offered with no finishing. “Tapiola” and “Dom na Frunzenskoy” are sold prepared for full finishing (half-finished).

The average price in the competitive zone is 130.5 thous. rub./ sq m.

The lowest sales speed is observed in Imperial complex, because it was being built and realized for some 10 years; and in the 3d phase of “Moskovsky Kvartal”, which exceeds apartments in other phases of this complex in absolute value.

The average quarterly sales rate within the location accounts 28 units.

Location VI. Moskovskoe Shosse 3

The analyzed project is rivaled by B class housing complexes located in Moskovsky district south to railroad ROW (right-of-way).

Map 11. The map of competition

Source: Knight Frank St Petersburg, 2016

5 residential complexes of B class are present in the zone under consideration. “Moskva” housing complex offers aparthotel units located in several sections of the house, apart from common residential premises (flats).

The residence at 5 Pobedy St. could be compared to elite objects by its technical characteristics, quality of construction, as well as by ratio of unit types and areas. However, according to the classification of housing, applied by Knight Frank, an object located only in the central city districts, in prestigious locations, can be elite. Therefore the house at 5 Pobedy St. cannot be classified in the premium segment.

“Graf Orlov” residential complex, despite of its broad variety of apartments at relatively low prices, has a reputation for "protracted", thus only the buildings already commissioned could rival the analyzed project.

Table 31. Characteristics of the competitive projects

Phase Commissio- Sellable Units Residence Address /buildin Developer Class ning area, sq m no. g no. Grand 63 Kosmonavtov PPK comfort commissioned 32,749 474 Familiya Ave

Phase Commissio- Sellable Units Residence Address /buildin Developer Class ning area, sq m no. g no. 185 Moskovsky Graf Orlov k. 2, 9 L1 comfort commissioned 33,718 493 Ave k. 3, 4, 185 Moskovsky Graf Orlov ǩ, 4ǩ, L1 comfort Q4 2016 53,877 810 Ave ǧ, 4ǧ 19 Kostyushko Moskva Setl City comfort Q3 2018 31,004 473 St. Siloviye Moskovsk Moskovsky Ave / Mashiny 2 comfort Q2 2016 49,108 658 y Kvartal Varshavskaya St. Developmen t Siloviye Moskovsk Moskovsky Ave / Mashiny 3 business commissioned 10,738 113 y Kvartal Varshavskaya St. Developmen t 181 Moskovsky Pobedy 5 Ave (5 Pobedy Legenda business commissioned 7,005 51

St.) Total: 218,199 3,072

Source: Knight Frank St Petersburg, 2016

The total sellable area amounts 218.2 thous. sq m or 3.1 thous. units. Graf Orlov residential complex is the largest project in the competitive zone, its 8 buildings remaining on sale. In “Grand Familiya” and “Pobedy 5” few last units stay on sale, so one should consider these complexes optionally.

Table 32. Perspective projects

Sellable area, Project Address Developer sq m - 57 Blagodatnaya St. Interkontrakt 3,588 KosmoStar 102 Kosmonavtov Ave Akvilon-Invest 11,150 - 102ǧ Kosmonavtov Ave Bau City 17,684 - 61/2ǧ Kosmonavtov Ave project on sale 18,432 - Moskovsky Ave Confidential 104,000 Chetyre Sezona 13 Moskovskoye Hwy Akvilon-Invest 56,532 - 13 Moskovskoye Hwy projects on sale 1,077,205

- 16 Moskovskoye Hwy Dom na Lensoveta 7,029 Bolshoy Moskovsky Novoizmailovsky Ave/Blagodatnaya St. Renovatsia SPb 1,159,500 - 30 Ǯ Pulkovskoye Hwy CTM-62 23,468 - Pulkovskoye Hwy/ Ring Road CDS 150,000 - 21ǧ Tipanova St. Kontsern Piter 108,500 Total: 2,737,088

Source: Knight Frank St Petersburg, 2016

12 perspective projects totaling 2.7 mn sq m of living area are declared in the competitive location. 81% of the areas concentrate in the two complexes (at 13 Moskovskoye Hwy and in “Bolshoy Moskovsky” by ‘Renovatsia

SPb”). The first project currently involves the sale of land for housing construction; the second project has been suspended after the start of sales in 2015. Thus the implementation of both projects is stretched over time.

In the near future it is expected to start selling the two projects of «Akvilon-Invest», a development company from Arkhangelsk – “KosmoStar” at 102 Kosmonavtov Ave, and “Chetyre Sezona” at 13 Moskovskoye Hwy

Table 33. Average prices and rate of sales of the competitive projects

Aver. Aver. rate Phase / Aver. Aver. price price of of sales, Residence Address building Finishing price, 1 pkg sp., commerc pcs/ no. rub./sq m mn rub. ., quarter rub./sq m Grand 63 Kosmonavtov half- not on 143,646 20 not on sale Familiya Ave finished sale 185 Moskovsky Graf Orlov k. 2, 9 none 131,021 5 2.02 110,304 Ave 185 Moskovsky k. 3, 4, 3ǩ, not on Graf Orlov none 127,868 1 1.92 Ave ǩ, 3ǧ, 4ǧ sale Moskva 19 Kostyushko St. none 128,583 107 not on sale 165,000

Moskovsky Moskovsky Ave / 2 none 134,157 50 1.90 n/a Kvartal Varshavskaya St. Moskovsky Moskovsky Ave / 3 none 133,554 8 1.90 n/a Kvartal Varshavskaya St. 181 Moskovsky half- not on Pobedy 5 423,298 4 2.20 Ave finished sale

Source: Knight Frank St Petersburg, 2016

The average price within the competitive zone varies from 127.8 to 423.3 thous. rub./sq m.

Maximal prices are recorded at 5 Pobedy St., in which large apartments with good views remain on sale. In addition, the object pricing was initially close to elite housing.

Minimal prices are found in” Graf Orlov” residential complex. Pricing policy of the object’s developer is focused on minimum prices by delaying the timing of construction.

The average price in the competitive zone is 174.6 thous. rub./ sq m. At the same time the indicator for relevant competitive properties is 34% lower and accounts 133.1 thous. rub./ sq m.

The average quarterly sales rate within the location is at the level of 28 units. The highest sales speed was registered “Moskva” residential complex, i.e. 107 apartments sold in the 1st quarter after the sales start, due to low absolute value of a unit and to a significant number of small footage apartments.

Location VII. Shuvalovsky, Zapovednaya 51

Northern part of Primorsky district, limited by Planernaya, Ilyushina streets and by railroad ROW forms the competitive zone for the objects under analysis. The opening of through traffic along Suzdal’skoye Hwy across Vyborgskoye Hwy taken into account, it is appropriate to consider the objects located in Vyborgsky district territory limited by Suzdal’sky, Engelsa and Lunacharskogo prospects. All complexes with units available for sale are taken into consideration, PRAGMA-HOUSE included.

Map 12. The map of competition

Source: Knight Frank St Petersburg, 2016

10 housing complex totaling 544.2 thous. sq m of sellable area are found in the competititve zone. The large- scale residential construction is carried out on the outskirts of the Primorsky district in the newly formed territories, which occupy 66% of the total supply in the considered location.

41% of rival objects are at are in advanced stage of readiness, either already put into operation, 24% declared to be commissioned in 2017, yet another 35% - to be commissioned up to the end of 2018.

Table 34. Characteristics of the competitive projects

Sellable Phase /building Commissio Units Residence Address Developer Class area, no. ning no. sq m Prosvescheniya PRAGMA- commission Ave/ Pragma economy 45,289 687 HOUSE ed Kompozitorov St. Ultra City 4 Prigorodny k.1,4 Setl City economy Q2 2018 33,191 663 Shuvalovsky Graffiti Ave/ k.1.2, 1.3, 1.5, 1.6 Oikumena economy Q4 2016 54,699 528 Parashutnaya St. Shuvalovsky/ Graffiti k. 2.1, 2.2 Oikumena economy Q4 2017 29,916 624 Parashutnaya St.

Sellable Phase /building Commissio Units Residence Address Developer Class area, no. ning no. sq m Repischeva St./ Do Re Mi, Repka Pragma medium Q3 2016 44,800 798 Verbnaya St. Legenda na 54-58 Komendantsko Komendantsky k.1-5 Legenda medium Q1 2018 50,643 1,008 m Ave Novaya Prime Beregovaya St. lot 5-2, 8-3, 16 comfort Q2 2016 27,127 240 Skandinavia Group Suzdal’skoye Hwy Novoorlovsky k.1.1.1, 1.1.2 YIT medium Q4 2016 25,547 444 /Novoorlovskaya St. Suzdal’skoye Hwy Novoorlovsky k.1.5.1, 1.5.2 YIT medium Q2 2017 31,068 620 /Novoorlovskaya St. Komendantsky Chistoe Nebo k.2.2 Setl City economy Q2 2017 28,903 924 Ave lot 2 Komendantsky Chistoe Nebo k.2.1 Setl City economy Q3 2017 43,402 1,278 Ave lot 2 Komendantsky Chistoe Nebo k.3.1 ȏ 3.2 Setl City economy Q1 2018 106,573 3,063 Ave lot 2 Shuvalovsky 7/2ǧ Prokofieva UK Finans economy Q3 2016 9,960 249 Park St. 7 Nizhne- commission - Temp comfort 13,111 142 Kamenskaya St. ed Total: 544,229 11,268

Source: Knight Frank St Petersburg, 2016

Sellable area of future projects in the location totals over 3.6 mn sq m. The project of Gorod Group, in which ca.1,5 mn sq m of housing was planned to build, was the biggest of all. However, the project is currently on sale due to the bankruptcy of the developer. “Chistoe Nebo” by Setl City, where in addition to the already realized buildings it is planned to build nearly 800 thous. sq m of housing is the other large-scale project in the location.

Table 35. Perspective projects

Sellable area, Project Address Developer District sq m Novaya Skandinavia Beregovaya St. Prime Group Vyborgsky 25,489 - 13 Kolomyazhsky Ave Megalit Primorsky 450,000 Legenda na Komendantskom 2nd Komendantsky Ave 54-58 Legenda Primorsky 58,194 and 3d phases Chistoe Nebo Komendantsky Ave lot 2 Setl City Primorsky 795,164 - 46/4 Koroleva Ave LenSpetsSMU Primorsky 11,500 - 17 Novokolomyazhsky Ave Novokolomyazhsky 17 Primorsky 4,495 Planernaya St. /Glukharskaya project on sale Gorod Group Primorsky 1,500,000 St./ Aviakonstruktorov Ave Novaya Kamenka Prigorodny SU-155 Primorsky 85,486 - Prigorodny (Kamenka) Lider Group Primorsky 100,000

Sellable area, Project Address Developer District sq m Ultra City 4 Prigorodny Severny Gorod Primorsky 182,765 - 19 Serebristy Blvd. Setl City Primorsky 5,164 Suzdal’skoye Hwy Novoorlovsky YIT Primorsky 303,819 /Novoorlovskaya St. Shuvalovsky Ave Graffiti Oikumena Primorsky 92,838 /Parashutnaya St. Total: 3,614,914

Source: Knight Frank St Petersburg, 2016

The average price within the competitive zone varies from 78.9 thous. rub./sq m in the 3d phase of “Chistoe Nebo” residential complex, which is at the initial stage of construction, up to 165.3 thous. rub./sq m in the house at 7 Nizhne-Kamenskaya St., a representative of B class housing.

The average price in the competitive zone regarding comparable projects is 92.8 thous. rub./ sq m.

Table 36. Average prices and rate of sales of the competitive projects

Aver. rate Aver. price Phase Aver. Aver. price of sales, of Residence Address /buildin Finishing price, 1 pkg sp., pcs/ commerc., g no. rub./sq m mn rub. quarter rub./sq m Prosvescheniya PRAGMA- Ave/ none 117,746 15 not on sale 142,813 HOUSE Kompozitorov St. Ultra City 4 Prigorodny k.1,4 none 94,706 63.0 not on sale not on sale Shuvalovsky/ k.1.2, 1.3, Graffiti full 91,806 52.0 not on sale not on sale Parashutnaya St. 1.5, 1.6 Shuvalovsky/ Graffiti k. 2.1, 2.2 full 79,991 sales start not on sale not on sale Parashutnaya St. Do Re Mi Repischeva St./ none 101,066 28.5 not on sale 129,207 (+Repka) Verbnaya St. Legenda na Komendantsky Komendantsko k.1-5 mixed 95,513 48 0.6 155,327 Ave 54-58 m Novaya lot 5-2, Beregovaya St. mixed 83,211 12 not on sale 85,086 Skandinavia 8-3, 16 Suzdal’skoye Hwy k.1.1.1, half- Novoorlovsky /Novoorlovskaya 89,652 39 516,025 not on sale 1.1.2 finished St. Suzdal’skoye Hwy k.1.5.1, half- Novoorlovsky /Novoorlovskaya 95,200 42 527,296 not on sale 1.5.2 finished St. Komendantsky Chistoe Nebo k.2.2 full 96,593 179 0.40 137,000 Ave lot 2 Komendantsky Chistoe Nebo k.2.1 full 89,562 290 0.40 not on sale Ave lot 2 Komendantsky k.3.1 ȏ Chistoe Nebo full 78,990 318 0.40 not on sale Ave lot 2 3.2 Shuvalovsky 7/2ǧ Prokofieva half- 92,569 33 not on sale not on sale Park St. finished

Aver. rate Aver. price Phase Aver. Aver. price of sales, of Residence Address /buildin Finishing price, 1 pkg sp., pcs/ commerc., g no. rub./sq m mn rub. quarter rub./sq m 7 Nizhne- - full 165,284 5 not on sale not on sale Kamenskaya St.

Source: Knight Frank St Petersburg, 2016

The highest sales speed is recorded in Chistoe Nebo residential complex, up to 318 units in a quarter for the one of phases. High demand levels in this complex are due to absolute apartment values, minimal for the competitive zone. The average quarterly sales rate regarding all other projects within the location accounts 34 units.

Location VIII. Sofiya, VIVA, Kvartet

Southern parts of Moskovsky and Frunzensky districts bordered by Blagodatnaya, Sofiyskaya streets, by the Ring Road and Western Speed Diameter (WSD) form the competitive zone for the analyzed projects. Residences of C class were considered as rivaling.

Map 13. The map of competition

Source: Knight Frank St Petersburg, 2016

The main part of objects belongs to Moskovsky district territory. The only complex offered for sale in Frunzensky district is “Balkany” residential complex by Lider Group.

About 60% of the objects are commissioned or are to be commissioned in 2016. In Zvezda residential complex few last units are offered for sale at the valuation date.

