Ojsc “Lsr Group” 36 Kazanskaya Street, St

STRICTLY CONFIDENTIAL – FOR ADDRESSEE ONLY

REPORT AND VALUATION FOR:

OJSC “LSR GROUP” 36 KAZANSKAYA STREET, ST. PETERSBURG,190031, RUSSIA

OF THE REAL ESTATE PROPERTIES TOGETHER KNOWN AS: “LSR GROUP PORTFOLIO”

DATE OF VALUATION: DECEMBER 31, 2011

DATE OF REPORT ISSUE: FEBRUARY 29, 2012

PREPARED BY: OOO CUSHMAN & WAKEFIELD LLC DUCAT PLACE III 6 GASHEKA STREET 125047, MOSCOW, RUSSIA TEL: +7 (495) 797-9600 FAX: +7 (495) 797-9601

TABLE OF CONTENTS

1. SCOPE OF INSTRUCTIONS ...... 3 2. BASIS OF VALUATION ...... 7 3. ASSUMPTIONS AND SOURCES OF INFORMATION ...... 7 4. TENURE AND TENANCIES ...... 8 5. NET ANNUAL RENT...... 10 6. TOWN PLANNING ...... 11 7. STRUCTURE ...... 13 8. SITE AND CONTAMINATION ...... 13 9. PLANT AND MACHINERY ...... 13 10. INSPECTIONS, AREAS AND DIMENSIONS ...... 13 11. GENERAL PRINCIPLES ...... 14 12. SPECIAL ASSUMPTIONS, RESERVATIONS AND DEPARTURES ...... 15 13. DISCLOSURE ...... 15 14. MATERIAL CHANGE ...... 15 15. MARKET VALUE ...... 16 16. AGGREGATE VALUATION ...... 16 17. CONFIDENTIALITY ...... 21 18. APPENDIX ONE: DESCRIPTION AND VALUATION ...... 23 18.1. VALUATION METHODOLOGY ...... 23 18.2. SCHEDULE OF VALUES ...... 30 18.3. PROPERTY DESCRIPTIONS ...... 31 19. APPENDIX TWO: MARKET COMMENTARY ...... 222 20. APPENDIX THREE: PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS ...... 311

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

The Directors,

LSR Group OJSC 36 Kazanskaya Street St. Petersburg, 190031, Russia

And

Goldman Sachs International Peterborough Court 133 Fleet Street London EC4 2BB United Kingdom

J.P. Morgan Securities Ltd. 10 Aldermanbury London EC2V 7RF United Kingdom

VTB Capital plc 14 Cornhill London EC3V 3ND

(“the Addressees”)

February 29, 2012

Dear Sirs,

Re: LSR Group Real Estate Portfolio Valuation

LSR Group OJSC (“the Company”) Various real estate properties together known as the LSR Group Real Estate Portfolio (“the Properties”)

In accordance with the contract 11-MOSC-900287 between ourselves and LSR Group OJSC from January 19, 2012, we have pleasure in reporting to you as follows:

1. SCOPE OF INSTRUCTIONS In accordance with your instructions, as confirmed by our Agreement and attached Principal Terms and Conditions of Appointment as Valuers we, OOO Cushman & Wakefield LLC (herein together referred as “C&W”), have considered each Property as set out below and made all necessary enquiries to provide you with our opinion of Market Value of the freehold interest in the buildings and the long leasehold interest in the land plots beneath the buildings.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

The effective date of each valuation is December 31, 2011.

We understand that this valuation report and the Schedule (together, the “Valuation Report”) are required for the completion of the Company’s financial accounts, dated December 31, 2011, and we hereby give our consent for such inclusion, this report may not be used for any other purpose.

Each valuation has been prepared in accordance with the Practice Statements contained in the RICS Appraisal and Valuation Standards (“the Red Book”) published by The Royal Institution of Chartered Surveyors and amended in May 2011 (7th edition) and prepared by an appropriate valuer who conforms to the requirements as set out in the Red Book, acting in the capacity of an External Valuer. We confirm that each Valuation is a “Regulated Purpose Valuation” as defined in the Red Book.

OOO Cushman & Wakefield LLC have not previously carried out valuations for the LSR Group and have no other previous involvement with the Group, therefore we can confirm that no conflict of interest exists in carrying out this Regulated Purpose Valuation. OOO Cushman & Wakefield LLC confirms that it is carrying out this valuation as an independent and external valuer.

The Subject Properties, which form the portfolio, are set out below:

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Total area / Total Estimated remaining Valued interst, % #Property Adress Land plot area, ha Property type Construction start Construction end Development strategy construction area, sqm construction costs, RUR (LSR Legal Share)

Saint-Petersburg Properties

Properties held as investments Existing buildings 1 Apollo Dobroliubova Avenue, 8 0.24 Class A 8,454 n/a n/a n/a 100% Hold 2 Orlov Paradnaya Street, 8, bld. 15 n/a Class A 4,990 n/a n/a n/a 100% Hold 3 Gelios Marata Street, 47-49 n/a Class B 3,909 n/a n/a n/a 100% Hold 4 Litera Galernaya Street, 10 0.09 Class B 2,379 n/a n/a n/a 100% Hold 5 Kazanskaya 36 Kazanskaya Street, 36 0.25 Class B 6,823 n/a n/a n/a 100% Hold 6 Zolotaya Kazanskaya Kazanskaya Street, 44 0.15 Class B 3,078 n/a n/a n/a 100% Hold Properties held for future development Commercial propeties held for future development 7 Gribalevoy Vali Gribalevoy Street, 9 0.75 Class B 46,038 1,372,788,785 January 2013 December 2015 100% Build and hold 8 Salova Salova Street, 61 2.50 Class B 139,588 4,439,818,355 January 2013 December 2015 100% Build and hold Residential propeties held for future development 9 Oktyabrskaya Embankment Oktyabrskaya Embankment 55.80 Mass market 1,000,000 27,330,508,475 July 2013 December 2024 100% Build and sell 10 Tsvetnoy gorod Piskarevskiy prospect, 145 455.18 Mass market 5,604,096 131,359,662,120 January 2016 December 2025 100% Build and sell Properties in the course of development Elite class residential 11 Smolniy Park Smolnaya Street, 4 8.65 Elite 176,447 5,564,051,646 100% Build and sell Stage 1 Smolnaya Street, 4 36,823 306,964,295 June 2010 June 2012 100% Stage 2 Smolnaya Street, 4 139,624 5,257,087,351 March 2012 August 2016 100% 12 Nevskiy 1 Nevskiy Avenue, 1 0.22 Elite 9,709 1,092,315,683 January 2014 December 2015 100% Build and sell 13 Paradniy Quarter* Paradnaya Street 9.57 Elite 116,054 2,581,508,279 100% Build and sell Stage 1 Paradnaya Street, 1-3, bld. 6-7 58,696 705,965,022 June 2008 June 2012 100% Stage 2 Paradnaya Street, 1-3, bld. 4-5-8 57,358 1,875,543,257 June 2011 November 2013 100% 14 Radishcheva 39 Radishcheva Street, 39 0.85 Elite 31,958 1,103,170,674 May 2012 February 2015 100% Build and sell 15 Suvorosvskiy 32 Suvorovskiy Avenue, 32 1.13 Elite 11,400 368,534,142 July 2013 December 2014 100% Build and sell 16 Morskoy Morskoy Avenue, 29 0.36 Elite 18,540 690,440,965 November 2012 March 2015 100% Build and sell 17 Kamennoostrovskaya kollektsiya Kamennoostrovskiy Avenue, 56-62 n/a Elite & Street-retail 1,975 n/a n/a n/a 100% Sell 18 Venice Deputatskaya Street, 43, lit. A 0.83 Elite 24,370 531,706,171 March 2010 September 2012 100% Build and sell 19 Kovenskiy Kovenskiy Lane, 5 0.39 Elite 12,870 374,567,315 June 2011 June 2013 100% Build and sell 20 Kuybysheva 13 Kuybysheva Street, 13, lit. B 0.19 Elite 7,958 273,037,386 July 2012 July 2014 100% Build and sell Business class residential 21 Europe city Medikov Avenue, 10 7.36 Business 188,581 5,519,425,243 100% Build and sell Stage 1 Medikov Avenue, 10 127,088 2,985,684,831 October 2012 June 2014 100% Stage 2 Medikov Avenue, 10 61,493 2,533,740,412 January 2014 June 2015 100% 22 Morskie bashni Savushkina Street, 151 3.05 Business 113,180 2,574,894,817 July 2013 December 2015 100% Build and sell Mass market residential 23 Dolgoozerniy Dolgoozernaya street, site 1 4.03 Mass market 10,374 219,156,494 December 2011 March 2013 100% Build and sell 24 Pulkovskiy Posad Pulkovskoe shosse, liter K, 30 8.25 Mass market 23,400 581,509,914 March 2011 December 2013 100% Build and sell 25 Antey Kosmonavtov prospect, site 10, 63 7.08 Mass market 120,158 1,233,504,586 July 2007 December 2014 100% Build and sell 26 Yuzhniy Leninskiy prospect, quarter 15,18, sites 1,2,3,6,7,8 1.65 Mass market 29,823 416,592,692 August 2008 December 2012 100% Build and sell 27 Uyzhnaya Aquatoria Krasnoselskiy Region, quarter 28,28A, Doblesti street 23.90 Mass market 523,065 13,468,460,876 March 2011 June 2016 100% Build and sell 28 Murinskiy kvartal Piskarevskiy prospect 110.52 Mass market 1,500,000 28,914,321,355 January 2016 December 2025 100% Build and sell 29 Ruch'i Piskarevskiy prospect 23.66 Mass market 282,321 9,424,123,087 January 2013 December 2016 100% Build and sell 30 Avrora Belisheva St., 9A 15.00 Mass market 390,270 8,758,008,683 July 2010 December 2015 100% Build and sell 31 Vostok Badaeva St., 19A 1.58 Mass market 59,655 1,119,894,489 July 2009 March 2013 100% Build and sell 32 Sofiya Yuzhnoe shosse, 55, site 1,2,3,4,5,6 20.86 Mass market 513,000 11,862,850,269 February 2013 December 2018 100% Build and sell 33 Marshala Blukhera Marshala Blukhera Avenue, 12 34.45 Mass market 507,000 14,033,897,556 February 2012 December 2016 100% Build and sell 34 Moskovskoe shosse Moskovskoe shosse, 3 9.15 Mass market 144,117 3,539,951,208 December 2012 December 2015 100% Build and sell 35 Vitebskiy, 15 Dunayskiy proezd 5.65 Mass market 137,666 2,871,491,983 August 2012 December 2015 100% Build and sell 36 Shuvalosvkiy kar'er Prigorodniy uchastok 64.00 Mass market 602,200 16,260,549,973 June 2013 December 2019 100% Build and sell Commercial properties 37 Paradniy Quarter (mansion)* Paradnaya Street, 1-3, bld. 16 9.57 Class A 5,075 n/a n/a n/a 100% Sell 38 Paradniy Quarter (office development)* Paradnaya Street, 1-3, bld. 17-18 9.57 Class A 12,691 465,241,095 June 2012 August 2014 100% Build and sell 39 TOC na Leningradskom Vyborg, Leningradskiy Avenue, 17 0.19 Class B 7,362 262,208,435 January 2012 October 2014 80% Build and hold 40 Nevskiy 68 Nevskiy Avenue, 68 0.15 Elite 8,400 452,753,390 December 2011 December 2012 100% Build and sell 41 Kamenoostrovskaya kollektsiya (offices) Kamennoostrovskiy Avenue, 58-60 0.83 Class B 8,233 531,448,405 December 2012 August 2014 100% Build and sell Country side residential properties (land plots) 42 Akhmatovo land plots 7.16 Land plot 52,754 21,370,575 June 2007 December 2012 100% Sell 43 Zolotaya Roshcha land plots 18.44 Land plot 144,650 40,482,254 June 2011 December 2012 100% Sell 44 Bolshoy Alakul land plots 75.84 Land plot 758,417 66,648,128 February 2011 December 2014 100% Sell 45 Dachnoe land plots 29.97 Land plot 299,700 6,820,975 July 2011 November 2012 100% Sell 46 Maloe Repino land plots 32.88 Land plot 266,309 0 August 2008 December 2011 100% Sell * The land plot with a total area of 9.57 is located under all buildings of Paradniy Quarter mixed-use complex

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Moscow Properties Properties held as investments Existing buildings 47 Davydkovskaya Moscow, Davydkovskaya Street, 16 1.14 Business 2,448 n/a n/a n/a 100% Sell 48 Tverskoy 16 Moscow, Tverskoy Boulevard, 16 0.14 Class A 3,648 n/a n/a n/a 100% Hold Properties in the course of development Commercial properties 49 Noviy Balchug Moscow, Sadovnicheskaya Street, 9, bld.1, 2, 3 0.42 Class A 24,815 1,354,349,264 December 2012 December 2015 100% Build and sell Business class residential Moscow Region, Odintsovskiy District, Zarech’e Settlement, Vesennyaya Street, 1, k.1-8, 5, k.1- 50 Grunvald 4.1 Business/Elite 58,331 40,406,781 December 2011 December 2012 100% Build and sell 5, 3, k.1-3, 7 51 Leningradskoe Highway 58 Moscow, Leningradskoe Highway, 58 1.81 Business 96,520 4,770,351,255 March 2013 December 2016 100% Build and sell 52 9 planet Moscow, Serpukhovskoy Val, 19 4.72 Business 239,160 9,159,094,915 March 2013 December 2017 100% Build and sell Mass market residential 53 New Nakhabino Moscow Region, Istrinskiy District, Pavlo-Slobodskoe Settlement, Chernaya Village 44.35 Mass market 241,388 New Nakhabino 1 phase Moscow Region, Istrinskiy District, Pavlo-Slobodskoe Settlement, Chernaya Village 15.30 Mass market 61,388 728,491,349 October 2010 December 2012 100% Build and sell New Nakhabino 2 phase Moscow Region, Istrinskiy District, Pavlo-Slobodskoe Settlement, Chernaya Village 29.05 Mass market 180,000 5,113,055,943 May 2012 December 2015 100% Build and sell 54 Staraya Bitsa Moscow Region, Leninskiy Municipal District, Sosenskoe Settlement, Bachurino Village 59.85 Mass market 461,834 13,790,037,420 June 2012 December 2016 100% Build and sell 55 Domodedovo Moscow Region, Domodedovo, Central District, Zapadniy Microdistrict 39.34 Mass market 611,831 10,324,211,168 August 2011 December 2018 100% Build and sell

Ekaterinburg Properties Properties in the course of development Mass market residential 56 Michurinskiy Sukhodolskaya Street 51.88 Mass market 214,143 4,556,187,823 April 2012 December 2015 100% Build and sell 57 Kalinovskiy Shefskaya, Sovkhoznaya and Taganskaya Streets 6.58 Mass market 149,724 2,340,665,241 October 2008 June 2015 100% Build and sell 58 40 let Komsomola 40-Letiya Komsomola Street, 2B 9.36 Mass market 149,145 3,465,771,128 March 2017 April 2021 100% Build and sell 59 Zeleniy Mys Aviatsionnaya Street, 8 Marta Street, 194 1.46 Business 56,474 10,300,881 July 2006 December 2012 100% Build and sell 60 Tatischev Tokarey Street, Tatisheva Street, Suhorukova Street, Nagornaya Street 1.89 Mass market 47,097 1,070,093,218 September 2010 March 2014 100% Build and sell 61 Vosstania Molodezhi Vosstaniya – Molodezhi – Dostoevskogo - Narodnogo Fronta Streets 0.98 Mass market 17,104 282,939,261 April 2011 June 2015 100% Build and sell 62 Bakinskikh Komissarov parking Bakinskikh Komissarov Street, 109 and Vosstaniya Street, 99 0.15 Parking 3,225 11,600,848 May 2008 December 2012 100% Buils and sell 63 Furmanova parking Furmanova Street, 123-A n/a Parking 5,062 0 n/a n/a 100% Build and sell 64 Evropeyskiy Gotvalda Street, 14A 0.72 Business 14,248 0 n/a n/a 100% Build and sell 65 KOSK Novgorodtsevoy Street, 25 0.88 Office 12,333 301,876,374 December 2012 December 2015 100% Build and sell 66 Vonsovskogo Leninskiy District, Akademika Vonsovskogo Street - Krasnoles'ya - Shirokorechenskaya 7.13 Mass market 94,688 1,593,513,877 May 2013 September 2015 100% Build and sell

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

2. BASIS OF VALUATION We confirm that, as instructed, the Valuation of each Property has been assessed on the basis of Market Value in accordance with the appropriate sections of both the current Practice Statements (“PS”), and United Kingdom Practice Statements (“UKPS”) contained within the RICS Valuation Standards, 7th Edition (the “Red Book”). Market Value is defined in the Red Book, as follows:

“The estimated amount for which a property should exchange on the date of valuation 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.”

Market Value is an internationally accepted basis of valuation, entirely consistent with the normal valuation basis followed in each country where the Properties are located. The Properties are held either as properties held as investments, properties held for development, or properties in the course of development and we have therefore used the appropriate property investment and development valuation methodology to calculate each Market Value.

Our Valuation Report is also in accordance with the relevant rules and recommendations of PR 5.6.5G of the Prospectus Rules (and related guidance) published by the Financial Services Authority and the relevant guidance published by the European Securities and Market Authority.

In this Valuation Report: “LSR Group legal share (%)” means the percentage stake that you have told us that the Company has in the legal entity by which the Property is held. For the avoidance of doubt we have valued a 100% share of the legal interest identified in each Property;

3. ASSUMPTIONS AND SOURCES OF INFORMATION An assumption is stated in the Glossary to the Red Book to be a “supposition taken to be true” (“assumption”). Assumptions are facts, conditions or situations affecting the subject of, or approach to, a valuation that, by agreement, need not be verified by a valuer as part of the valuation process. In undertaking our valuations, we have made a number of assumptions and have relied on particular sources of information. We believe that the assumptions we have made are reasonable, taking into account our knowledge of the Properties, and the contents of reports made available to us.

However, in the event that any of these assumptions prove to be incorrect then our valuations should be reviewed. The assumptions we have made for the purposes of our Valuations are referred to below. We have made an assumption that the information which the Company and its professional advisers have supplied to us in respect of the Properties is both full and correct.

It follows that we have made an assumption that details of all matters likely to affect value within their collective knowledge such as prospective lettings, construction timetables, completion schedules, outstanding requirements under legislation and planning decisions have been made available to us and that the information is up to date.

In completing the valuations herein, we have made the following assumptions:

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

 landplots held under long leaseholds will be renewed at lease expiry, effectively into perpetuity – the right of renewal to the current long leaseholder is established at law in Russia;  that shares in land leases held in Special Purpose Vehicles can be sold;  all notices have been served validly and within appropriate time limits;  the Properties exclude any mineral rights; and  vacant possession can be given for all accommodation which is not leased  that where currently the permitted use of the landplots is not identical with a use which currently permits the construction of residential or other planned development, we assume that it will be possible to achieve such a permission and have reflected this permitting risk in our valuation inputs which determine value;  where the Company holds part shares in projects, we have assumed that no material reasons exist why such shares may not be sold as at the date of valuation and that co- owner’s consent will be given for such disposals;  where the Company intends to acquire long-leasehold or freehold shares in land or buildings within the current portfolio, either through negotiation with current owners or at the expiry of a build lease/investment contract, that such ownership or long leasehold tenure will be granted;  that any bank pledges/mortgages relating to the subject properties owned either directly or partly be the Company itself, or by one of its subsidiaries, will not have any detrimental effect on value and will in no way impede the normal open market disposal of such properties as at the date of valuation;  that where the relocation of families and or trading entities must take place as a necessary condition of development at a Subject Property, that such relocation takes place in a timely manner and that such relocations pose no unusual risk of delay to the proposed development project;

4. TENURE AND TENANCIES We have had access to the public title deeds or lease documentation in respect of the Properties but these do not always reveal all aspects relating to title. Each valuation has been based entirely on the information which the Company has supplied to us as to tenure, tenancies and statutory notices. We understand each property is either held by the Company, its subsidiaries, or jointly with third parties.

We have valued a 100% share of the tenure stated in each Property, unless otherwise specifically stated, as if each Property was held entirely by the Company as at the valuation date. We have not made any adjustment to value, which may be appropriate when considering fractural ownership for each individual Property.

Unless disclosed to us to the contrary and recorded in the Property descriptions, each valuation is on the basis that: a) the Property possesses a good and marketable title, free from any unusually onerous restrictions, covenants or other encumbrances;

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 b) where the interest held in the property is leasehold, there are no unreasonable or unusual clauses which would affect value and no unusual restrictions or conditions governing the assignment or disposal of the interest; c) leases to which the Property may be subject are on standard market terms, and contain no unusual or onerous provisions or covenants which would affect value; d) all notices have been served validly and within appropriate time limits; e) the Property excludes any mineral rights; and f) vacant possession can be given of all accommodation which is unlet, or occupied either by the Company or by its employees on service occupancies.

Unless otherwise stated our valuation is for a full share interest in the Property and assumes that a good and marketable title exists. This should be taken into account in consideration of individual Properties. Where specific outstanding costs have been identified to us as being required to arrive at ownership of a full share interest in the requisite Property or in order to obtain the necessary permits, these costs have been taken into account in the valuation in full.

For some properties we have been informed by the Company that investment contracts are held for the development. In these cases our valuations assume that a ground lease and an ownership certificate will be issued upon completion of the development, as is normal development practice in Moscow.

In some cases land plots underlying the Properties are held leasehold. The long-term (49-years) lease is the most common type of ownership of land in Moscow and the Moscow Region, and such leases are treated as virtual freeholds due to legislative rights to renew and prolong such long leasehold interests, which are codified in Russian law. On the majority of these land plots buildings are held freehold according to the corresponding ownership certificates.

Real estate development projects in Russia are subject to a complicated regulatory framework, which may result in development projects being conducted on land that is leased under a long term lease from the relevant or under a short term construction lease. Where the property is still in development on a short-term land lease, such lease may be terminated early where the developer fails to make timely rental payments or complete the development on time or if a breach of other obligations under the lease agreement or the investment contract occurs.

In addition, if construction has not been completed during the term of the short-term lease, there is no assurance that the term will be renewed to proceed with the property construction. Once registration of ownership of the completed building has been obtained, by Russian law a developer is entitled either to enter into a long-term lease agreement in relation to the land with the relevant state authority or obtain the ownership rights (freehold interest) in the land. The maximum term of a long-term lease is currently 49 years. We have assumed that, where applicable, construction will be completed during the term of the relevant short-term ‘build’ lease or investment contract and that registration of ownership will be obtained. We have assumed that in all cases the Company or its subsidiaries, will obtain long-term lease agreements or ownership rights post registration.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Russian law also provides for the right of an owner of a building to acquire ownership rights to the underlying land plots which are in the federal or municipal ownership. In addition, with respect to development properties, developers may enter into investment contracts. An investment contract entered into between a land lease owner and a regional or local government often serves as a condition to the execution and renewal of a short-term construction land lease agreement. At the same time, a failure to enter into a land lease agreement promptly after the execution of the investment contract may constitute a material breach of the investment contract.

If a developer does not complete the development by the agreed date, it could lead to termination of the land lease agreement and the investment contract. A material breach of an investment contract may entitle the regional or local government to impose contractual penalties on a developer, or may lead to delays in completion of construction or rescission of the investment contract in its entirety. The relevant governmental authorities may require the removal of any incomplete construction or, alternatively, may argue that partially incomplete construction is an “unauthorised construction” and seek a court ruling declaring such construction to be state property or ordering its demolition.

In the event of termination of a land lease (whether during the term or at the expiry of the term) under the Civil Code of Russia, there is a risk that the land owner will acquire the right to buy the building in question on that land at a price to be determined by a court or request the demolition of the building. However, there is a lack of court practice or precedent on how these provisions will actually operate, and in this valuation we assume no investment contract or short term lease will be terminated due to a delay to complete or other material breach.

In addition, some state authorisations and permits that are required for construction are issued for a certain term specified in such authorisations and permits. If developers are unable to commence or complete particular developments by the specified dates, they will be required to apply for a renewal or extension of the respective authorisation and permit, which may be a complicated and time-consuming process. In this valuation we assume that the Company or its subsidiaries will be successful in the renewal or extension of such authorisations and permits.

5. NET ANNUAL RENT We were provided by the Company with net annual rent as at the date of valuation for each existing Property for lease.

Net annual rent is defined as:

“the current income or income estimated by the valuer:

(i) ignoring special receipts or deductions arising from the property;

(ii) excluding Value Added Tax and before taxation (including tax on profits and any allowances for interest on capital or loans); and

(iii) after making deductions for superior rents (but not for amortization), and any disbursements including, if appropriate, expenses of managing the property and allowances to maintain it in a condition to command its rent”.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

6. TOWN PLANNING We have not made formal searches, but have generally relied on verbal enquiries and any informal information received from the Local Planning Authority, or from the Company. Each valuation is on the basis that the Property has been erected either prior to planning control or in accordance with a valid planning permission and is being occupied and used without any breach of planning or building regulations. Except where stated otherwise, each valuation is on the basis that each Property is not affected by proposals for road widening, Compulsory Purchase, planning inquiry, or archaeological investigation.

Although, where appropriate, we have considered the Company’s business plan to develop each Property, each valuation reflects our opinion of an appropriate development that could reasonably be expected to form the basis of a bid for a Property by a third party. I.e. the Highest and Best Use as defined by the International Valuation Standards has been considered for each Property.

The Highest and Best Use is defined in Paragraph 3.4 of IVS 1 as: “The most probable use of a property which is physically possible, appropriately justified, legally permissible, financially feasible, and which results in the highest value of the property being valued”.

All lands in Russia are assigned to a particular land category and must be used for certain purposes, i.e. a “permitted use”, in order to achieve more optimal use of different land plots.

Through the Land Code, land in Russia is divided into the following seven categories, with a designated prescribed use for each:

1. agricultural land; 2. settlement land; 3. industrial land; 4. lands specially protected areas and objects (e.g. nature parks); 5. forest land; 6. water land; 7. reserved land.

Generally, lands of settlement are used for development of commercial real estate property. In addition, each land plot has a certain permitted use, which requires the owner of the land plot to use if for strictly determined purposes, for example, for constructions and management of an office building.

Construction and development in Russia is a complex multi-stage process, which involves compliance with many regulatory requirements, and obtaining authorisations from a large number of authorities at the federal, regional and local levels. Development in Russia is primarily governed by the Town-Planning Code, Civil Code, Land Code and other federal laws and regulatory acts.

In addition, construction activity is subject to regional and local regulation. Under Russian federal law, the basic steps typically required for commencement of construction projects are:  obtaining the rights to land;  preparation of design documentation and obtaining infrastructure/utilities documentation;  obtaining a construction permit;

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

 performing construction works;  obtaining a conclusion on conformity of construction with the applicable rules (ZOS) and operational permit; and  registration of title to the new building. Property development activities are subject to regulation by various governmental entities and agencies in connection with obtaining and renewing various permits, approvals and authorisations, as well as with ongoing compliance with existing laws, regulations and standards. A number of preliminary planning and architectural design approvals, as well as land ownership and lease rights, are necessary in order to receive construction permits and commence construction.