Table 37. Characteristics of the competitive projects

Phase / Sellable Commissi Residence Address building Developer Class area, Units no. oning no. sq m 16 Moskovskoye Zvezda Elis medium Q1 2016 18,112 315 Hwy Kosmonavtov Ave/ commissio Zvezdny k. 3-1, 3-2 L1 medium 31,596 672 Ordzhonikidze St. ned Kosmonavtov Ave/ Zvezdny k. 1-1- 2-2 L1 medium Q1 2016 46,755 537 Ordzhonikidze St. Kremlevskie RosStroyInve 25 Tipanova St. medium Q4 2018 21,256 403 Zvezdy st Pulkovsky 3 38 Pulkovskoye Hwy CDS economy Q1 2016 17,605 395

13 Moskovskoye Sirius k.ǧ, k.Ǩ Lider Group economy Q3 2016 25,238 576 Hwy Mirland Triumf Park 30 Pulkovskoye Hwy 3 medium Q2 2016 19,390 1,350 Development Mirland Triumf Park 30 Pulkovskoye Hwy 4 medium Q3 2017 63,918 1,244 Development 102 Budapeshtskaya Balkany Lider Group economy Q3 2019 33,143 723 St. Total: 277,013 6,215

Source: Knight Frank St Petersburg, 2016

The sellable area of the projects on sale totals 277 thous. sq m or 6.2 thous. units. The two complexes, "Zvezda" and "Zvezdny", have earned the reputation of "protracted" among the competing objects. Three more complexes: “Sirius”, “Balkany” and “Pulkovsky 3" - are being built by developers, who often postpone their objects' commissioning.

Table 38. Perspective projects

Sellable area, Project Address ǷȇȐȕȔ Developer sq m - Blagodatnaya St. 57 Moskovsky Interkontrakt 3,588 Glorax Dom na Budapeshtskoy 6 Budapeshtskaya St. Frunzensky 10,235 Development KosmoStar 102 Kosmonavtov Ave Moskovsky Akvilon-Invest 11,150 102ǧ Kosmonavtov - Moskovsky Bau City 17,684 Ave 61/2ǧ Kosmonavtov - Moskovsky project on sale 18,432 Ave - Moskovsky Ave Moskovsky Confidential 104,000 Chetyre Sezona 13 Moskovskoye Hwy Moskovsky Akvilon-Invest 56,532 - 13 Moskovskoye Hwy Moskovsky project on sale 1,077,205 - 16 Moskovskoye Hwy Moskovsky Dom na Lensoveta 7,029 Novoizmailovsky Bolshoy Moskovsky Moskovsky Renovatsia SPb 1,159,500 Ave/Blagodatnaya St. Prazhskaya St. - Frunzensky Renovatsia SPb 433,350 /B.Kuna St.

Sellable area, Project Address ǷȇȐȕȔ Developer sq m - 30 Ǯ Pulkovskoye Hwy Moskovsky CTM-62 23,468 Pulkovskoye Hwy - Moskovsky CDS 150,000 /Ring Road - 21ǧ Tipanova St. Moskovsky Kontsern Piter 108,500 - 8 Fuchika St. Frunzensky Baltiysky Bereg 180,000 Total: 3,360,673

Source: Knight Frank St Petersburg, 2016

The sellable area of the projects declared in the competitive zone accounts 3.3 mn sq m. The long-term projects of Renovatsia SPb and also of the projects located in the former Samson Meat Processing plant territory take a considerable share in the total area.

During 2016 one can expect the start of sales in the two projects of Akvilon-Invest Co. coming from Arkhangelsk: “KosmoStar” at 102 Kosmonavtov Ave, and “Chetyre Sezona” at 13 Moskovskoye Hwy, and also in “Dom na Budapeshtskoy”, a project by Moscow developer Glorax Development.

Table 39. Average prices and rate of sales of the competitive projects

Aver. rate Aver. Aver. price Phase / Aver. of sales, price of Residence Address building Finishing price, pcs/ 1 pkg sp., commerc., no. rub./sq m quarter mn rub. rub./sq m 16 Moskovskoye half- Zvezda 95,277 25.4 not on sale not on sale Hwy finished Kosmonavtov Ave/ k. 3-1, 3- Zvezdny none 112,777 28.7 1.18 132,600 Ordzhonikidze St. 2 Kosmonavtov Ave/ k. 1-1- 2- Zvezdny none 105,743 28.7 1.19 135,200 Ordzhonikidze St. 2 Kremlevskie half- 25 Tipanova St. 116,315 45.7 not on sale not on sale Zvezdy finished Pulkovsky 3 38 Pulkovskoye Hwy none 92,185 54.4 0.68 n/a

13 Moskovskoye Sirius k.ǧ, k.Ǩ none 105,033 95.0 n/a 127,800 Hwy Triumf Park 30 Pulkovskoye Hwy 3 mixed 121,105 56.6 not on sale not on sale Triumf Park 30 Pulkovskoye Hwy 4 mixed 101,594 82.4 not on sale not on sale 102 Budapeshtskaya Balkany none 78,301 sales start not on sale not on sale St.

Source: Knight Frank St Petersburg, 2016

The average price within the competitive zone is in the interval from 78.3 thous. rub./sq m in Balkany residential complex, , which is at the initial stage of construction, up to 121.1 thous. rub./sq m in the 3d phase of Triumf Park, scheduled to be put into exploitation in Q2 of 2016, apartments are being sold half-finished (prepared for full finishing).

The average price in the competitive zone is 103.1 thous. rub./ sq m.

The minimal sales rate in the competitive zone is observed in ‘protracted’ projects, 27 units in a quarter. Quarterly sales volumes in all the rest complexes vary from 45 to 95 units.

The average quarterly sales rate in the location amounts 52 apartments.

Location IX. Yuzhnaya Aquatoriya

The competititve zone is presented majorily by a single large neighborhood in the south-west of St. Petersburg, plus the newly formed block adjacent to Budennogo Ave. We have also considered the residential complexes being constructed around “Prospekt Veteranov” metro station.

Map 14. The map of competition

Source: Knight Frank St Petersburg, 2016

9 residential complexes meet the requirements. The sellable area currently on sale in the zone totals 572.2 mn sq m or 12.7 thous. units.

Table 40. Characteristics of the competitive projects

Phase / Commissi Sellable Residence Address building Developer Class Unit No. oning area, sq m no. Admirala Tributsa More 4 Setl City economy Q1 2016 55,740 1,332 St. Konnolakhtins Aleksandrit 21/1ǧ Dachny Ave medium Q1 2016 13,548 265 ky 55

Phase / Commissi Sellable Residence Address building Developer Class Unit No. oning area, sq m no. 78/6 Angliyskaya Glorax Petergofskoye k. 34 economy Q2 2017 12,316 290 Milya Development Hwy 78/6 Angliyskaya Glorax Petergofskoye k. 35 economy Q4 2017 7,546 190 Milya Development Hwy Marshala Baltiyskaya Kazakova St. 3,4 Rant economy Q1 2016 35,640 752 Volna /Kuznetsova Ave 15 Leni Golikova Dom Benois 2 Voin economy Q2 2016 1,834 36 St. Admirala Zhemchuzhny Baltiyskaya commissio Konovalova St., lot 2 medium 63,981 1,003 Fregat Zhemchuzhina ned 1 Admirala Zhemchuzhny Baltiyskaya Konovalova St., lot 3 medium Q1 2016 63,327 1,021 Fregat Zhemchuzhina 1 k. 10, 11, BFA- Ogni Zaliva Leninsky Ave medium Q1 2016 109,553 2,120 12 Development Soldata Korzuna Polezhayevsky St./ Marshala k.1,2,3 Kompakt medium Q1 2016 28,962 527 Park Zhukova Ave St. Petersburgskoye Solnechny Hwy k.2,3 Setl City economy Q4 2016 80,547 2,372 Gorod /Krasnosel’skoye Hwy /Budennogo Ave St. Petersburgskoye Solnechny Hwy k.4 Setl City economy Q4 2017 99,204 2,879 Gorod /Krasnosel’skoye Hwy /Budennogo Ave 645,629 14,056

Source: Knight Frank St Petersburg, 2016

The majority of projects in the location belongs to C class and “economy” subclass, focused at mass demand primarily.

Unit types’ ratio in the rival objects is represented by a majority of small 1-room and 2-room apartments, totaling up to 68% in the projects.

In general one can characterize competition in the location as intense, especially on the part of integrated developments.

The forecast for the development of perspective territories in the competitive zone allows evaluating the increased competition in the immediate vicinity of the Project location. Against the background of existing competitors’ offer of small-sized apartments, the deficit of comfortable and affordable housing in the Project's location is likely to occur.

The sellable area of the nearest perspective residential projects in the competitive location totals the 4.6 mn sq m commissioned before 2020, net of the analyzed Project. The population in the location is expected to rise by 230 thous. in the same period.

Table 41. Perspective projects

Sellable area, Project Address Developer District sq m Angliyskaya Milya 2,3 78/6 Petergofskoye Hwy Glorax Development Krasnoselsky 119,486 phases St. Petersburgskoye Hwy / Solnechny Krasnosel’skoye Hwy / Setl City Petrodvortsovy 1,120,249 Gorod Budennogo Ave Zhemchuzhnaya Baltiyskaya Matisov Channel Emb. Krasnoselsky 44,062 Riviera Zhemchuzhina Avtovskaya St. /Primakova St. / Avtovo Renovatsia SPb Kirovsky 345,270 Chervonnogo Kazachestva St. Ul’yanka Veteranov Ave/Dachny Ave Renovatsia SPb Kirovsky 347,400 Dachnoye 5 Leninsky Ave/Novatorov St. Renovatsia SPb Kirovsky 275,850 Promyshlennaya St. /Trefoleva St. Milingof Renovatsia SPb Kirovsky 472,500 /Stachek Ave Confidential Legenda Krasnoselsky 71,200

Sosnovaya Veteranov Ave /L.Pilyutova St. Renovatsia SPb Krasnoselsky 218,820 Polyana 1-5 /Chekistov St. Landskrona 86/3 Petergofskoye Hwy Krasnoselsky 26,631 Development 5 Tambasova St. Megapolis-Invest Krasnoselsky 18,662

Novo Sergievo Krasnosel’skoye Hwy Satellit-Development Petrodvortsovy 1,037,000 Krasnosel’skoye Hwy / St. V Strel’ne Petersburgskoye Hwy / KVS Petrodvortsovy 463,000 Budennogo Ave 90/3 Petergofskoye Hwy 47 Trest Petrodvortsovy 5,310

Total: 4,565,440

Source: Knight Frank St Petersburg, 2016

The rival projects are comparable to the analyzed project in terms of location and transport accessibility. All are built in locations far removed from the subway stations, with a limited amount of social and commercial infrastructure. An important role is played by difficult transport accessibility to the new neighborhoods.

Currently many developers offer finished units in their residential complexes. When choosing an apartment in the objects of mass demand, one pays a special attention to the presence and composition of finishing.

The average price in comparable objects accounts 94.6 thous.rub./sq m. If several phases of a project are considered, there is a dependence of the price upon the readiness, ranging from 4 to 16% in different objects.

Table 42. Average prices and rate of sales of the competitive projects

Aver. Aver. Phase rate of Aver. price Aver. price of price, Residence /buildi Developer Finishing sales, 1 pkg sp., commerc., rub./sq ng no. pcs/ rub. rub./sq m m quarter More 4 Setl City full 110,358 92.7 400,000 not on sale Konnolakhtins Aleksandrit none 107,225 24.7 - not on sale ky 55 Glorax Angliyskaya Milya k. 34 none 79,407 53 not on sale 75,000 Development Glorax Angliyskaya Milya k. 35 none 74,866 48 not on sale not on sale Development Baltiyskaya Volna 3,4 Rant half-finished 83,896 19.7 - - Dom Benois 2 Voin half-finished 111,500 n/a not on sale not on sale Zhemchuzhny Baltiyskaya 2 half-finished 107,020 52 - - Fregat Zhemchuzhina Zhemchuzhny Baltiyskaya 3 half-finished 103,100 70 - - Fregat Zhemchuzhina k. 10, BFA- Ogni Zaliva full 95,742 143.0 not on sale not on sale 11, 12 Development Polezhayevsky k.1,2,3 Kompakt none 99,706 45.5 - - Park Solnechny Gorod k.2,3 Setl City full 89,029 446.2 400,000 not on sale Solnechny Gorod k.4 Setl City full 75,636 742.3 400,000 106,875

Source: Knight Frank St Petersburg, 2016

From the standpoint of a buyer a developer's reputation plays an important role in choosing of apartment. In mass segment a developer’s reputation is based upon the number of houses built and commissioned according to the declared schedule. It is a priority for buyers to guarantee the object completion by the specified time, particularly in an unstable economic situation.

In this regard, the undisputed market leader in the location is Setl City - the company, which sells the highest number of apartments.

The average quarterly sales rate in comparable complexes of the location is around 140 units.

Location X. Kalina-Park, CINEMA

The competititve zone is a neighborhood bounded by the railroad ROW, Marshala Blyukhera Ave with adjacent blocks, and the Neva river.

Mass housing construction in the competitive zone has started since 2010 in former industrial and storage territories, i.e. in the blocks north and south of Marshala Blyukhera Ave, between Kushelevskaya Rd. and Kondratievsky Ave

Over 400 thous. sq m of housing have been built and sold in the location in the last 5 years. The majority of housing currently on sale is positioned in subsequent phases of complexes, which have entered the market earlier.

Map 15. The map of competition

Source: Knight Frank St Petersburg, 2016

Sellable area of residential complexes currently offered for sale in the location totals 443.7 thous. sq m.

All the housing projects in the zone refer to C class and are focusing primarily at mass demand. Ratio of unit types and areas offered for sale in the rivaling complexes is represented mainly by small-size 1-room and 2- room apartments, which share totals ca. 70% in the projects.

Table 43. Characteristics of the competitive projects

Phase / Sellable Units Residence Address building Developer Class Commissioning area, no. no. sq m 54 Bestuzhevskaya Ekaterininsky k.1 Okhta Group economy Q1 2016 28,012 660 St. 54 Bestuzhevskaya Ekaterininsky k.2, 3 Okhta Group economy Q4 2016 35,991 850 St. M.Blyukhera Ave Kantemirovsky k. 5, 7 CDS economy Q1 2016 50,886 1196 /Kushelevskaya Rd. M.Blyukhera Ave/ Kantemirovsky k. 8 CDS economy Q3 2016 22,247 541 Kushelevskaya Rd. Polustrovsky Ave Landyshi /Mendeleyevskaya k.1 LenSpetsSMU economy Q4 2017 30,120 697 St.

Phase / Sellable Units Residence Address building Developer Class Commissioning area, no. no. sq m Polustrovsky Ave Landyshi /Mendeleyevskaya k.2 LenSpetsSMU economy Q2 2018 40,247 821 St. M.Blyukhera Ave Marshal /58 Kondratievsky k.1, 2 L1 economy Q3 2016 62,858 1472 Ave 12 M.Blyukhera Medalist Lider Group economy Q4 2016 51,933 1170 Ave 12 M.Blyukhera Pifagor Grafit economy Q1 2017 8,700 208 Ave Polustrovo 68/3 Kondratievsky k.1 Setl City economy Q3 2018 85,723 2352 Park Ave 12 M.Blyukhera Flamingo Ave sec.1-3 KapStroy economy Q4 2016 15,791 337 /Laboratornaya St. 12 M.Blyukhera Flamingo Ave sec.4-6 KapStroy economy Q1 2018 11,199 239 /Laboratornaya St. Total: 443,707 10,543

Source: Knight Frank St Petersburg, 2016

Of future projects in the location, the redevelopments of former industrial territories at Beloostrovskaya St. and Bolshoy Sampsonievsky Ave are worth mentioning. Sellable area of the projects declared in the competitive zone totals ca. 631 thous. sq m.

Table 44. Perspective projects

Sellable area, Project Address District Developer sq m Sampsonievsky 68 B. Sampsonievsky Ave Vyborgsky Otdelstroy 160,000 - 77 B. Sampsonievsky Ave Vyborgsky GTC 73,000 - Beloostrovskaya St. Primorsky Confidentia 37,151 - 28 Beloostrovskaya St. Primorsky LenSpetsSMU 40,000 - 9 Beloostrovskaya St. Primorsky Klimov Works 40,000 - 55 Vyborgskaya Emb. Vyborgsky GTC 25,000 - 8 Vyborgskaya Vyborgsky York 16,277 - 7 J.Duclos St. Vyborgsky Arsenal-Nedvizhimost’ 4,552 - 4 Krapivny Lane Vyborgsky Ǳ4 5,500 - Lesnoy Ave Vyborgsky Confidential 32,508 LIFE-Lesnaya 10-12 Novolitovskaya St. Vyborgsky Pioner 112,444 Total: 546,432

Source: Knight Frank St Petersburg, 2016

The forecast for the development of perspective territories in the competitive zone allows to evaluate the weakening of competition in the immediate vicinity of the analyzed objects. The projects most likely to be implemented are located closer to the waterfront. These projects will have an additional competitive advantage - the spectacular views out of a number of apartments.

Table 45. Average prices and rate of sales of the competitive projects

Aver. Aver. price Phase / Aver. Aver. rate of price of Residence Address building Finishing price, sales, pcs/ 1 pkg commerc., no. rub./sq m quarter sp., mn rub./sq m rub. 54 Bestuzhevskaya not on Ekaterininsky k.1 none 91,847 51 105,000 St. sale 54 Bestuzhevskaya not on Ekaterininsky k.2, 3 none 86,857 17 100,000 St. sale M.Blyukhera Ave Kantemirovsky k. 5, 7 none 90,193 54.0 0.65 135,000 /Kushelevskaya Rd. M.Blyukhera Ave Kantemirovsky k. 8 none 88,708 sales start 0.65 135,000 /Kushelevskaya Rd. Polustrovsky Ave / not on Landyshi Mendeleyevskaya k.1 full 84,029 sales start not on sale sale St. Polustrovsky Ave / not on Landyshi Mendeleyevskaya k.2 full 79,617 158.0 not on sale sale St. M.Blyukhera Ave Marshal /58 Kondratievsky k.1, 2 none 99,129 51.0 0.94 106,920 Ave Medalist 12 M.Blyukhera Ave mixed 105,282 114 n/a not on sale

not on Pifagor 12 M.Blyukhera Ave none 86,249 22 not on sale sale Polustrovo 68/3 Kondratievsky not on k.1 full 85,966 sales start 115,650 Park Ave sale 12 M.Blyukhera Ave Flamingo sec.1-3 none 82,701 64 0.59 90,000 /Laboratornaya St. 12 M.Blyukhera Ave Flamingo sec.4-6 none 82,133 56 0.59 90,000 /Laboratornaya St.

Source: Knight Frank St Petersburg, 2016

The average price within the competitive zone is in the interval from 79.6 to 105.3 thous. rub./sq m. The lowest prices in the location are found in “Landyshi” residential complex by LenSpetsSMU. The most expensive is currently “Medalist” residential complex, since more expensive apartments on the upper floors remain on sale.

The average price in the competitive zone is 88.6 thous. rub./ sq m.

High sales rate one can observe in building 2 of “Landyshi”, where prices are minimal wihin the competitive zone. There are also high demand levels in “Medalist”, where previously a large number of apartments at low prices was on sale.

The average quarterly sales rate in the location is at the level of 65 units.

Location XI. Tsivilizatsiya

The competitive zone comprises 3 large neighborhoods: 2 complex redevelopments of former industrial territories, and 1 of former agricultural lands. Firstly, residential complexes, built on the former ash dump site at Dalnevostochny Ave are considered as competitors. This area is actively built up to date. Secondly, the former industrial area at Oktyabrskaya embankment in the vicinity of the Project, that has recently started to develop.

Rusanovka residential neighborhood, where two large residential complexes are being built, is also considered. Besides, residential complexes under construction in Kudrovo, Vsevolozhsky district of Leningradskaya Oblast’, are considered.

Map 16. The map of competition

Source: Knight Frank St Petersburg, 2016

17 residential complexes meet the requirements. Sellable area of objects currently on sale in the location totals 1.3 mn sq m or 30.2 thous. units.

Table 46. Characteristics of the competitive projects

Phase / Commissi Sellable Residence Address building Developer Class Unit No. oning area, sq m no. 7 Stolits. London Kudrovo 9/1- 13/1 Setl City economy Q3 2017 227,227 5,916 10/1,10/2, 7 Stolits. London Kudrovo Setl City economy Q4 2017 58,684 1,713 10/3 Vesna-2 Kudrovo k. 1 CDS economy Q1 2016 43,300 1,221 Vesna-2 Kudrovo k. 2 CDS economy Q2 2016 6,000 168 Vesna-3 Kudrovo k. 1 CDS economy Q3 2018 30,000 742 Vernisazh Kudrovo k. 7 Polis Group economy Q4 2017 24,624 896 Krylenko St. Vivat 1,2 Donk economy Q4 2016 17,931 532 14

Phase / Commissi Sellable Residence Address building Developer Class Unit No. oning area, sq m no. Leningradska ya St Evropeisky k. 6.4; 6.5 Investtorg economy Q2 2016 32,535 722 ./Tsentral’nay a St. Leningradska ya St. Evropeisky k. 2.1; 2.2 Investtorg economy Q3 2016 38,340 848 /Tsentral’nay a St. Energetikov ZimaLeto k.1 Setl City economy Q3 2016 31,966 830 Ave 9 Energetikov ZimaLeto k.2 Setl City economy Q4 2016 27,131 669 Ave 9 Energetikov ZimaLeto k.3 Setl City economy Q2 2017 43,030 1,108 Ave 9 Stroitelny Capital Kudrovo lot 4, 15 economy Q1 2016 98,357 1,732 Trest Novy Stroitelny Capital lot 6 economy Q4 2018 63,608 1,190 Okkervil’ Trest Lot no. 2-3Ȉ, Kudrov-House Prok economy Q2 2016 10,216 261 block no. 2 Lastochkino Oktyabrskay k.4-9, 11, commissio LenSpetsSMU economy 134,302 3,197 Gnezdo a Emb. 118 12 ned Legenda na Dalnevostoc Legenda medium Q2 2018 39,321 627 Dalnevostochnom hny Ave 12 Podvoiskogo Nevsky Etalon PSK economy Q1 2016 9,279 194 St. 8ǧ Novy Okkervil’ - Dybenko St. Dom u /Solidarnosti Otdelstroy economy Q4 2016 48,010 1,120 Kashtanovoy Ave Alleyi Novy Okkervil’ - Dybenko St. Dom u /Solidarnosti Otdelstroy economy Q4 2018 43,922 962

Ryabinovoy Alleyi Ave Novy Okkervil’ - Dybenko St. Dom u Sirenevoy /Solidarnosti Otdelstroy economy Q4 2017 75,590 1,592

Alleyi Ave Krylenko St. ǵ’Yunost’ k.1-4 Seven Suns economy Q4 2016 89,514 2,209 ǧ Oktyabrskay Prinevsky k.5 CDS economy Q2 2017 35,038 836 a Emb. 122 Progress Kudrovo k.5 MAVIS economy Q1 2017 16,799 424 Skladskaya St. /Soyuzny 1-3 Temp medium Q3 2017 26,326 489

Ave Total: 1,271,050 30,198

Source: Knight Frank St Petersburg, 2016

The majority of projects in the location belong to C class, "economy” subclass and are focused primarily at mass demand.

Ratio of apartment types and areas in the complexes is characterized by mainly studios, small 1-room and 2- room units, totaling around 70% of the projects’ area.

In general, the competition of the analyzed project can be assessed as moderate, for the only residential complex under development in the vicinity is “ǵ’Yunost’”, which will not have a significant impact on the future Project.

The forecast for the perspective territories development in the competitive zone allows evaluating the increased competition in the immediate vicinity of the Project. Against the background of existing competitors' offer in the form of small-sized apartments, there is a probability of occurring a shortage of comfortable and affordable apartments in the project location.

The nearest future projects’ area in the competitive location totals 1.04 mn sq m of housing commissioned before 2020, net of the analyzed Project. The population in the location is expected to grow by 68 thous.

Table 47. Perspective projects

Phase / Sellable area, Project Address building Developer District sq m no. ǵ’Yunost’ ǧ Krylenko St. k.5-8 Seven Suns Nevsky 77,950 122 Oktyabrskaya Prinevsky k.1-4,6-7 CDS Nevsky 264,999 Emb. 15 Dalnevostochny Confidential Nevsky 67,000 Ave Renaissance 8 Dybenko St. 2 buildings AAG Nevsky 75,000 ǧ Krylenko St. Bazis Nevsky 23,059

54 Oktyabrskaya Emb. BFA-Development Nevsky 400,000

Soyuzny Ave Temp Nevsky 49,917 /Kollontay St. ZimaLeto 9 Energetikov Ave k.4 Setl City Krasnogvardeisky 27,492 Malaya Utkin Ave Renovatsia SPb Krasnogvardeisky 39,000 Okhta Fregat 51Ǩ Novoselov St. StroyProektSPb Nevsky 14,531

Total: 1,038,948

Source: Knight Frank St Petersburg, 2016

The majority of mass market housing projects is currently being built in locations far away from the subway stations, still this factor plays a significant role in pricing of this segment.

Rival projects are comparable with the analyzed Project by their location and transport accessibility. All are buing built in the redevelopment zone, except those of Kudrovo with limited social and commercial infrastructure. An important role is played by difficult transport accessibility to the new neighborhoods. Thus Oktyabrskaya Emb is characterized by high traffic; it is one of the city's main thoroughfares, where there is a large number of heavy trucks. The planned bridge across the Neva river in alignment with Kollontay St. will help to unload the roads.

Currently many developers offer the option of finishing in their residential complexes. Availability and composition of finishing play a special role in choosing an apartment in mass demand residences.

The average price of analogous objects varies in the location from 78 thous. rub/sq m without finishing up to 86 thous. rub./sq m fully finished. Thereby the average price of sq m accounts 83 thous. rub. in rival complexes. If several phases of a project are considered, there is a dependence of the price upon the readiness, ranging from 4 to 8% in different objects.

Table 48. Average prices and rate of sales of the competitive projects

Aver. Aver. price Aver. rate of Aver. price Phase / of Residence Developer Finishing price, sales, 1 pkg sp., building no. commerc., rub./sq m pcs/ rub. rub./sq m quarter 7 Stolits. London 9/1-13/1 Setl City full 82,734 136 400,000 not on sale 7 Stolits. London 10/1,10/2, 10/3 Setl City full 78,328 40 not on sale not on sale Vesna-2 k. 1 CDS none 90,301 76 575,000 not on sale Vesna-2 k. 2 CDS none 83,269 74 not on sale not on sale sales Vesna-3 k. 1 CDS none 71,879 not on sale not on sale start Vernisazh k. 7 Polis Group none 78,028 158 not on sale 114,422 Vivat 1,2 Donk none 75,787 30 not on sale not on sale Evropeisky k. 6.4; 6.5 Investtorg half-finished 72,043 74 600,000 not on sale Evropeisky k. 2.1; 2.2 Investtorg half-finished 74,517 31 600,000 not on sale ZimaLeto k.1 Setl City full 102,558 121.2 600,000 224,000 ZimaLeto k.2 Setl City full 108,642 173.3 600,000 not on sale sales ZimaLeto k.3 Setl City full 105,216 not on sale not on sale start Capital lot 4, 15 Stroitelny Trest half-finished 91,666 62.0 n/a n/a sales Capital lot 6 Stroitelny Trest half-finished 80,100 n/a n/a start Kudrov-House Prok none 65,625 18.8 not on sale not on sale

Lastochkino not on k.4-9, 11, 12 LenSpetsSMU mixed 78,579 445,000 126,010 Gnezdo sale Legenda na Legenda mixed 99,939 129.0 not on sale 134,613 Dalnevostochnom Nevsky Etalon PSK none 92,059 41.3 not on sale not on sale

Novy Okkervil’ - Dom u Otdelstroy half-finished 89,551 74.9 not on sale not on sale Kashtanovoy Alleyi Novy Okkervil’ - sales Dom u Otdelstroy none 83,731 not on sale not on sale start Ryabinovoy Alleyi Novy Okkervil’ - sales Dom u Sirenevoy Otdelstroy half-finished 81,889 not on sale not on sale start Alleyi ǵ’Yunost’ k.1-4 Seven Suns full 68,909 n/a not on sale not on sale Prinevsky k.5 CDS none 61,323 61.8 545,000 not on sale Progress k.5 MAVIS none 65,727 96.0 not on sale not on sale sales 1-3 Temp full 84,968 not on sale not on sale start

Source: Knight Frank St Petersburg, 2016

Within the city border high sales rates are recorded in the complexes by the large developers, like Setl City and Legenda. In suburbs Setl City and Polis Group are the leaders of sales.