For any project being developed or redeveloped in a major city, the architectural design must be approved by several administrative bodies within the city administration. In addition, each project must receive administrative approvals from various governmental agencies, including the fire, health and safety, environmental protection and sanitary departments, as well as technical approvals from various utility providers, including providers of electricity, gas and sewage services. These requirements may hinder, delay or significantly increase the costs of development activities. The development or redevelopment of properties is carried out pursuant to certain specifications, including building area measurements, approved by certain state compliance authorities and, ultimately, upon the issuance of a construction permit issued by the regional or local authorities.

Valuation of the Property “held for future development” or “in the course of development” assumes that all required planning permission consents will be received within a normally acceptable timescale and that there are no such issues which would materially delay the issuance of the required consent, or have a material effect on value or marketability.

In the event that a developer changes design documentation during the process of construction, a developer will need the design documentation to be examined by state authorities and the previously issued construction permit to be amended. In some cases developers conduct the process of applying for construction permits concurrently with construction works.

We have assumed that the projects that the Company intends to develop in the future will not fail to conform to the project documentation or otherwise fail to comply with regulatory requirements, and that the Company will hence not be subject to fines or penalties, or to the cancellation of any project by governmental officials.

Regulatory authorities exercise considerable discretion in the enforcement and interpretation of applicable laws, regulations and standards, the issuance and renewal of permits, approvals and authorisations, and in monitoring compliance of companies with the terms thereof. Russian authorities and other authorised organisations have the right to, and frequently do, conduct inspections of existing and development properties.

We assume that all of the Company’s developments and completed or existing buildings fully comply with such existing laws and regulations and that an inspection of any of the Company’s properties would not bring to light any conditions or breaches detrimental to the construction, or construction timetables relied upon for the purposes of this valuation.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

7. STRUCTURE We have neither carried out a structural survey of each Property, nor tested any services or other plant or machinery. We are therefore unable to give any opinion on the condition of the structure or services at any Property. Each valuation takes into account any information supplied to us and any defects noted during our inspection, but otherwise are on the basis that there are no latent defects, wants of repair or other matters which would materially affect each valuation.

We have not inspected those parts of each Property which are covered, unexposed or inaccessible and each valuation is on the basis that they are in good repair and condition.

We have not investigated the presence or absence of High Alumina Cement, Calcium Chloride, Asbestos and other deleterious materials. In the absence of information to the contrary, each valuation is on the basis that no hazardous or suspect materials or techniques have been used in the construction of any Property.

8. SITE AND CONTAMINATION We have not investigated ground conditions/stability and each valuation is on the basis that any buildings have been constructed, having appropriate regard to existing ground conditions. Where the Property has development potential, our valuation is on the basis that there are no adverse ground conditions which would affect building costs.

However, where you have supplied us with a building cost estimate, we have relied on it being based on full information regarding existing ground conditions. We have considered the Company’s construction estimates in the light of typical market norms.

We have not carried out any investigations or tests, nor been supplied with any information from you or from any relevant expert that determines the presence or otherwise of contamination (including any ground water). Accordingly, our valuation has been prepared on the basis that there are no such matters that would materially affect our valuation.

9. PLANT AND MACHINERY Process-related plant/machinery and tenants’ fixtures/trade fittings have been excluded from each valuation.

No specialist tests have been carried out on any of the service systems or utilities present in each building or at each land-plot, and for the purposes of our valuations we have assumed that all are in good working order and in compliance with any relevant statute bye-law or regulation.

10. INSPECTIONS, AREAS AND DIMENSIONS All properties which comprise the portfolio were inspected by members of C&W’s Valuation and Advisory Department.

The Subject Properties situated in Moscow were inspected by Joshua Askew MRICS, and Irina Doshchenko between the December 14, 2011 and December 16, 2011.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

The Subject Properties situated in St. Petersburg and the Leningradsky Region were inspected by Joshua Askew MRICS, Polina Mitina and Alexey Romantsov MRICS between the December 19, 2011 and December 23, 2011.

The Subject Properties situated in Yekaterinburg were inspected by Irina Doshchenko and Alexandra Avdonina on December 22, 2011 and December 23, 2011.

We have relied entirely on the site and floor areas and dimensions provided to us by the Company. We have assumed that these are correct and calculated on the appropriate basis, as normally adopted by the local property market.

We have been advised by the Company that there have been no material changes to any of the Properties since our inspections.

11. GENERAL PRINCIPLES Each valuation is based on the information which has been supplied to us by the Company or which we have obtained in response to our enquiries. We have relied on this information as being correct and complete and on there being no undisclosed matters which would affect each valuation.

In respect of tenants’ covenants, whilst we have taken into account information of which we are aware, we have not received a formal report on the financial status of the tenants. We have not been supplied with any information to indicate that there are material arrears or that the tenants are unable to meet their commitments under the leases. Each valuation is on the basis that this is correct. You may wish to obtain further information to verify this.

Where we have reflected development potential in a valuation, we have assumed that all structures at the Property will be completed using good quality materials and first class workmanship and that the development scheme, where held as an income producing tenanted asset, will let to tenants who satisfy the tenant mix policy and are of reasonable covenant status and on typical market lease terms.

We have made subjective judgements during our valuation approach in arriving at our opinion and whilst we consider these to be both logical and appropriate they are not necessarily the same as would be made by a purchaser. The purpose of the Valuations does not alter the approach to the Valuations.

Property values can change substantially, even over short periods of time, and so our opinion of value could differ significantly if the date of valuation was to change. If you wish to rely on our Valuations as being valid on any other date you should consult us first. Should you contemplate a sale of any of the properties valued herein, we strongly recommend that the Property is given proper exposure to the market.

Each valuation assumes that there is an active letting and funding market. This Valuation Report should be read in conjunction with the contracts referred to above, our terms of engagement and in particular our Standard Terms and Conditions of Appointment of C&W as Valuers.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

12. SPECIAL ASSUMPTIONS, RESERVATIONS AND DEPARTURES We confirm that each valuation is not made on the basis of any Special Assumptions or any Departures from the Practice Statements contained in the Red Book. Subject to the general limitations of our inspections and sources of information set out above, each valuation is not subject to any specific Reservations in relation to restricted information or Property inspection.

13. DISCLOSURE The members of The Royal Institution of Chartered Surveyors who are named below in Section 15 have not previously been the signatories to the Valuations provided to the Company for the same purposes as this Valuation Report. C&W has not previously carried out these Valuations for the same purpose as this Report on behalf of the Company.

In relation to the preceding financial year of C&W, the proportion of the total fees payable by the Company to the total fee income of the firm is less than 5 per cent.

This Valuation Report has been prepared for inclusion in the listed financial reports and circulars of the Company. We hereby consent to inclusion of this Valuation Report in such listed financial reports and circulars.

14. MATERIAL CHANGE We hereby confirm that as at the date of this Valuation Report:

We have not become aware of any material change since December 31, 2011 in any matter relating to any specific Property covered by our Valuation Report which in our opinion would have a material effect on the Market Values as at today’s date, or

In relation to market conditions and movements in the property markets in which the Properties covered by our Valuation Report are located, we do not consider that any movement in respect of the Properties constitutes material change since December 31, 2011.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

15. MARKET VALUE In our opinion the Market Value of the freehold and leasehold interests in the Subject Properties as at the valuation date, December 31, 2011, subject to minor rounding, is fairly represented by the sum of

124,363,726,000 RUR (One Hundred and Twenty Four Billion, Three Hundred and Sixty Three Million, Seven Hundred and Twenty Six Thousand Rubles)

The valuation stated above represents the aggregate of the current values attributable to each of the individual properties and should not be regarded as a valuation of the portfolio as a whole in the context of a single sale. We set out the value related to each Property in the Aggregate Valution below.

16. AGGREGATE VALUATION Subject to the foregoing, and based on values current as at December 31, 2011, we are of opinion that the Market Value of each 100% share of each freehold and leasehold interest in each Property, as set out in the Appendix to this Report, is as follows:

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Valued interst, % # Property Tenure Property type C&W MV, RUR (LSR Legal Share)

Freehold

Saint-Petersburg Properties

Properties held as investments Existing buildings 1 Gelios Freehold Class B 407,110,000 100% 2 Litera Freehold Class B 267,680,000 100% 3 Kazanskaya 36 Freehold Class B 709,680,000 100% Properties held for future development Commercial propeties held for future development 4 Gribalevoy Freehold Class B 294,368,565 100% 5 Salova Freehold Class B 665,449,444 100% Residential propeties held for future development 6 Oktyabrskaya Embankment Freehold Mass market 8,572,312,705 100% 7 Tsvetnoy gorod Freehold Mass market 10,050,502,893 100% Properties in the course of development Elite class residential 8 Radishcheva 39 Freehold Elite 1,619,896,134 100% 9 Morskoy Freehold Elite 1,006,986,066 100% 10 Kamennoostrovskaya kollektsiya Freehold Elite & Street-retail 301,744,698 100% 11 Venice Freehold Elite 2,264,151,355 100% 12 Kuybysheva 13 Freehold Elite 385,779,153 100% Business class residential 13 Europe city Freehold Business 4,078,408,302 100% Stage 1 100% Stage 2 100% Mass market residential 14 Pulkovskiy Posad Freehold Mass market 233,317,930 100% 15 Antey Freehold Mass market 1,432,674,307 100% 16 Murinskiy kvartal Freehold Mass market 5,216,523,639 100% 17 Ruch'i Freehold Mass market 2,689,696,223 100% 18 Sofiya Freehold Mass market 5,849,486,546 100% 19 Bluxera Freehold Mass market 3,623,468,324 100% 20 Moskovskoe shosse Freehold Mass market 2,351,809,114 100% 21 Vitebskiy, 15 Freehold Mass market 1,535,546,755 100% 22 Shuvalosvkiy kar'er Freehold Mass market 4,098,679,418 100% Commercial properties 23 TOC na Leningradskom Freehold Class B 24,863,083 80% Country side residential properties (land plots) 24 Akhmatovo Freehold Land plot 8,195,623 100% 25 Zolotaya Roshcha Freehold Land plot 104,291,052 100% 26 Bolshoy Alakul Freehold Land plot 313,099,948 100% 27 Dachnoe Freehold Land plot 174,162,822 100% 28 Maloe Repino Freehold Land plot 112,447,693 100%

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Valued interst, % # Property Tenure Property type C&W MV, RUR (LSR Legal Share)

Freehold

Moscow Properties Properties held as investments Existing buildings 29 Davydkovskaya Freehold Business 342,280,000 100% Properties in the course of development Business class residential 30 Leningradskoe Highway 58 Freehold Business 1,654,072,000 100%

Ekaterinburg Properties Properties in the course of development Mass market residential 31 Michurinskiy Freehold Mass market 1,456,844,000 100% 32 Kalinovskiy Freehold Mass market 805,594,000 100% 33 40 let Komsomola Freehold Mass market 428,632,000 100% 34 Vosstania Molodezhi Freehold Mass market 141,441,000 100% 35 Furmanova parking Freehold Parking 16,750,000 100% 36 Evropeyskiy Freehold Business 18,404,000 100% Total Market Value of the properties held freehold, RUR 63,256,348,792

Share in Aggregate Market Value of the properties freehold, RUR 49%

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Valued interst, % # Property Tenure Property type C&W MV, RUR (LSR Legal Share)

Leasehold

Saint-Petersburg Properties

Properties held as investments Existing buildings 1 Apollo Leasehold Class A 966,760,000 100% 2 Orlov Investment contract Class A 671,750,000 100% 3 Zolotaya Kazanskaya Leasehold Class B 389,490,000 100% Properties in the course of development Elite class residential 4 Smolniy Park Leasehold Elite 7,368,777,310 100% Stage 1 100% Stage 2 100% 5 Nevskiy 1 Leasehold Elite 1,675,936,054 100% 6 Paradniy Quarter Investment contract Elite 6,240,175,117 100% Stage 1 100% Stage 2 100% 7 Suvorosvskiy 32 Investment contract Elite 261,646,660 100% 8 Kovenskiy Leasehold Elite 109,435,518 100% Business class residential 9 Morskie bashni Leasehold Business 1,191,157,599 100% Mass market residential 10 Dolgoozerniy Leasehold Mass market 108,778,995 100% 11 Yuzhniy Leasehold Mass market 416,481,454 100% 12 Uyzhnaya Aquatoria Leasehold Mass market 4,083,928,223 100% 13 Avrora Leasehold Mass market 7,056,549,528 100% 14 Vostok Leasehold Mass market 897,729,591 100% Commercial properties 15 Paradniy Quarter (mansion) Investment contract Class A 718,071,752 100% 16 Paradniy Quarter (office development) Investment contract Class A 901,893,339 100% 17 Nevskiy 68 Leasehold Elite 1,960,157,494 100% 18 Kamenoostrovskaya kollektsiya (offices) Leasehold Class B 762,330,844 100%

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Valued interst, % # Property Tenure Property type C&W MV, RUR (LSR Legal Share)

Leasehold

Moscow Properties Properties held as investments Existing buildings 19 Tverskoy 16 Leasehold Class A 1,218,912,000 100% Properties in the course of development Commercial properties 20 Noviy Balchug Investment Contract Class A 2,227,677,000 100% Properties in the course of development Business class residential 21 Grunvald Investment Contract Business/Elite 1,547,767,000 100% 22 9 planet Investment Contract Business 5,891,713,000 100% Mass market residential 23 New Nakhabino Leasehold Mass market 2,643,026,000 New Nakhabino 1 phase Mass market 100% New Nakhabino 2 phase Mass market 100% 24 Staraya Bitsa Investment Contract Mass market 5,806,755,000 100% 25 Domodedovo Leasehold/Freehold Mass market 4,226,559,000 100%

Ekaterinburg Properties Properties in the course of development Mass market residential 26 Zeleniy Mys Leasehold Business 514,820,000 100% 27 Tatischev Leasehold Mass market 615,199,000 100% 28 Bakinskikh Komissarov parking Leasehold Parking 22,645,000 100% 29 KOSK Leasehold Office 124,772,000 100% 30 Vonsovskogo Leasehold Mass market 486,483,000 100% Total Market Value of the properties held freehold, RUR 61,107,377,479

Share in Aggregate Market Value of the properties held leasehold, RUR 51%

GRAND TOTAL PORTFOLIO 124,363,726,270

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

The Total valuation sum stated above represents the aggregate of the current values attributable to the individual Properties and should not be regarded as a valuation of the Portfolio as a whole in the context of a sale as a single lot.

We have considered an appropriate development commencement date and development period for each Property in isolation, based on each property’s particular circumstance. Each valuation does not consider any effect of multiple properties being developed concurrently (e.g. any resource, expense or savings issues if undertaken by a single developer), or released to the market (occupation or investment) together.

The Summary Valuation Schedule shows our opinion of the appropriate discount rate on an un- leveraged basis as used in the valuation of each Property. This discount rate is calculated on the assumption that each Property would be held for a reasonable period to allow stabilisation of income upon development completion or full and complete sale of all residential and other units offered for sale and that no debt is used.

17. CONFIDENTIALITY No reliance may be place upon the contents on the Valuation Report by any party for any purpose other than in connection with the Company’s financial reports.

You must not modify, alter (including altering the context in which the report is displayed) or reproduce the contents of this valuation report (or any part) without first obtaining our written approval. Any person who contravenes this provision shall be responsible for all of the consequences of the same, including indemnifying C&W against all consequences of the contravention. C&W accepts no liability for any use of the Report that is in contravention of this section.

The Valuation Report is provided to the Addressees as set out on the first page of the Valuation Report for the specific purpose to which they refer. The Valuation Report forms part of the Company’s financial reports and may be referred to in supplementary documents. The Addressees of the Valuation Report may rely on it. No reliance may be placed upon the contents on the Valuation Report by any party for any purpose other than in connection with the public financial reports produced by the Company.

Neither the whole nor any part of the Valuation Report nor any reference thereto may be included in any other published document, circular or statement, nor published in any way without our written approval of the form and context in which it is to appear.

For the avoidance of doubt, such approval is required whether or not C&W are referred to by name and whether or not the contents of the Valuation Report are combined with other reports.

Nothing in this paragraph shall prevent the Addressees of this Valuation Report from quoting from, referring to or disclosing this Valuation Report (without any reliance) in communications with its professional advisers duly bound by obligations of confidentiality or as may be required by law, regulation, or upon designation by the relevant listing authority or any other competent authority or judicial authority. Disclosure of this Valuation Report by the Addressees of this Valuation Report is not prohibited if required (i) in connection with any actual or threatened legal, judicial or regulatory proceedings (for the avoidance of doubt, this shall include disclosure by any Addressee in connection with any form of due diligence defence) or for the purpose of resolving

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 any actual or threatened dispute or (ii) in communications to insurers in connection with an actual or threatened dispute or claim, or (iii) in connection with the Addressees' due diligence enquiries of the contents of the financial reports of the Company.

To the fullest extent permitted by the law (including any mandatory responsibility arising from the listing rules of any stock exchange) we do not assume any responsibility to and we hereby exclude all liability arising from use of and/or reliance on this report by any person or persons for the purposes of determining whether or not to purchase shares in the Company other than those parties to whom this report is addressed.

Yours faithfully

For and on behalf of Cushman & Wakefield

TJ MILLARD MA(Cantab) MRICS Joshua Askew MA MRICS Managing Partner, Russia & CIS Director Cushman & Wakefield Valuation & Advisory

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

18. APPENDIX ONE: DESCRIPTION AND VALUATION 18.1. VALUATION METHODOLOGY There are three generally adopted approaches used to value property: The Sales Comparison Approach; The Income Approach; and The Cost Approach. We have valued the majority of the properties using the income approach; except for the following properties: Paradniy Quarter (1 existing mansion and 2 office project development schemes), Kammennoostrovskaya Kollektsiya (residential and commercial premises) and Tverskoy Boulevard, 16. However, where possible, we have taken into account and cross-referenced our income approach results with those of the sales comparable approach.

The cost approach has not been used as this produces a “Non-Market Value” suitable for financial statements relating only to “specialised properties”. An overview of the Sales Comparison Approach and the Income Approach and how these relate to the Russian Market, follows.

The Cost Approach Under RICS standards this approach is relevant to specialised properties (i.e. properties that are rarely if ever sold on the open market due to their uniqueness which arises from their specialised nature and design of the buildings, their configuration, size, location or otherwise) and Limited Market Properties (i.e. properties that because of market conditions, unique features, or other factors attract relatively few buyers). The subject properties can be considered neither as Specialized Properties nor Limited Market Properties therefore the Cost Approach has not been used.

The Sales Comparison Approach This method involves analysing all available information on sales of comparable properties that have recently taken place and making adjustments in the prices achieved to reflect the differences in the properties sold and the property to be valued. This approach hinges on the availability of reliable market evidence of comparable sales. Distinction must be drawn between information that is known to be accurate and reported information that is second hand or at best hearsay. Only information that is known to be accurate can be relied upon with any degree of comfort to provide an accurate valuation.

There are severe difficulties in applying this valuation approach in emerging real estate markets, including Russia, as, due to their comparative immaturity, the availability of reliable market information is very limited. To reflect this, the International Valuation Standards Committee (“IVSC”) (a leading international body for setting valuation standards) devoted a recent White Paper to the study. It identifies specific problems for valuers in emerging markets, which apply very well to Moscow, Saint-Petersburg and to Russia – and these problems also tend to inhibit the operation of the market as a whole, in particular as regards investment.

The principal problem is a lack of transparency and a relatively low volume of recorded deals. In mature property markets there is a wealth of information available on completed sales transactions, in the form of yields and total sales prices, and this makes it relatively straight-forward to apply this valuation technique to any property. In Russia this sort of information is often not available, and where the details of transactions are publicized their accuracy cannot always be guaranteed. In addition, a large number of sales transactions in Russia take place “off-market” and therefore details of them are seldom known beyond those who were party to the deal.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

The volume of completed deals is very low in all sectors of the Russian real estate market. In addition – as outlined above, deal information is rarely reported accurately and is often manipulated for other reasons benefiting the separate parties to any sale deal. Therefore it is often necessary to use offered prices as a basis for assessing the opinion as to value using the sales comparison approach.

Development sites are transacted, but these transactions are usually “off-market” and therefore reliable comparable information is therefore only available to the parties to the transactions and their advisers – who are usually bound by confidentiality restrictions.

Therefore, in the majority of cases, we have not applied the Sales Comparison Approach

The Income Approach

The Income Approach determines a property’s Market Value by assessing it as an income producing investment. The Income Approach assumes that a property is acquired by a potential purchaser for its investment criteria, that is, for income returns and capital appreciation. In order to determine a property’s value using the various valuation techniques which fall under the Income (or Investment) Approach the valuer will attempt to appraise the property in the manner in which a potential investor would appraise it.

A commonly used technique for assessing Market Value within the Income Approach is the Discounted Cash Flow (“DCF”). This is a financial modeling technique based on explicit assumptions regarding the prospective cash flow to a property or business and the costs associated with being able to generate that income. To this assessed cash flow is applied a market-derived discount rate to establish a present value of the income stream. This Net Present Value (“NPV”) is an indication of Market Value and indicates the sum a third party developer would bid or pay for the property/site/project given a market level minimum hurdle rate or return required to undertake the risks of the project/ or to brave the risks related to the investment. This approach is considered to be a technically sophisticated valuation technique which is less based on subjective judgments but more objectively on economic and market information. For the basis of the current valuations the Income Approach is the most relevant and the DCF approach has been applied.

To assess the correct market derived discount rate we based our approach on current market trends and investors’ return/hurdle rate expectations.

In the Russian real estate market this approach specifically excludes the use of debt and the effect of leverage. The availability of debt, and on what terms, varies widely from investor to investor, and there is no market standard – especially in comparatively immature debt markets such as Moscow. Pre-debt discount and capitalization rates are therefore used to represent the risk-return requirement of investors.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

GLOBAL ASSUMPTIONS FOR THE INCOME APPROACH

Below we provide the main assumptions that have been applied in current valuations:

FOR EXISTING COMMERCIAL PROPERTIES:

Rental rates In order to calculate the Market Rent for income producing commercial properties we have based our assumptions on the tenancy schedules provided by the Company. We have analyzed the level of current passing rent and compared it to the Market Rent (“the ERV” or “the Estimated Rental Value”).

In order to analyze the Estimated Rental Value of each Property as well as to understand how the market rental values differ from the current contracted passing rent, we have analyzed the characteristics of each Property and the current rental market in St Petersburg together with our in- house Office Agency team who are deeply involved in leasing transactions on a daily basis. We have based our analysis on existing rent rolls, preliminary agreements with potential tenants and on our market knowledge.

Our assumptions in terms of the letting status of the premises are based on the tenancy schedules with which we have been provided.

Indexation On the basis of information provided to us, we have applied rent indexation for all tenants according to the rent rolls in regards to each Property.

Based on the market research carried out by C&W and taking into account current trends in the office market, for ERV growth we have applied for 5.70% for 2012 according to the inflation forecast of Ministry of Economic Development. For 2013 and 2014 we have assumed a nominal growth of the ERV for 10%. Starting from 2015 we have applied inflation growth rates presented by the Ministry of Economic Development.

Fees on Leasing and Acquisition When selling and leasing commercial premises, it is a standard market practice to use a brokers’ services. Taking into account the size of each Property, standard market practice and other relevant characteristics, we have estimated brokers’ fee commission. Thus, brokers’ fees for acquisition have been applied at the rate of 0.50% which includes agency fees and legal fees for documenting and completing the transaction.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

We have not applied any leasing commission due to the Company has its’ own company to lease premises.

Operating Expenses The nature of the real estate market in Russia allows landlords to recover most of the property related expenses from their tenants. For the subject Properties all operating expenses apart from the non-recoverable running costs are assumed to be paid by the tenant at cost, and they are therefore cash-flow and VAT neutral. As the Client presented us rental rates which included operational expenses based on the analysis of all the details of all the tenancies and market information concerning the current market level of operational expenses we have deducted $80 (for class A properties) and $60 (for class B properties).

Property Tax The current rate of Property Tax in Russia is 2.2% of the depreciated cost of the Property. Property Tax is included into operating expenses for all yielding Properties according to the detailed information provided to us by the Company.

Projected Sale For the purposes of capitalizing the rental incomes at the end of the forecast period a sale of the yielding Properties is assumed at the end of 2016, in regards to sales of the Properties in course of development – a sale has been assumed 1-3 years time after construction commencement. This is a valuation assumption rather than any reflection of the actual intentions of the Properties’ owner. It is assumed that commercial space will be fully leased and the income stream from the Properties’ operation will stabilize.

Discount and Exit Yields Generally, the discount rate is the rate of return that would be required by an investor to purchase the stream of expected benefits (e.g., future cash flows), given the risk of achieving those benefits.

Risk is generally defined as the degree of certainty or uncertainty as to the realization of expected future returns. In terms of a discounted cash flow projection, risk can be interpreted as the probability and extent to which the future projections will be realized.

Based on our knowledge of required rates of return for various investments, in particular real estate, as well as through discussions with persons active in the real estate market in Moscow and St Petersburg, we have been able to estimate an appropriate discount rate that reflects the perceived risk and required rate of return for the subject properties. The capitalization rates/exit yields were derived from our analysis of recent market transactions, together

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

with our market knowledge derived from C&W investment agency coverage.

The level of yield may vary in different areas for many reasons such as condition, desirability of location, which might be related to such factors as accessibility, visibility, reputation, etc. Investors expect larger returns when investing in high-risk income properties. High quality newer income properties generally have lower yields than older existing properties.

FOR THE PROPERTIES IN COURSE OF DEVELOPMENT:

Construction Phasing All projects, unless specifically stated otherwise, have been assumed to be constructed in one phase according to the time schedule provided to us by the Company. Where longer term projects have several phases, we have adopted several phases where, after market testing information supplied to us by the Company, we have concluded that the proposed phasing is reasonable and achievable.

Construction Timing All construction timetables have been assessed according to market date as communicated to us by our Development Consulting Department and based on our knowledge of typical construction timetables in similar projects. In most cases we have adopted the construction timetable presented to us by the client, but in those cases where the construction timetable was considered to be optimistic, we have applied our own timescale.

Construction Costs Construction costs have been assessed in accordance with standard rates in the market that a third party developer / purchaser would expect to have to pay in the course of the development of each project. All costs were provided to us by the Company, a reliable and a well-known developer, and were then double-checked by ourselves, based on the tables and construction costs guidance that we have got in-house as well as the data on other developments in Russia that we have from the information provided on other valuation projects.

Sales Rates Sales rates for apartments, parking spaces and first floor retail or office space have been derived having taken comparable sale evidence into consideration and also having taken the Company’s own recent sales evidence at their various schemes into consideration. Average primary market sales rates have been utilised in most cases, however, inflationary growth has been applied annually to these figures on the assumption that a rational vendor would

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

attempt to maintain the purchasing power of sales receipts. This assumption is supported by the rate of sales price growth in 2011 and forecast for 2012 (see below).

Income due from sales before the Date of Valuation In many cases the Company is due payment instalments on residential sales made before the date of valuation, where these sums are receivable after the date of valuation we have assumed that a third party purchaser will inherit the right at law to receive these sums after purchase of the scheme/building and have explicitly modelled such sums in our DCFs.

Sales Timetable In most cases C&W has applied its own sales timetable to the residential developments valued herein, in general we have assumed that sales only begin well into the construction period, become more frequent close to completion and terminate some time after completion, usually at least a year after completion. Car Parking is assumed to sell at a slower rate than residential apartments. Finally, retail and office space is only assumed to sell toward the end of the construction period and thereafter.

VAT Rate The VAT rate has been taken at the current rate of 18% introduced at the beginning of 2004. The VAT rate is of importance because although in theory VAT in Russia is immediately recoverable from the government the practice is slightly different. The VAT paid on construction and other development costs is considered a VAT credit account in favour of the landowner. VAT on future rents can be retained and offset against the VAT account until it is zeroed out. This has a significant effect on cash-flow. For the purchase of existing properties VAT is payable in respect of that part of the purchase price apportioned to building improvements. VAT is not payable in respect of the part (or whole) of the purchase price that relates to the land plot (or land lease).

It has been assumed that all of the costs in association with the development of residential projects will be subject to VAT and also that residential sales are not subject to VAT. Therefore, VAT on residential construction and materials are not reclaimed in our DCF models. However, VAT is applicable to commercial sales and on the sales of car parking spaces, so in respect of these types of property it is assumed that VAT will be reclaimed one quarter (3 months) after each discrete sale of such space.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Discount Rates Generally, the discount rate is the rate of return that would be required by an investor to purchase the stream of expected benefits (e.g., future cash flows), given the risk of achieving those benefits.

In the case of development projects, over and above country, investment and general economic risks, project specific risk is specifically related to planning, construction and sales/property market cycle risk. We have assessed these risks in respect of each property in deriving our opinion of the appropriate and applicable rate of return we believe a third party developer would require for entering into and completing a development project.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

18.2. SCHEDULE OF VALUES

Net areas, sqm breakdown Net areas (vacant / unsold), sqm breakdown Leases Sales Total area / Total Total net leasable / Total Net leasable / Net saleable Parking Office RR, RUR Retail RR, RUR Retail / Other Parking RR, RUR Residential, Apartments, Office, RUR Retail / Other, Parking, RUR Estimated remaining Construction costs, Valued interst, % # Property Land plot area, ha Tenure Property type Residential Office Retail Apartments Other Parking spaces Residential Office Retail Apartments Other C&W MV, RUR ERV, RUR per sqm Discount rate, % Exit yield, % Construction start Construction end Development strategy Current stage of development construction area, sqm net saleable area, sqm area (vacant / unsold), sqm spaces per sqm per sqm RR, RUR per sqm per pp RUR per sqm RUR per sqm per sqm RUR per sqm per pp construction costs, RUR RUR per sqm (LSR Legal Share)

Saint-Petersburg Properties

Properties held as investments Existing buildings 1 Apollo 0.24 Leasehold Class A 8,454 6,196 966,760,000 11,894 11,913 11.50% 9.00% n/a n/a n/a n/a 100% Hold Completed 2 Orlov n/a Investment contract Class A 4,990 3,183 671,750,000 13,491 14,488 11.00% 8.00% n/a n/a n/a n/a 100% Hold Completed 3 Gelios n/a Freehold Class B 3,909 3,099 407,110,000 10,207 10,563 12.00% 9.00% n/a n/a n/a n/a 100% Hold Completed 4 Litera 0.09 Freehold Class B 2,379 2,151 267,680,000 5,507 10,234 11.00% 9.00% n/a n/a n/a n/a 100% Hold Completed 5 Kazanskaya 36 0.25 Freehold Class B 6,823 4,801 709,680,000 8,006 11,913 12.00% 9.00% n/a n/a n/a n/a 100% Hold Completed 6 Zolotaya Kazanskaya 0.15 Leasehold Class B 3,078 2,600 389,490,000 7,448 11,913 12.00% 9.00% n/a n/a n/a n/a 100% Hold Completed Total Market Value of existing buildings 3,412,470,000 Properties held for future development Commercial propeties held for future development 7 Gribalevoy 0.75 Freehold Class B 46,038 29,324 26,840 2,484 275 29,324 26,840 2,484 275 294,368,565 8,500 8,500 48,000 20.00% 10.00% 1,372,788,785 46,815 January 2013 December 2015 100% Build and hold Concept Development 8 Salova 2.50 Freehold Class B 139,588 91,696 83,020 8,676 1207 91,696 83,020 8,676 1207 665,449,444 8,000 8,000 48,000 23.00% 10.00% 4,439,818,355 48,419 January 2013 December 2015 100% Build and hold Concept Development Total Market Value of commercial properties held for future development 959,818,009 Residential propeties held for future development 9 Oktyabrskaya Embankment 55.80 Freehold Mass market 1,000,000 750,000 750,000 750,000 750,000 8,572,312,705 65,000 25.00% n/a 27,330,508,475 36,441 July 2013 December 2024 100% Build and sell Concept development 10 Tsvetnoy gorod 455.18 Freehold Mass market 5,604,096 3,121,365 2,470,215 651,150 25,413 3,121,365 2,470,215 651,150 25,413 10,050,502,893 65,000 65,000 300,000 30.00% n/a 131,359,662,120 42,084 January 2016 December 2025 100% Build and sell Concept development Total Market Value of residential properties held for future development 18,622,815,598 Properties in the course of development Elite class residential 11 Smolniy Park 8.65 Leasehold Elite 176,447 95,781 83,552 11,245 0 0 983 1,103 91,788 79,658 11,146 983 1,089 7,368,777,310 21.00% n/a 5,564,051,646 100% Build and sell Stage 1 36,823 25,617 22,106 3,058 453 176 21,623 18,211 2,959 453 162 150,000 127,119 117,840 1,761,352 306,964,295 14,196 June 2010 June 2012 100% Construction Stage 2 139,624 70,164 61,446 8,188 530 927 70,164 61,446 8,188 530 927 180,000 127,119 127,119 1,779,661 5,257,087,351 74,925 March 2012 August 2016 100% Designing 12 Nevskiy 1 0.22 Leasehold Elite 9,709 6,829 2,151 4,678 29 6,829 2,151 4,678 29 1,675,936,054 635,593 283,113 2,542,373 17.00% n/a 1,092,315,683 159,946 January 2014 December 2015 100% Build and sell Designing 13 Paradniy Quarter* 9.57 Investment contract Elite 116,054 64,736 58,377 6,359 0 0 0 1,043 50,852 6,240,175,117 19.00% n/a 2,581,508,279 100% Build and sell Stage 1 58,696 33,085 30,692 2,393 492 19,201 17,155 2,046 429 180,000 149,903 1,568,982 705,965,022 36,767 June 2008 June 2012 100% Construction Stage 2 57,358 31,651 27,684 3,966 551 31,651 27,684 3,966 551 180,000 144,068 1,525,424 1,875,543,257 59,258 June 2011 November 2013 100% Construction 14 Radishcheva 39 0.85 Freehold Elite 31,958 21,110 18,686 2,038 386 174 21,110 18,686 2,038 386 174 1,619,896,134 180,000 144,068 33,898 1,525,424 21.00% n/a 1,103,170,674 52,258 May 2012 February 2015 100% Build and sell Designing 15 Suvorosvskiy 32 1.13 Investment contract Elite 11,400 5,395 4,318 1,077 60 5,395 4,318 1,077 60 261,646,660 140,000 101,695 1,525,424 21.00% n/a 368,534,142 68,315 July 2013 December 2014 100% Build and sell Concept development 16 Morskoy 0.36 Freehold Elite 18,540 10,684 9,893 616 176 108 10,684 9,893 616 176 108 1,006,986,066 200,000 127,119 42,373 1,694,915 22.00% n/a 690,440,965 64,622 November 2012 March 2015 100% Build and sell Designing 17 Kamennoostrovskaya kollektsiya n/a Freehold Elite & Street-retail 1,975 13,435 11,024 2,411 99 1,975 331 489 1,155 301,744,698 100% Sell Completed 18 Venice 0.83 Freehold Elite 24,370 15,690 15,038 652 116 4,877 4,484 392 77 2,264,151,355 386,292 42,373 2,423,509 15.00% n/a 531,706,171 109,032 March 2010 September 2012 100% Build and sell Construction 19 Kovenskiy 0.39 Leasehold Elite 12,870 5,881 1,068 4,662 151 41 5,467 653 4,662 151 41 109,435,518 190,000 80,000 177,966 1,440,678 21.00% n/a 374,567,315 68,515 June 2011 June 2013 100% Build and sell Construction 20 Kuybysheva 13 0.19 Freehold Elite 7,958 6,174 5,475 699 35 5,838 5,475 363 35 385,779,153 130,000 110,169 1,016,949 21.00% n/a 273,037,386 46,768 July 2012 July 2014 100% Build and sell Designing Total Market Value of elite class residential 21,234,528,065 Business class residential 21 Europe city 7.36 Freehold Business 188,581 120,316 107,635 12,681 492 120,316 107,635 12,681 492 4,078,408,302 24.00% n/a 5,519,425,243 100% Build and sell Stage 1 127,088 64,311 58,393 5,917 328 64,311 58,393 5,917 328 95,000 110,169 932,203 2,985,684,831 46,426 October 2012 June 2014 100% Designing Stage 2 61,493 56,005 49,242 6,763 164 56,005 49,242 6,763 164 95,000 110,169 932,203 2,533,740,412 45,241 January 2014 June 2015 100% Designing 22 Morskie bashni 3.05 Leasehold Business 113,180 56,000 31,000 25,000 700 56,000 31,000 25,000 700 1,191,157,599 90,000 76,271 847,458 24.00% n/a 2,574,894,817 45,980 July 2013 December 2015 100% Build and sell Designing Total Market Value of business class residential 5,269,565,901 Mass market residential 23 Dolgoozerniy 4.03 Leasehold Mass market 10,374 5,387 5,131 256 109 1,887 1,631 256 109 108,778,995 75,000 68,000 600,000 15.00% n/a 219,156,494 116,128 December 2011 March 2013 100% Build and sell Construction 24 Pulkovskiy Posad 8.25 Freehold Mass market 23,400 9,206 8,631 575 296 8,564 7,990 575 296 233,317,930 80,000 70,000 325,000 16.00% n/a 581,509,914 67,898 March 2011 December 2013 100% Build and sell Construction 25 Antey 7.08 Freehold Mass market 120,158 68,098 63,532 4,566 536 29,138 26,568 2,570 496 1,432,674,307 75,000 90,000 800,000 17.00% n/a 1,233,504,586 42,333 July 2007 December 2014 100% Build and sell Designing / Construction / Completed 26 Yuzhniy 1.65 Leasehold Mass market 29,823 23,959 23,039 920 6,183 5,771 412 0 416,481,454 70,000 70,000 0 15.00% n/a 416,592,692 67,376 August 2008 December 2012 100% Build and sell Construction 27 Uyzhnaya Aquatoria 23.90 Leasehold Mass market 523,065 308,734 292,421 16,313 2,500 308,734 292,421 16,313 2500 4,083,928,223 66,000 68,000 300,000 23.00% n/a 13,468,460,876 43,625 March 2011 June 2016 100% Build and sell Designing 28 Murinskiy kvartal 110.52 Freehold Mass market 1,500,000 758,462 742,602 15,860 7,222 758,462 742,602 15,860 7222 5,216,523,639 65,000 65,000 300,000 26.00% n/a 28,914,321,355 38,122 January 2016 December 2025 100% Build and sell Designing 29 Ruch'i 23.66 Freehold Mass market 282,321 211,421 209,435 1,986 2,495 211,421 209,435 1,986 2495 2,689,696,223 65,000 65,000 300,000 22.00% n/a 9,424,123,087 44,575 January 2013 December 2016 100% Build and sell Designing 30 Avrora 15.00 Leasehold Mass market 390,270 258,998 254,729 4,269 3,270 195,227 192,174 3,054 3270 7,056,549,528 70,000 100,000 600,000 20.00% n/a 8,758,008,683 44,861 July 2010 December 2015 100% Build and sell Construction 31 Vostok 1.58 Leasehold Mass market 59,655 41,500 40,360 1,140 80 26,560 25,419 1,140 80 897,729,591 68,000 100,000 600,000 17.00% n/a 1,119,894,489 42,165 july 2009 March 2013 100% Build and sell Construction 32 Sofiya 20.86 Freehold Mass market 513,000 308,038 305,038 3,000 1,958 308,038 305,038 3,000 1958 5,849,486,546 74,000 68,000 500,000 24.00% n/a 11,862,850,269 38,511 February 2013 December 2018 100% Build and sell Designing 33 Marshala Blukhera 34.45 Freehold Mass market 507,000 345,655 338,583 7,072 1,200 345,655 338,583 7,072 1200 3,623,468,324 65,000 65,000 300,000 23.00% n/a 14,033,897,556 40,601 February 2012 December 2016 100% Build and sell Designing 34 Moskovskoe shosse 9.15 Freehold Mass market 144,117 91,915 90,894 1,021 499 91,915 90,894 1,021 499 2,351,809,114 75,000 85,000 600,000 21.00% n/a 3,539,951,208 38,513 December 2012 December 2015 100% Build and sell Designing 35 Vitebskiy, 15 5.65 Freehold Mass market 137,666 74,480 73,465 1,015 520 74,480 73,465 1,015 520 1,535,546,755 65,000 65,000 300,000 21.00% n/a 2,871,491,983 38,554 August 2012 December 2015 100% Build and sell Designing 36 Shuvalosvkiy kar'er 64.00 Freehold Mass market 602,200 375,834 372,429 3,404 5,291 375,834 372,429 3,404 5291 4,098,679,418 65,000 65,000 200,000 25.00% n/a 16,260,549,973 43,265 June 2013 December 2019 100% Build and sell Concept development Total Market Value of mass market residential 39,594,670,047 Commercial properties 37 Paradniy Quarter (mansion)* 9.57 Investment contract Class A 5,075 3,561 3,561 27 3,561 3,561 27 718,071,752 141,489 n/a n/a n/a n/a n/a n/a 100% Sell Completed 38 Paradniy Quarter (office development)* 9.57 Investment contract Class A 12,691 7,282 7,114 168 63 7,282 7,114 168 63 901,893,339 142,000 21.00% n/a 465,241,095 36,659 June 2012 August 2014 100% Build and sell Designing 39 TOC na Leningradskom 0.19 Freehold Class B 7,362 5,449 5,449 5,449 5,449 24,863,083 11,500 22.00% 12.50% 262,208,435 48,117 January 2012 October 2014 80% Build and hold Concept development 40 Nevskiy 68 0.15 Leasehold Elite 8,400 5,527 2,250 3,277 26 5,527 2,250 3,277 26 1,960,157,494 508,475 423,729 2,542,373 16.00% n/a 452,753,390 81,917 December 2011 December 2012 100% Build and sell Construction 41 Kamenoostrovskaya kollektsiya (offices) 0.83 Leasehold Class B 8,233 7,505 5,852 901 753 7,505 5,852 901 753 762,330,844 118,644 24.00% n/a 531,448,405 64,551 December 2012 August 2014 100% Build and sell Designing Total Market Value of commercial properties 4,367,316,512 Country side residential properties (land plots) 42 Akhmatovo 7.16 Freehold Land plot 52,754 52,754 52,754 18,283 18,283 8,195,623 1,500 14.00% n/a 21,370,575 1,169 June 2007 December 2012 100% Sell Construction 34 Zolotaya Roshcha 18.44 Freehold Land plot 144,650 144,650 144,650 126,504 126,504 104,291,052 1,300 18.00% n/a 40,482,254 320 June 2011 December 2012 100% Sell Construction 44 Bolshoy Alakul 75.84 Freehold Land plot 758,417 758,417 758,417 758,417 758,417 313,099,948 700 25.00% n/a 66,648,128 88 February 2011 December 2014 100% Sell Construction 45 Dachnoe 29.97 Freehold Land plot 299,700 299,700 299,700 299,700 299,700 174,162,822 700 20.00% n/a 6,820,975 23 July 2011 November 2012 100% Sell Construction 46 Maloe Repino 32.88 Freehold Land plot 266,309 266,309 266,309 95,248 95,248 112,447,693 1,400 16.00% n/a 0 0 August 2008 December 2011 100% Sell Completed Total Market Value of country side residential properties (land plots) 712,197,138 Total Market Value on properties in Saint-Petersburg 94,173,381,270

Moscow Properties

Properties held as investments Existing buildings 47 Davydkovskaya 1.14 Freehold Business 2,448 19,090 17,353 1,737 130 1,737 1,737 6 342,280,000 20,112 108,000 23,282 12% 11% n/a n/a n/a 100% Sell Completed 48 Tverskoy 16 0.14 Leasehold Class A 3,648 1,960 1,960 25 1,645 1,645 25 1,218,912,000 51,529 152,542 32,000 n/a n/a n/a n/a n/a 100% Hold Completed Total Market Value of existing buildings 1,561,192,000 Properties in the course of development Commercial properties 49 Noviy Balchug 0.42 Investment Contract Class A 24,815 12,099 7,731 2,880 589 899 170 12,099 7,731 2,880 589 899 170 2,227,677,000 485,000 280,000 390,000 4,000,000 22% n/a 1,354,349,264 111,935 December 2012 December 2015 100% Build and sell Designing Total Market Value of commercial properties 2,227,677,000 Business class residential 50 Grunvald 4.1 Investment Contract Business/Elite 58,331 26,977 24,019 1,452 1,506 269 7,082 4,353 1,452 1,277 148 1,547,767,000 251,823 97,904 69,609 1,718,049 10% n/a 40,406,781 5,705 December 2011 December 2012 100% Build and sell Completed 51 Leningradskoe Highway 58 1.81 Freehold Business 96,520 49,389 46,079 3,310 989 49,389 46,079 3,310 989 1,654,072,000 150,000 130,000 1,400,000 25% n/a 4,770,351,255 96,588 March 2013 December 2016 100% Build and sell Concept development 52 9 planet 4.72 Investment Contract Business 239,160 81,310 75,023 6,288 1,329 81,310 75,023 6,288 1,329 5,891,713,000 230,000 160,000 1,900,000 24% n/a 9,159,094,915 112,644 March 2013 December 2017 100% Build and sell Concept development Total Market Value of business class residential 9,093,552,000 Mass market residential 53 New Nakhabino 44.35 Leasehold Mass market 241,388 159,714 133,284 2,643,026,000 New Nakhabino 1 phase 15.30 Mass market 61,388 39,714 32,407 496 6,811 13,284 10,670 276 2,338 63,600 60,000 25,000 16% n/a 728,491,349 54,840 October 2010 December 2012 100% Build and sell Construction New Nakhabino 2 phase 29.05 Mass market 180,000 120,000 116,618 3,382 120,000 116,618 3,382 63,600 5,113,055,943 42,609 May 2012 December 2015 100% Build and sell Designing 54 Staraya Bitsa 59.85 Investment Contract Mass market 543,334 275,175 207,175 68,000 3,086 275,175 207,175 68,000 3,086 5,806,755,000 95,000 72,000 650,000 24% n/a 13,790,037,420 49,385 June 2012 December 2016 100% Build and sell Designing 55 Domodedovo 39.34 Leasehold/Freehold Mass market 611,831 296,966 287,154 9,813 292,744 282,932 9,813 4,226,559,000 54,130 60,000 20% n/a 10,324,211,168 35,267 August 2011 December 2018 100% Build and sell Construction Total Market Value of mass market residential 12,676,340,000 Total Market Value on properties in Moscow 25,558,761,000

Ekaterinburg Properties

Properties in the course of development Mass market residential 56 Michurinskiy 51.88 Freehold Mass market 214,143 164,725 140,015 16,473 8,237 164,725 140,015 16,473 8,237 1,456,844,000 45,000 42,000 42,000 23% n/a 4,556,187,823 27,659 April 2012 December 2015 100% Build and sell Designing 57 Kalinovskiy 6.58 Freehold Mass market 149,724 79,360 74,254 1,872 1,935 1,299 1,322 51,004 46,073 3,632 1,299 1298 805,594,000 51,689 51,509 50,000 450,921р. 16% n/a 2,340,665,241 45,892 October 2008 June 2015 100% Build and sell Construction 58 40 let Komsomola 9.36 Freehold Mass market 149,145 76,621 65,133 6,308 5,181 1376 76,621 65,133 6,308 5,181 1376 428,632,000 52,000 55,000 55,000 530,000р. 25% n/a 3,465,771,128 45,232 March 2017 April 2021 100% Build and sell Concept Development 59 Zeleniy Mys 1.46 Leasehold Business 56,474 33,806 25,933 6,019 1,853 360 5,907 1,093 4,814 238 514,820,000 59,362 70,289 679,398р. 12% n/a 10,300,881 43,281 July 2006 December 2012 100% Build and sell Completed 60 Tatischev 1.89 Leasehold Mass market 47,097 33,149 31,026 374 1,749 196 28,318 26,445 374 1,499 196 615,199,000 60,171 60,225 60,225 550,000р. 20% n/a 1,070,093,218 37,778 September 2010 March 2014 100% Build and sell Construction 61 Vosstania Molodezhi 0.98 Freehold Mass market 17,104 6,558 6,558 266 4,954 4,954 266 141,441,000 50,213 450,000р. 15% n/a 282,939,261 28,857 April 2011 June 2015 100% Build and sell Construction 62 Bakinskikh Komissarov parking 0.15 Leasehold Parking 3,225 94 94 22,645,000 450,000р. 13% n/a 11,600,848 123,413 May 2008 December 2012 100% Buils and sell Construction 63 Furmanova parking n/a Freehold Parking 5,062 146 33 16,750,000 599,091р. 12% n/a 0 0 n/a n/a 100% Build and sell Completed 64 Evropeyskiy 0.72 Freehold Business 14,248 8,944 888 255 39 255 255 7 18,404,000 56,442 800,000р. 11% n/a 0 0 n/a n/a 100% Build and sell Completed 65 KOSK 0.88 Leasehold Office 12,333 11,100 9,000 2,100 11,100 9,000 2,100 124,772,000 50,000 70,000 23% n/a 301,876,374 27,196 December 2012 December 2015 100% Build and sell Designing 66 Vonsovskogo 7.13 Leasehold Mass market 94,688 50,189 50,189 50,189 50,189 486,483,000 48,000 25% n/a 1,593,513,877 31,750 May 2013 September 2015 100% Build and sell Designing Total Market Value on properties in Ekaterinburg 4,631,584,000 GRAND TOTAL PORTFOLIO 124,363,726,270 *The land plot with a total area of 9.57 is located under all buildings of Paradniy Quarter mixed-use complex

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

18.3. PROPERTY DESCRIPTIONS

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Dobroblubova Avenue, 8, Lit. A Apollo

Picture 1. City map with project location

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: The building, with a total area of 8,340.5 sqm, is held freehold by CHSC A Plus Estate according to ownership certificate 78АГ415813, dated May 16, 2008. The land plot consists of three parcels: 1) A land plot with a total area of 1,530 sqm (cadastral number 78:7:3018:3) is held leasehold by the CHSC A Plus Estate according to long-term lease agreement 15/ЗД-001941 dated March 01, 2008, and expiring on November 20, 2056; 2) A land plot with a total area of 914 sqm (cadastral number 78:7:3018:1003) is held leasehold by the CHSC A Plus Estate according to short-term lease agreement 15/ЗК -001909 dated September 27, 2007, and additional agreement no. 2 to the lease agreement dated December 30, 2010 and expiring on December 14, 2013; 3) A land plot with a total area of 415 sqm (cadastral number 78:7:3018:1004) is held leasehold by the CHSC A Plus Estate according to short-term lease agreement 15/ЗK-02014 dated October 05, 2009 and expiring on September 08, 2012.

Description: Valuation considerations: Site area, ha: 0.2859 No of tenants: The property is currently let to 17 tenants, comprising mainly office tenants and a cafe on the ground floor. Property type: Class A office centre Annual income 64,870,543 from current tenants, RUR: Gross build 8,340.5 Expiry void 30 area, sqm: period, days: Net leasable 6,068.5 Average market 11,913 area, sqm: rental rate, RUR: Vacant area, 0 Special n/a sqm: assumptions: Underground 23 Current stage Completed parking: of development: Ground 32 Development Hold parking: strategy: Market Value, RUR: 966,760,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is situated in the Description: The property comprises an eight floor, environment: Petrogradsky District in the quadrant class A office centre with underground formed by Dobrolubova parking. The office centre has one Av,Mytninskaya Emb and main entrance, 2 emergency exits and Zoologochesky Lane. The property one entrance in the cafe on the ground benefits from a central location. floor. Levels 2 to 7 are open-plan in lay-out. Level 8 is occupied by a two- Access / egress: The property can be accessed through level office space with panoramic Dobrolubova Av which leads to such views. The property accommodates a major thoroughfares as Bolshoy Av cafe and retail shop on the ground and Kamenoostovsky Av. Sportivnaya floor and a conference hall on the 1st metro station is located within a 5- floor. minute walk of the property. Nearby Leningrad Zoo, Petrovsky Stadium, amenities: Yubileyny Sport Palace, Petrovavlovskaya Krepost. Physical considerations: Year of 2007 Zoning and The subject land plot has the following construction: restrictions: characteristics:  Category: settlement land;  Permitted use: for the allocation of administrative and public buildings.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Paradnaya Street, 8 Orlov

Picture 1. City map with project location

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Tenure: The building with a total area of 4,989 sqm is held freehold by JSC Stroitelnaya Korporatsiya Vozrozhdenie Sankt-Peterburg according to ownership certificate 78АД890662, dated April 14, 2010.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: n/a No of tenants: The property is currently let to 6 tenants, comprising mainly office tenants. Property type: Class A office manor Annual income 44,933,289 from current tenants, RUR: Gross build 4,990 Expiry void 30 area, sqm: period, days: Net leasable 3,182.9 Average market 14,488 area, sqm: rental rate, RUR: Vacant area, 0 Special n/a sqm: assumptions: Underground 23 Current stage Completed parking: of development: Ground n/a Development Hold parking: strategy: Market Value, RUR: 671,750,000 Planning considerations: Location / The Subject Property is situated in the Description: The property comprises a four floor environment: Central District in the quadrant formed class A office mansion with by Kirochnaya St, Radishcheva St, underground parking. The office Vilensky Lane and Paradnaya St. The centre has one main entrance, several property benefits from a central separate entrances for the tenants. The location. property accommodates medical centre Scandinavia on the first floor. Access / egress: The property can be accessed through Paradnaya St which leads to Kirochnaya St. The Subject Property has good transport accessibility to such main thoroughfare as Nevskiy Av, Liteyniy Av, Suvorovskiy Av and Robesspiera Embankment. Chernishevskaya metro station is located within a 10-minute walk of the property. Nearby Saint Petersburg Medical Academy, amenities: Tavricheskiy Garden, Nekrasov Garden, Maltsevskiy Market. Physical considerations: Year of 2008 Zoning and The subject land plot has the following construction: restrictions: characteristics:  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Marata Street, 47-49 Gelios

Picture 1. City map with project location

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Valuation & Advisory -37-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: The premises with a total area of 1,259.4 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266050, dated July 30, 2009. The premises with a total area of 75.1 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД991942, dated July 24, 2010. The premises with a total area of 101.5 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266059, dated July 30, 2009. The premises with a total area of 25.2 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266164, dated July 30, 2009. The premises with a total area of 2.9 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266058, dated July 30, 2009. The premises with a total area of 300.9 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266162, dated July 30, 2009. The premises with a total area of 13.5 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266161, dated July 30, 2009. The premises with a total area of 13.1 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266060, dated July 30, 2009. The premises with a total area of 620.8 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266052, dated July 30, 2009. The premises with a total area of 513.1 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266054, dated July 30, 2009. The premises with a total area of 13.5 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266055, dated July 30, 2009. The premises with a total area of 517 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266051, dated July 30, 2009. The premises with a total area of 14.1 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266056, dated July 30, 2009. The premises with a total area of 49.2 sqm are held freehold by the CHSC A Plus Estate according to ownership certificate 78АД266057, dated July 30, 2009. The premises with a total area of 450.8 sqm are held freehold by CHSC A Plus Estate according to ownership certificate 78АД266163, dated July 30, 2009.