From the standpoint of a buyer, a developer's reputation plays an important role in choosing an apartment. In mass segment a developer’s reputation is based upon the number of houses built and commissioned according to the declared schedule. It is a priority for buyers, to have the object completion guaranteed by the specified time, particularly in an unstable economic situation.

The average quarterly sales rate in comparable complexes of the location is around 82 units.

Location XII. Novaya Okhta, Tsvetnoy Gorod, Ruch’i

The competitive zone is represented by the new complex development area in the northern part of Vsevolozhsky district, where the housing construction has started from the redevelopment of “Ruch’i” JSC former agricultural territories. The housing complexes under construction located in Murino, Novoye Devyatkino, Lavriki settlements refer to it. Regarding that the analyzed Projects are in Krasnogvardeisky district, the residential developments under construction, closest to them will be considered. In addition one residential complex located in Kalininsky district is considered within the zone.

Map 17. The map of competition

Source: Knight Frank St Petersburg, 2016

29 residential complexes meet the requirements. Sellable area of residential objects on sale totals 1.7 mn sq m in the location, which accounts 41% of suburban housing under construction.

Table 49. Characteristics of the competitive projects

Sellable Building Commissi Units Residence Address Developer Class area, no. oning no. sq m k. GreenLandiya 12,13,14, Murino Setl City economy Q2 2017 124,437 3,642 15 GreenLandiya k. 2.1,2.4 Murino Setl City economy Q1 2018 41,033 1,189 UP-kvartal 5 Bugry FSK Lider economy Q4 2016 38,595 1,076 Svetlanovsky VillaDevelopmen commissio VillaCity Murino economy 3,390 84 t ned VITAMIN Murino Lider Group economy Q4 2018 42,766 1,135

Sellable Building Commissi Units Residence Address Developer Class area, no. oning no. sq m Arsenal- YouPiter 20 Murino economy Q4 2020 10,315 266 Nedvizhimost’ Alfavit ǩǪ Devyatkino Petrostroy economy Q4 2016 15,320 583 Alfavit ǧǨ Devyatkino Petrostroy economy Q2 2017 13,303 480 Alfavit ǫǬ Devyatkino Petrostroy economy Q4 2017 15,166 600 Viktoriya k.5 Murino MAVIS economy Q2 2017 22,218 582 Viktoriya k.2 Murino MAVIS economy Q3 2017 11,480 322 Viktoriya k.1014 Murino MAVIS economy Q3 2017 6,844 183 Vorontsov 1; 2 Murino Titan economy Q2 2016 9,077 264 Novoye Gamma 1 PromServis economy Q4 2016 65,805 958 Devyatkino Novoye Gamma 2 PromServis economy Q4 2017 30,155 439 Devyatkino Desiatkino 2.0 k. 1,2 Murino Normann economy Q4 2016 28,915 788 Desiatkino 2.0 k. 3 Murino Normann economy Q1 2017 31,940 884 Dom na Novoye Russkaya Skazka economy Q3 2018 44,728 1,210 Ozernoy Devyatkino Kraski Leta 1-5 Murino Polis Group economy Q4 2016 61,029 2,441 Kraski Leta 6 Murino Polis Group economy Q4 2017 66,365 2,047 Lastochka sec. ǳǴ Murino Petrostroy economy Q2 2016 8,792 291 Lastochka sec. ǭǯ Murino Petrostroy economy Q2 2019 10,494 331 Lastochka sec. Ǳǲ Murino Petrostroy economy Q2 2020 7,424 196 Leningradskay Murino LenSpetsStroy economy Q4 2017 69,000 1,349 a Perspektiva Leningradskay phase Murino LenSpetsStroy economy Q4 2017 51,233 1,146 a Perspektiva 1,2,3 Moy Gorod 13 Murino Polis Group economy Q2 2017 15,168 502 Moy Gorod 14 Murino Polis Group economy Q2 2017 19,400 485 Murinsky 1 phase 1 Murino CDS economy Q1 2016 50,000 907 Posad Murinsky 1 phase 2 Murino CDS economy Q4 2016 38,318 684 Posad Murinsky 1 phase 3 Murino CDS economy Q2 2017 28,302 725 Posad Novoye k. 9,10 Murino CDS economy Q2 2016 38,911 997 Murino Novoye k. 7 Murino CDS economy Q1 2016 12,865 323 Murino Novoye k. 12 Murino CDS economy Q1 2016 6,825 175 Murino Okhtinskaya 4-5, 1-3 Murino Zapstroy economy Q4 2016 22,857 628 Duga Severnaya MonArkh- Murino economy Q4 2016 15,504 308 Palitra Development Sily Prirody 1,2 Murino ǵ2 Development economy Q2 2016 65,820 1,850 Sily Prirody 3,4 Murino ǵ2 Development economy Q1 2016 69,190 1,976 StroyTechInvest2 Sokol Murino economy Q4 2016 30,742 392 5 Arsenal- Solnechny 7,13 Murino economy Q4 2016 36,276 768 Nedvizhimost’

Sellable Building Commissi Units Residence Address Developer Class area, no. oning no. sq m Arsenal- Solnechny 6 Murino economy Q2 2017 9,121 180 Nedvizhimost’ Arsenal- Solnechny 11 Murino economy Q4 2017 27,179 588 Nedvizhimost’ Arsenal- Solnechny 9 Murino economy Q2 2017 23,389 556 Nedvizhimost’ Arsenal- Solnechny 14 Murino economy Q2 2018 3,716 62 Nedvizhimost’ Staraya phases Murino RosStroyInvest economy Q4 2018 57,649 1,529 Krepost’ 1,2 Territoriya 1,2 Murino Lider Group economy Q4 2018 23,869 642 Tri Kita 2 Murino Lider Group economy Q2 2017 68,793 1,802 Tri Kita 3 Murino Lider Group economy Q4 2018 68,649 1,816 Tridevyatkino k.7 Murino Unisto Petrostal’ economy Q1 2017 48,784 882 Tsarstvo Tridevyatkino k.8 Murino Unisto Petrostal’ economy Q3 2017 20,269 438 Tsarstvo Tridevyatkino k.9-10 Murino Unisto Petrostal’ economy Q2 2017 42,079 1,008 Tsarstvo Tridevyatkino k.11 Murino Unisto Petrostal’ economy Q4 2017 24,599 503 Tsarstvo Novoye Shkol’naya 2 1 PromServis economy Q2 2016 12,484 304 Devyatkino Shosse v 3 Murino MISK economy Q2 2016 1,900 38 Lavriki 42 Eland 6 Murino NCC ȘȗȌȋȔȏȐ Q1 2016 18,121 264 Eland 7 Murino NCC ȘȗȌȋȔȏȐ Q1 2017 12,937 221 Eland 8 Murino NCC ȘȗȌȋȔȏȐ Q2 2017 9,415 228 Total: 1,924,567 49,042

Source: Knight Frank St Petersburg, 2016

The majority of projects in the location belong to C class, "economy” subclass and is focused primarily at mass demand.

Ratio of apartment types and areas in the complexes is characterized by mainly studios, small 1-room and 2- room units, totaling around 70% of the projects’ area.

In general one can characterize competition in the location as intense. At that over 82% of the projects in the competitive zone are to be commissioned between 2016 and 2017.

The forecast for the development of perspective territories in the competitive zone allows evaluating the increased competition in close proximity to the project location. In addition, development potential near Murino, Devyatkino and Bugry settlements will decline. Against the background of small-sized apartments on sale, there is a probability of shortage of comfortable and affordable apartments in the Projects’ location.

Total area of the nearest perspective projects in the location accounts 5.2 mnsq m of housing to be commissioned ahead of 2020, net of the analyzed Projects. As a result the population in the considered location will grow by 260 thous.

Table 50. Perspective projects

Phase Sellable Project Address /building Developer District area, sq m no. UP-kvartal Bugry phase 2 FSK Lider Vsevolozhsky LO 73,457 Svetlanovsky Noviye Gorizonty Bugry phase 2 CDS Vsevolozhsky LO 313,212 Noviye Gorizonty Bugry phase 3 CDS Vsevolozhsky LO 103,788 Bugry Rosengineering Vsevolozhsky LO 675,000

Arsenal- Bugry Vsevolozhsky LO 306,000 Nedvizhimost’ Bugry Samolet LO Vsevolozhsky LO 266,000

Bugry USG Development Vsevolozhsky LO 225,000

Alfavit Devyatkino ǭǯǱ Petrostroy Vsevolozhsky LO 23,188 Azimut Lavriki Lider Group Vsevolozhsky LO 8,000

Residence in Lavriki Prok Vsevolozhsky LO 13,500 Novodevyatkino phase 2, GreenLandiya Murino k.2.2,2.3,2.5- Setl City Vsevolozhsky LO 479,834 2.14 Arsenal- YouPiter Murino k.21 Vsevolozhsky LO 126,520 Nedvizhimost’ phase Viktoriya Murino MAVIS Vsevolozhsky LO 51,749 6,7,8,9,10 Kraski Leta Murino 7… Polis Group Vsevolozhsky LO 172,721 Leningradskaya Murino phase 3 LenSpetsStroy Vsevolozhsky LO 66,767 Perspektiva Murin Grad Murino Grand Familiya Vsevolozhsky LO 150,000

Murinsky Posad Murino phase 3… CDS Vsevolozhsky LO 328,144 Novoye Murino Murino k. 11 CDS Vsevolozhsky LO 6,800 Okhtinskaya Duga Murino phase 2,3 Zapstroy Vsevolozhsky LO 43,710 MonArkh- Severnaya Palitra Murino k.3-6 Vsevolozhsky LO 46,439 Development Sily Prirody Murino phase 2 ǵ2 Development Vsevolozhsky LO 214,990 Territoriya Murino k.3,4,5,6 Lider Group Vsevolozhsky LO 64,731 Tsveta Radugi Murino MAVIS Vsevolozhsky LO 6,000

Murino VIpS Vsevolozhsky LO 200,000

Murino CDS Vsevolozhsky LO 185,000

Murino RosStroyInvest Vsevolozhsky LO 47,720

Novoye Galaktika phase 2… Glavstroikompleks Vsevolozhsky LO 77,060 Devyatkino Novoye Gamma 3 PromServis Vsevolozhsky LO 20,357 Devyatkino Novoye Novoye Dal’piterstroy Vsevolozhsky LO 285,000 Devyatkino Devyatkino Novoye Grad Vsevolozhsky LO 294,000 Devyatkino Novoye PromServis Vsevolozhsky LO 20,000 Devyatkino Shafirovsky Volgodonskoy Dal’piterstroy Krasnogvardeisky 185,000

Phase Sellable Project Address /building Developer District area, sq m no. KvartALL Ave / Shafirovsky Ave SPb Dom na Ulitse 28 Khimikov St. Teorema Krasnogvardeisky 150,000 Khimikov SPb Total: 5,229,687

Source: Knight Frank St Petersburg, 2016

The majority of mass market housing projects is currently being built in locations far away from metro stations, yet this factor plays a significant role in pricing of this segment objects. Traditionally, objects located within walking distance from a metro station (15 minutes walk), are more attractive for buyers compared with counterparts, to which one needs to travel on a personal or public transport.

The competitor complexes are comparable with the Projects by location and transport accessibility. All are being built in the new residential development area with a limited amount of social and commercial infrastructure. An important role is played by the difficult transport accessibility to the new neighborhoods.

The average price in comparable complexes varies from 68 thous. rub./sq m in units without finishing to 78 thous. rub./sq m fully finished. Thus the average price of sq m accounts 76 thous. rub. in rival projects. If several phases of a project are considered, there is a dependence of the price upon the readiness, ranging from 4 to 8% in different objects.

Table 51. Average prices and rate of sales of the competitive projects

Aver. Aver. rate of Aver. price, 1 Aver. price of Residence Building Finishing price, sales, pcs/ pkg sp., mn commerc., rub./sq m quarter rub. rub./sq m UP-kvartal Svetlanovsky 5 none 64,790 190 open parking 104,500 Alfavit ǩǪ none 71,250 60 - 112,600 Alfavit ǧǨ none 69,146 60 - 112,600 Alfavit ǫǬ none 58,202 60 - 112,600 Eland 6 semi-full 99,514 55 - 140,000 Novoye Murino k. 7 none 93,000 58 - 90,000 VillaCity none 92,852 5 open parking absent

Novoye Murino k. 12 none 92,000 50 - 90,000 Murinsky Posad 1 ȤșȇȖ 1 none 89,225 100 - 102,600 Moy Gorod 14 none 85,631 90 - not on sale Novoye Murino k. 9,10 none 85,250 130 - 90,000 Eland 8 semi-full 82,700 114 - 140,000 YouPiter 20 full 81,306 40 - not on sale Eland 7 semi-full 80,887 49 - 140,000 Solnechny 7,13 full 80,850 117 - - Murinsky Posad 1 ȤșȇȖ 2 none 80,383 103 - 102,600 Solnechny 9 full 79,200 53 - - Solnechny 14 full 79,200 sales start - -

Aver. Aver. rate of Aver. price, 1 Aver. price of Residence Building Finishing price, sales, pcs/ pkg sp., mn commerc., rub./sq m quarter rub. rub./sq m Solnechny 6 full 78,774 92 - - Solnechny 11 full 78,576 90 - - Tri Kita 2 mixed 78,075 250 - - Murinsky Posad 1 ȤșȇȖ 3 none 77,750 165 - 102,600 Viktoriya k.2 full 75,280 51 - for rent k. GreenLandiya 12,13,14, full 75,132 330 open parking 117,000 15 Moy Gorod 13 none 74,571 130 - not on sale GreenLandiya k. 2.1,2.4 full 74,459 50 open parking 121,000 Viktoriya k.1014 full 74,363 51 - for rent Territoriya 1,2 mixed 72,866 sales start - - Tri Kita 3 mixed 72,630 60 - - Lastochka sec. ǳǴ none 70,765 115 - 135,000 Kraski Leta 1-5 none 69,657 320 - not on sale VITAMIN none 67,728 145 - -

Severnaya Palitra none 67,263 15 - -

Desiatkino 2.0 k. 1,2 none 66,990 250 - 163,903 Viktoriya k.5 full 66,311 100 - for rent Tridevyatkino Tsarstvo k.8 full 64,370 70 - for rent Shosse v Lavriki 42 3 none 64,166 10 open parking absent Sily Prirody 1,2 none 63,900 142 open parking 91,300 Staraya Krepost’ ȤșȇȖȢ 1,2 semi-full 63,205 114 - - Kraski Leta 6 none 63,078 270 - not on sale Desiatkino 2.0 k. 3 none 63,023 40 - 163,903 Sokol none 60,800 15 - -

Lastochka sec. ǭǯ none 58,610 74 - 135,000 Lastochka sec. Ǳǲ none 58,610 70 - 135,000 Okhtinskaya Duga 4-5, 1-3 none 58,553 150 - - Tridevyatkino Tsarstvo k.9-10 full 58,288 70 - for rent Tridevyatkino Tsarstvo k.7 full 56,850 70 - for rent Tridevyatkino Tsarstvo k.11 full 54,426 70 - for rent Sily Prirody 3,4 none 53,700 182 open parking 91,300 Leningradskaya phase mixed 45,631 80 - - Perspektiva 1,2,3 Leningradskaya mixed 44,590 80 - - Perspektiva Vorontsov 1; 2 none 43,991 12 - - Shkol’naya 2 1 none 60,579 11 open parking 65,000 Dom na Ozernoy full 60,000 30 - -

Gamma 1 full 43,798 46 - - Gamma 2 full 37,714 46 - -

Source: Knight Frank St Petersburg, 2016

High sales rates are recorded in complexes by big developers, such as: Setl City, Polis Group, Lider Group, Normann et al. From the standpoint of a buyer, a developer's reputation plays an important role in choosing an apartment. In mass segment a developer’s reputation is based upon the number of houses built and

commissioned according to declared schedule. It is a priority for buyers to have the object completion guaranteed by the specified time, particularly in an unstable economic situation.