Description: Valuation considerations: Site area, ha: n/a No of tenants: The property is currently let to 20 tenants, comprising mainly office tenants and a cafe in the basement. Property type: Class B office centre Annual income 30,430,924 from current tenants, RUR: Gross build 3,909 Expiry void 30 area, sqm: period, days: Net leasable 3,073 Average market 10,563 area, sqm: rental rate, RUR: Vacant area, 52.2 Special According to the lease agreements the sqm: assumptions: following tenants have leases without defined expiry dates – Biblio Travel OOO, Klarans OOO, Drees I

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Zommer Project Management OOO, MARAT OOO. We have made the assumption that these lease agreement are concluded for 5 years. Underground 16 parking spaces Current stage Completed parking: of development: Ground n/a Development Hold parking: strategy: Market Value, RUR 407,110,000 Planning considerations: Location / The Subject Property is situated in the Description: The property comprises a five floor, environment: Central District in the quadrant formed renovated, historical class B office by Marata St, Razyezhaya St, building with underground parking. Dostoevskogo St And Svechnoy Lane. The office centre has one main The property benefits from a central entrance, one emergency exit and one location. entrance in the cafe on the ground floor. The property accommodates a Access / egress: The property can be accessed through cafe on the ground floor. Marata St. which leads to such major thoroughfares as Nevskiy Av. Mayakovskaya, Ligovskiy Propect and Vladimirskaya metro stations are located within a 10-minute walk of the property. Nearby Yamskoy Market, Galery Mall, amenities: Kuznechny Market. Physical considerations: Year of 2004 (renovation completion) Zoning and n/a construction: restrictions:

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Galernaya Street, 10 Litera

Picture 1. City map with project location

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Tenure: The building with a total area of 2,367 sqm is held freehold by CHSC A Plus Estate according to ownership certificate 78АД094541, dated August 08, 2009. A land plot with a total area of 874 sqm plot. no 78:32:1090:6 is held freehold by the CHSC A Plus Estate according to ownership certificate 78АД094380 dated August 24, 2009.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.0874 No of tenants: The property is currently let to one tenant. Property type: Class B office manor Annual income 11,843,732 from current tenants, RUR: Gross build 2,367 Expiry void 30 area, sqm: period: Net leasable 2,150.6 Average market 10,234 area, sqm: rental rate, RUR: Vacant area, 0 Special n/a sqm: assumptions: Underground n/a Current stage Completed parking: of development: Ground 8 Development Hold parking: strategy: Market Value, RUR: 267,680,000 Planning considerations: Location / The Subject Property is situated in the Description: The property comprises two buildings: environment: Admiraltesyskiy District. The property a two–floor office building with a benefits from a central location. retained historical facade and a 6-floor newly developed building (2007). The Access / egress: The property can be accessed through property has one pedestrian entrance Galernaya St. which is a street parallel and is accessed by vehicle from to Anglisyskaya Embankment. Nevskiy Galernaya St. Av is located approximately 900 m to the West of the Subject Property. The Sadovaya metro station is located within a 15-minute walk of the property. Nearby Senatskaya Square, Aleksandrobskiy amenities: Garden, Isaakiyevskiy Cathedral, Astoria and Angleterre hotels, The Hermitage Museum, New Holland Island. Physical considerations: Year of 2004 Zoning and The subject land plot has the following construction: restrictions: characteristics:  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Kazanskaya Street, 36 Kazanskaya 36

Picture 1. City map with project location

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Tenure: The land plot with a total area of 2,526 sqm (cadastral number 78:1293:5) is held freehold by ZAO Kazanskaya, 36 according to ownership certificate ВЛ 138316 dated April 05, 1999.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.25 No of tenants 10 Projected Class B office centre Annual income 34,572,406 property type: from current tenants, RUR Gross build 6,823 Expiry void 30 area, sqm: period, days Net office area, 4,800 Average market 11,913 sqm: rental rate for office area, RUR per sqm per annum: Projected net n/a Special n/a other area, assumptions: sqm: Underground n/a Current stage Completed parking: of development: Ground 21 Development Hold parking: strategy: Market Value, RUR: 709,680,000 Planning considerations: Location: The Subject Property is located in the Property The Subject Property comprises an office Admiralteyskiy Administrative District description: scheme built around a square courtyard of Saint-Petersburg within a 10-minute with vehicular access via the primary walk of Sadovaya, Spasskaya and façade. The five- to eight-floor scheme Sennaya Ploschad metro stations. retains its historic façade and provides partitioned class B office accommodation Access / egress: Access to the Subject Property can be which is fully fitted out. realized through Kazanskaya Street. There is internal parking for 6 parking The property is easily accessible from spaces in the five-floor section. 15 open- the main thoroughfares of the district air parking spaces are provided in the – Nevskiy Avenue, Sadovaya Street internal yard. and the Embankment of Fontanka River. Nearby The following amenities are situated in amenities: close proximity to the Subject Property: Hermitage Museum, Palace Square, The Admiralty, Senatskaya Square, St. Kazanskiy Cathedral, Kazanskaya Square, Nikolskaya Square, Teatralnaya Square and etc. A great amount of restaurants, bars, boutiques and stores are located on Nevskiy Avenue. Bolshoy Gotinyi Dvor Shopping Centre is located within a 20-minute walk of the Subject Property.

Valuation & Advisory -43-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of Completed Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected Completed  Category: settlement land. completion:

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Kazanskaya Street, 44 Zolotaya Kazanskaya

Picture 1. City map with project location

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Tenure: A land plot with a total area of 1,475 sqm (cadastral number 78:1293:2) is held leasehold by ZAO Skanska Sankt-Peterburg Development according to lease agreement # 11/ЗД-00623 dated October 10, 1996 and expiring on July 10, 2045.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.15 No of tenants 4 Projected Class B office centre Annual income 19,174,053 property type: from current tenants, RUR Gross build 3,078 Expiry void 30 area, sqm: period, days Net office area, 2,600 Average market 11,913 sqm: rental rate for office area, RUR per sqm per annum: Projected net n/a Special n/a other area, assumptions: sqm: Underground n/a Current stage Completed parking: of development: Ground n/a Development Hold parking: strategy: Market Value, RUR: 389,490,000 Planning considerations: Location: The Subject Property is located in the Property The Subject Property comprises an office Admiralteyskiy Administrative District description: scheme built around a square courtyard of Saint-Petersburg within a 10-minute with vehicular access via the primary walk of Sadovaya, Spasskaya and façade. The five-floor scheme retains its Sennaya Ploschad metro stations. historic façade and provides partitioned class B office accommodation fully fitted Access / egress: Access to the Subject Property can be out. realized through Kazanskaya Street. There is casual parking in the internal The property is easily accessible from yard. the main thoroughfares of the district – Nevskiy Avenue, Sadovaya Street and the Embankment of Fontanka River. Nearby The following amenities are situated in amenities: close proximity to the Subject Property: the Hermitage Museum, Palace Square, The Admiralty, Senatskaya Square, St. Kazanskiy Cathedral, Kazanskaya Square, Nikolskaya Square andTeatralnaya Square A great number of restaurants, bars, boutiques and stores are located on Nevskiy Avenue. Bolshoy Gotinyi Dvor Shopping Centre is located within a 20-minute walk of the Subject Property.

Valuation & Advisory -46-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Valuation & Advisory -47-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Gribalevoy Street, 9 Gribalevoy

Picture 1. City map with project location

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Tenure: A land plot with a total area of 7,536 sqm (cadastral number 78:36:5121:12) is held freehold by the OAO Upravlenie Mekhanizatsii # 260 according to the ownership certificate 78-AB 596790 dated April 14, 2007.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.75 Estimated 1,372,788,785 remaining construction costs, RUR: Projected Class B+ office centre Average market 8,500 property type: rental rate for office area, RUR per sqm per annum: Projected gross 46,038 Average market 8,500 build area, sqm: rental rate for retail area, RUR per sqm per annum: Projected net 26,840 Average annual 48,000 office area, market rental sqm: rate for parking, RUR per parking place: Projected net 2,484 Special n/a retail area, sqm: assumptions: Underground 275 Current stage Concept development parking: of development: Ground n/a Development Build and hold parking: strategy: Market Value, RUR: 294,369,000

Valuation & Advisory -49-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location: The subject property is located in the Site description: The Subject Property comprises a land Vyborgskiy District within a 10-minute plot with a total area of 7,536 sqm. walk of Lesnaya metro station. As at the Valuation Date there are several Access / egress: The Subject Property can be accessed buildings on the land plot which will be from Gribalevoy Street. The Subject demolished. Property is located within The Subject Property will provide an 11- approximately 200 m of storey class B+ business centre with retail Kantemirovskaya Street, which is one premises on the ground floor and of the main transport routes in the underground parking. district and it links the Vyborgskiy, Primorskiy, Kalininskiy and Petrogradskiy Districts. Nearby The following amenities are situated in amenities: close proximity to the Subject Property: Upravlenie Mekhanizatsii # 67 and Sovenergostroytrans enterprises, Mebel City 2 furniture shop and retail and furniture store Akvilon. Retail centre Kantemirovskiy with a total area of approximately 90,000 sqm is being constructed at 32 Kantemirovskaya Street. Physical considerations: Start of January 2013 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected December 2015  Category: settlement land. completion:

Valuation & Advisory -50-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Salova Street, 61 Salova

Picture 1. City map with project location

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Tenure: A land plot with a total area of 23,258 sqm (cadastral number 78:13:7335Г:15) is held freehold by the OOO Gruzovoe Avtotransportnoe Predpriyatie # 1 according to the ownership certificate 78-АЖ 040756 dated October 20, 2010. A land plot with a total area of 1,663 sqm (cadastral number 78:13:7335Г:1005) is held leasehold by OOO Gruzovoe Avtotransportnoe Predpriyatie # 1 according to lease agreement # 21-ЗК03487 dated December 31, 2008.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 2.5 Estimated 4,439,818,355 remaining constructions costs, RUR: Projected Class B+ office centre Average market 8,000 property type: rental rate for office area, RUR per sqm per annum: Projected gross 139,588 Average market 8,000 build area, sqm: rental rate for retail area, RUR per sqm per annum: Projected net 83,020 Average annual 48,000 office area, market rental sqm: rate for parking, RUR per parking place: Projected net 8,676 Special n/a retail area, sqm: assumptions: Underground 1,207 Current stage Concept development parking: of development: Ground n/a Development Build and hold parking: strategy: Market Value, RUR: 665,449,000

Valuation & Advisory -52-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location: The Subject Property is located in the Site description: The Subject Property is represented by a Frunzenskiy District within a 15- land plot with a total area of 24,921 sqm. minute walk of Volkovskaya metro As at the Valuation Date there are several station. However, it is planned that the buildings on the land plot which will be construction of Bukharestskaya metro demolished. station on the opposite side of the The Subject Property will provide a class street will take place in 2012. B+ business centre with retail premises Access / egress: The location of the Subject Property on the ground floor and underground can be characterized as possessing parking. good transport accessibility for cars. The Subject Property can be accessed both through Salova and Bukharestskaya Streets. Nearby The following amenities are situated in amenities: close proximity to the Subject Property: Avtotransporntniy Mekhanicheskiy College, auto market at Salova, Bus park # 1and a number of industrial enterprises. Physical considerations: Start of January 2013 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected December 2015  Category: settlement land. completion:

Valuation & Advisory -53-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Oktyabrskaya Embankment, 42 Oktyabrskaya Embankment

Picture I. City map with project location

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Valuation & Advisory -54-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: The land plot with a total area of 204,710 sqm (cadastral number 78:12:6333:18) is held freehold by OAO Proizvodstvennoe Ob’edinenie Barrikada according to ownership certificate 78-АГ796248 dated November 01, 2008. The land plot with a total area of 5,650 sqm (cadastral number 78:12:6331Б:649) is held freehold by OAO Rudas according to ownership certificate 78-АГ957038 dated March 04, 2009. The land plot with a total area of 18,276 sqm (cadastral number 78:12:6331Б:651) is held freehold by OAO Rudas according to ownership certificate 78-АГ957040 dated March 04, 2009. The land plots with a total area of 33,399 sqm (cadastral number 78:6331Д:1) and 234,023 (cadastral number 78:6331Б:64) are held leasehold by OAO Sanktpeterbugskiy Rechnoy Port according to the lease agreement # 13/ЗД-02455 dated November 09, 2004 and additional agreement # 13/ЗД- 02455/1 dated January 27, 2006. The land plot with a total area of 87,509 sqm (cadastral number 78:6331Б:65) is held leasehold by OOO Aerok Sankt-Peterburg according to the lease agreement # 13/ЗД-04070 dated January 27, 2006 and additional agreement # 13/ЗД-04070/1 dated September 20, 2006.

Description: Valuation considerations: Site area, ha: 55.8 Estimated 27,330,508,475 remaining construction costs, RUR: Projected 10 phases of mass-market residential Average market 75,000 property type: buildings sale price for residential area, RUR per sqm: Projected gross 1,000,000: Average market n/a build area, sqm: 100,000 – phase 1 sale price for commercial 100,000 – phase 2 area, RUR per 100,000 – phase 3 sqm: 100,000 – phase 4 100,000 – phase 5 100,000 – phase 6 100,000 – phase 7 100,000 – phase 8 100,000 – phase 9 100,000 – phase 10 Net area of the 75,000 – phase 1 Average market n/a unsold flats, sale price for 75,000 – phase 2 sqm: parking space, 75,000 – phase 3 RUR: 75,000 – phase 4 75,000 – phase 5 75,000 – phase 6 75,000 – phase 7 75,000 – phase 8 75,000 – phase 9 75,000 – phase 10

Valuation & Advisory -55-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Net n/a Phases: 10 commercial area (unsold), sqm: Underground n/a Current stage Concept development parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 8,572,313,000 Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises several land environment: Nevskiy District of Saint-Petersburg plots with a total area of 58,357 sqm. within a 20-minute walk of However, the Client has informed us that Chernyshevskaya metro station. the total area of the land plot for construction of 10 phases of the Access / egress: The property is easily accessible from residential complex will amount to Oktyabrskaya Embankment, which 55,800 sqm. provides convenient access to all city districts and the KAD through As at the Valuation Date the land plots Oktyabrskaya Embankment. are occupied with factories. However these factories will be relocated in the Nearby The following amenities are situated in near future. amenities: close proximity to the Subject The project development scheme Property: Stroiteley Park, sporting and consists of 10 phases. cultural centres – ice stadium, stadium of water sports Nevskaya Volna, retail The buildings will be of monolith centre Felichita, hypermarkets – concrete and will provide fitted-out or Karusel, Lenta, Castorama, Leroy shell & core residential accommodation. Merlin, fitness centre Olympic and Gazprom sporting club.

Valuation & Advisory -56-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of Phase 1 - July 2013 Zoning and The subject land plot has the following construction: Phase 2 - July 2014 restrictions: characteristics: Phase 3 - July 2015  Category: settlement land. Phase 4 - July 2016 Phase 5 - July 2017 Phase 6 - July 2018 Phase 7 - July 2019 Phase 8 - July 2020 Phase 9 - July 2021 Phase 10 - July 2022 Projected Phase 1 - July 2015 completion: Phase 2 - July 2016 Phase 3 - July 2017 Phase 4 - July 2018 Phase 5 - July 2019 Phase 6 - July 2020 Phase 7 - July 2021 Phase 8 - July 2022 Phase 9 - July 2023 Phase 10 - July 2024

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Piskarevskiy Avenue, 145 Tsvetnoy Gorod

Picture I. City map with project location

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Valuation & Advisory -58-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: Ownership certificate 78-AД 541664 dated as of 30.01.2009 for the land plot with a total area of 583,959 sqm (cadastral number 78:11:5607:54; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 5. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AД 541665 dated as of 31.12.2006 for the land plot with a total area of 369,674 sqm (cadastral number 78:11:5606:73; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 8. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AД 207472 dated as of 13.05.2011 for the land plot with a total area of 644,530 sqm (cadastral number 78:11:5606:68; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 9. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 207471 dated as of 13.05.2011 for the land plot with a total area of 283,268 sqm (cadastral number 78:11:5607:55; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 13. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AД 541661 dated as of 30.01.2009 for the land plot with a total area of 523,405 sqm (cadastral number 78:11:5606:75; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 15. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AД 541861 dated as of 21.12.2006 for the land plot with a total area of 37,635 sqm (cadastral number 78:11:5606:62; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 16. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AЖ 327799 dated as of 13.09.2011 for the land plot with a total area of 130,653 sqm (cadastral number 78:11:5606:91; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 17. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AД 541666 dated as of 21.12.2006 for the land plot with a total area of 97,233 sqm (cadastral number 78:11:5606:66; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 38. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AГ 890358 dated as of 17.02.2009 for the land plot with a total area of 315,381 sqm (cadastral number 78:11:5606:83; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 39. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AД 541669 dated as of 11.11.2008 for the land plot with a total area of 576,674 sqm (cadastral number 78:11:5606:82; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 40. Holder of the right: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AГ 890357 dated as of 17.02.2009 for the land plot with a total area of 180,004 sqm (cadastral number 78:11:5606:86; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 43. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AГ 890359 dated as of 17.02.2009 for the land plot with a total area of 174,362 sqm (cadastral number 78:11:5606:87; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 44. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AД 541668 dated as of 30.01.2009 for the land plot with a total area of 6,281 sqm (cadastral number 78:11:5606:67; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 45. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AЖ 327800 dated as of 13.09.2011 for the land plot with a total area of 205,392 sqm (cadastral number 78:11:5606:88; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 67. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AД 541671 dated as of 11.11.2008 for the land plot with a total area of 79,041 sqm (cadastral number 78:11:5606:81; category: settlement land) located at address: Saint Petersburg,

Valuation & Advisory -59-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

territory of the enterprise “Ruch’i”, land plot 71. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AЖ 327802 dated as of 13.09.2011 for the land plot with a total area of 255,004 sqm (cadastral number 78:11:5606:84; category: settlement land) located at address: Saint Petersburg, Piskarevskiy Prospect, 171, bldg.3, litera A. Held by: LLC “Municipal DomoConstruction Company”.

Description: Valuation considerations: Site area, ha: 455.18 Estimated 131,359,662,120 remaining construction costs, RUR: Projected A mass market residential complex Average market 65,000 property type: (economy segment) sale price for residential area, RUR per sqm: Projected gross 5,604,096 Average market 65,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 2,470,215 Average market 300,000 flats, sqm: sale price for parking space, RUR: Net 651 150 Current stage Concept development commercial of area, sqm: development: Ground 25,413 Development Build and sell parking: strategy: Market Value, RUR: 10,050,503,000

Valuation & Advisory -60-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is locatedalong Site description: The Subject Property is represented by environment: Piskarevskiy Prospect, near the St- land plots with a total area of 455,18 Petersburg Ring Road (the KAD), in hectares intended for future development the Krasnogvardeyskiy District of St- of a residential complex with a total area Petersburg. of 5 604 096 sqm. Access / egress: The area is well connected to the city As at date of valuation the land plots are centre by Sverdlovskaya Embankment free of any buildings, and are unfenced. and the Orlovsky Tunnel, which is The future complex is to consist of currently under construction. residential buildings of different number The nearby KAD provides highway of floors with integrated commercial access to the southern and northern premises, underground parking, and parts of the city. social facilities: 12 schools, 15 nursery schools and 4 clinics. The closest metro stations: Devyatkino and Grazhdanskiy Prospect and Currently the development project is in Plowad Muzhestva – are located at a the planning process. distance of 15-20 minutes by car to the north of the property. A new metro station, Ruchyi, has been planned to be built by 2020 in close proximity to the Subject Property. Nearby The Subject Property is surrounded by amenities: agricultural fields, parkland and the Okhta River. Physical considerations: Start of January 2013 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2025  Permitted use: for agricultural use; completion:  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Smolnaya Street, 4 Smolniy Park

Picture I. City map with project location

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Tenure: A land plot with a total area of 86,498 sqm is held leasehold by OOO Smolniy Quarter according to the lease agreement on investment terms # 20/3K-02037 dated June 24, 2004 and expiring on January 01, 2014.or the land plot with a total area of 86,498 sqm.

Valuation & Advisory -62-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 8,65 Estimated 306,964,295 – phase 1 remaining 5,257,087,351 – phase 2 construction costs, RUR: Projected The first 2 phases of an elite residential Average market 150,000 – phase 1 property type: complex sale price for 180,000 – phase 2 residential area, RUR per sqm: Projected gross 176,447 Average market 127,119 – office (phase 1 and 2) build area, sqm: 36,823 – phase 1 sale price for 117,840 – retail (phase 1) commercial 139,624 – phase 2 area, RUR per 127,119 – retail (phase 2) sqm: Net area of the 18,221 – phase 1 Average market 1,761,352 – phase 1 unsold flats, 61,446 – phase 2 sale price for 1,779,661 – phase 2 sqm: parking space, RUR: Net 3,412 – phase 1 Phases: 2 commercial 8,718 – phase 2 area (unsold), sqm: Underground 162 – phase 1 Current stage Phase 1 – Construction parking: 927 – phase 2 of Phase 2 – Designing development: Ground n/a Development Build and sell parking: strategy:

Market Value, RUR: 7,368,777,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a land plot with environment: Central District of Saint-Petersburg a total area of 86,498 sqm which is in the within a 25-minute walk from process of residential complex Chernyshevskaya metro station. development. Access / egress: The property is easily accessible from The project development scheme the main thoroughfares of the district – consists of 2 phases which will include 14 Smolnaya Embankment, Shpalernaya blocks (10 newly constructed block and 4 Street and Suvorovskiy Avenue. redeveloped blocks). The buildings are of monolith columns Nearby The following amenities are situated in and have brick walls and provide shell & amenities: close proximity to the Subject core residential accommodation. Property: Smolniy Cathedral, Aleksandrovskiy institute, Parter As of the Valuation Date, Block 1 was at garden with fountains. the final stage of construction. Blocks from 2 to 14 were at the expertise stage The infrastructure to the North of in the planning process . Tvesrkaya Street is not developed. However it is planned to create retail Phase 1 is to be put into operation in infrastructure on the ground floors of June 2012. the Smolniy Park buildings and in the Phase 2 is to be put into operation in business centre Basel, where August 2016. supermarket and fitness-centre are planned. Physical considerations: Start of Phase 1 - June 2010 Zoning and The subject land plot has the following construction: Phase 2 - March 2012 restrictions: characteristics: Projected Phase 1 - June 2012  Category: settlement land. completion: Phase 2 - August 2016

Valuation & Advisory -64-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Nevskiy Lane, ¼, Lit. A Nevskiy 1

Picture I. City map with project location

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Tenure: The land plot with a total area of 2,197 sqm (cadastral number 78:31:1095:3)is held leasehold by OAO Stoitelnaya Korporatsia Sankt-Peterburg according to the lease agreement # 10/ЗД-01170 dated November 14, 2008 and expiring on July 21,2057.

Valuation & Advisory -65-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.22 Estimated 1,092,315,683 remaining construction costs, RUR: Projected Redeveloped historical building with Average market n/a property type: elite apartments and retail premises sale price for residential area, RUR per sqm: Projected gross 9,709 Average market 635,593 – apartments build area, sqm: sale price for 283,113 – retail area commercial area, RUR per sqm: Net area of the n/a Average market 2,542,373 unsold flats, sale price for sqm: parking space, RUR: Net 4,678 – apartments Phases: 1 commercial 2,151 – retail area area (unsold), sqm: Underground 29 Current stage Designing parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 1,675,936,000

Valuation & Advisory -66-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a land plot with environment: Central District of Saint-Petersburg a total area of 2,197 sqm and a building within a 10-minute walk of Nevskiy of a historical interest. Prospekt and Gostinyi Dvor metro According to the project development stations. scheme it is planned to internally Access / egress: Access to the Subject Property can be refurbish the premises only and renovate realized through Admiralteyskiy the façade. It is forbidden to demolish Avenue and Nevskiy Avenue. The car the building due to its’ historical interest. entrance is located at Admiralteyskiy As at the Valuation Date the premises are Avenue. leased to several tenants. Nearby The following amenities are situated in The redeveloped brick / monolith- amenities: close proximity to the Subject concrete building will comprise Property: Hermitage Museum, Palace apartments, retail premises on the ground Square, The Admiralty, Senatskaya floor and parking for 25 cars. Square, St. Isaac’s Cathedral. A great amount of restaurants, bars, boutiques and stores are located on Nevskiy Avenue. Bolshoy Gotinyi Dvor Shopping Center is located within a 15-minute walk of the Subject Property. Physical considerations: Start of January 2014 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected December 2015  Category: settlement land. completion:

Valuation & Advisory -67-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Paradnaya Street, 1-3 Paradniy Quarter

Picture I. City map with project location

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Valuation & Advisory -68-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: The land plot with a total area of 95,741 sqm (cadastral number 78:1210:12) is held freehold by 131 Kvartirno-ekspluatatsionnoe upravlenie Glavnogo Kvartirno-ekspluatatsionnogo upravleniya Ministerstva Oborony RF according to the ownership certificate 78-AB 540614 dated February 08, 2007. It is also held on an agreement on investment activity without number dated September 23, 2005 on designing and construction of the Subject Property.