The average quarterly sales rate in comparable complexes of the location is around 95 apartments.

Location XIII. Rzhevka

The competitive zone of the Project comprises several projects under constructiobn in Krasnogvargeisky district. Apart from this, the adjacent Yuzhny neighborhood in Vsevolozhsk, and the new complex development territory in Yanino were considered.

Map 18. The map of competition

Source: Knight Frank St Petersburg, 2016

11 residential complexes meet the requirements. Sellable area of residential objects on sale totals 440.6 thous. sq m and 10.4 thous. apartments in the zone.

Table 52. Characteristics of the competitive projects

Sellable Unit Residence Building Address Developer Class Commissioning area, No. sq m 2/4 2nd Zhernovka bdg 17 Zhernovskaya St. DM medium Q4 2016 4,506 80 SPb

Sellable Unit Residence Building Address Developer Class Commissioning area, No. sq m 35 Irinovsky Ave N’yu-Ton k.1,2 Lenstroitrest economy commissioned 23,649 528 SPb lot 4 Ryabovskoye Stereos Hwy /Belomorskaya Renovatsia SPb economy Q4 2016 39,467 853

St. SPb lot 1 Ryabovskoye Stereos Hwy /Belomorskaya Renovatsia SPb economy Q4 2017 22,549 439

St. SPb Jaanila 2 phase- Yanino-1 Lenstroitrest economy Q4 2016 14,203 301 country k. 1,2,3 Jaanila 2 phase- Yanino-1 Lenstroitrest economy Q4 2017 23,623 519 country k. 4,5,6,7 14ȇ Novaya St. Brusnichny 1 NSK economy Q2 2016 8,959 194 Yanino-1 14ȇ Novaya St. Brusnichny 2 NSK economy Q2 2016 7,142 158 Yanino-1 37ǧ Shosseinaya Brusnichny 3 NSK economy Q1 2017 2,563 82 St. Yanino-1 Novoe Ǭ Yanino CDS economy Q1 2016 22,298 598 Yanino Novoe ǫ Yanino CDS economy Q2 2016 23,200 620 Yanino Novoe Ǫ Yanino CDS economy Q4 2016 23,273 640 Yanino Yaninsky 1 Zanevskaya St. Stroitel’noye 1 economy commissioned 19,197 377 Kaskad-1 Yanino-1 Upravleniye Yaninsky 6 Novaya St., Stroitel’noye 2 economy Q3 2016 31,250 647 Kaskad-2 Yanino-1 Upravleniye Yaninsky 3 7th liniya Yanino- Stroitel’noye 3 economy Q2 2017 11,786 284 Kaskad-3 1 Upravleniye Yaninsky Yanino-1, lot 12 Stroitel’noye 4 economy Q2 2018 8,703 176 Kaskad-4 Kol’tsevaya St. Upravleniye Yarkiy k. ǧ, Ǩ Yanino-1 Normann economy Q1 2017 25,968 825 Yasno.Yanino 7.1-7.7 Yanino-1 KVS economy Q4 2016 78,175 1,652 Yuzhny Raduzhny 6 kv. 7,2 neighborhood, Glavstroikompleks economy Q2 2016 21,500 430 Vsevolozhsk Yuzhny Raduzhny 6 kv. 1,6 neighborhood, Glavstroikompleks economy Q2 2016 12,573 670 Vsevolozhsk Yuzhny Yuzhnaya Garant bdg 5 neighborhood, medium Q3 2015 5,477 120 Polyana Development Vsevolozhsk Yuzhny Yuzhnaya Garant bdg 4 neighborhood, medium Q2 2016 10,533 228 Polyana Development Vsevolozhsk Total: 440,594 10,421

Source: Knight Frank St Petersburg, 2016

The majority of projects in the location belong to C class, "economy” subclass and is focused primarily at mass demand.

Ratio of apartment types and areas in the complexes is characterized by mainly studios, small 1-room and 2- room units, totaling around 70% of the projects’ area.

The forecast for the development of perspective territories in the competitive zone allows evaluating the increased competition in close proximity to the project location. In parallel with this, development potential near Yanino settlement will decline, because traffic problems on Koltushskoe highway have already created a tense situation directly in Krasnogvardeyskiy district and at the entrances to it.

Total area of the nearest perspective projects in the location accounts 2.02 mnsq m of housing to be commissioned ahead of 2020. As a result the population in the considered location is expected to grow by 100 thous., the Project residents not regarded.

Table 53. Perspective projects

Phase / Sellable Project Address building Developer District area, sq m no. Volgodonskoy Shafirovsky Ave / Shafirovsky Dal’piterstroy Krasnogvardeisky 185,000 KvartALL Ave SPb Dom na Ulitse 28 Khimikov St. Teorema Krasnogvardeisky 150,000 Khimikov SPb Ryabovskoye Hwy Stereos Renovatsia SPb Krasnogvardeisky 146,444 /Belomorskaya St. 48ǧ 2nd Okhtinskoye Krasnogvardeisky 11,467 Zhernovskaya St. Garant Yuzhnaya Polyana Vsevolozhsk bdg 1-2 Vsevolozhsky LO 26,100 Development 6 kv. Raduzhny Vsevolozhsk Glavstroikompleks Vsevolozhsky LO 33,480 3,4,5,6 Yasno.Yanino Yanino phase 2-6 KVS Vsevolozhsky LO 376,645 Jaanila country Yanino phase 4 Lenstroitrest Vsevolozhsky LO 89,667 Jaanila country Yanino phase 3 Lenstroitrest Vsevolozhsky LO 92,946 Yarkiy Yanino phase 2-5 Normann Vsevolozhsky LO 90,277 Yanino-Ƕȇȗȑ Yanino Patriot-Neva Vsevolozhsky LO 200,000

Yanino-Ƕȇȗȑ Yanino 5… SU-155 Vsevolozhsky LO 525,848 Novoe Yanino Yanino phase 2… CDS Vsevolozhsky LO 91,229 Total: 2,019,103

Source: Knight Frank St Petersburg, 2016

Rival projects are comparable with the analyzed Project by their location and transport accessibility. All are being built in the new residential development area with a limited amount of social and commercial infrastructure. A significant role is played by the difficult transport accessibility to the new neighborhoods. An important factor to be taken into account in launching projects is the difficult transport accessibility to the Kovalevo settlement, due to high workload of Ryabovskoye highway. The Customer's plans for construction of tram lines to the new neighborhood could have a positive effect on demand.

The average price in comparable complexes varies from 63 thous. rub./sq m in units without finishing to 73 thous. rub./sq m fully finished. Thus the average price of sq m accounts 67 thous. rub. in competitive projects. . If several phases of a project are considered, there is a dependence of the price upon the readiness, ranging from 4 to 8% in different objects.

Table 54. Average prices and rate of sales of the competitive projects

Aver. rate of Aver. price, 1 Aver. price of Aver. price, Residence Building Finishing sales, pcs/ pkg sp., mn commerc., rub./sq m quarter rub. rub./sq m

Zhernovka bdg 17 none 92,395 22 800,000 absent N’yu-Ton k.1,2 none/mixed 99,182 45 990,732 162,744 Stereos full 71,273 109 not on sale not on sale

Stereos full 68,077 109 not on sale not on sale

2 phase-k. Jaanila country full 82,634 32 open parking absent 1,2,3 2 phase-k. Jaanila country full 74,786 32 open parking 87,411 4,5,6,7 Brusnichny 1 none 60,190 30 open parking absent Brusnichny 2 none 61,000 30 open parking absent Brusnichny 3 none 59,529 30 open parking absent Novoe Yanino Ǭ none 65,649 94 open parking 115,200 Novoe Yanino ǫ none 60,564 84 open parking 115,200 Novoe Yanino Ǫ none 60,623 109 open parking absent Yaninsky 1 none 59,700 45 open parking not on sale Kaskad-1 Yaninsky 2 none 56,300 45 open parking not on sale Kaskad-2 Yaninsky 3 none 56,000 45 open parking not on sale Kaskad-3 Yaninsky 4 none 52,700 45 open parking not on sale Kaskad-4 Yarkiy k. ǧ, Ǩ none 57,037 103 open parking 96,586 Yasno.Yanino 7.1-7.7 full 61,901 112 390,000 105,909 Raduzhny 6 kv. 7,2 full 55,206 55 open parking not on sale Raduzhny 6 kv. 1,6 full 60,050 55 open parking not on sale Yuzhnaya bdg 5 none 56,263 15 open parking for rent Polyana Yuzhnaya bdg 4 none 54,809 15 open parking for rent Polyana

Source: Knight Frank St Petersburg, 2016

High sales rates are recorded in complexes by big developers, such as: CDS, Normann, KVS, where average sales speed may reach 100 units in a quarter. From the standpoint of a buyer, a developer's reputation plays an important role in choosing an apartment. A developer’s reputation in mass segment is based upon the number of houses built and commissioned according to declared schedule.

The average quarterly sales rate in comparable complexes of the location is around 55 apartments.

Residential market overview of Moscow

Supply

In Q4 2015 the volume of supply in the market of residential buildings (excluding apartments) amounted to about 1.9 million sq. m (approximately 27,100 flats in 289 buildings), which is almost 32% more than at the end of the 3rd quarter of this year. Compared to the same period of 2014 there is an increase of almost 60%.

The volume of supply including the apartments is at the level of 2.6 million sq. m, which is 24% higher than in the previous period and 44% higher compared to the end of 2014.

Chart 28. Supply volume dynamics, thous. sq m

Supply volume dynamics, thousand sq m 2000

1500

1000

500

Supply volume, thousand sq m

Source: Blackwood

At the end of Q4 2015 significant changes in the structure of the supply by classes is observed. Due to release of a large number of new projects comfort-class share in this segment exceeded a half of total supply, and constituted 52.5%. Compared to Q4 2014, this indicator is higher by almost 20 percentage points. The share of the business class, which prevailed in the market for a long time, fell to 27.9% (-7.5 percentage points compared to the previous period). Compared to the end of 2014, a decrease of more substantial - about 21 percentage points. The share of new elite buildings decreased to 8.3% (-3 percentage points compared to the previous period and -6 percentage points compared to December 2014). Economy class segment, which accounted for 11.3% has least suffered from the change with respect to Q3 2015 (-1.3 percentage points), and compared to December 2014, its share has grown more significantly, by 8 percentage points.

The largest volume of new supply in Q4 2015 was recorded in the segment of the comfort class. Among the new projects is to provide the most noticeable are residential complex "Zolotaya Zvezda", "Domashny", “Rodnoy gorod. Octyabrskoe pole", "Rodnoy gorod. Kakhovskaya”, “Perovsky”, “Green Park”, ”Dushinskaya, 18" and other. The total volume of new supply in the comfort class segment in Q4 2015 was app. 270 thousand sq. m.

Among the business-class projects, which have filled up a supply in the 4Q 2015, it is worth noticing a new building within the residential complex "Zilart", as well as a residential complex "Saturday", "Vander park" and

"Veresaeva, 11". The total volume of new supply in the business-class segment amounted to about 28 thousand sq. m.

About 45 thousand sq. m entered the market in the economy class segment, including residential complex "Kvartaly 21/19", as well as residential complexes "On Bazovskoy" and "Nekrasovka".

Chart 29. Supply by class, %

The structure of supply in the primary market of residential buildings (excluding apartments) in "old" Moscow, December 2015

Central AD Western AD Southern AD South-Western AD South-Eastern AD Eastern AD North-Western AD Zelenograd Northern AD North-Eastern AD

7% 11% 11% 3% 11%

15% 14%

10% 12%

Source: Blackwood

Share of apartments continues its decline (4.5 percentage points), share of fitted-out apartments offered for sale (by 3.5 percentage points) in the total volume of active offer.

Chart 30. Supply structure transformation

Apartments and residential units

January 2015 24,1% 75,9%

apartment units residential units

December 2015 19,6% 80,4%

0% 20% 40% 60% 80% 100%

Source: http://www.1rre.ru/

Fit out vs. shell-and-core

January 2015 23,4% 76,6%

Fit out Shell & Core

December 2015 26,9% 73,1%

0% 20% 40% 60% 80% 100%

Source: http://www.1rre.ru/

There is a trend of reduction of the average size of the apartment. The average area of the lot declined in 2015 from 68.3 to 63.9 sq m (excluding elite real estate). The structure of the proposal the proportion of 1-2- bedroom apartments and studios reached almost 80% (for the year grew by 5.3 percentage points). According to the parameters of the average area and number of rooms in a Moscow apartment building is now close to the Soviet housing stock.

Chart 31. Supply structure transformation on Moscow primary market, January to December 2015

January 2015; 6,8%

December 2015; percentage of 1- January 2015; 4,5% room residential 19,9% units December 2015; January 2015; 17,0% 38,1% percentage of 2- room residential units December 2015; 41,4% percentage of 3- room residential units

percentage of 4- December 2015; room residential 37,1% units January 2015; 35,2%

Chart 32. Weighted average prices, thousand rubles per sq m

250

200

150

100

0 2 2 2 3 3 3 4 4 4 5 5 5 1 2 2 2 3 3 3 4 4 4 5 5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ...... r t r t r t r c c c c v b n g b n g b n g b n p c c c p p p p e e e e o e e e e e u u u u u u u j o j o j o j f f f f a a a a s d d d d n a a a Weighted average prices, thousand rubles per sq m

Demand

The fall of the main socio-economic indicators naturally led to a decrease of consumer demand in the primary residential real estate market. According to Moscow's Russian State Register, the number of registered contracts equity participation in the building in 2015 decreased by 18.4% and amounted to 19.6 thousand units.

The number of registered transactions involving mortgage according to the same agency was 33.1 thousand units, which is 23.4% lower with respect to 2014.

Among the factors that contributed to a drop in demand are:

i Falling incomes, i High level of amounts due by population, i Deferred demand anticipation of lower prices on the market, i Reduction of mortgage loans. According to the Central Bank of the Russian Federation the number of mortgage housing loans for the period from January to November in Moscow fell by 45% in quantity and 46% in monetary terms. The state program on subsidizing mortgage rates supported the primary housing market, preventing its further downfall.

As of the end of November, the weighted average mortgage rate in Moscow was established at the level of 13.43%. For comparison, in December 2014 it amounted to 12.45%.

Chart 33. Monthly percentage dynamics of mortgage and direct selling deals, Moscow primary market, 2015

100%

15% 90% 19% 26% 29% 27% 35% 80% 38% 37% 46% 45% 46% 51% 70%

60% mortgage 50% direct…

85% 40% 81% 74% 71% 73% 65% 30% 62% 63% 54% 55% 54% 49% 20%

10%

0% l t r r r r y y y i y e h l s r r r e e e e a c n u u a a r p b b b b u J r g a u M J A o b m m m u t n M e e c e e a A t c J F v O p e o e D N S

There is a tendency of decrease in the average area of apartments sold. In 2012, the average area of sold apartments in Moscow was 80 sq m and in 2015 it was 62.4 sq m. The tendency is observed in all types of residential market.

Chart 34. Average sold units area dynamics, oscow and new Moscow, 2010-2015

100

80 Moscow

70 Moscow (new borders) 60

50 2010 2011 2012 2013 2014 2015

The buyers’ profile has changed. In the absence of a visible market price growth it took many so-called investors left the market. Stagnation in the labor market has led to a decrease in migration flows to Moscow, which has led to a reduced demand from buyers from the regions.

Commercial Terms

The weighted average bid price on the primary market at the end of the 4Q 2015 amounted to 182,053 rubles per sq. m (excluding the elite segment and apartments). Compared to the previous period, the decrease of 3% is registered. Compared to the end of 2014 a decrease is more substantial and constitutes about 16%. Dollar equivalent to the weighted average prices are at $2,571 per sq. m. The decrease compared to December 2014 amounted to about 34% (growth of the dollar during this period was more than 25%).

Average offer prices in the primary market, depending on the class in Q4 2015 were fixed at the following level (approximately):

i Economy class 130,000 rubles per sq. m; i Comfort class 156,000 rubles per sq. m; i Business class 250,000 rubles per sq. m. The change in the market prices of new buildings in the 4Q 2015 due to a significant change in the structure of the Supply in connection with the release of a large number of new projects, as well as in connection with the leaching of the most liquid offers in terms of reduced demand.

Due to the significant increase in the share of comfort class segment as a whole, the average price proposals in the primary market has declined. At the same time the average indicators segment by segment showed different indicator dynamics.

Compared to the 3Q of 2015 the average offer price in the segment of comfort class remained at the same level; but as compared with the end of 2014 the decline was about 5.5%.

Business class for the quarter gained 1.5%; but compared to December 2014 there is a decrease of 2.9%.

In the segment of economy-class in comparison with the previous period marked by growth of 10.2%, however, with respect to December 2014 there is a decrease of 26%.

In general, it is worth noticing that in the 4Q 2015, the majority of developers offered discounts and various, and transaction prices in most cases, were below the offer prices.

The highest level of average prices in the boundaries of the "old" Moscow (excluding the elite segment) are traditionally recorded in the Central Administrative District (344,200 rubles per sq m), as where there is no supply of new buildings of economy and comfort class.

The lowest prices are in Zelenograd (81,500 rubles per sq m) and South-East districts (142,500 rubles per sq m). That is due to significant supply of economy- and comfort class "Zhemchuzhina Zelenograda", residential complex "Zeleny Bor" and residential complex "Nekrasovka".

Trends and Forecasts

This year was marked by the economic downturn. The decline in energy prices, as well as raising the key rate of the Central Bank of Russia (CBR) negatively affected the business and investment activity in the country.

According to the Federal State Statistics Service in January-November 2015 industrial production in the country decreased by 3.3% compared to the same period last year.

Investments in fixed assets have decreased by 5.5%. The volume of construction works for 11 months showed a decline of 9.9%.

The deterioration of the macroeconomic situation has led to a reduction in the number of employees in companies and reduction the level of salaries. The total number of unemployed in January-November 2015 increased by 7.2%. In comparison, for the entire 2014 there was a reduction of unemployed by 5.2%. Average monthly real wages decreased by 9.2% (compared to 1.3% growth in 2014). This is the strongest reduction in accrued salaries since 1999.

According to "Romir" research holding in autumn 2015, employees downsizing faced 39% of Russian companies. Reduction of salaries recorded in every fourth (26%) Russian company, in every tenth (11%) there was a cut or complete cancelation of benefits package. According to experts, these indicators were better during the crisis of 2008-2009.

Reducing income of the population naturally led to a reduction in the level of consumption in the country. Retail sales in the 11 months of 2015 fell by 9.3%, paid services by 1.9%.

Reduced incomes, on the one hand, and increasing rates on loans led to a fall in lending to households. The volume of loans to individuals, according to the Russian Central Bank decreased by 34.6%. According to the National Agency credit about 18% of borrowers have a late payment on the loan for 60 days or more.

According to the latest estimates of the Ministry of Economic Development decline in GDP in 2015 will be about 3.7%.

According to the ministry forecast in 2016 it expected GDP growth of 0.7%. However, such growth is possible if the average oil price is at the level of $50 per barrel.

Thus, the forecast for 2016 is unfavorable. This will inevitably affect the real estate market as one of sectors of the economy.

Despite the economic crisis, the number of new projects in the "old" Moscow has increased significantly. Investment costs that were made in previous years, have forced developers to bring new projects to the market, despite the decline in consumer demand. As a result, the level of competition in the market has increased.

In the area of housing policy it is worth noting the important changes that are planned to the law FZ-214 "On Participation in joint construction ...". They suggest a binding equity builder to the price of new housing under the contracts of share participation, the creation of a single register of real estate developers and the introduction of an alternative mechanism for ensuring the rights of shareholders - the placement of funds of participants of shared construction on escrow accounts in banks. Adoption of amendments can contribute to the growth of the construction cost, the price of apartments, as well as the withdrawal from the market of small construction companies.

Thus, given the projected external and internal factors affecting the development of the residential real estate market, we can talk about the stage of the crisis on the market, which is reflected in the decrease in the number of transactions, the level of prices.

As of December 2015 a decrease of prices in "old" Moscow is observed, but so far it has not become a mass trend. The main impact to reduction of the prices was caused by change in the structure of supply, such as increase of supply on early development stages. Although price stability starting from September 2015 a veiled price declines can be noted. Developers have begun to provide a variety of promotions and discounts, which lasted until the end of the year. Discounts size ranged from 3 to 20% and an average of 10-15%. In addition to direct discounts developers offer individual terms of the acquisition.

In 2016 the market price increase is not expected, on the contrary, developers will be forced to reduce asking prices in order to stimulate the sale of apartments. This applies to just put into operation residential complexes. Groth of the prices in projects under construction is possible and it will be associated with the stage of construction readiness.

Ministry of Finance has extended the program to subsidize mortgage rates till May 2016. This is a positive impact on the primary housing market, keeping it from falling further. Upon completion of the program a decline in the number of transactions on the market may occur. Based on the background of the unfavorable macroeconomic situation the level of consumer demand on the primary housing market of the "old" Moscow will continue to decline.

Rival projects in the immediate neighborhood. Analysis of competitive environment changing perspectives

Table 55. The list of existing competitors in the zone of influence of “Noviy Balchug” apartment complex

Type Average area of flats, sq m Asking price, RUR per sq m Date of Residential of the Fitting Number three- two- three- Address Developer commission Class one-room three- two-room complex premi out of flats room room room ing flats room flats flats ses flats flats flats GALS- 57, Sadovnicheskaya St, Wine House Flats Developm Completed Shell&core Elite 205 67-117 62-125 56-149 471,000 n/d 471,000 Moskva ent Balchug Apart 3,5,7 Sadovnicheskaya AO IIIQ 2016 Shell&core Elite 116 58 64-158 120-262 489,160 500,600 489,160 Viewpoint ments emb., Moscow “INTECO” Balchug Apart 31, Sadovnicheskaya AO IIIQ 2016 Shell&core Elite 107 53-221 81-105 123-182 464,800 471,300 464,800 Residence ments street, Moscow “INTECO

Table 56. The list of existing competitors in the zone of influence of “Leningradskoye Shosse” residential complex

Type Average area, sq m Asking price, RUR per sq m of Date of Residential the Fitting Number one- two- one- two- three- Address Developer commission Class three- complex pre out of flats room room room room room ing room flats mise flats flats flats flats flats s 10, Golovinskoye Hw, TEKTA Mayakovsky Flats 4Q2018 Shell&core Econom 1092 45 62 85 156,335 163,000 155,000 Moscow group Best 9, Belomorskaya Str., Novostroy, Bely Park 2 Flats Completed Fitted-out Econom 328 45-53 70-85 94-104 193,000 180,000 171,237 Moscow TsentrInve st 10 b1. Admirala makarova Nevsky Flats Krost 4Q2016 Shell&core Comfort 484 29-36 40-50 57-82 190,000 190,000 190,000 Str., Moscow

Table 57. The list of existing competitors in the zone of influence of “Donskoy Olimp” residential complex

Type Average area, sq m Asking price, RUR per sq m of Date of Residential the Fitting Number one- two- one- two- three- Address Developer commission Class three- complex pre out of flats room room room room room ing room flats mise flats flats flats flats flats s Dom na 4, 2-aya Samarinskaya Lider Flats 1Q2016 Shell&core Business 73 40-43 55-68 87-133 333,850 329,700 300,000 Samarinskoy Str., Moscow Invest Bestkon, Sky House Flats 40, Mytnaya Str., Moscow MosCityGr 2Q2016 Shell&core Business 539 53-69 97-155 127-172 322,232 282,306 281,882 oup Zhiloy 4, Kozhevnetchesky Flats PSN group 4Q2018 Shell&core Business 200 32-46 46-79 89-134 335,141 337,415 327,231 Kvartal I'M proezd, Moscow Angliysky 7 b. 1, Mytnaya Str., PIK, Flats Completed Shell&core Business 949 43-64 73-127 109-126 458,716 468,750 409,295 Kvartal Moscow StrabagSe Dom na Business 20, Serpukhovskoy Val, Lider Serpukhovsk Flats 1Q2017 Shell&core /Premiu 38 56 75 112 250,000 240,000 225,000 Moscow Invest om Valu m

Table 58. The list of existing competitors in the zone of influence of “Grunvald” residential complex

Type Average area, sq m Asking price, RUR per sq m of Date of Residential the Fitting Number one- two- one- two- three- Address Developer commission Class three- complex pre out of flats room room room room room ing room flats mise flats flats flats flats flats s Kashtanovaya/Berezovaya Fort Str., Zarechye, GK Flats Completed Shell&core Business 156 42-53 71-80 95-139 145,414 146,250 146,250 Skolkovo Odintsovsky district, Absolut Moscow region Kashtanovaya Residentsya Flats Str.,Zarechye, Odintsovsky Zarechie Completed Shell&core Business 614 39-51 62-83 82-105 167,553 121,446 n/a Skolkovo district, Moscow region Tikhaya Str.,Zarechye, Business Russky ZhilInvest Flats Odintsovsky district, Completed Shell&core / 80 n/a n/a 218-503 n/a n/a 200,000 Avangard XXI Moscow region Premium 26 b. 4, Tikhaya Akademgoro Flats Str.,Zarechye, Odintsovsky Bestkon Completed Shell&core Business 180 43 n/a 106 162,000 136,364 134,930 dok district, Moscow region 17, Tikhaya Str.,Zarechye, Dom na ZhilInvest Flats Odintsovsky district, 2Q2016 Shell&core Business 54 82 n/a 220 n/a 244,970 210,058 Tikhoy XXI Moscow region

Table 59. The list of existing competitors in the zone of influence of “ZILART” residential complex

Type Average area, sq m Asking price, RUR per sq m of Date of Residential the Fitting Number one- two- one- two- three- Address Developer commission Class three- complex pre out of flats room room room room room ing room flats mise flats flats flats flats flats s Dom na 4, 2-aya Samarinskaya Lider Flats 1Q2016 Shell&core Business 73 40-43 60-68 87-133 333,850 329,700 300,000 Samarinskoy Str., Moscow Invest AEON Corporatio River Park Flats 7, Rechnikov Str., Moscow 2Q2016 Shell&core Comfort 648 39 57 80 196,000 205,500 197,3000 n, FerroStroy 16 b.5-6, Elektrolitny Vedis V-House Flats 1Q2017 Shell&core Business 304 50 75 103 190,000 212,664 206,487 proezd, Moscow group Dom na 14 b.2, 1-y Nagatinsky Lider Flats 4Q2016 Shell&core Comfort 259 42 62 96 196,400 193,000 197,000 Nagatinskoy proezd, Moscow Invest Flats AFI /Apa 8, Paveletskaya Emb., AFIDevelo 4Q2017- Shell&core Business 546 57 87 115 170,090 170,039 164,057 Residence rtme Moscow pment 2019 nts

Table 60. The list of existing competitors in the zone of influence of “Luchi” residential complex

Type Average area, sq m Asking price, RUR per sq m of Date of Residential the Fitting Number one- two- one- two- three- Address Developer commission Class three- complex pre out of flats room room room room room ing room flats mise flats flats flats flats flats s Completed (1 ph)/1Q- Govorovo village, RC 2Q 2016 (2,3 Novomoskovsky 39,93- 100,96- "Tat'yanin Flats GK Mits ph)/ 4Q Shell&core Comfort 10332 62,8-97 132,850 135,850 130,850 administrative district, 62,66 133,94 park" 2016 (3 ph)/ Moscow 1Q 2017 (6 ph) Vnukovskoe rural RC settlement, 4Q 2016 (1 Sezar "Rasskazovo Flats Novomoskovsky ph)/ 4Q Shell&core Comfort 1203 37.5-45 54.2-70 87-99.4 140,895 141,653 134,150 Group " administrative district, 2017 (2 ph) Moscow RC 2 bld, Borovskoe Hw, "Meschersky Flats Zapadny administrative GK PIK 4Q 2017 Shell&core Comfort 263 22-47 45-70 85-94 127,006 102,900 89,167 les" district, Moscow Moscow Fiscal Enterprise "Upravleni RK "V Flats 5 Aviatorov St., Moscow e Completed Shell&core Econom 640 37-38 50-61 73-76 136,995 121,783 112,645 Solntsevo" grazhdans kogo stroitelstva "