Description: Valuation considerations: Site area, ha: 9.57 (total area of the land plot under Estimated 705,965,022 – phase 1 all buildings of Paradniy Quarter remaining 1,875,543,257 – phase 2 mixed-use complex) construction costs, RUR: Projected 2 phases of elite residential complex Average market 180,000 – phase 1 property type: sale price for 180,000 – phase 2 residential area, RUR per sqm: Projected gross 207,118 Average market 149,903 – office (phase 1) build area, sqm: 58,696 – phase 1 sale price for 144,068 – office (phase 2) commercial 57,358 – phase 2 area, RUR per sqm: Net area of the 17,155 – phase 1 Average market 1,568,982 – phase 1 unsold flats, 27,684 – phase 2 sale price for 1,525,424 – phase 2 sqm: parking space, RUR: Net 2,046 – phase 1 Phases: 2 commercial 3,966 – phase 2 area (unsold), sqm: Underground 429 – phase 1 Current stage Phase 1 – Construction parking: 551 – phase 2 of Phase 2 – Construction development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 6,240,175,000

Valuation & Advisory -69-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprisesa land plot with a environment: Central District of Saint-Petersburg total area of 95,741 sqm. within a 10-minute walk from According to the initial concept of the Chernyshevskaya metro station. development of the district it was Access / egress: Access to the Subject Property can be planned to construct a great mixed-use realized through Paradnaya Street or complex. Velenksiy Lane Two phases of the residential concept The property is easily accessible from have already been built as well as several the main thoroughfares of the district – office buildings. Suvorovskiy Avenue, Ligovskiy Avenue, Nevskiy Avenue and Robiespiera Embankment. Nearby The following amenities are situated in amenities: close proximity to the Subject Property: Tavricheskiy Garden, Tavricheskiy Palace, Ovalniy Park, Suvorov Museum, Smolniy Cathedral and a number of educational facilities. The Paradniy Quarter is a mixed-use residential complex. It is planned that the residents can use the developing infrastructure of mixed-use residential complex which includes stores, supermarkets and a fitness centre. Physical considerations: Start of Phase 1, bld. 6,7 - June 2008 Zoning and The subject land plot has the following construction: Phase 2, bld. 4,5,8 - June 2011 restrictions: characteristics: Projected Phase 1, bld. 6,7 - June 2012  Category: settlement land. completion: Phase 2, bld. 4,5,8 – November 2013

Valuation & Advisory -70-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Radishcheva Street, 39, Lit. M Radishcheva

Picture I. City map with project location

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Valuation & Advisory -71-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: A land plot with a total area of 8,500 sqm (share of the land plot – ¼) (cadastral number 78:31:1210:14) is held freehold by OAO Stroitelnaya Korporatsiya Vozrozhdenie Sankt-Peterburga according to the ownership certificate 78-AB 114353 dated August 31, 2006. A land plot with a total area of 8,500 sqm (share of the land plot – ¼) (cadastral number 78:31:1210:14) is held freehold by OAO Stroitelnaya Korporatsiya Vozrozhdenie Sankt-Peterburga according to the ownership certificate 78-AB 114354 dated August 31, 2006. A land plot with a total area of 8,500 sqm (share of the land plot – ¼) (cadastral number 78:31:1210:14) is held freehold by OAO Stroitelnaya Korporatsiya Vozrozhdenie Sankt-Peterburga according to the ownership certificate 78-AB 114355 dated August 31, 2006. A land plot with a total area of 8,500 sqm (share of the land plot – ¼) (cadastral number 78:31:1210:14) is held freehold by OAO Stroitelnaya Korporatsiya Vozrozhdenie Sankt-Peterburga according to the ownership certificate 78-AB 114356 dated August 31, 2006.

Description: Valuation considerations: Site area, ha: 0.85 Estimated 1,103,170,674 remaining construction costrs, RUR: Projected Elite residential complex Average market 180,000 property type: sale price for residential area, RUR per sqm: Projected gross 31,958 Average market 144,068 – office premises build area, sqm: sale price for 33,898 – other premises commercial area, RUR per sqm: Net area of the 18,686 Average market 1,525,424 unsold flats, sale price for sqm: parking space, RUR: Net 2,424 Phases: 1 commercial area (unsold), sqm: Underground 174 Current stage Designing parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 1,619,896,000

Valuation & Advisory -72-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a brown-field environment: Central District of Saint-Petersburg land plot with a total area of 8,500 sqm. within a 10-minute walk of The territory of the land plot is fenced. Chernyshevskaya metro station. The newly constructed residential Access / egress: The Subject Property can be accessed building will comprise residential by the city’s main arteries, including premises, commercial areas and Nevskiy Avenue, Liteyniy Avenue and underground parking. Suvorovskiy Avenue. Access to the Subject Property can be realized through Radishcheva Street. Nearby The following amenities are situated in amenities: close proximity to the Subject Property: Tavricheskiy Garden, Tavricheskiy Palace, Ovalniy Park, Suvorov Museum, Smolniy Cathedral and educational facilities. The Paradniy Quarter mixed-use residential complex is located in close vicinity to the Subject Property. It is planned that the residents can use the developing infrastructure of this mixed-use residential complex which includes stores, supermarkets and a fitness centre. Physical considerations: Start of May 2012 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected February 2015  Category: settlement land. completion:

Valuation & Advisory -73-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Suvorosvkiy Avenue, 32 Suvorovskiy 32

Picture I. City map with project location

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Tenure: Investment contract # 01-8/325 dated November 16, 2005 for construction of residential building on the land plots with a total area of 8,262 sqm and 3,000 sqm which are the parts of the land plot with a total area of 43,781 sqm (cadastral number 78:1122:5). The land plot with a total area of 43,781 sqm is held freehold by Voennaya Akademiya Svyazi. Additional agreement # 01-8/30 dated May 22, 2006 to the investment contract # 01-8/327. Additional agreement # 01-8/38 dated May 29, 2006 to the investment contract # 01-8/327. Additional agreement # 141/532/Д dated January 26, 2010 to the investment contract # 01-8/327.

Valuation & Advisory -74-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 1.14 Estimated 368,534,142 remaining construction costs, RUR: Projected Elite residential complex Average market 140,000 property type: sale price for residential area, RUR per sqm: Projected gross 11,400 Average market 101,695 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 4,318 Average market 1,525,424 unsold flats, sale price for sqm: parking space, RUR: Net 1,077 Phases: 1 commercial area (unsold), sqm: Underground 60 Current stage Concept development parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 261,647,000

Valuation & Advisory -75-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises 2 adjacent land environment: Central District of Saint-Petersburg plots with a total area of 11,362 sqm. within a 10-minute walk of There are a few existing buildings and Chernyshevskaya metro station. incomplete constructions on the land Access / egress: Access to the Subject Property is via plot as at the Valuation Date. In order to Paradnaya Street. build a residential complex the existing buildings and unfinished construction Nearby The following amenities are situated in will be demolished. amenities: close proximity to the Subject The newly constructed residential Property: Tavricheskiy Garden, building will comprise residential Tavricheskiy Palace, Ovalniy Park, premises, commercial areas and Suvorov Museum, Smolniy Cathedral underground parking. and educational facilities. Paradniy Quarter mixed-use residential complex is located in close vicinity to the Subject Property. It is planned that the residents will use the developing infrastructure of this mixed-use residential complex which includes stores, supermarkets and a fitness centre. Physical considerations: Start of July 2013 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected December 2014  Category: settlement land. completion:

Valuation & Advisory -76-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Morskoy Avenue, 29 Morskoy

Picture I. City map with project location

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Tenure: A land plot with a total area of 3,572 sqm (cadastral number 78:7:3282:6) is held freehold by OAO Stroitelnaya korporatsiya Vozrozhdenie Sankt-Peterburga according to the ownership certificate 78- АЖ 029869 dated November 18, 2010.

Valuation & Advisory -77-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0,36 Estimated 690,440,965 remaining construction costs, RUR: Projected Elite residential complex Average market 200,000 property type: sale price for residential area, RUR per sqm: Projected gross 18,540 Average market 127,119 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 9,893 Average market 1,694,915 unsold flats, sale price for sqm: parking space, RUR: Net 792 Phases: 1 commercial area (unsold), sqm: Underground 108 Current stage Designing parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 1,006,986,000

Valuation & Advisory -78-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a land plot with environment: Petrogradskiy District of Saint- a total area of 3,572 sqm. The old Petersburg in the central part of building located on the land plot as at the Kresotvskiy Island and is within a 5- Valuation Date is to be demolished. The minute walk of Krestovskiy Ostrov newly constructed residential building metro station. will comprise residential premises, commercial areas and underground Access / egress: The property is easily accessible from parking. the main thoroughfares of the district – Krestovskiy Avenue, Morskoy Avenue and Petrogradskaya Street. Nearby The following amenities are situated in amenities: a close proximity to the Subject Property: Elagin Palace, amusement park Divo-Ostrov, restaurants, sporting and educational facilities and 2 yacht- clubs. In the Eastern part of Krestovskiy Island the construction of the new Zenit football team stadium is underway. It is also planned to redevelop the Dinamo stadium. Physical considerations: Start of November 2012 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected March 2015  Category: settlement land; completion:  Permitted use: for the allocation of residential building.

Valuation & Advisory -79-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Kamennoostrovskoy Avenue, 56-62 Kamennoostrovskaya Kollektsiya (residential building)

Picture 1. City map with project location

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Valuation & Advisory -80-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: The land plot with a total area of 7,642 sqm (cadastral number 78:3207A:3006) is held leasehold by OOO Sankt-Peterburgskiy gumanitarniy delovoy tsentr UNA according to the lease agreement on investment terms # 15/ЗКС-02075 dated May 27, 2004. Agreement on termination of lease agreement on investment terms # 15/ЗКС-02075 dated May 27, 2004 signed on October 22, 2009, due to the completion of the construction of the residential complex. Thus, the land plot is in shared ownership of the residents of the complex. The legal documents on unsold premises were not presented by the Client.

Description: Valuation considerations: Site area, ha: 0.76 Estimated 0 remaining construction costs, RUR: Projected Elite residential building Average market 163,952 property type: sale price of penthouse, RUR per sqm: Gross build 18,821 Average market 142,684 area, sqm: sale price of flat, RUR per sqm: Unsold 1,486.4 Average market 131,093 residential area, 1,155 – penthouses sale price of sqm: commercial 331.4 - flats area, RUR per sqm: Unsold 489 Current stage Completed commercial of area, sqm: development: Underground n/a Development Sell parking: Strategy: Ground n/a parking: Market Value, RUR: 301,745,000

Valuation & Advisory -81-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location: The Subject Property is located in the Site description: The Subject Property comprises unsold Petrogradskiy District of Saint- premises in the completed residential Petersburg within a 10-minute walk of building: 3 penthouses, 2 flats and 2 Petrogradskaya metro station. commercial premises. Access / egress: Access to the Subject Property is All premises have shell & core fit-out. through Kamennoostrovskoy Avenue. The property is easily accessible from the main thoroughfares of the district – Kamennoostovskoy Avenue and Bolshoy Avenue. Nearby The following amenities are situated in amenities: a close proximity to the Subject Property: Petropavlovskaya Krespost, Avrora, Botanicheskiy Garden and a great variety of shops, restaurants and cinema theaters at Kamennoostrovskoy and Bolshoy Avenues. Physical considerations: Start of Completed Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected Completed  Category: settlement land; completion:  Permitted use: for the allocation of residential building.

Valuation & Advisory -82-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Deputatskaya Street, 34, Lit. A Venice

Picture I. City map with project location

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Tenure: Ownership certificate 78-AB 622295 dated June 25, 2007 for the land plot with a total area of 8,305 sqm.

Valuation & Advisory -83-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0,83 Estimated 531,706,171 remaining construction costs, RUR: Projected Elite residential complex Average market 386,292 property type: sale price for residential area, RUR per sqm: Projected gross 24,370 Average market 42,373 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 4,484 Average market 2,423,509 unsold flats, sale price for sqm: parking space, RUR: Net 392 Phases: 1 commercial area (unsold), sqm: Underground 77 Current stage Construction parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 2,264,151,000

Valuation & Advisory -84-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a land plot with environment: Petrogradskiy District of Saint- a total area of 8,305 sqm which is in the Petersburg in the northern part of process of residential complex Kresotvskiy Island and is within a 10- development. The land plot is located minute walk of Krestovskiy Ostrov near Srednaya Nevka river. metro station. The project development scheme Access / egress: The property is easily accessible from consists of a building with residential the main thoroughfares of the district – premises, commercial areas and Krestovskiy Avenue, Morskoy Avenue underground parking. and Petrogradskaya Street. The building is of monolith concrete and has brick walls and provides shell & core Nearby The following amenities are situated in residential accommodation. amenities: close proximity to the Subject Property: Elagin Palace, amusement park Divo-Ostrov, restaurants, sporting and educational facilities and two yacht-clubs. In the Eastern part of Krestovskiy Island the construction of Zenit football team’s new stadium is being realized. It is planned to redevelop Dinamo stadium also. Physical considerations: Start of March 2010 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected September 2012  Category: settlement land. completion:

Valuation & Advisory -85-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Kovenskiy Lane, 5 Kovenskiy

Picture I. City map with project location

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Valuation & Advisory -86-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: Land plot (cadastral number 78:1218:2) with a total area of 3,866 sqm is held leasehold by OAO Stroitelnaya Korporatsiya Vozrozhdenie Sankt-Peterburga according to lease agreement #2A-K5 dated July 27, 2010 and expiring on December 31, 2013.

Description: Valuation considerations: Site area, ha: 0.39 Estimated 374,567,315 remaining cocnstruction costs, RUR: Projected Elite residential complex Average market 190,000 property type: sale price for residential area, RUR per sqm: Projected gross 12,870 Average market 80,000 – office area build area, sqm: sale price for 177,966 – retail area commercial area, RUR per sqm: Net area of the 653 Average market 1,440,678 unsold flats, sale price for sqm: parking space, RUR: Net 4,662 – office area Phases: 1 commercial 151 – retail area area (unsold), sqm: Underground 41 Current stage Construction parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 109,436,000

Valuation & Advisory -87-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a land plot with environment: Central District of Saint-Petersburg a total area of 3,866 sqm. within a 10-minute walk of The newly constructed building will Mayakovskaya, Ploshchad Vosstaniya comprise a 5-storey residential and 7- and Chernischevskaya metro stations. storey office development. The ground Access / egress: Access to the Subject Property can be floor will be occupied by parking and realized through Kovenskiy Lane. technical premises. Nearby The following amenities are situated in amenities: close proximity to the Subject Property: historical buildings such as church of Madonna and the first garage of the Krummel automobile company. Nevskiy Avenue, St Petersburg’s prime street retail pitch, is located in close proximity to the Subject Property where a plethora of restaurants, bars, boutiques and stores are situated. In addition, retail centre Galereya is situated within a 20-minute walk of the Subject Property. Physical considerations: Start of June 2011 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected June 2013  Category: settlement land. completion:

Valuation & Advisory -88-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Kuybysheva Street, 13, Lit. B Kuybysheva

Picture I. City map with project location

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Tenure: The land plot (cadastral number 78:7:3008:11) with a total area of 1,864 sqm is held freehold by OAO Stroitelnaya Korporatsiya Vozrozhdenie Sankt-Peterburga according to the ownership certificate 78-АГ 953380 dated March 05, 2009.

Valuation & Advisory -89-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.19 Estimated 273,037,386 remaining construction costs, RUR: Projected Elite residential complex Average market 130,000 property type: sale price for residential area, RUR per sqm: Projected gross 7,958 Average market 110,169 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 5,475 Average market 1,016,949 unsold flats, sale price for sqm: parking space, RUR: Net 699 Phases: 1 commercial area (unsold), sqm: Underground 35 Current stage Designing parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 385,779,000 Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a land plot with environment: Petrogradskiy District of Saint- a total area of 1,864 sqm. Petersburg within a 15-minute walk of The newly constructed building will have Gorkovskaya metro station. 8-storeys of mainly residential premises Access / egress: The Subject Property can be easily with commercial premises on the first accessed from Kuybysheva Street. and second floors, the property will also possess underground parking. Nearby The following amenities are situated in The building will provide shell & core amenities: a close proximity to the Subject residential accommodation. Property: Petropavlovskaya Krespost, Avrora, Botanicheskiy Garden and a great amount of shops, restaurants and cinema theaters at Kamennoostrovskoy and Bolshoy Avenues. Physical considerations: Start of July 2012 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected July 2014  Category: settlement land. completion:

Valuation & Advisory -90-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Medikov Avenue, 10 Europa City

Picture I. City map with project location

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Tenure: The land plot with a total area of 73,576 sqm (cadastral number 78:7:3170:63) is held freehold by OAO Zavod Elektrik according to the ownership certificate 78-АЖ 075168 dated February 14, 2011.

Valuation & Advisory -91-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 7.36 Estimated 2,985,684,831 – phase 1 remaining 2,533,740,412 – phase 2 construction costs, RUR: Projected 2 phases of a business-class residential Average market 95,000 – phase 1 property type: complex sale price for 95,000 – phase 2 residential area, RUR per sqm: Projected gross 188,581 Average market 110,169 – phase 1 build area, sqm: 127,088 – phase 1 sale price for 110,169 – phase 2 commercial 61,493 – phase 2 area, RUR per sqm: Net area of the 58,393 – phase 1 Average market 932,203 – phase 1 unsold flats, 49,242 – phase 2 sale price for 932,203 – phase 2 sqm: parking space, RUR: Net 5,917 – phase 1 Phases: 2 commercial 6,763 – phase 2 area (unsold), sqm: Underground 328 – phase 1 Current stage Phase 1 – Desigining parking: 164 – phase 2 of Phase 2 – Desigining development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 4,078,408,000 Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a the land plot environment: Petrogradskiy District of Saint- with a total area of 73,576 sqm. Petersburg within a 10-minute walk of The project development scheme Petrogradskaya metro station. consists of 2 phases. The complex will Access / egress: The property can be accessed either consist of 17 buildings. from Medikov Avenue or Akademika The buildings will be of monolith Pavlova Street. The Subject Property concrete and will provide shell & core can be easily accessed from the main residential accommodation. thoroughfares of the district – Medikov As at the Valuation Date an old building Avenue, Kamennoostrovskoy Avenue, is located on the land plot but it is Bolshoy Avenue and Aptekarskaya planned to be demolished. Embankment. Nearby The following amenities are situated in amenities: a close proximity to the Subject Property: Petropavlovskaya Krespost, Avrora, Botanicheskiy Garden and a great amount of shops, restaurants and cinema theaters at Kamennoostrovskoy and Bolshoy Avenues.

Valuation & Advisory -92-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of Phase 1 - October 2012 Zoning and The subject land plot has the following construction: Phase 2 – January 2014 restrictions: characteristics:  Category: settlement land; Projected Phase 1 - June 2014  Permitted use: for allocation of completion: Phase 2 - June 2015 residential buildings.

Valuation & Advisory -93-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Savushkina Street, 151 Morskie Bashni

Picture I. City map with project location

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Tenure: A land plot with a total area of 35,000 sqm is held leasehold by OOO Gorodskaya DomoStroitelnaya Kompaniya according to the lease agreement # 04/03-05/1 dated January 20, 2003 and additional agreement dated September 19, 2011.

Valuation & Advisory -94-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 3.05 Estimated 2,574,894,817 remaining construction costs, RUR: Projected 1 phase of business-class residential Average market 90,000 property type: complex sale price for residential area, RUR per sqm: Projected gross 113,180 Average market 76,271 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 31,000 Average market 847,458 unsold flats, sale price for sqm: parking space, RUR: Net 25,000 Phases: 1 commercial area (unsold), sqm: Underground 700 Current stage Desigining parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 1,191,158,000 Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a land plot with environment: Primorskiy District of Saint-Petersburg a total area of 30,488 sqm. within a 20-minute walk of Staraya The project development scheme Derevnya metro station. consists of 1 phase. Access / egress: The property can be accessed either The buildings will be of concrete and will from Primorskiy Avenue or from provide shell & core residential Yakhtennaya Street. Public transport is accommodation. very developed in the Primorskiy District. Nearby The following amenities are situated in amenities: close proximity to the Subject Property: Piterland retail and leisure centre, office and retail infrastructure, educational and sporting facilities, hospitals and clinics.

Valuation & Advisory -95-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of July 2013 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected December 2015  Category: settlement land; completion:  Permitted use: for allocation of residential buildings.

Valuation & Advisory -96-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Dolgoozernaya Street Dolgoozerniy

Picture I. City map with project location

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Tenure: Land lease agreement # 00/ЗК-03458 (17) under investment contract in favor of LLC “BaltStroyKomplekt” dated 15.09.2005 for the land plot with a total area of 40,329 sqm (cadastral number 78:4121Б:1), located at address: Dolgoozernaya Street, land plot 1. Contract duration until 07.02.2010, prolonged

Valuation & Advisory -97-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 4.0329 Estimated 219,156,494 remaining construction costs, RUR: Projected Building 5Б and underground parking Average market 75,000 property type: within a mass market residential sale price for complex (economy segment) residential area, RUR per sqm: Projected gross 10,374 Average market 68,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 5,131 Average market 600,000 unsold flats, sale price for sqm: parking space, RUR: Net 256 Current stage Construction commercial of area (unsold), development: sqm: Underground 109 Development Build and sell parking strategy: (unsold): Market Value, RUR: 108,779,000 Planning considerations: Location / The Subject Property is situated in the Site description: The Property comprises a land plot with environment: Primorskiy District of St-Petersburg, at a total area of 40,327 sqm in the course the intersection of Parashutnaya and of development of a residential complex Dolgoozernaya Streets. with a total area of 106,728 sqm. Access / egress The Property is located within a 15- The complex consists of two residential minute drive of Pionerskaya and sections of five blocks and seven blocks Komendantskaya Ploschad metro respectively, with underground and stations. above-ground parking between the two sections. The Property is close to main roads, and is also well served by public The buildings are of reinforced concrete transportation. construction and provide fully fitted-out residential accommodation. Nearby The Property benefits from a number As at the date of valuation 11 buildings amenities: of nearby leisure, retail and social with a total area of 98 268 sqm within the amenities. complex have been built, put into There is a nature reserve, operation and sold. Yuntolovskaya Dacha, in close The final premises Building 5Б and proximity to the Subject Property that parking with a total area of 10 374 sqm features an artificial lake, playgrounds ,should be delivered in March 2013. and walking paths.

Valuation & Advisory -98-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of August 2005 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected March 2013  Permitted use: for the development completion: of a residential complex;  Category: settlement land.

Valuation & Advisory -99-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Pulkovskoe Highway Pulkovskiy posad

Picture I. City map with project location

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Tenure: Ownership certificate 78-ВЛ 767545 dated as of 25.06.2003 for the land plot with a total area of 82,543 sqm (cadastral number 78:7691:87; category: settlement land) located at address: Saint Petersburg, Pulkovskoe Shosse, 30, litera K. Holder of the right: JSC “LenStroyRekonstrukciya”.

Valuation & Advisory -100-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 8.25 Estimated 581,509,914 remaining construction costs, RUR: Projected The final phase (building #12) within a Average market 80,000 property type: mass market residential complex sale price for (economy segment) residential area, RUR per sqm: Projected gross 23,400 Average market 70,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 7,990 Average market 325,000 unsold flats, sale price for sqm: parking space, RUR: Net 575 Current stage Construction commercial of area (unsold), development: sqm: Underground 296 Development Build and sell parking strategy: (unsold): Market Value, RUR: 233,318,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a land plot with environment: Moskovskiy District of St-Petersburg, a total area of 8.25 hectares sqm on at the intersection of Pulkovskoye which the development of a mass market Highway (which leads to Pulkovo residential complex is already under way. airport) and Dunaisky Avenue. The complex consists of 14 buildings Access / egress: The Property is located within a 15- with floor numbers and heights. In the minute walk of Zvezdnaya metro common courtyard between the buildings station. Another metro station, there is underground and above-ground Moskovskaya, is less than a 15 minute parking extending to 2 floors, the roofs drive from the Property. of which are used as playground. Pulkovskoye Highway provides easy As at date of valuation, 13 buildings and direct access both to the city centre within the complex are built, have been and to the areas beyond the St- put into operation and have already been Petersburg ring road (the KAD) south substantially sold. of the city. The final phase of the complex with a Pulkovo airport is less than 3 km to the total area of 23,400 sqm should be south of the Subject Property. delivered in December, 2013. Nearby One million sqm of residential amenities: accommodation is planned to be built on a site that adjoins the subject site, which, together with the Subject development, will form a self- contained residential suburb, complete with social infrastructure. Within walking distance of the Subject Property is a large retail park with hypermarkets (Lenta, O’Key, METRO Cash & Carry, Karusel, Castorama, Pulkovo-3 and Santa House) and an entertainment zone. Several car showrooms and a sports and leisure centre are also situated nearby. The Gorod Geroev park, a large green area with a pond, is situated close to the property, across Dunaisky Avenue. Physical considerations: Start of March 2011 Zoning and The subject land plot has the following construction: restrictions: characteristic: Projected December 2013  Permitted use: for the allocation of completion: residential buildings;  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Kosmonavtov Avenue Antey

Picture I. City map with project location

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Tenure: Ownership certificate 78-AГ 324950 dated as of 28.12.2007 for the land plot with a total area of 70,819 sqm (cadastral number 78:7680:6; category: settlement land) located at: Saint Petersburg, Prospect Kosmonavtov, 63, litera A. Held by: LLC “Municipal Construction Company”.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 7.0819 Estimated 1,233,504,586 remaining construction costs, RUR: Projected The final 3 phases of a mass market Average market 75,000 property type: class residential complex (comfort sale price for segment) residential area, RUR per sqm: Projected gross 120,158: Average market 90,000 build area, sqm: 52,719 – phase 2 sale price for commercial 19,150 – phase 3-2 area, RUR per 48,289 – phase 4 sqm: Net area of the 63,532: Average market 800,000 unsold flats, 24,093 – phase 2 sale price for sqm: parking space, 13,000 – phase 3-2 RUR: 26,439 – phase 4 Net 4,566: Phases: 3 commercial 2,502 – phase 2 area (unsold), 304 – phase 3-2 sqm: 1,761 – phase 4 Structured 536: Current stage Phase 2 – Completed parking 234 – phase 2 of Phase 3-2 – Desiging (unsold): development: 0 – phase 3-2 Phase 4 – Construction 302 – phase 4 Development Build and sell strategy: Market Value, RUR: 1,432,674,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a land plot with environment: Moskovskiy District of St-Petersburg, a a total area of 70,819 sqm which is in the 5-minute walk from Zvezdnaya metro process of the construction of a station. residential complex. Access / egress: The property is easily accessible from The complex consists of 11 buildings of the main thoroughfares of the district – a different number of stories (12-16 Kosmonavtov Avenue, Pulkovskoe floors). In the common courtyard there is Highway and the St-Petersburg Ring a parking structure with both Road (the KAD). underground and above-ground parking extending to two floors, the roof of Pulkovo Airport is slightly over 3 km which is used as a playground. to the south of the Subject Property. The buildings are of reinforced concrete Nearby The Property is situated in an emerging construction and provide fully fitted out amenities: residential development, begun in or shell & core residential 2002, with both retail and social accommodation. amenities. As of date of valuation, 8 buildings A 10-minute drive from the property within the complex have been completed, there is a large retail park with put into operation and sold. hypermarkets (Lenta, O’Key, METRO The final phases of the complex, with a Cash & Carry, Karousel, Castorama, total area of 120,158 sqm, should be Pulkovo-3 and Santa House) and an delivered in the coming years. entertainment zone. Less than 2 km away, to the west of the Subject Property, are the Zvezdny retail centre, several car showrooms, sports and leisure centre, and the Gorod Geroev park, a large green area with a pond. Physical considerations: Start of Phase 2 – July 2007 Zoning and The subject land plot has the following construction: Phase 3-2 – August 2007 restrictions: characteristics: Phase 4 – March 2008  Permitted use: for the allocation of Projected Phase 2 – December 2011 residential buildings; completion: Phase 3-2 – December 2014  Category: settlement land. Phase 4 – December 2013

Valuation & Advisory -105-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Leninskiy Avenue Yuzhniy

Picture I. City map with project location

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Tenure: Land lease agreement # 08/ЗКС-000042 under an investment contract in favor of LLC “GDSK Invest-35” dated 15.06.2006 for the land plot with a total area of 16,484 sqm (cadastral number 78:8391:23), located at: Leninskiy prospect, land plot 2. Contract duration: until 14.06.2010.

Valuation & Advisory -106-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 9.3236 Estimated 416,592,692 remaining construction costs, RUR: Projected Phase 2 within a mass market Average market 70,000 property type: residential complex (economy segment) sale price for residential area, RUR per sqm: Projected gross 29,823 Average market 70,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 23,039 Current stage Consturction unsold flats, of sqm: development: Net 920 Development Build and sell commercial strategy: area (unsold), sqm: Market Value, RUR: 416,482,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located on Site description: The Property comprises a land plot with environment: Leninsky Avenue between Doblesti a total area of 93,236 sqm in the process Street and Brestsky Boulevard, in the of development of the residential Krasnoselskiy District of southwestern complex. St-Petersburg. The development project represents a Access / egress: The Subject Property is close to the pipeline residential complex with two main arterial routes of the types of residential buildings: 17-18-floor Krasnoselsky District - Marshala panel buildings and 19-25-floor Zhukova Avenue and Stachek Avenue, brick/concrete buildings. which provide access to the city centre. The scheme is being developed over six There is also easy access to the St- phases. The panel buildings will provide Petersburg’s Ring Road (the KAD) and fully fitted-out residential the suburban areas along the Kievskoye accommodation, while the concrete- and Tallinskoye Highways. framed buildings with brick elevations will offer both shell & core and fitted-out Though the Subject Property is flats. currently far from any metro station, two new metro stations (Kazakovskaya The scheme will also include commercial and Brestskaya) will be built within a premises and parking. few minute’s walk of the Subject As at the date of valuation 9 buildings Property. with a total area of 239,817 sqm and 2 integrated parking structures for 186 slots Nearby The Subject Property benefits from its within complex have been built, have amenities: proximity to the Krasnenkaya River, been put into operation and have already Yuzhno-Primorsky Park and the Gulf been substantially sold. of Finland, and the absence of industrial development in the The final premises (phase 2) with a total neighborhood. area of 29,823 sqm should be delivered in December 2012. There are schools, nursery schools, sport complexes, clinics and shopping centres near the Subject Property. Physical considerations: Start of August 2008 Zoning and The subject land plot has the following construction: restrictions: characteristic: Projected December 2012  Permitted use: for realization of an completion: investment project - construction of residential complex;  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Leninskiy Avenue and Doblesti Street Yuzhnaya Aquatoriya

Picture I. City map with project location

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Tenure: Land lease agreement # 08/ЗКС-000069 for integrated residential development in favor of LLC “Municipal DomoConstruction Company” dated 08.06.2007 for the land plot with a total area of 172,643 sqm (cadastral number 78:40:8341:14), located at: Saint Petersburg, land plot 3; and land plot with a total area of 66,397 sqm (cadastral number 78:40:8341:15) located at address: Saint Petersburg, land plot 4. Contract duration: until May 14, 2014.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 23.90 Estimated 13,468,460,876 remaining construction costs, RUR: Projected Mass market residential development Average market 66,000 property type: (economy segment) sale price for residential area, RUR per sqm: Projected gross 523,065 Average market 68,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 292,421: Average market 300,000 unsold flats, 38,652 – land plot 13 sale price for sqm: parking space, 60,515 – land plot 14 RUR: 25,000 – land plot 24 52,696 – land plot 9 11,035 – land plot 1 72,655 – land plot 2 31,868 – land plot 6 Net 16,313: Current stage Designing commercial 125 – land plot 13 of area (unsold), development: 1,793 – land plot 14 sqm: 2,100 – land plot 9 1,000 – land plot 1 11,175 – land plot 2 120 – land plot 6 Ground parking 2,500: Development Build and sell (unsold), lots: 300 – land plot 13 strategy: 600 – land plot 14 300 – land plot 24 330 – land plot 9 70 – land plot 1 600 – land plot 2 300 – land plot 6 Market Value, RUR: 4,083,928,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property comprises a land environment: southwestern part of the Krasnoselskiy plot with a total area of 23.90 hectares District of St-Petersburg, to the south- zoned as settlement land. west of the intersection of Doblesti As at the date of valuation the land plot and Marshala Zakharova Streets, in is free of any buildings, and is unfenced. close proximity to the Gulf of Finland. In accordance with information received Access / egress: The road system around the property is from the Client, the land plot is intended under development, with additional for future development for a residential highways planned for construction. complex with a total area of 523,065 The nearest metro station Leninsky sqm. The complex is to consist of several Avenue - is located within a 20 minute residential buildings of 7 - 25 floors with drive of the Property. integrated commercial premises and parking. Two new metro stations: Ugo- zapadnaya and Finsliy Zaliv – are The residential buildings are to be of planned to be completed by 2020. reinforced concrete construction and will provide fully fitted-out residential Nearby The Property benefits from the close accommodation. amenities: proximity to the Gulf of Finland Physical considerations: Start of March 2011 Zoning and The subject land plot has the following construction: restrictions: characteristic: Projected June 2016  Permitted use: for the allocation of completion: the residential buildings;  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Krasnogvardeyskiy District, north-east border of Murinskiy kvartal the city

Picture I. City map with project location

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Valuation & Advisory -112-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: Ownership certificate 78-AЖ 234621 dated as of 31.05.2011 for the land plot with a total area of 605,611 sqm (cadastral number 78:11:5606:67; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 11. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 234735 dated as of 01.06.2011 for the land plot with a total area of 8,556 sqm (cadastral number 78:11:5608:68; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 12. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 234040 dated as of 26.08.2011 for the land plot with a total area of 249,666 sqm (cadastral number 78:11:5609:13; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 116. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AЖ 327085 dated as of 26.08.2011 for the land plot with a total area of 43,660 sqm (cadastral number 78:11:5609:14; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 117. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AЖ 327039 dated as of 26.08.2011 for the land plot with a total area of 11,030 sqm (cadastral number 78:11:5609:15; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 118. Held by: LLC “Okhtinskiy Bereg”. Ownership certificate 78-AЖ 234439 dated as of 31.05.2011 for the land plot with a total area of 186,682 sqm (cadastral number 78:11:5608:66; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 36Held by: LLC “Okhtinskiy Bereg”.

Description: Valuation considerations: Site area, ha: 110.52 Estimated 28,914,321,355 remaining construction costs, RUR: Projected Mass market residential complex Average market 65,000 property type: (economy segment) sale price for residential area, RUR per sqm: Projected gross 1,500,000 Average market 65,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 742,602 Average market 300,000 flats, sqm: sale price for parking space, RUR: Net 15,860 Current stage Designing commercial of area, sqm: development: Ground 7,222 Development Build and sell parking: strategy: Market Value, RUR: 5,216,524,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located along Site description: The Subject comprises a land plot with a environment: Piskarevskiy Prospect, near the St- total area of 110.52 hectares intended for Petersburg Ring Road (the KAD), in future development as a residential the Krasnogvardeyskiy District of St- complex with a total area of 1 500 000 Petersburg. sqm. Access / egress: The area is well connected to the city As of the date of valuation the land plot centre by Sverdlovskaya Embankment is free of any buildings, and is unfenced. and the Orlovsky Tunnel, which is The future complex is to consist of currently under construction. residential buildings of varying floors The nearby KAD provides highway with integrated commercial premises and access to the southern and northern underground parking, and social facilities: parts of the city. 3 schools, 5 nursery schools and 2 clinics. The closest metro stations: Devyatkino, Currently this development project is in Grazhdanskiy Prospect and Plowad the process of planning. Muzhestva – are located at a distance of 10-15 minutes by car to the north of the property. A new metro station, Ruchyi, is planned to be built by 2020 in close proximity to the Subject Property. Nearby The Subject Property is surrounded by amenities: agricultural fields, parkland and the Okhta River and development project “Tsvetnoy Gorod”. Physical considerations: Start of January 2013 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2025  Permitted use: for agricultural use; completion:  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Piskarevskiy Avenue, 145 Ruch’i

Picture I. City map with project location

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Valuation & Advisory -115-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: Ownership certificate 78-AЖ 206715 dated as of 26.04.2011 for the land plot with a total area of 89,793 sqm (cadastral number 78:11:5606:98; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 111. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 206714 dated as of 26.04.2011 for the land plot with a total area of 15,510 sqm (cadastral number 78:11:5606:99; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 112. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 206872 dated as of 26.04.2011 for the land plot with a total area of 43,266 sqm (cadastral number 78:11:5606:104; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 114. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 206875 dated as of 26.04.2011 for the land plot with a total area of 21,749 sqm (cadastral number 78:11:5606:104; category: settlement land) located at address: Saint Petersburg, territory of the enterprise “Ruch’i”, land plot 115. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 206874 dated as of 26.04.2011 for the land plot with a total area of 66,307 sqm (cadastral number 78:11:5606:105; category: settlement land) located at address: Saint Petersburg, Pickarevskiy Prospect, 145, bldg. 3, litera A. Held by: LLC “Municipal DomoConstruction Company”.

Description: Valuation considerations: Site area, ha: 23.6625 Estimated 9,424,123,087 remaining construction costs, RUR: Projected Mass market residential complex Average market 65,000 property type: (economy segment) sale price for residential area, RUR per sqm: Projected gross 282,321 Average market 65,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 209,435 Average market 300,000 flats, sqm: sale price for parking space, RUR: Net 1,986 Current stage Designing commercial of area, sqm: development: Ground 2,495 Development Build and sell parking: strategy: Market Value, RUR: 2,689,696,000

Valuation & Advisory -116-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located along Site description: The Subject Property comprises a land environment: Piskarevskiy Prospect, near the St- plot with a total area of 236,625 sqm Petersburg Ring Road (the KAD), in intended for future development of a the Krasnogvardeyskiy District of St- residential complex with a total area of Petersburg. 282,321 sqm. Access / egress: The area is well connected to the city As of date of valuation the land plot is centre by Sverdlovskaya Embankment free of any buildings, and is not fenced. and the Orlovsky Tunnel, which is The future complex is to consist of currently under construction. residential buildings of varying floors The nearby KAD provides highway with integrated commercial premises and access to the southern and northern underground parking, and social facilities: parts of the city. a school and a nursery school. The closest metro stations: Devyatkino, Currently the development project is in Grazhdanskiy Prospect and Plowad the process of planning. Muzhestva – are located at a distance of 15-20 minutes by car to the north of the property. A new metro station, Ruchyi, is planned to be built by 2020 in close proximity to the Subject Property. Nearby The Subject Property is surrounded by amenities: agricultural fields, parkland, the Okhta River and development project “Tsvetnoy Gorod”. Physical considerations: Start of December 2012 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2016  Permitted use: for agricultural use; completion:  Category: settlement land.

Valuation & Advisory -117-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Belisheva Street Avrora

Picture I. City map with project location

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Valuation & Advisory -118-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: Land lease agreement # 858 under an investment contract in favor of LLC “Municipal DomoConstruction Company” dated 08.05.2008 for the following land plots:  Land plot with a total area of 8,480 sqm (cadastral number 78:6309A:5), located at address: Belisheva street, land plot 1;  Land plot with a total area of 10,400 sqm (cadastral number 78:6309A:12), located at address: Belisheva street, land plot 2;  Land plot with a total area of 13,900 sqm (cadastral number 78:6309A:4), located at address: Belisheva street, land plot 3;  Land plot with a total area of 13,900 sqm (cadastral number 78:6309A:3), located at address: Belisheva street, land plot 4;  Land plot with a total area of 9,300 sqm (cadastral number 78:6309A:2), located at address: Belisheva street, land plot 5;  Land plot with a total area of 9,300 sqm (cadastral number 78:6309A:10), located at address: Belisheva street, land plot 6;  Land plot with a total area of 9,060 sqm (cadastral number 78:6309A:6), located at address: Belisheva street, land plot 7;  Land plot with a total area of 7,900 sqm (cadastral number 78:6309A:8), located at address: Belisheva street, land plot 8;  Land plot with a total area of 10,400 sqm (cadastral number 78:6309A:11), located at address: Belisheva street, land plot 9;  Land plot with a total area of 13,900 sqm (cadastral number 78:6309A:9), located at address: Belisheva street, land plot 10;  Land plot with a total area of 13,900 sqm (cadastral number 78:6309A:7), located at address: Belisheva street, land plot 11;  Land plot with a total area of 29,530 sqm (cadastral number 78:6309A:13), located at address: Belisheva street, land plot 12;  Land plot with a total area of 8,035 sqm (cadastral number 78:6309A:10), located at address: Badaeva street, land plot 7;  Land plot with a total area of 7,775 sqm (cadastral number 78:6319A:11), located at address: Badaeva street, land plot 8; Contract duration: until December 31, 2014.

Description: Valuation considerations: Site area, ha: 15.00 Estimated 8,758,008,683 remaining construction costs, RUR: Projected Residential complex of mass market Average market 70,000 property type: class (economy and comfort segments) sale price for residential area, RUR per sqm: Projected gross 390,270 Average market 100,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 192,174 Average market 600,000 unsold flats, sale price for sqm: parking space, RUR:

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Net 3,054 Current stage Construction commercial of area (unsold), development: sqm: Ground parking 3,270 Development Build and sell (unsold): strategy: Market Value, RUR: 7,056,550,000 Planning considerations: Location / The subject site is situated in the Site description: The Subject Property comprises a land environment: Nevskiy District of St. Petersburg, at plot with a total area of 15 hectares the intersection of Kollontay and zoned as settlement land. Belysheva Streets. As at the date of valuation the land plot Access / egress: The property has convenient access to is in the process of development. the city centre: Nevsky Avenue is circa In accordance with the information 5 km to the north-west of the property, provided, the project represents a accessible via Dalnevostochny Avenue, residential complex with a total area of which becomes Zanevsky Avenue via 390,270 sqm consisting of 16 residential the Alexander Nevsky bridge. buildings of 14 – 25 floors with Dalnevostochny Avenue also provides integrated commercial space and access to the St. Petersburg Ring Road underground parking. Both the (approximately 8 km to the south-east residential and commercial space will be of the property). offered in fitted-out condition. The nearest metro station, Bolshevikov Avenue, is within 1 km of the Subject Property. Nearby The property is located a short distance amenities: from the Felichita retail and entertainment complex, the hypermarkets Karusel and Castorama, and the Ledovy Dvorets sports centre. The immediate environs comprise an established residential area with social amenities. Physical considerations: Start of July 2010 Zoning and The subject land plots have the following construction: restrictions: characteristics: Projected December 2015  Permitted use: for developing of completion: town planning documentation and construction documentation for building development and for determination of the typ of construction;  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Badaeva Street Vostok

Picture I. City map with project location

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Tenure: Land lease agreement # 13/ЗКС-03979 provided for the development of town planning and construction documentation to LLC “Sintez Development” (agreement on the cession of rights and obligations in favor of LLC “Municipal DomoConstruction Company”, dated 06.04.2009) dated 27.09.2005 for the land plot with a total area of 8,035 sqm (cadastral number 78:6319A:10), located at address: Saint Petersburg, Badaeva Street, land plot 7. Contract duration: 6 years. Land lease agreement # 13/ЗКС-03980 provided for the development of town planning and construction documentation of LLC “Sintez Development” (agreement on the cession of rights and obligations in favor to LLC “Municipal DomoConstruction Company”, dated 06.04.2009) dated 27.09.2005 for the land plot with a total area of 7,775 sqm (cadastral number 78:6319A:11), located at address: Saint Petersburg, Badaeva Street, land plot 8. Contract duration: 6 years.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 1.58 Estimated 1,119,894,489 remaining construction costs, RUR: Projected Mass market residential complex Average market 68,000 property type: (economy segment) sale price for residential area, RUR per sqm: Projected gross 59,655 Average market 100,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 25,419 Average market 600,000 unsold flats, sale price for sqm: parking space, RUR: Net 1,140 Current stage Construction commercial of area (unsold), development: sqm: Ground parking 80 Development Build and sell (unsold): strategy: Market Value, rubles: 897,730,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The subject site is situated in the Site description: The Subject Property comprises a land environment: Nevskiy District of St. Petersburg, at plot with a total area of 1.58 hectares the corner of Kollontay and Badayeva zoned as settlement land. Streets. As at the date valuation the land plot is in Access / egress: The property has convenient access to the course of construction. On the city centre: Nevsky Avenue is circa completion the development will 5 km to the north-west of the property, comprise a residential complex with a accessible via Dalnevostochny Avenue, total area of 59,655 sqm consisting of which becomes Zanevsky Avenue via two residential buildings of 12 and 22 the Alexander Nevsky bridge. floors with integrated commercial Dalnevostochny Avenue also provides premises and parking. access to the St. Petersburg Ring Road The flats will be offered for sale fully (approximately 8 km to the south-east fitted out. At present the site is fenced, of the property). the construction preparation works are in The nearest metro station, Bolshevikov progress. Avenue, is within one km of the Subject Property. Nearby The property is located a short distance amenities: from the Felichita retail and entertainment complex, the hypermarkets Karusel and Castorama, and the Ledovy Dvorets sports centre. The Subject Property’s immediate environs comprise an established residential area with social amenities. Physical considerations: Start of July 2009 Zoning and The subject land plot has the following construction: restrictions: characteristic: Projected March 2013  Permitted use: for developing of completion: town planning documentation and construction documentation for building development and for determine of the construction possibility;  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Yuzhnoe Highway, 55 Sophia

Picture I. City map with project location

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: Ownership certificate 78-AЖ 392863 dated as of 17.11.2011 for the land plot with a total area of 1,689 sqm (cadastral number 78:13:7420:63; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 1. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392865 dated as of 17.11.2011 for the land plot with a total area of 468 sqm (cadastral number 78:13:7420:65; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 2. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392862 dated as of 17.11.2011 for the land plot with a total area of 23,574 sqm (cadastral number 78:13:7420:62; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 3. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392864 dated as of 17.11.2011 for the land plot with a total area of 100 sqm (cadastral number 78:13:7420:64; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 4. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392858 dated as of 17.11.2011 for the land plot with a total area of 11,419 sqm (cadastral number 78:13:7420:58; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 5. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392867 dated as of 17.11.2011 for the land plot with a total area of 10,740 sqm (cadastral number 78:13:7420:67; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 7. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392866 dated as of 17.11.2011 for the land plot with a total area of 4,756 sqm (cadastral number 78:13:7420:66; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 8. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392869 dated as of 17.11.2011 for the land plot with a total area of 27,224 sqm (cadastral number 78:13:7420:69; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 9. Holder of the right: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392870 dated as of 17.11.2011 for the land plot with a total area of 100 sqm (cadastral number 78:13:7420:70; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 10. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392861 dated as of 17.11.2011 for the land plot with a total area of 200 sqm (cadastral number 78:13:7420:61; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 11. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392868 dated as of 17.11.2011 for the land plot with a total area of 13,587 sqm (cadastral number 78:13:7420:68; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 12. Holder of the right: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392859 dated as of 17.11.2011 for the land plot with a total area of 18,290 sqm (cadastral number 78:13:7420:59; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 13. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 392857 dated as of 17.11.2011 for the land plot with a total area of 7,152 sqm (cadastral number 78:13:7420:57; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 14. Held by: LLC “Research and Manufacturing Association Keramika”. Ownership certificate 78-AЖ 393437 dated as of 17.11.2011 for the land plot with a total area of 15,781 sqm (cadastral number 78:13:7420:71; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 15. Held by: LLC “Research and Manufacturing Association Keramika”.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Ownership certificate 78-AЖ 393443 dated as of 17.11.2011 for the land plot with a total area of 4,304 sqm (cadastral number 78:13:7420:52; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 1. Held by: LLC “Municipal Construction Company”. Ownership certificate 78-AЖ 393444 dated as of 17.11.2011 for the land plot with a total area of 100 sqm (cadastral number 78:13:7420:53; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 2. Held by: LLC “Municipal Construction Company”. Ownership certificate 78-AЖ 393445 dated as of 17.11.2011 for the land plot with a total area of 7,780 sqm (cadastral number 78:13:7420:54; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 3. Held by: LLC “Municipal Construction Company”. Ownership certificate 78-AЖ 393446 dated as of 17.11.2011 for the land plot with a total area of 1,337 sqm (cadastral number 78:13:7420:55; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 4. Held by: LLC “Municipal Construction Company”. Ownership certificate 78-AЖ 393447 dated as of 17.11.2011 for the land plot with a total area of 232 sqm (cadastral number 78:13:7420:56; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, land plot 5. Held by: LLC “Municipal Construction Company”. Ownership certificate 78-AЖ 100054 dated as of 17.12.2010 for the land plot with a total area of 63,924 sqm (cadastral number 78:13:7420:56; category: settlement land) located at address: Saint Petersburg, Yuzhnoe shosse, 49, litera A. Held by: LLC “Factory “StroyFarfor”.

Description: Valuation considerations: Site area, ha: 20.86 Estimated 11,862,850,269 (net of VAT) remaining construction costs, RUR: Projected Mass market residential complex Average market 70,000 – 80,000 property type: (comfort segment) sale price for residential area, RUR per sqm: Projected gross 513,000 Average market 65,000 – 70,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 305,038 Average market 500,000 unsold flats, sale price for sqm: parking space, RUR: Net 3,000 Phases: In accordance with information received commercial from the Client the residential complex area (unsold), plan to is to be realized in 5 phases sqm: between 2013 – 2018. Ground parking 1,958 Current stage Designing (unsold): of development: Development Build and sell strategy: Market Value, RUR: 5,849,487,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The subject land plot is located in the Site description: The Subject Property is a brown-field environment: Frunzensky District, to the south of St- land plot with a total area of 21 hectares. Petersburg, in the quadrant formed by As of date of valuation the Sofyskaya Street, Dimitrova Street, redevelopment project is in the planning Bukharestskaya Street and Yuzhnoye stage. The project represents a residential Highway. complex of several residential buildings Access / egress: Bukharestskaya Street provides direct of 17 to 25 floors. access to the city centre via Ligovsky The ground floors of these buildings will Avenue. be occupied by commercial premises Sofyskaya Street provides direct access (retail and offices) as well as two schools to the St-Petersburg’s Ring Road (the and two nursery schools. KAD) circa 3.3 km from the Subject When construction is completed the Property. grounds will be landscaped to create an The nearest metro station, Kupchino, attractive park for residents. is a 15 minute ride by public transport. Another metro station, Slavy Avenue, within a short walking distance from the Subject Property, is planned for delivery in 2015. Nearby On the northern and southern borders amenities: of the Subject Property are vast green areas with large ponds. 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 Subject Property. Two modern retail schemes – the Yuzhny Polus retail centre and the Lenta hypermarket – are within 500 m of the subject site, on the corner of Slavy Avenue and Prazhskaya Street and Bukharestskaya Street, respectively. Physical considerations: Start of February 2013 Zoning and In accordance with Ownership construction: restrictions: certificates the land plots have the Projected December 2018 following characteristics: completion:  Permitted use: for allocation and construction of industrial facilities/ residential buildings/ communal facilities/ educational facilities/ transport infrastructure.  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Marshala Blukhera Avenue Kalina Park

Picture I. City map with project location

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Valuation & Advisory -128-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: Ownership certificate 78-AЖ 160248 dated as of 15.03.2011 for the land plot with a total area of 29,627 sqm (cadastral number 78:10:5125:18; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera БЩ. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 160236 dated as of 15.03.2011 for the land plot with a total area of 29,452 sqm (cadastral number 78:10:5125:29; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera H. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 160247 dated as of 15.03.2011 for the land plot with a total area of 29,359 sqm (cadastral number 78:10:5125:34; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera БB. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 160250 dated as of 15.03.2011 for the land plot with a total area of 21,006 sqm (cadastral number 78:10:5125:18; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera AЧ. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 160249 dated as of 15.03.2011 for the land plot with a total area of 29,528 sqm (cadastral number 78:10:5125:44; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera AЛ. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 160246 dated as of 15.03.2011 for the land plot with a total area of 16,974 sqm (cadastral number 78:10:5125:47; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera БЕ. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 228183 dated as of 22.04.2011 for the land plot with a total area of 21,697 sqm (cadastral number 78:10:5125:23; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera АЭ. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 228185 dated as of 22.04.2011 for the land plot with a total area of 16,944 sqm (cadastral number 78:10:5125:19; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera БЖ. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 228180 dated as of 22.04.2011 for the land plot with a total area of 16,574 sqm (cadastral number 78:10:5125:42; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera БИ. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 228181 dated as of 22.04.2011 for the land plot with a total area of 11,865 sqm (cadastral number 78:10:5125:26; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera БС. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 228179 dated as of 22.04.2011 for the land plot with a total area of 5,673 sqm (cadastral number 78:10:5125:25; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera Е. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 228184 dated as of 22.04.2011 for the land plot with a total area of 20,518 sqm (cadastral number 78:10:5125:24; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera БЗ. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 228178 dated as of 22.04.2011 for the land plot with a total area of 18,701sqm (cadastral number 78:10:5125:45; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera Л. Held by: LLC “Municipal DomoConstruction

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Company”. Ownership certificate 78-AЖ 228182 dated as of 22.04.2011 for the land plot with a total area of 10,332sqm (cadastral number 78:10:5125:41; category: settlement land) located at address: Saint Petersburg, Marshala Blukhera prospect, 12, litera Ж. Held by: LLC “Municipal DomoConstruction Company”.

Description: Valuation considerations: Site area, ha: 34.35 Estimated 14,033,897,556 remaining construction costs, RUR: Projected Mass market residential complex Average market 65,000 property type: (economy segment) sale price for residential area, RUR per sqm: Projected gross 507,000 Average market 65,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 338,583 Average market 300,000 flats, sqm: sale price for parking space, RUR: Net 7,072 Currenta stage Designing commercial of area, sqm: development: Ground 1,200 Development Build and sell parking: strategy: Market Value, RUR: 3,623,468,000 Planning considerations: Location / The subject site is situated in the Site description: The Subject Property represents a land environment: Kalininskiy District of St. Petersburg, plot with a total area of 34.45 hectares in the quarter formed by Marshala zoned as settlement land. Blukhera Avenue, Laboratorniy As at the date of valuation the land plot Avenue and Bestuzhevskaya Street. is fenced, buildings intended for the Access / egress: The property has good accessibility. All demolition are currently still on site. types of public transport are well In accordance with information received developed in the subject district. from the Client, the development project The metro stations Lesnaya and will comprise the construction of a Ploshad Muzhestva are located 3 and 5 residential complex with a total area of km from the subject site, respectively. 507,000 sqm consisting of several residential buildings of 17 – 25 floors Nearby The immediate environs comprise an with integrated commercial space and amenities: established residential area with social underground parking. amenities.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of February 2012 Zoning and The subject land plots have the following construction: restrictions: characteristics: Projected December 2016  Permitted use: for allocation of completion: industrial and warehouse facilities;  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Moskovskoe Highway Viva

Picture I. City map with project location

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Tenure: Ownership certificate 78-AЖ 137100 dated as of 21.01.2011 for the land plot with a total area of 80,001 sqm (cadastral number 78:14:7686:6; category: settlement land) located at address: Saint Petersburg, Moskovskoe shosse, 3, litera З. Held by: LLC “Municipal DomoConstruction Company”. Ownership certificate 78-AЖ 137107 dated as of 21.01.2011 for the land plot with a total area of 11,500 sqm (cadastral number 78:14:7686:7; category: settlement land) located at address: Saint Petersburg, Moskovskoe shosse, 3, litera Д. Held by: LLC “Municipal DomoConstruction Company”.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 9.15 Estimated 3,539,951,208 remaining construction costs, RUR Projected Mass market residential complex Average market 75,000 property type: (comfort class segment) sale price for residential area, RUR per sqm: Projected gross 144,117 Average market 85,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 90,894 Average market 600,000 flats, sqm: sale price for parking space, RUR: Net 1,021 Current stage Designing commercial of area, sqm: development: Ground 499 Development Build and sell parking: strategy: Market Value, RUR: 2,351,809,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property comprises a land environment: Moskovskiy District of St-Petersburg, plot with a total area of 9.15 hectares at the intersection of Moscovskoe zoned as settlement land. Highway and Dunaisky Avenue. As of the date of valuation the land plot Access / egress: The Property is located approximately is fenced and free of any buildings. in 15 minutes walk from Zvezdnaya In accordance with information received and Moskovskaya metro stations. from the Client, the land plot is intended Pulkovskoye Highway, located for the future development of a approximately 1 km to the west of the residential complex with a total area of subject site, provides easy and direct 144,117 sqm. The complex is to consist access both to the city centre and to of several residential buildings of 14 - 16 the areas beyond the St-Petersburg ring floors with integrated commercial road (the KAD) south of the city. premises and underground parking. The residential buildings are to be of Nearby Within walking distance of the Subject reinforced concrete panel construction amenities: Property is a large retail park with and provide fully fitted-out residential hypermarkets (Lenta, O’Key, METRO accommodation. Cash & Carry, Karusel, Castorama, Pulkovo-3 and Santa House) and an entertainment zone. Several car showrooms and a sports and leisure centre are also situated nearby. The Gorod Geroev park, a large green area with a pond, is only 100 m from the property Physical considerations: Start of December 2012 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2015  Permitted use: for the allocation completion: and construction of residential buildings;  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Dunayskiy Avenue, 27 Vitebskiy

Picture I. City map with project location

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Tenure: Ownership certificate 78-AЖ 373062 dated as of 05.10.2011 for the land plot with a total area of 61,762 sqm (cadastral number 78:14:7692В:67; category: settlement land) located at address: Saint Petersburg, Dunayskiy Prospect, 27, bldg.2, litera Г1. Held by: LLC “Municipal DomoConstruction Company”.