Table 61. The list of existing competitors in the zone of influence of “Ibitsa” residential complex

Type Average area, sq m Asking price, RUR per sq m of Date of Residential the Fitting Number one- two- one- two- three- Address Developer commission Class three- complex pre out of flats room room room room room ing room flats mise flats flats flats flats flats s Bachurino village, Sosenskoe rural A 101 RC "Moscow settlement, Flats Developm Q3 2016 Fitting out Comfort 4643 41.7-45.1 63-77.6 77.3-125.5 131,800 121,200 95,200 101" Novomoskovsky ent administrative district, Moscow Nikolo-Khovanskaya RC "Nikolin Sezar Flats Str.,Gazoprovod Completed Shell&core Comfort 1630 34.4-52.7 55-71.4 77-92 145,000 157,263 145,000 Park" Group Settlement, Moscow Business RC "Legenda Kommunarka community, Flats K-Region Q1 2016 Shell&core /Comfor 928 27-29.4 40.5-77.6 71.4-72.3 113,000 98,000 111,000 18" Moscow t RC Kommunarka community, Avgur "Ispanskie Flats Q3 2018 Shell&core Comfort 451 30-49.1 56.4-69.3 82-104.4 89,000 91,200 76,200 Moscow Estate kvartaly" RC "Novaya Gazoprovod community, Flats Krost O1 2017 Shell&core Comfort 889 21-30 30-47 42-49 130,000 104,550 112,000 Zvezda" Moscow RC Kommunarka community, MITS- "Kommunark Flats Completed Shell&core Econom 958 32-48 66-69 98.4-102 152,778 151,515 117,117 Moscow Finance a 14"

Table 62. The list of existing competitors in the zone of influence of “Nakhabino Yasnoe” residential complex

Type Average area of flats, sq m Asking price, RUR per sq m Date of Residential of the Fitting Number one- one- one- two- three- Address Developer commission Class three- complex premi out of flats room room room room room ing room flats ses flats flats flats flats flats 9, Krasnaya street, s. Pavlovaskaya Sloboda, OOO Skazka Flats IVQ 2016 Shell&core Comfort 382 42-50 55-78 78-118 93,500 84,000 89,000 Istrinskiy district, “Magi” Moscovskaya oblast s. Isakovo, Istrinskiy Iska- Nakhabino- Flats district, Moscovskaya Nedvozhi Completed Shell&core Comfort 1,109 37-40 58-60 72-81 73,150 68,970 63,745 Skver oblast mist Novaya street, s. Lobanovo, Pavlovo- Pavlovskiy Flats Slobodskoe, Istrinskiy OPIN Completed Shell&core Comfort 1,500 38-48 59-73 79-97 82,680 68,340 78,290 kvartal district, Moscovskaya oblast

Table 63. The list of existing competitors in the zone of influence of “Novoe Domodedovo” residential complex

Type Number Average area of flats, sq m Asking price, RUR per sq m Date of Residential of the Fitting of flats one- one- two- three- Address Developer commission Class three- three- complex premi out room room room room ing room flats room flats ses flats flats flats flats OOO Vostryakovo micro- “Lider Bolshoe Flats district, Domodedovo, Group IQ 2016 Shell&core Comfort 24-46 51-68 73-80 54,000 53,000 48,500 Domodedovo Moscovskaya oblast Domoded ovo” OOO Vostryakovo micro- “Lider Gorod Flats district, Domodedovo, Group IIQ 2016 Shell&core Comfort 382 24-40 50-57 66-76 64,500 58,500 58,500 Shastya Moscovskaya oblast Domoded ovo” Zapadniy micro-district, Fully fitted Evropeiskiy Flats Domodedovo, Stroyteks Completed Comfort 1,032 43-48 59-72 85-89 95,000 90,000 76,000 out Moscovskaya oblast

Table 64. The list of existing competitors in the zone of influence of “Podolsk-Erino” residential complex

Type Average area of flats, sq m Asking price, RUR per sq m Date of Residential of the Fitting Number one- three- two- three- Address Developer commission Class three- two-room complex premi out of flats room room room room ing room flats flats ses flats flats flats flats Micro-district Vesenniy, Simpheropol s. Sosnoviy Bor, Podolskiy Flats IQ 2016 Shell&core Econom 173 35-43 54-60 78-79 57,260 69,450 57,260 skiy Podolskiy district, DSC Moscovskaya oblast s. Bykovo, Podolskiy FSK Vesenniy Flats district, Moscovskaya IQ 2016 Shell&core Econom 1,402 38-47 57-68 79-120 54,000 59,500 54,000 “Razvitie” oblast OOO “Consultin s. Polivanovo, Podolskiy g Polivanovo Flats district, Moscovskaya IQ 2016 Shell&core Econom 272 18-47 33-54 92-111 n/d 52,450 n/d company oblast Podmosko v’e” s. L’vovskiy, Podolskiy Group of L’vovskiy Flats district, Moscovskaya companies IQ2016 Shell&core Econom 288 35-65 62-67 84 n/d 74,000 n/d oblast “PZHI” V poselke s. L’vovskiy, Podolskiy Glavgrado Fabriki 1 Flats district, Moscovskaya IQ 2016 Shell&core Econom 83 43-48 64-76 86-93 65,000 65,000 65,000 stroy Maya oblast

Residential market overview of Yekaterinburg

Supply

Yekaterinburg market of residential real estate under construction was characterized by stable supply in the post-crisis period of 2008-2011. At the same time there was a significant number of "frozen" projects. Active new construction has started since 2012, both by reducing the amount of suspended construction projects, as well as by the new projects launching.

Market volume of residential real estate under construction was about 2.6 mn sq m in Yekaterinburg at the end of 2015 (gross building area residential complexes on sale).

Chart 35. Gross building area of housing under construction in Yekaterinburg, mn sq m

Source: Knight Frank St Petersburg, 2016

Professional participants of Yekaterinburg real estate market divide the city into 5 price zones depending on the distance from the center. Each zone includes several city districts. The districts are distributed by price zones as follows:

i The Downtown (the Center, the Central area), limited by Moskovskaya St., Chelyuskintsev St., Vostochnaya St., Dekabristov St., Lunacharskogo St. and Bol’shakova St.; i Zone 1, embracing neighborhoods of Avtovokzal (Bus Station), Botanichesky, VIZ (Upper Iset’ Metallurgical Plant), Vokzal’ny, VTUZgorodok, Zarechny, Parkoviy, Pionersky, Shartashsky Rynok (Shartash Market) and Yugo-Zapadny (South-Western); i Zone 2, including Akademichesky, ZhBI (Concrete Factory), Zavokzal’ny, Novaya Sortirovka, Sibirsky, Siniye Kamni (Blue Stones), Uktus, Uralmash, Shirokaya Rechka (Broad River) and El’mash; i Zone 3, comprising Elizavet, Kompressorny (Compressor), Lechebny, North Sortirovka, Sovkhoz, UNC (Ural Scientific Center), Khimmash and Chermet; i Zone 4, comprizing Verkhnemakarovo, Gorny Schit (Mountain Shield), Izoplit, Istok, Kalinovsky, Kol’tsovo, Medniy, Nizhne-Isetsky, Palkino, Ptitsefabrika (Poultry Farm), Pyshma, Rudny, Sadovy,

Severka, Sem’ Klyuchey (Seven Springs), Chusovskoye Ozero (Chusovskoye Lake), Shabrovsky, Shartash and Shuvakish. Map 19. Division of the city by the price zones

Source: Knight Frank St Petersburg, 2016

Main housing construction is carried out in two locations, in Zone 1 and in Zone 2 – 72% of the total volume of housing under development in Yekaterinburg. This figure remained stable during the last year, but the ratio of locations has altered. Yet in 2014 the most active construction took place in the zone 2, and then zone 1 took the leadership in 2015. The share of the Central area accounts for about 7% of the market.

Avtovokzal (Bus Station) and VIZ (Upper Iset’ Metallurgical Plant) neighborhoods are the leaders by the amount of housing under construction, that is ca. 600 thous. sq m in total.

Chart 36. Distribution of housing under construction of Yekaterinburg by price zones, %

Source: Knight Frank St Petersburg, 2016

A steady growth of housing put into operation was recorded in Yekaterinburg starting in 2013. At the same time the pace of launching new objects began to decline. As a result, the amount of residential space entering the market has reduced by 42% in 2015, compared to that already commissioned.

Chart 37. Comparison of residential real estate volumes that entered the market to that put into operation

put into operation, mn sq m excess of the new supply above the commissioned, %

Source: Knight Frank St Petersburg, 2016

The ratio of the supply already commissioned and the new supply is reflected in the distribution of Yekaterinburg developers by volumes of housing put into operation in the last 6 years, as well as by the number of projects under realization.

Since 2009, 44% of the housing was put into operation by the three companies: AtomStroyKomplex, Kortros (integrated development project of “Akademichesky”) and “LSR. Nedvizhimost’-Ural”.

Chart 38. Rating of developers by housing put into exploitation, %

Source: Knight Frank St Petersburg, 2016

As of 2015, AtomStroyKomplex, GK ASTRA, UralEnergoStroyKomplex and “LSR. Nedvizhimost’-Ural” were the key players in Yekaterinburg residential real estate market, which in aggregate build 39% of residential complexes in the city.

Chart 39. Rating of developers by number of residential objects on sale, %

Source: Knight Frank St Petersburg, 2016

Demand

The level of demand in 2015 one can describe as low, below the stable 2013 by performance. The amount of deals in Yekaterinburg primary market has reduced by 43% compared to an excessive 2014, accounting 16 thous. of residential units or 640 thous. sq m.

Chart 40. Sales dynamics in Yekaterinburg primary residential market

Source: Knight Frank St Petersburg, 2016

To analyze the Projects, qualitative parameters of demand were considered depending on the buyers' requirements, depending in their turn on the class of housing. Regarding the classification of the housing market, one should note that today there is no uniform standard classification and the criteria approved by the legislation, which would give a clear division of property in the Russian Federation by classes. Each region has its own specificity. As a consequence, there is no clear evaluation of the object parameters to assign it to a particular segment of the housing market. In the research, an expert has determined the class of a property by the classification adopted in Knight Frank company, given the basic criteria:

i location (district) i proximity to big thoroughfares and transport hubs (for determining the degree of comfort for residents) i social status of residents i structural and technical, architectural and planning characteristics of the house i the number of units in the house and on the floor i minimal area of an apartment i the quality of construction and finishing materials i engineering i availability of adjacent territory, parking and the number of parking spaces per apartment i infrastructure (kindergarten, school, stores) i professional building management Principal requirements:

Buyers of mass demand housing are mainly focused at: i transport accessibility (proximity to the stopping points, ability to get to the city center); i developed infrastructure (availability of kindergartens, schools, food stores); i "turnkey" finishing (no additional costs for finishing premises); i minimal footage of units (1-room - from 30 sq m, 2-room - from 45 sq m, 3-room - from 65 sq m; no overpayment for corridors, balconies and loggias); i location (this group of consumers is less likely to move and is more inclined to stay in the area of residence). Relevant buying schemes for this group of customers are as follows: i secondary housing in offset when paying for an apartment i payment in installments i mortgage Buyers of business-class housing pay special attention to the following features: i location of the house; i proximity to transport interchanges, local city centers, shopping centers; i quality fit-out of an apartment;

i open or underground parking available; i well-maintained house territory, playground, bicycle stands and professional property management company; i convenient apartment layouts, availability of auxiliary rooms and balconies. Buyers of elite housing pay special attention to the following features: i multi-system protection, private territory; i the object appearance - number of floors, design of adjoining territory and of in-house spaces; i adjoining the house and nearby infrastructure; i comfortable and safe parking, underground parking with car wash; i ceiling height over 3 m; i duplex apartments and penthouses; i professional management company.

Sales show general trends, common for the market:

i During periods of strong demand, regardless of the project characteristics the sales were at a high level until 2015. i The main reasons for the decline in demand in the past year were: an expensive mortgage, reducing the proportion of the solvent population, withdrawal of private investors from the market. i The decline in demand for primary housing market affected the construction activity. The rate of doing work has considerably decreased on many construction sites in late 2015. i The deal, under which funding is derived from the sale of apartment in the secondary market make a significant part of the market demand. The strong reduction in demand against the background of significant increase in supply in the secondary market, have an indirect effect on the primary market. Only a decrease in supply price could support the market in 2016.

Commercial Terms

Over the last 5 years one could observe the positive dynamics of prices in the primary market of Yekaterinburg. A marked increase in prices for housing under construction has occurred against the background of the sales surge in 2014. However, the market began to change due to changes in the economic situation. In the IV quarter of 2015 one could observe a decrease in average asking price due to a variety of marketing campaigns, organized by developers. However, the annual dynamics of the average price index still kept a positive trend and stood at 3%. The average price of housing under construction in Yekaterinburg was 67.5 thous. rub./sq m at the end of December 2015.

Chart 41. Dynamics of the average price for housing under construction in Yekaterinburg, thous. rub./sq m

Source: Knight Frank St Petersburg, 2016

Annual dynamics of prices by Yekaterinburg locations had multidirectional trends at the end of 2015. Thus the average price indices rose in the Center and in the Zone 2, while in other zones the average prices declined. The highest increase in average prices was recorded in Novaya Sortirovka, ZhBI (concrete factory) and Uralmash, while the biggest decrease occurred in Chermet and VTUZgorodok neighborhoods.

Map 20. Average prices distributed by Yekaterinburg price zones and its annual dynamics16.

Source: Knight Frank St Petersburg, 2016

Average price of sq m in a most popular 1-room flat as of December 2015 was 70,290 rubles. In contrast to the secondary market there was a positive trend during the year in the new construction market but the number of projects on sale was declining.

The increase in prices one could observe for all types of apartments: for one-room flats + 3.2%, two-room flats + 3.1%, three-room flats + 4.1%.