Description: Valuation considerations: Site area, ha: 5.65 Estimated 2,871,491,983 remaining

construction costs, RUR: Projected Mass market residential complex Average market 65,000 property type: (economy segment) sale price for residential area, RUR per sqm:

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Projected gross 137,666 Average market 65,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 73,465 Average market 300,000 flats, sqm: sale price for parking space, RUR: Net 1,015 Current stage Designing commercial of area, sqm: development: Ground 520 Development Build and sell parking: strategy: Market Value, RUR: 1,535,547,000 Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property comprises a land environment: Moskovskiy District of St-Petersburg, plot with a total area of 5.65 hectares along Dunayskiy Prospect. zoned as settlement land. Access / egress: The Property is located within a 5 As at the date of valuation the land plot minute walk of Kupchino metro is free of any buildings and is not fenced. station and 7 minutes by transport In accordance with information received from Zvezdnaya metro station. from the Client, the land plot is intended The land plot is located in close for future development for a residential proximity to the 3 main transport complex with a total area of 137,666 routes of the city: Vitebskiy Prospect, sqm. The complex is to comprise several Dunayskiy Prospect and Prospect residential buildings with integrated Kosmonavtov. commercial premises and underground parking. Moskovskoe Shosse and the St- Petersburg ring road (the KAD) are The residential buildings are to be of located at a distance of 5 minutes by reinforced concrete construction and to transport, which provides easy and provide fully fitted-out residential direct access both to the city centre and accommodation. to the areas beyond the south of the city. Nearby The Property benefits from the well amenities: developed business, retail and social infrastructure in the zones of metro stations Zvezdnaya and Kupchino. The Gorod Geroev park, a large green area with a pond, is located 2 km from the Property. Physical considerations: Start of August 2012 Zoning and The subject land plot has the following construction: restrictions: characteristic: Projected December 2015  Permitted use: for the allocation completion: warehouse facilities;  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint Petersburg Address: Parashutnaya Street Shuvalovskiy Kar’er

Picture I. City map with project location

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Tenure: Ownership certificate 78-AЖ 361449 dated as of 09.09.2011 for the land plot with a total area of 309,448 sqm (cadastral number 78:34:4281:121; category: settlement land) located at address: Saint Petersburg, Prigorodniy, land plot 208. Held by a private individual – Berezin D.K. Type of the right: ownership in common - 50% of interest. Ownership certificate 78-AЖ 361448 dated as of 09.09.2011 for the land plot with a total area of 309,448 sqm (cadastral number 78:34:4281:121; category: settlement land) located at address: Saint Petersburg, Prigorodniy, land plot 208. Held by: a private individual – Zhorov V.A. Type of the right: ownership in common - 50% of interest.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 64.00 Estimated 16,260,549,973 remaining construction costs, RUR: Projected A mass market residential complex Average market 65,000 property type: (economy and comfort segment) sale price for residential area, RUR per sqm: Projected gross 602,200 Average market 65,000 build area, sqm: sale price for commercial area, RUR per sqm: Net area of the 372,429 Average market 200,000 flats, sqm: sale price for parking space, RUR: Net 3,404 Current stage Concept development commercial of area, sqm: development: Ground 5,291 Development Build and sell parking, slots: strategy: Market Value, RUR: 4,098,679,000 Planning considerations: Location / The Subject Property is situated in the Site description: The Subject Property comprises land environment: Primorskiy District of St-Petersburg, plots with a total area of 64.00 hectares on Parashutnaya Street. zoned as settlement land. Nearby The Property is located within a 20- As at date of valuation the land plot is amenities: minute drive of Pionerskaya and free of any buildings. A protection zone Komendantskaya Plostchad metro related to the overhead electricity lines stations. (5,234 sqm), a coastal/embankment protection zone for water bodies (4,674 The Property is close to main roads, is sqm) and a water conservation zone for also well served by public water bodies (23,478 sqm) spread transportation. through the territory of the Property. Access / egress: The Property benefits from a number In accordance with information received of nearby leisure, retail and social from the Client, the land plot is intended amenities. for the future development of a mass There is a nature reserve, market residential complex with a total Yuntolovskaya Dacha, in close area of 602,200 sqm. The complex is to proximity to the Subject Property comprise several residential buildings of which features an artificial lake, 15 - 25 floors with integrated commercial playgrounds and walking paths. premises and underground parking. Currently the development project is in the planning process.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of June 2013 Zoning and The subject land plot has the following construction: restrictions: characteristic: Projected December 2019  Permitted use: for agricultural uses; completion:  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Paradnaya Street, 1-3 Paradniy Quarter (mansion)

Picture 1. City map with project location

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Tenure: The land plot with a total area of 95,741 sqm (cadastral number 78:1210:12) is held freehold by 131 Kvartirno-ekspluatatsionnoe upravlenie Glavnogo Kvartirno-ekspluatatsionnogo upravleniya Ministerstva Oborony RF according to ownership certificate 78-AB 540614 dated February 08, 2007. Agreement on investment activity without number dated September 23, 2005 on the designing and construction of the Subject Property.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 9.57 (total area of the land plot under Estimated 0 all buildings of Paradniy Quarter remaining mixed-use complex) construction costs, RUR: Projected Class A office centre property type: Projected gross 5,075 Average market 141,489 build area, sqm: sale price, RUR per sqm: Projected net 3,561 office area, sqm: Projected net n/a Special n/a other area, assumptions: sqm: Underground 27 Current stage Completed parking: of development: Ground n/a Development Build and sell parking: Strategy: Market Value, RUR: 718,072,000 Planning considerations: Location: The Subject Property is located in the Site description: The Property is represented by a land Central District of Saint-Petersburg plot with a total area of 95,741 sqm. within a 10-minute walk of The Subject Property comprises a brick- Chernyshevskaya metro station. clad mansion-style office building Access / egress: Access to the Subject Property can be featuring historical facades and state-of- realized through Paradnaya Street or art engineering systems. The building Velenksiy Lane provides class A open-floor plate office space arranged over four floors and The property is easily accessible from underground parking. the main thoroughfares of the district – Suvorovskiy Avenue, Ligovskiy Avenue, Nevskiy Avenue and Robiespiera Embankment. Nearby The following amenities are situated in amenities: a close proximity to the Subject Property: Tavricheskiy Garden, Tavricheskiy Palace, Ovalniy Park, Suvorov Museum, Smolniy Cathedral and educational facilities. Paradniy Quarter is a mixed-use residential complex. It is planned that the residents will use the developing infrastructure of the mixed-use residential complex which includes stores, supermarkets and a fitness centre.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Paradnaya Street, 1-3 Paradniy Quarter (office development)

Picture 1. City map with project location

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Tenure: The land plot with a total area of 95,741 sqm (cadastral number 78:1210:12) is held freehold by 131 Kvartirno-ekspluatatsionnoe upravlenie Glavnogo Kvartirno-ekspluatatsionnogo upravleniya Ministerstva Oborony RF according to ownership certificate 78-AB 540614 dated February 08, 2007. Agreement on investment activity without number dated September 23, 2005 on designing and construction of the Subject Property.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 9.57 (total area of the land plot under Estimated 465,241,095 all buildings of Paradniy Quarter remaining mixed-use complex) construction costs, RUR Projected Class A office centre property type: Projected gross 12,691 Average market 142,000 build area, sqm: sale price, RUR per sqm: Projected net 7,114 office area, sqm: Projected net 168 Special n/a other area, assumptions: sqm: Underground 63 Current stage Designing parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 901,893,000 Planning considerations: Location: The Subject Property is located in the Site description: The Property is represented by a land Central District of Saint-Petersburg plot with a total area of 95,741 sqm. within a 10-minute walk of The Subject Property comprises a Chernyshevskaya metro station. brown-field site which currently Access / egress: Access to the Subject Property can be accommodates buildings which are realized through Paradnaya Street or subject to demolition. Two-brick-clad Velenksiy Lane mansion-style class A office buildings featuring replica historical facades and The property is easily accessible from state-of-art engineering systems are the main thoroughfares of the district planned to be constructed on the site. – Suvorovskiy Avenue, Ligovskiy The buildings will be linked by a covered Avenue, Nevskiy Avenue and gallery and will provide class A open- Robiespiera Embankment. floor plate office space and underground Nearby The following amenities are situated in car parking. amenities: close proximity to the Subject Property: Tavricheskiy Garden, Tavricheskiy Palace, Ovalniy Park, Suvorov Museum, Smolniy Cathedral and educational facilities. Paradniy Quarter is a mixed-use residential complex. It is planned that the residents will use the developing infrastructure of the mixed-use residential complex which includes stores, supermarkets and a fitness centre.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of June 2012 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected August 2014  Category: settlement land. completion:

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Vyborg, Leningradskiy Region Address: Leningradsky Avenue, 17 TOC on Leningradskom Prospekte

Picture 1. City map with project location

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Tenure: The land plot with a total area of 1,750 sqm cad. no 47:01:01-07-003-0033 is held freehold by the CJSC NPO Vyborgstroyrekonstruktsiya according to ownership certificate 47-AA 447801 dated as of August 04, 2004.. The land plot with a total area of 180 sqm cad. no 47:01:01-07-003-0038 is held freehold by the CJSC NPO Vyborgstroyrekonstruktsiya according to ownership certificate 78-AA 361473 dated as of November 10, 2005.

Valuation & Advisory -146-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.1927 Estimated 262,208,000 remaining Projected Class B office centre constructions property type: costs, RUR: Projected gross 7,362 Average annual 11,500 build area, sqm: market rental rate for office Projected ground 6,989 area, RUR per area, sqm: sqm: Projected n/a Special n/a underground assumptions: area, sqm: Net commercial 5,449 Current stage Concept development area, sqm: of develoipment: Underground n/a parking: Ground parking: In accordance with the information Development Build and Hold received from the Client, spontaneous strategy: surface parking will be allocated in the front on the building. Market Value, RUR: 24,863,000 (80%) Planning considerations: Location: The Subject Property is situated in the Description: The property comprises a brown-field Petrogradsky District in the south of site with a total area of 1,927 sqm Aptekarskiy Island at the corner of zoned as settlement land. The Zoologicheskiy Lane and development scheme assumes a Dobroluybova Av. construction of a multifunctional office complex. The Subject Property will Access / egress: The Property is situated in the comprise a five floor class B office historical city centre: on the corner of centre with retail premises at ground Leningradsky Prospect and Lenina floor level. Prospect. Nearby The Property benefits from a central amenities: location. Physical considerations: Start of December 2012 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected October 2014  Category: settlement land; completion:  Permitted use: for the allocation of an office and retail centre.

Valuation & Advisory -147-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Embankment of Fontanka river, 40/68, Lit. B Nevskiy 68

Picture I. City map with project location

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Valuation & Advisory -148-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: The land plot with a total area of 1,530 sqm (cadastral number 78:1283:21)is held leasehold by OOO AvtoKomBalt according to the lease agreement # 10/ЗK-0006020 dated February 16, 2009 and additional agreement without number dated July 14, 2010 and expiring on April 30, 2013. The land plot with a total area of 635 sqm (cadastral number 78:31:1283:1017) is held leasehold by OOO AvtoKomBalt according to the lease agreement # 0003/ЗК-006137 dated October 19, 2010 and expiring on April 13, 2013. Investment agreement # 10-(И)006020 dated August 12. 2005 and additional agreement without number dated July 13, 2010.

Description: Valuation considerations: Site area, ha: 0.15 Estimated 452,753,390 remaining construction costs, RUR: Projected Building with elite apartments and Average market n/a property type: retail premises sale price for residential area, RUR per sqm: Projected gross 8,400 Average market 508,475 – apartments build area, sqm: sale price for 508,475 – retail area (1st floor) commercial area, RUR per 338,983 – retail area (2nd floor) sqm: Net area of the n/a Average market 2,542,373 unsold flats, sale price for sqm: parking space, RUR: Net 3,277 – apartments commercial 2,250 – retail area area (unsold): Underground 26 Current stage Construction parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 1,960,158,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a land plot with environment: Central District of Saint-Petersburg a total area of 1,530 sqm. within a 5-minute walk of According to the project development Mayakovskaya and Gostinyi Dvor scheme it is planned to construct a metro stations. building with apartments, retail premises Access / egress: Access to the Subject Property can be on the first and second floors and realized through the Embankment of underground parking for 26 cars. the Fontanka River and Nevskiy Avenue. Nearby The following amenities are situated in amenities: a close proximity to the Subject Property: Kazanskiy Cathedral, Vosstaniya Square, educational and health facilities. A great amount of restaurants, bars, boutiques and stores are located on Nevskiy Avenue. The following retail centres are located in close proximity to the Subject Property: Nevskiy Centre, Galereya, Nevskiy Atrium, Gostinyi Dvor, Perinnye Ryady, and Passage. Physical considerations: Start of January 2012 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected December 2012  Category: settlement land. completion:

Valuation & Advisory -150-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Saint-Petersburg Address: Kamennoostrovskoy Avenue, 58-60 Kamennoostrovskaya Kollektsiya (office building)

Picture 1. City map with project location

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Tenure: The land plot with a total area of 8,294 sqm (cadastral number 78:7:3207A:12) is held leasehold by OOO Sankt-Peterburgskiy gumanitarniy delovoy tsentr UNA according to the lease agreement # 15/ЗК-001516 dated July 08, 2009. Investment agreement # 15-И001515 for redevelopment of the existing buildings dated July 08, 2009 and an order # 260 dated September 13, 2011 for prolongation of the investment agreement until November 25, 2012, was issued by city’s authorities.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.83 Estimated 531,448,405 remaining Projected Class B office centre construction property type: costs, RUR: Projected gross 8,233 Average market 118,644 build area, sqm: sale price, RUR per sqm: Projected net 5,852 office area, sqm: Projected net 901 Current stage Designing retail area, sqm: of development: Projected net 753 other area, sqm: Underground n/a Development Build and sell parking: Strategy: Ground n/a parking: Market Value, RUR: 762,331,000 Planning considerations: Location: The Subject Property is located in the Site description: The Property comprises a land plot with Petrogradskiy District of Saint- a total area of 8,294 sqm. Petersburg within a 10-minute walk of The Subject Property comprises a land Petrogradskaya metro station. plot with three mansions of historical and Access / egress: Access to the Subject Property is via cultural value which are planned to be Kamennoostrovskoy Avenue. redeveloped into high-quality business centres. The property is easily accessible from the main thoroughfares of the district – Kamennoostovskoy Avenue and Bolshoy Avenue. Nearby The following amenities are situated in amenities: a close proximity to the Subject Property: Petropavlovskaya Krespost, Avrora, Botanicheskiy Garden and a great amount of shops, restaurants and cinema theaters at Kamennoostrovskoy and Bolshoy Avenues. Physical considerations: Start of December 2012 Zoning and The subject land plot has the following construction: restrictions: characteristics: Projected August 2014  Category: settlement land; completion:  Permitted use: for allocation of administrative and public buildings.

Valuation & Advisory -152-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Leningrad Region Address: Vyborgskiy District, “Leninskoe” Village Ahkmatovo

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Tenure: Ownership certificates for the 42 land plots with a total area of 18,243 sqm located within cottage village “Maloe Repino” at address: Leningrad Region, Vyborgskiy District, municipal entity “Pervomayskoe rural settlement”, village “Leninskoe”. Held by: LLC “Osobnyak”.

Description: Valuation considerations: Site area, ha: 7.16 Estimated 21,370,575 remaining construction costs, RUR: Projected Individual land plots intended for Average market 1,500 property type: further cottage development sale price for the land plot, RUR per sqm: Total area of 18,283 Current stage Construction the unsold land of plot, sqm development: Quantity of the 42 Development Sell land plots: strategy: Market Value, RUR: 8,196,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Nearby The Property is situated in a zone of amenities: near completed cottage development projects in their final stages (ParkWay, Akhmatovo, Repinskaya usadba). Physical considerations: Start of June 2007 Zoning and The subject land plots have the following construction: restrictions: characteristic:  Permitted use: for country house/cottage development;  Category: agricultural land. Projected December 2012 Infrastructure In accordance with information received completion: issues / utilities: from the Client as of December 31, 2011 the Properties have all necessary engineering, communications, access, lighting, an asphalted road and landscaping required for sale. The cottage village is fenced.

Valuation & Advisory -154-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Leningrad Region Address: Vyborgskiy District, “Leninskoe” Village Zolotaya Roshcha

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Tenure: Ownership certificates for the 118 land plots located within cottage village “Maloe Repino” at address: Leningrad Region, Vyborgskiy District, municipal entity “Pervomayskoe rural settlement”, village “Leninskoe”. Held by: LLC “Osobnyak”.

Description: Valuation considerations: Site area, ha: 18.44 Estimated 40,482,254 (net of VAT) remaining construction costs, RUR: Projected Individual land plots intended for Average market 1,300 property type: further cottage development sale price for the land plot, RUR per sqm: Total area of 126,650 Current stage Construction the unsold land of plot, sqm development: Quantity of the 118 Development Sell land plots: strategy: Market Value, RUR: 104,291,000

Valuation & Advisory -155-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located Site description: The Subject Property comprises environment: approximately 40 km north of St- development land with a total area of Petersburg in the Vyborgskiy District, 18.44 hectares intended for the the most prestigious district of the development of individual land plots. northern Leningrad Region for out-of- As of the date of valuation, the Property town residential development. is delivered; 10% of the land plots are Access / egress: The Property benefits from easy access sold. to St. Petersburg via the Scandinavia In accordance with information received federal highway, Zelenogradskoe from the Client, the remaining land plots shosse and Vyborgskoe shosse. with a total area of 126,504 sqm will be The railway station “Repino” is located sold between 2012–2014. within a 10 minutes car drive distance from the Property. Nearby The Property benefits from close amenities: proximity to Repino and Sestrorestk, which both possess well developed infrastructure. It is situated 8 km from the Gulf of Finland, within 8 km of the Bolshoe Simaginskoe Lake, within 1.5 km – of the river Sestra, within 1.5 km – of a lake and beach. Physical considerations: Start of June 2011 Zoning and The subject land plots have the following construction: restrictions: characteristics:  Permitted use: for country house/cottage development;  Category: agricultural land. Projected December 2012 Infrastructure According to development project by its completion: issues / utilities: completion the land plots will have all necessary engineering communications, access, lighting, asphalted roads and landscaping.

Valuation & Advisory -156-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Leningrad Region Address: Vyborgskiy District, “Leninskoe” Village Bolshoy Alakul

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Tenure: Ownership certificate 47-AБ 073735 dated as of 12.01.2011 for the land plot with a total area of 467,346 sqm (cadastral number 47:01:17-06-001:0879; category: agricultural land) located at address: Leningrad Region, Vyborgskiy District, municipal entity “Pervomayskoe rural settlement”, land plot # 1. Held by: LLC “Osobnyak”. Ownership certificate 47-AБ 007372 dated as of 21.01.2011 for the land plot with a total area of 127,715 sqm (cadastral number 47:01:17-06-001:0878; category: agricultural land) located at address: Leningrad Region, Vyborgskiy District, municipal entity “Pervomayskoe rural settlement”, land plot # 2. Held by: LLC “Osobnyak”. Ownership certificate 47-AБ 007369 dated as of 21.01.2011 for the land plot with a total area of 37,674 sqm (cadastral number 47:01:17-06-001:0160; category: agricultural land) located at address: Leningrad Region, Vyborgskiy District, municipal entity “Pervomayskoe rural settlement”, land plot # 11. Held by: LLC “Osobnyak”. Ownership certificate 47-AБ 007370 dated as of 21.01.2011 for the land plot with a total area of 125,685 sqm (cadastral number 47:01:17-06-001:0162; category: agricultural land) located at address: Leningrad Region, Vyborgskiy District, municipal entity “Pervomayskoe rural settlement”, village “Leninskoe”. Held by: LLC “Osobnyak”.

Description: Valuation considerations: Site area, ha: 75.84 Estimated 66,648,128 remaining construction costs, RUR: Projected Individual land plots intended for Average market 700 property type: further cottage development sale price for the land plot, RUR per sqm: Total area of 758,417 Current stage Construction the unsold land of plot, sqm development: Quantity of the 300 Development Sell land plots: strategy: Market Value, RUR: 313,100,000

Valuation & Advisory -157-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located Site description: The Subject Property comprises environment: approximately 40-45 km north of St- development land with a total area of Petersburg in the Vyborgskiy District, 75.84 hectares intended for the the most prestigious district of the development of individual land plots. northern Leningrad Region for out-of- In accordance with information received town residential development. from the Client, the land plots will be on Access / egress: The Property benefits from easy access the market “as serviced”. to St. Petersburg via the Scandinavia federal highway. The railway station “Repino” is located within a 10 minute drive from the Property. Nearby The Property is situated in a zone of amenities: development projects in their final stages (Noviy Mir, ParkWay, Akhmatovo, Repinskaya Usadba). Physical considerations: Start of February 2011 Zoning and The subject land plots have the following construction: restrictions: characteristics:  Permitted use: for country house/cottage development;  Category: agricultural land. Projected December 2014 Infrastructure According to development project by its completion: issues / utilities: completion the land plots will have the necessary engineering communications, access, lighting, asphalted roads and landscaping

Valuation & Advisory -158-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Leningrad Region Address: Vyborgskiy District, “Leninskoe” Village Dachnoe

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Tenure: Ownership certificate 47-AБ 007371 dated as of 21.01.2011 for the land plot with a total area of 299,700 sqm (cadastral number 47:01:17-06-001:0430; category: agricultural land) located at address: Leningrad Region, Vyborgskiy District, municipal entity “Pervomayskoe rural settlement”, land plot # 7 and 8. Held by: LLC “Osobnyak”.

Description: Valuation considerations: Site area, ha: 29.97 Estimated 6,820,975 remaining construction costs, RUR: Projected Individual land plots intended for Average market 700 property type: further cottage development sale price for the land plot, RUR per sqm: Total area of 299,700 Current stage Construction the unsold land of plot, sqm development: Quantity of the 142 Development Sell land plots: strategy: Market Value, RUR: 174,163,000

Valuation & Advisory -159-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located Site description: The Subject Property comprises environment: approximately 50 km north of St- development land with a total area of Petersburg in the Vyborgskiy District, 29.97 hectares intended for the further the most prestigious district of the development of individual land plots. northern Leningrad Region for out-of- In accordance with information received town residential development. from the Client, the land plot will be Access / egress: The Property benefits from easy access marketed “as serviced”. to St. Petersburg via the Scandinavia federal highway. The railway station “Repino” is located within a 10 minutes drive of the Property. Nearby The Property is situated in a zone of amenities: completed cottages and development projects in the final stages of construction (Akhmatovo, Repinskaya usadba). It is situated 5-7 km to the east of the Gulf of Finland. Physical considerations: Start of July 2011 Zoning and The subject land plot has the following construction: restrictions: characteristic:  Permitted use: for country house/cottage development;  Category: agricultural land. Projected November 2012 Infrastructure The subject land plot will have the completion: issues / utilities: following technical characteristics:  Gas distribution: by 01.11.12 the land plot will be connected to the gas system;  Electricity: by 01.07.2012 the land plot will have a benefit from electrical power of 430 kVA.

Valuation & Advisory -160-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Leningrad Region Address: Vyborgskiy District, “Leninskoe” Village Maloe Repino

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Tenure: Ownership certificates for the 121 land plots with a total area of 95,248 sqm located within cottage village “Maloe Repino” at address: Leningrad Region, Vyborgskiy District, municipal entity “Pervomayskoe rural settlement”, village “Leninskoe”. Held by: LLC “Osobnyak”.

Description: Valuation considerations: Site area, ha: 32.88 Estimated 0 remaining construction costs, RUR: Projected Individual land plots intended for Average market 1,400 property type: further cottage development sale price for the land plot, rubles per sqm: Total area of 95,248 Current stage Completed the unsold land of plot, sqm development: Quantity of the 121 Development Sell land plots: strategy: Market Value, RUR: 112,448,000

Valuation & Advisory -161-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located Site description: The Subject Property comprises environment: approximately 45 km north of St- development land with a total area of Petersburg in the Vyborgskiy District, 32.88 hectares intended for the most prestigious district of the developmentof the individual land plots. northern Leningrad Region for out-of- As at the date of valuation the Property is town residential development. available on the market; 65% of the land Access / egress: The Property benefits from easy access plots have been sold. to St. Petersburg via the Scandinavia In accordance with information received federal highway, Zelenogradskoe from the Client the remaining land plots Shosse and Vyborgskoe Shosse. with a total area of 95,249 sqm will be sold between 2012–2015. Nearby The Property benefits from the close amenities: proximity to Repino and Sestrorestk, which both possess well developed infrastructure. It is situated 8 km from the Gulf of Finland, within 8 km of the Bolshoe Simaginskoe Lake, within 1.5 km – of the river Sestra, within 1.5 km – of a lake and beach. Physical considerations: Start of August 2008 Zoning and The subject land plots have the following construction: restrictions: characteristic:  Permitted use: for country house/cottage development;  Category: agricultural land. Projected December 2011 Infrastructure In accordance with information received completion: issues / utilities: from the Client, the Property has all necessary engineering and communications in place. The property has a formal entrance, lighting, asphalted roads is landscaped. The land plot is fenced; and a security and administration building is located on site.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Moscow Address: Davydkovskaya Street, 16 Davydkovskaya

Picture 1. City map with project location

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Valuation & Advisory -163-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: The land plot with a total area of 1.14 ha (cadastral number 770709004052) is held freehold. The land plot is held on a common hold collective basis by the flat owners. The premises with a total area of 1,737 sqm is held freehold by CJSC “Mosstroyrekonstruktsiya” in accordance with the Ownership Certificates: Ownership certificate for the premise of 3.7 sqm (77-AZh 620171 dated 22.08.2008); Ownership certificate for the premise of 273.3 sqm (77-AZh 495711 dated 14.05.2008); Ownership certificate for the premise of 406.1 sqm (77-AZh 438017 dated 25.04.2008); Ownership certificate for the premise of 342.2 sqm (77-AZh 495712 dated 14.05.2008); Ownership certificate for the premise of 308.4 sqm (77-AZh 437607 dated 28.03.2008); Ownership certificate for the premise of 403.5 sqm (77-AZh 438018 dated 25.04.2008). 6 parking spaces are held freehold by CJSC “Mosstroyrekonstruktsiya” in accordance with the Ownership Certificates: Ownership certificate for the parking space of 11.9 sqm (77-AZh 541948 dated 30.04.2008); Ownership certificate for the parking space of 11.8 sqm (77-AZh 541812 dated 23.04.2008); Ownership certificate for the parking space of 11.7 sqm (77-AZh 541749 dated 18.04.2008); Ownership certificate for the parking space of 11.9 sqm (77-AZh 541949 dated 30.04.2008); Ownership certificate for the parking space of 11.8 sqm (77-AZh 541900 dated 29.04.2008); Ownership certificate for the parking space of 11.9 sqm (77-AZh 541811 dated 23.04.2008).