Table 65. Annual changes in apartment prices during 2015

Unit type Average price, rubles Changes per sq m 1 room 70,290 3.2% 2 rooms 73,660 3.1% 3 rooms 69,696 4.1%

Source: Knight Frank St Petersburg, 2016

16 The average prices are cited as of December 2015. The price dynamics is given compared to Q4 2014.

Professional Opinion Regarding Market Development Perspectives

Active reduction in the volume of new projects entering the market can lead to a deficit of liquid supply. At the same time the city administration is actively working to develop new spots for residential construction, mainly due to the redevelopment of former industrial areas. However, the prospects for the development of housing construction in Yekaterinburg are sufficiently stretched in time.

Change of the economic situation in the country, the ending of the state program to subsidize mortgage rates in 2016 could lead to a decline in demand. Against this background, the exit of investment buyers from the market looks quite expected. A reduction in the value of housing under construction can be the only factor stimulating the demand in the market. As a result a reduction in the average prices in Yekaterinburg primary market is likely, in the range of 10-15%.

Rival projects in the immediate neighborhood. Analysis of competitive environment changing perspectives

Table 66. The list of existing competitors in the zone of influence of “Rassvetniy” residential complex

Type of Average asking price, RUR per sq m Date of Residential complex the Address Developer Fitting out Class one-room two-room three- commissioning premises17 flats flats room flats Universitetskiy Flats 41, Mira St. Pervostroitel’ commissioned Shell&core Comfort+ 81,534 77,929 69,285 Accord Apartments Novgorodtsevoy St. Uralenegrostroykomplex 15.05.2017 Shell&core Comfort 53,303 51,363 50,368 Olymp Apartments 32Ǫ, 40-Letiya Komsomola Dominvest 15.05.2016 Shell&core Comfort 56,788 55,928 49,024 Pedagogicheskaya, Gagarina, Bazilic Flats Victoria Invest 15.08.2016 Shell&core Comfort 68,000 63,000 58,000 Vishneva, Mira streets

Table 67. The list of existing competitors in the zone of influence of “Khrustal’niye Klyuchi” residential complex

Average asking price, RUR per sq m Type of Date of one- Residential complex the Address Developer Fitting out Class two-room three- commissioning room premises flats room flats flats

Koltsovskiy Dvorik, phase 1 Flats Sputnikov, Aviatorov, 15.11.2016 60,000 52,000 46,000 Diart Ural Shell&core Economy Raketnaya streets, Koltsovo Koltsovskiy Dvorik, phase 2 Flats 15.11.2016 60,000 52,000 46,000 Residential complex at not on Flats 12, Yaskina St. Gorzhilstroy commissioned Shell&core Economy 53,471 49,105 Yaskina Street sale Aviator Flats Aviatorov, Raketnaya streets Efes commissioned Fully fitted out Economy 54,200 54,222 50,750

17 hereafter in the tables: ‘flats’ for residential premises, ‘apartments’ for non-residential premises

Table 68. The list of existing competitors in the zone of influence of “Michurinskiy” residential complex

Average asking price, RUR per sq m Type of the Date of Residential complex Address Developer Fitting out Class one-room two-room premises commissioning flats flats Zapadniy Flats Krasnoles’ya St. Maksima commissioned Fully fitted out Economy 65,257 63,700 Greenwood Apartments Proninoy St. Alta 01.04.2016 Fully fitted out Economy 60,000 59,000 Residential complex at Tenistaya Flats Tenistaya, Sukhodolskaya St. AtomStroyKomplex III quarter 2017 Fully fitted out Economy 53,239 55,124 street

Khrustal’nogorskiy Flats Savkova, Khrustal’nogorskaya St. AtomStroyKomplex commissioned Fully fitted out Economy n/a 59,094 Sukhodol’skiy Flats 199, Sukhodol’skaya St. Brusnika IV quarter 2016 Fully fitted out Comfort 69,326 67,091 Kortros “Akademicheskoye Akademicheskiy Flats Krasnoles’ya St. commissioned Fully fitted out Economy 66,349 58,217 Group”

Table 69. The list of existing competitors in the zone of influence of “Rastochnaya” residential complex

Average asking price, RUR per sq m Type of the Date of Residential complex Address Developer Fitting out Class one-room two-room premises commissioning flats flats Semitsvet, phase 1 Flats 01.01.2016 Fully fitted out Economy 62,733 63,928 Tehnicheskaya, Druzhinina streets Astrainveststroy Semitsvet, phase 2 Flats 01.04.2017 Fully fitted out Economy 61,000 60,000 Simphonia Flats 13, Kourovskaya St. Zheldoripoteka 01.10.2016 Shell&core Economy 66,143 63,708 Kvartet Flats 30, Manevrovaya St. UIT Uralstroy 01.10.2016 Shell&core Economy 64,357 61,361

Table 70. The list of existing competitors in the zone of influence of “Flagman” residential complex

Average asking price, RUR per sq m Type of the Date of Residential complex Address Developer Fitting out Class one-room two-room premises commissioning flats flats Repin park Flats 75, Zavodskaya St. Aston commissioned Fully fitted out Comfort 75,418 73,501 Regata Flats 126, Tatischeva St. NKS-Development commissioned Fully fitted out Comfort 84,150 79,588 Bulgakov Flats 27, Tokarey St. AtomStroyKomplex commissioned Fully fitted out Comfort 87,270 81,002

Table 71. The list of existing competitors in the zone of influence of “Shefskaya” residential complex

Type of Average asking price, RUR per sq m Date of Residential complex the Address Developer Fitting out Class one-room two-room three-room commissioning premises flats flats flats Alfa Flats Tsvetochniy pereulok Formula Stroitel’stva 15.11.2016 Fully fitted out Economy 73,085 61,147 62,158 Partly fitted Oazis, phase 1 Flats 15.05.2016 Comfort 65,000 59,000 56,000 out Sredneural’skoe Partly fitted Oazis, phase 2 Flats 1A, Starykh Bolshevikov St. 15.08.2016 Comfort 65,000 59,000 56,000 Stroitel’noe Upravleniye out Partly fitted Oazis, phase 3 Flats 15.11.2016 Comfort 65,000 59,000 56,000 out Residential complex at Flats 6, Parnikovaya St. UGMK-Holding commissioned Fully fitted out Economy 76,096 73,065 67,036 Teplichnaya street Residential complex at Partly fitted Flats 5, Elektrikov St. Efes commissioned Economy 63,167 62,333 59,000 Elektrikov street out Atlant Flats 3, Starykh Bolshevikov St. Stroytek commissioned Fully fitted out Economy n/a n/a 58,285

Appendix 4 – Residential market segmentation according to the current classification

The classification of modern residential buildings supposes differentiation of projects according to the following basic characteristics: x Location; x Areas and proportion of different types of apartments; x Parking availability and its characteristics; x Constructional type; x Number of storeys in the building; x Average apartment18 area.

We define the following classes of multi-apartment houses in the residential real estate market of Saint- Petersburg: x Class A (prime) which in its turn is subdivided into 2 subclasses: A+ and A. x Class B (middle-class), which is also subdivided into 2 subclasses: higher middle-class (B+) and class B. x Class C (mass-market residential real estate), which is subdivided into 2 subclasses: higher mass-market class and lower mass-market class residential real estate.

Table 72.Market segmentation according to the modern classification

C B A Characteristics C C+ B (comfort) B+ (business) A (elite A) A+ (elite A+) (economy) (medium) Prestigious zones of non- central districts; The most Non-central Historical centre; embankments prestigious districts, embankments Location Non-central districts outside the zones of prestigious with scenic borders of historical suburbs views historical centre centre; prestigious suburbs Large Panel Large Panel System System building; building(rare Brick or brick Brick or brick Brick or brick & Brick or brick Constructional brick and ly); & reinforced & reinforced reinforced & reinforced type reinforced brick and concrete concrete concrete concrete concrete reinforced building building building building building with concrete small building

18 hereafter an ‘apartment’ means a residential premise; a ‘unit’ means a residential premise or an aparthotel room/flat, literally a non- residential premise

C B A Characteristics C C+ B (comfort) B+ (business) A (elite A) A+ (elite A+) (economy) (medium) apartments Storey number (prevailing in a Of no importance Up to 16 Up to 12 Up to 9 residential complex) Apartment number on a Of no importance Up to 7 Up to 5 Up to 4 stairwell, item Parking index, place number Of no importance From 0,5 From 0,7 From 1,1 per one apartment Placing offices, service Placing offices industries and and service Non- trade is No industries is Mainly for residential No requirements possible. Public requirements possible, internal use premises catering and excluding public food products catering are not preferred Studios – 0% Studios – to Studios – 0% Studios – 0% Studios – to Studios – to 1 room – 0% 5% 1 room – to 1 room – to 15% 50% 15% 2 room -15- 1 room – 30- 25% 2 room – 25- Usual 1 room – to 1 room – 35- 25% 40% 2 room – 30- 35% apartments 70% 45% 3 room – 40- 2 room – 35- 40% 3 room – 35- ratio by room 2 room – to 2 room – 25- 60% 45% 3 room – 35- 50% number 30% 35% 4 room – 15- 3 room – 20- 45% 4 room – to 15% 3 room – to 3 room – 15- 25% 35% 4 room – to Multiroom – to 15% 20% Multiroom – to 4 room – to 5% 10% 2% 10% Average apartment From 35 From 52 From 65 From 80 From 110 From 130 area, sq.m Source: Knight Frank St Petersburg, 2015

Appendix 5 – Office market segmentation according to the current classification

Table 73.Market segmentation according to the modern classification

Class A Class B+ Class B-

1. BUILDING ENGINEERING SYSTEMS

1.1. Building Management System (BMS)

must must recommended

1.2. Heating Ventilation and Air-Conditioning (HVAC)

HVAC system that provides all- HVAC system that provides the-year-round cooling, heating Heating, Ventilation and Air cooling, heating and humidity and humidity control within Conditioning systems. control. individual premises.

must must must

Recommendation: four-pipe AC.

1.3. HVAC capacities

Capacity to provide 24-hour and all-the-year-round cooling in server rooms. Temperature in office areas: 22 C0 ± 1 C0. Fresh air supply: 60 m3 per hour per 10 m2 of office rentable space, according to planned occupancy.

must optional recommended

1.4. Modern fire security system

which includes fire detection, fire alarm and fire suppression.

must must must

1.5. Elevators

Modern high quality speed elevators from major Modern elevators for 4-storey buildings and higher. international brands.

must must must

1.6. Maximum waiting time of elevators

No longer than 30 seconds.

must recommended recommended

Recommendation: an intelligent elevator control system to be

installed in the buildings with 20 or more floors.

1.7. Power supply

Class A Class B+ Class B-

Two independent sources of power supply with automatic change-over or diesel generator power supply system as emergency backup (power supply should be a minimum 70 VA of the one-time electric load per 1 m2 effective office space), UPS for emergency systems.

must optional recommended

1.8. Security system Modern security and access Modern security and access control systems: CCTV at all control systems: CCTV at all CCTV at all entrance points, 24- entrance points, around the entrance points, around the hour security personnel. Access building, at parking areas, building, at parking areas, control. electronic card access, 24-hour electronic card access, 24-hour security personnel. security personnel.

must must must

2. BUILDING STRUCTURE

2.1. Clear ceiling height: min 2.7 m and over

must must recommended

2.2. Layout

Open floor plates, efficient Open floor plates, efficient layout, Open floor plates for the whole layout, supporting columns. supporting columns. Regular Regular column grid: not less or more than 50% of office column grid: not less than 6×6. rentable area, efficient layout. than 6×6.

must must recommended

Recommendation: For not less than 90% of usable area distance

from windows to columns should not be less than 4 m.

2.3. Floor depth

Floor depth: not more than 20 m from window to window. Not more than 10 m from window to floor plate core and 12 m for buildings with non-regular forms and atriums.

must optional recommended

2.4. Loss factor

Building loss factor: not exceeding 12%. Areas are calculated according to BOMA standards.

must must recommended

2.5. Load bearing capacity: not less than 400 kg/m2

Class A Class B+ Class B-

must optional recommended

2.6. Fit-out of common areas and facade finishing

High quality materials used in fit- Quality materials used in fit-out of common areas and facade out of common areas and facade finishing. finishing.

must must must

2.7. Raised floors

Building is designed for full value Possibility to install raised floors. raised floor installation.

must optional recommended

2.8. Lighting & window grid

Modern high quality windows providing sufficient natural lighting.

must must recommended

3. LOCATION

3.1. Location

Good building location, an absence of nearby objects that can have a negative impact on a building’s image

(e.g. functioning industrial buildings, dumps, etc.).

must optional recommended

3.2. Transport access

Location within not more than 15-minute walks from the nearest metro station or an adequately organized shuttle-bus service (waiting time of about 5–15 minutes during morning and evening peak traffic periods).

must optional recommended

4. PARKING

4.1. Parking type

Underground parking or covered multilevel parking. Surface guest Organized guarded parking. parking.

must must must

4.2. Parking ratio

Class A Class B+ Class B-

- Within the Garden Ring: not less than 1 space per 100 m2 of leasable area (1/100).

recommended recommended recommended - Between the Garden Ring and the Third Ring Road: not less than 1/80;

- Between the Third Ring Road and MKAD: not less than 1/60;

- Outside MKAD: 1/30–1/40 or more. must must recommended

5. OWNERSHIP

5.1. Single ownership (the building is not sold by floors or blocks to different owners)19

must optional recommended

6. PROPERTY MANAGEMENT & SERVICES FOR OCCUPIERS

6.1. Property management

Professional property management company with not less than 5 buildings under Organized property Property management company. management (not less than management. 5,000 m2 each) or with relevant international experience.

must must must

6.2. Telecom providers

No exclusive telecom provider. Potential possibility to use services of two or more independent telecom providers.

must must recommended

6.3. Lobby

Efficiently organized reception area appropriate to building size, providing convenient access to the building. Well organized waiting zone.

must optional recommended

6.4. Amenities

Professionally organized staff Staff cafeteria and other amenities in the building (ATM, newsstand, cafeteria adequate to building dry-cleaning, shops, etc.). Infrastructure nearby should be considered.

19 Not applicable for multifunctional complexes (MFC) comprising office and retail premises or apartments

Class A Class B+ Class B-

size and populationȥ At least two more amenities in the building (ATM, newsstand, dry-cleaning, shops, etc.). Infrastructure nearby should be considered.

must must must

7. CERTIFICATION 7.1. Certification according to one or more international environmental assessment methods for buildings (e.g. BREEAM or LEED) recommended recommended recommended Source: Knight Frank St Petersburg, 2015