Description: Valuation considerations: Site area, ha: 1.14 No of tenants: The Property is owner occupied Property type: Commercial premises situated in the Annual income 37,343,124 residential building of business class from current tenants, RUR: Gross build 41,819 Average market 21,113 area, sqm: rental rate/sqm/year, Net leasable 1,737 RUR: area, sqm: Vacant area, n/a Special n/a sqm: assumptions: Underground 6 parking spaces Current stage Completed parking: of development: Ground The adjacent territory allows the Development Sell parking: allocation of approximately 10 car strategy: parking spaces. Market Value, RUR: 342,280,000

Valuation & Advisory -164-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Property is located in the Western Site description: The Property comprises commercial environment: Administrative District of Moscow, premises with a total area of 1,737 sqm Davydkovo Microdistrict, in close situated in a semi-basement and two proximity to Kutuzovskiy Avenue above-ground floors of the business class (within 600 meters). residential building. The external and internal condition may be characterized Access / egress: The Property is situated at a small as excellent. distance from Kutuzovskiy Avenue (approximately 600 meters) and within 2 kilometers from Slavyanskiy Boulevard metro station. It also has an access to two major city thoroughfares – Rublevskoe Highway and Amin’evskoe Highway. Nearby The Western Administrative District of amenities: Moscow is one of the most prestigious residential areas in the city due to its favorable ecological environment. The Property is surrounded by parkland and the river Setun from the south and residential buildings from the north, west and east. There are also some industrial facilities in the district. The Property is surrounded by well developed infrastructure objects – in close proximity are several large retail properties - «Perekrestok», «Sportmaster», «M-Video», retail complex «Mozhayskiy», retail complex de-lux class «Vremena Goda». A large business-centre «Vereyskaya Plaza» is situated within 5 min by car. Physical considerations: Year of 2007 Zoning and The subject land plot has the following construction: restrictions: characteristics:  Permitted use: for the development of a residential complex;  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Moscow Address: Tverskoy Boulevard, 16 Tverskoy, 16

Picture 1. City map with project location

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Valuation & Advisory -166-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: The building with a total area of 4,903.8 sqm belongs to JSC MTO “Arkhproekt” at around 74.4% (3,647.8 sqm) and the Moscow city at around 25.6% (1,256 sqm). Part of the building, witha total area of 3,647.8 sqm belongs to JSC MTO “Arkhproekt” in accordance with the following documents: Ownership certificate for the premise 1,176.8 sqm, share in the right 7/10 (823.76 sqm), #77AD 078696 dated 02.03.2007; Ownership certificate for the premise 1,016 sqm, share in the right 85/100 (863.6 sqm), #77AD 078697 dated 02.03.2007; Ownership certificate for the premise 338.5 sqm, #77AD 076823 dated 26.12.2006; Ownership certificate for the premise 1,621.9 sqm, #77AD 076822 dated 26.12.2006. The land plot, with a total area of 0.14 ha (cadastral number 770101069074) is held on a short-term leasehold according to Land Lease Agreement # M-01-507584 dated 24.04.2001. We were informed by the Client that the Land Lease Agreement expired and the Client is in the process of registration of land lease rights.

Description: Valuation considerations: Site area, ha: 0.14 No of tenants: Owner occupied Property type: Office building Average market 334,154 sale price, RUR Gross build 4,903.8 per sqm area, sqm: Net leasable 1,644.9 Special n/a area, sqm: assumptions: Vacant area, 557.8 Current stage Completed sqm: of development: Underground 30 parking spaces parking: Ground n/a Development Hold parking: strategy: Market Value, RUR: 1,218,912,000 Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property comprises an office environment: Central Administrative District of building with a total area of 4,903.8 sqm Moscow, right on the Boulevard Ring (the area belong to the Client comprises at Tverskoy Boulevard, 16. 3,647.8 sqm). Number of floors – 2 underground and 4 above ground. A Access / egress: The Property is situated in close renovation of the building was conducted proximity to the Pushkinskaya, in 2005. The external and internal Tverskaya andChekhovskaya metro condition may be characterized as stations. Access to the Property is easy excellent. and convenient. The property is occupied by the Client. Nearby The Property is situated in a mixed area amenities: and surrounded by residential buildings, office and business objects, as well as by cultural and social properties.

Valuation & Advisory -167-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Year of 2005 Zoning and The subject land plot has the following construction: restrictions: characteristics:  Permitted use: for the allocation of administrative and business property – property for the allocation of office premises, business centres with several functions;  Category: settlement land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Moscow Address: Sadovnicheskaya Street, 9, bld.1, 2, 3 Noviy Balchug

Picture I. City map with project location

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Tenure: The land plot with a total area belongs to the city of Moscow. Investment contract #2-2148/p-2 dated 13.07.2003 between the Government of Moscow and LLC “Velikan-XXI vek” (Investor) is currently expired.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.42 Estimated 1,354,349,264 remaining Projected A class multifunctional complex with construction property type: office and retail premises, apartments costs, RUR: and underground car park Projected gross 24,815 Average market 485,000 build area, sqm: sale price for residential area, RUR per sqm: Projected n/a Average market 280,000 – office premises ground area, sale price for 390,000 – retail premises sqm: commercial area, RUR per Projected n/a sqm: underground area, sqm: Net area of the 7,731 Average market 4,000,000 flats, sqm: sale price for parking space, RUR: Net 2,880 – office premises Phases: 1 commercial 589 – retail premises area, sqm: 899 – other premises (canteen, etc.) Underground 170 Current stage Designing parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 2,227,677,000

Valuation & Advisory -170-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property comprises a land environment: Central Administrative District of plot with a total area 0.42 ha with existing Moscow, at Sadovnicheskaya Street, 9, old residential buildings which are within 0.5 km from the Kremlin and projected to be renovated and Red Square, surrounded by Raushskaya reconstructed into A class and Sadovnicheskaya embankments. multifunctional complex with office, retail premises, apartments and Nearby The following properties are situated underground car park. Total area of the amenities: near the Subject Property: Balchug- complex will comprise 24,815 sqm. Kempinsky Hotel, Bank of Russia office and RosNeft office, The English The current status of the project if the Embassy. following: - all former residents are resettles except for one flat; - project The Property is situated close to the documentation is completed; - planned district “Zolotoy Ostrov” MosGosExpertisa conclusion is received; which will include elite residential Act of permitted use is received; quarters, office, retail and technical and economic performances for entertainment complexes, high class the project are received. hotels and historical and architectural monuments. The Client is planning to start construction in Q4 2012. Property location may be described as excellent due to its position in the centre of Moscow, proximity to the Red Square and the Cathedral of Christ the Savior. Access / egress: Property location is a well established business centree which can be accessed via both major transport road and by metro. Excellent transport accessibility is provided by the Garden Ring and Boulevard Ring. Nearest metro stations are Novokuznetskaya and Tret’yakovskaya. Physical considerations: Start of December 2012 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2015  Category: settlement land. completion:

Valuation & Advisory -171-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Moscow Region Address: Odintsovskiy District, Zarech’e Settlement, Grunvald Vesennyaya Street, 1, k.1-8, 5, k.1-5, 3, k.1-3, 7

Picture I. City map with project location

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Tenure: The Land Plot, with a total area of 4.1 ha (cadastral number 50:20:002 02 02:0114) belongs to the Federal Security Service of the Russian Federation in accordance with ownership certificate 50 AD 655402 dated 20.10.2003. Investment contract #F504/03 dated 17.12.2003 is concluded between the Federal Security Service of the Russian Federation and CJSC “Mosstroyrekonstruktsiya”. According to the investment contract shares of the participants are as follows: the Federal Security Service of the Russian Federation (Developer) – 30%, CJSC “Mosstroyrekonstruktsiya” (Investor) – 70%.

Valuation & Advisory -172-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 4.1 Estimated 40,406,781 remaining Projected Business class residential complex construction property type: costs, RUR: Projected gross 58,330.60 Average market 251,823 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market 69,609 underground sale price for area, sqm: commercial area, RUR per Net area of the 4,353 sqm sqm: flats (unsold), sqm: Net 1,452 retail premises Average market 1,718,049 commercial 1,277 – storages sale price for area (unsold), parking space, sqm: RUR: Underground 148 Current stage Completed parking of (unsold): developement: Ground 18 parking spaces (parking for visitors) Development Build and sell parking: strategy: Market Value, RUR: 1,547,767,000

Valuation & Advisory -173-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a business class environment: Moscow Region, within 1.5 kilometer complex of 13 detached low-rise of the MKAD and 0.4 kilometer to the residential buildings, custom designed to Zarech’e Settlement. It is linked with modern specifications. The complex also the city centre via Skolkovskoe includes underground parking for 269 Highway. parking spaces (148 are unsold) and commercial premises, including a fitness- Nearby The boundaries of the site from the centre. All the apartments are ready for amenities: north-east, north-west and south-east, internal fit-out works. are the land plots of LLC “Zarech’e S.A.Kushnareva”, from the south-west – land plots of the NPO "Economika", in the north - the river Setun. In close proximity is an elite class country houses development. The distance of the area from the residential development is about 100 meters. The site is accessed via a good asphalt road that passes through the Zarech’e Settlement. Access / egress: The Subject Property is easy to access via Skolkovskoe Highway and through Zarech’e Settlement using road interchange ‘50th km of the MKAD’. There are also several public transport routes – buses № 205, 818 and mini- buses № 818 from Kievskaya metro station and Park Pobedy metro station. Travel time comprises 15-20 minutes. The location of the property may be characterized as very successful due to its situation in the prestigious Western district, its close proximity to Moscow, convenient access to major thoroughfares (Kutuzovskiy Avenue) and situation in an ecologically favorable green zone, which are all locationaly advantageous. Physical considerations: Start of March 2005 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected January 2011  Land category: settlement land completion:  Permitted use: for residential construction.

Valuation & Advisory -174-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Moscow Address: Leningradskoe Highway, 58, bld.14, 21 Leningradskoe Shosse

Picture I. City map with project location

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Tenure: The land plot with a total area 1.81 ha consists of two land plots of 0.96 ha and 0.85 ha. The land plot of 0.96 ha (cadastral number 77:09:0001020:71), located at the address Leningradskoe Highway, 58, bld.14, belongs to CJSC “Mosstroirekonstruktsiya” on freehold in accordance with the sale contract #M-09-C00170 dated 23.06.2009. The land plot of 0.85 ha (cadastral number 77:09:0001020:73), located at the address Leningradskoe Highway, 58, bld.21, is held on a long-term leasehold by LLC “Kentavr management”. The Company is currently arranging the purchase of the land plot.

Valuation & Advisory -175-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 1.81 (0.96 ha + 0.85 ha) Estimated 4,770,351,255 remaining Projected Business class residential complex construction property type: costs, RUR: Projected gross 96,520 Average market 150,000 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market 130,000 underground sale price for area, sqm: commercial area, RUR per Net area of the 46,079 sqm: flats, sqm: Net 3,310 Average market 1,400,000 commercial sale price for area, sqm: parking space, RUR: Underground 989 Current stage Concept development parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 1,654,072,000 Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property is designed for environment: North Administrative District of construction of a business class Moscow in close proximity to residential complex with a total area of Leningraskoe Highway (second line) 96,520 sqm; the complex will include and Vodniy Stadion metro station. commercial premises as well as underground parking. Nearby The Subject Property is situated on the amenities: territory of the Scientific and Research Currently the project is going through the Institute of Machinery Manufacturing, stage of architectural and urban which will be actively developed into decisions. The Client is planning to residential and social properties in the obtain a construction permit by March nearest future. 2013. From the north the Property borders with new a residential area, from the south with two retail centres, from the east – a former industrial area under residential development and from the west – Leningradskoe Highway and the recreational area of the river port. The location of the Property is characterized by well developed social and business infrastructure. Prestigious surrounding of the Property is represented by an elite residential

Valuation & Advisory -176-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

complex “Gorod Yakht” recreational area of the river port. A modern fitness-centre is being constructed in close proximity. Access / egress: The Subject Property is well situated: Vodniy Stadion is located within 500 meters; the distance between the Property and the city centre is about 12 km; Sheremet’evo airport is located at a distance of 15 km from the site. The site is situated in close proximity to the largest transport thoroughfares – Leningradskoe Highway, Golovinskoe Highway and Pulkovskaya Street. Construction works are taking place on the interchanges for the Leningraskoe and Golovinskoe Highways, which will provide adequate vehicular access to the Property. Physical considerations: Start of March 2013 Zoning and Land plot of 0.96 ha: category – construction: restrictions: settlement land; permitted use – for Projected December 2016 operation of administrative and industrial completion: building. Encumbrances: there is ban on construction and renovation works for the land plot of a total area 0.96 ha. Land plot of 0.85 ha: category - settlement land; permitted use – for operation of administrative and building.

Valuation & Advisory -177-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Moscow Address: Serpukhovskiy Val, 19 9 Planet

Picture I. City map with project location

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Tenure: Investment contract #15-03/2011-MK9 dated 06.04.2011 between CJSC “Mosstroyrekonstruktsiya” (Developer) and JSC “MZOTsM” (Investor). Currently the land plot (cadastral number 77:05:0001011:8) is held on long-term leasehold by JSC “MZOTsM”. According to the investment contract, the land plot with a total area of 4.72 ha will be held by CJSC “Mosstroyrekonstruktsiya” in the long-term leasehold. The participants determine their shares in the project in the following way: LLC “Mosstroyrekonstruktsiya” share – 71.45%, JSC “MZOTsM” share – 28.55%.

Valuation & Advisory -178-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 4.72 Estimated 9,159,094,915 remaining Projected Business class residential complex construction property type: costs, RUR: Projected gross 239,160 Average market 230,000 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market 160,000 underground sale price for area, sqm: commercial area, RUR per Net area of the 75,023 (CJSC sqm: flats, sqm: “Mosstroyrekonstruktsiya” share) Net 6,288 (CJSC Average market 1,900,000 commercial “Mosstroyrekonstruktsiya” share) sale price for area, sqm: parking space, RUR Underground 1,329 (CJSC Current stage 0% parking: “Mosstroyrekonstruktsiya” share) of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 5,891,713,000 Planning considerations Location / The Subject Property is located in one Site description: The Subject Property currently comprises environment: of the central and prestigious districts a brown-field site with existing industrial of Moscow – Danilovskiy Microdistrict plant. The territory is designed for the of the South Administrative District of development and the construction of a the city. business class residential complex with a total area of 239,160 sqm. The complex Nearby The Property is surrounded by will include 9 residential buildings, a 3- amenities: residential buildings with level underground car park, restaurants accompanying amenities from the and retail premises and a fitness-centre. north, south, east and west. There are also several industrial micro-zones and As of the date of valuation the Client is Donskoy Monastery in close proximity developing the site concept and is to the site. arranging the transfer of leasehold rights in respect of the land plot. The Client Access / egress: The Property is situated 900 meters plans to start on site instruction in from Shabolovskaya metro station, not January 2013. far from the Third Transport Ring (within 1 km). The unconstructed area of the site is a pedestrian and park zone isolated traffic flows and vehicles.

Valuation & Advisory -179-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of March 2013 Zoning and According to the provided information construction: restrictions: the category of the land plot is settlement Projected December 2017 land, permitted use - operation of plant completion: for the production of flat-rolled products of non-ferrous metals.

Valuation & Advisory -180-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Moscow Region Address: Istrinskiy District, Pavlo-Slobodskoe Settlement, Novoe Nakhabino Chernaya Village

Picture I. City map with project location

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Tenure: The land plot with a total area 44.35 ha (cadastral numbers 50: 08:050204:24; 50: 08:050204:25; 50: 08:050204:26; 50: 08:050204:27; 50: 08:050204:35; 50: 08:050209:35; 50: 08:050204:36; 50: 08:050204:37; 50: 08:050204:38; 50: 08:050204:39) is held by CJSC “Mosstroyrekonstruktsiya” on a leasehold with an option to purchase land.

Valuation & Advisory -181-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 44.35: Estimated 728,491,349 – phase 1 15.30 – phase 1 remaining 5,113, 055,943 – phase 2 construction 29.05 – phase 2 costs, RUR: Projected Low-rise residential development of Average market 63,600 property type: economy class sale price for residential area, RUR per sqm: Projected gross 61,388 – phase 1 Average market 60,000 build area, sqm: 180,000 – phase 2 sale price for commercial Projected n/a area, RUR per ground area, sqm: sqm: Projected n/a Average market n/a underground sale price for area, sqm: parking space, RUR: Net area of the 10,670 sqm – phase 1 flats (unsold), 116,618 – phase 2 sqm: Net 276 ( office premises) and 2,338 Phases: 2 commercial (storages) – phase 1 area, sqm: 3,382 (storages) – phase 2 Underground n/a Current stage Phase 1 – Construction parking: of Phase 2 – Designing development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 2,643,026,000

Valuation & Advisory -182-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property comprises a land environment: North-West of the Moscow Region, in plot with a total area of 44.35 ha, the Istrinsky District near Nahabino consisting of two land plots of 15.30 ha Village, at a distance of around 20 km and 29.05 ha, with an economy low-rise from the MKAD, 5 km from residential complex under construction. Pavlovskaya Sloboda Village and within The complex includes two phases. The 4 km of Dedovsk town. first phase is 90% completed and 67% sold. Nearby The site borders a large forest area, amenities: Nakhabino settlement and quarter Flats from 41 to 68 sqm m will be sold “Noviy gorodok”, which has a well- with full finishings. developed infrastructure including a The Client is planning to start the second public school, two kindergartens, a phase in Q2 2012. fitness centre, bowling club, supermarket, church, nature park, beauty salon, entertainment centre and restaurant. Approximately 4 km from the Property the private school “Pavlovskaya Gymnaziya” and a retail centre “Pavlovskoe Podvor’e” which includes a supermarket, fitness centre, dry cleaning, restaurants are situated. Access / egress: The property is linked with the centre of Moscow by two Highways – the fast Novorizhskoe Highway (on average a 20 minute drive to the centre f) and Volokolamskoe Highway (about 40 minutes of driving). Residential complex “New Nakhabino” also can be reached by public transport – by train (to “Nakhabino” train station, then 5-10 minutes by car to the neighborhood) or by bus. In the near future it is expected that new lines in connection with the opening of metro stations “Mitinskaya”, “Volokolamskaya”, “Myakininskaya” will be constructed. Physical considerations: Start of 1 phase – October 2010 Zoning and The subject land plots have the following construction: 2 phase – May 2012 restrictions: characteristic:  Land category: settlement land Projected 1 phase – December 2012 completion:  Permitted use: for residential 2 phase – December 2015 construction.

Valuation & Advisory -183-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Moscow Region Address: Leninskiy Municipal District, Sosenskoe Bitsevskie Prudy Settlement, Bachurino Village

Picture I. City map with project location

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Tenure: The land plot with a total area of 59.85 ha (cadastral number 50:21:12 03 16:0087) is held by LLC “Verkros” on a long-term leasehold (49 years). Investment contract #1-11/2010-INP dated 18.11.2010 is signed between CJSC “Mosstroyrekonstruktsiya” (Contractor) and LLC “Verkros“ (Investor-1) and LLC “Lesnaya Kompaniya” (Investor-2). The participants determine their shares in the project in the following way: CJSC “Mosstroyrekonstruktsiya” share – 85%, LLC “Verkros“ and LLC “Lesnaya Kompaniya” share – 15% in total.

Valuation & Advisory -184-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 59.85 Estimated 13,790,037,420 remaining Projected Economy class residential complex construction property type: costs, RUR: Projected gross 461,833.90: Average market 95,000 build area, sqm: 35,066.75 – phase 1 sale price for residential area, 91,862.05 – phase 2 RUR per sqm: 87,307.75 – phase 3 67,737.35 – phase 4 85,000 – retail centre 49,300 – garage complex phase 1 45,560 – garaxe complex phase 2 Projected n/a Average market 72,000 ground area, sale price for sqm: commercial area, RUR per Projected n/a sqm: underground area, sqm: Net area of the 207,175: Average market 650,000 flats (unsold), sale price for 26,151.95 – phase 1 sqm: parking space, 67,582.65 – phase 2 RUR: 64,407.90 – phase 3 49,032.25 – phase 4 Net 325.47 – phase 1 Phases: 4 commercial 1,301.01 – phase 2 area (unsold), sqm: 1,245.93 – phase 3 1,188.56 – phase 4 68,000– retail & entertainment centre Underground n/a Current stage Designing parking: of development: Garage 3,086 Development Build and sell complex: strategy: Market Value, RUR: 5,806,755,000

Valuation & Advisory -185-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property is designed for the environment: Leninskiy District of the Moscow construction of a residential complex Region, in the nature park “Bitsevskiy with infrastructure amenities, retail & an Forest”. entertainment centre. The total area of the complex will comprise 461,833.90 Nearby The Subject Property borders the sqm. amenities: MKAD (36th km) and the Severnoe Butovo Microdistrict of the South- Currently, the project documentation is West Administrative District of developed; the project design is at the Moscow. In the east, the Property state expertise stage of the planning borders with the territory of “Usadba process. The Client expects to obtain the Znamenskoe Sadki”. construction permit for the first phase by May 2012. The Bitsa River is situated in the north of the Property; the river runs from the west to the east. Wooded areas and brush woods are located on part of the land plot. Access / egress: The Property has convenient access. Entry into the territory of the Property is from the MKAD in the north- western part of the site, exit to the MKAD is via the north-eastern part of the site. There is also a bus stop on the MKAD in the close proximity to the site. Physical considerations: Start of Phase 1 – June 2012 Zoning and The subject land plots have the following construction: Phase 2 – June 2013 restrictions: characteristic: Phase 3 – April 2014  Land category: settlement land. Phase 4 – March 2015  Permitted use: for residential construction with developed Retail & entertainment center – infrastructure. October 2013 Garage complex phase 1 – July 2013 Garage complex phase 2 – March 2016 Projected Phase 1 – March 2014 completion: Phase 2 – September 2015 Phase 3 – March 2016 Phase 4 – December 2016 Retail & entertainment center – December 2016 Garage complex phase 1 – September 2015 Garage complex phase 2 – December 2016

Valuation & Advisory -186-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Moscow Region Address: Domodedovo, Central District, Yuzhniy Novoe Domodedovo Microdistrict

Picture I. City map with project location

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Valuation & Advisory -187-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: Investment contract №01-02/2011-MKYu dated 01.02.2011 is signed between CJSC “Mosstroyrekonstruktsiya” (Contractor) and LLC “Bolshoe Domodedovo” (Investor). It determines shares of participants in the project in the following way: Investor’s share – 21.5%, Contractor’s share – 78.5%. The land plot with a total area 39.34 ha consisted of two land plots of 8.95 ha (cadastral number 50:28:0060113:76) and 30.38 ha (cadastral number 50:28:0000000:361). According to the provided documents – sales contracts #1 dated 14.10.2011 and #2 dated 14.10.2011 signed between CJSC “Mosstroyrekonstruktsiya” and LLC “Bolshoe Domodedovo” the owner of the land plots is CJSC “Mosstroyrekonstruktsiya”. Currently these contracts are not registered and therefore ownership rights not obtained.

Description: Valuation considerations: Site area, ha: 39.34 Estimated 10,324,211,168 remaining Projected Economy class residential complex construction property type: costs, RUR: Projected gross 611,831 Average market 54,130 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market 60,000 underground sale price for area, sqm: commercial area, RUR per sqm: Net area of the 282,932 Average market n/a flats (unsold) sale price for sqm: parking space, RUR: Net 9,813 Phases: n/a commercial area (unsold), sqm: Underground n/a Current stage Construction parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 4,226,559,000

Valuation & Advisory -188-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The area of residential construction of Site description: The Subject Property represents the land environment: “Novoe Domodedovo” is situated in plot with a total area 39.34 ha intended close proximity to the Federal Highway for construction of an economy class M-4 “Don”, at a distance of 18 km residential quarter. It will consist of 26 from the MKAD, 10 km from multi-storeys (from 9 to 17 floors) Domodedovo Airport and 3 km from residential buildings, 2 schools, 3 railway stations “Vostryakovskaya” and kindergartens, clinics, children’s “Vzlentaya” of Paveletskaya Railway playgrounds, landscaped recreation areas, Station. stadiums and sport complexes and three eight-storeys car parks. The initial Nearby The reserved areas of Barybinskoe parameters of social properties are not amenities: forestry, Bortnevsky, Stepyginsky and determined yet. Total area of the Akulinsky parks are located within complex is 611,831sqm. walking distance from the property. Construction of the Property was started Access / egress: The easiest way to get to the Property in October 2011. is by car. It takes about 20 minutes of driving by car. There also will be additional public transport routes to the platform “Vzlentaya” after construction completion. Physical considerations: Start of August 2011 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2018  Land plot category: settlement completion: land.  Permitted use: complex residential development.

Valuation & Advisory -189-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: Sukhodolskaya Street Michurinskiy

Picture I. City map with project location

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Tenure: The land plot with a total area 51.88 ha (cadastral numbers 66:41:03 06 109:11; 66:41:03 06 109:10; 66:41:03 06 109:8; 66:41:03 06 109:5; 66:41:03 06 109:7; 66:41:03 06 109:9; 66:41:03 13 009:17; 66:41:03 13 009:18; 66:41:03 13 009:19) is held on freehold in accordance with the following ownership certificates: 66 AG № 566314 dated 10.02.2009; 66 AG № 566313 dated 10.02.2009; 66 AG № 566312 dated 10.02.2009; 66 AG № 638904 dated 09.04.2009; 66 AG № 638905 dated 09.04.2009; 66 AG № 566311 dated 10.02.2009; 66 AG № 566315 dated 10.02.2009; 66 AG № 638923 dated 09.04.2009; 66 AG № 638903 dated 09.04.2009.

Valuation & Advisory -190-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 51.88 Estimated 4,556,187,823 remaining Projected Economy class country houses construction property type: residential development costs, RUR: Projected gross 214,143 Average market 45,000 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market 42,000 underground sale price for area, sqm: commercial area, RUR per sqm: Net area of the 140,015 Average market n/a flats (unsold), sale price for sqm: parking space, RUR: Net 16,473 – office premises Phases: n/a commercial 8,237 – retail premises area (unsold), sqm: Underground n/a Current stage Designing parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 1,456,844,000 Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property represents a green- environment: south-west outskirts of Yekaterinburg, field land plot with a total area 51.88 ha close to the rural settlement of intended for construction of an economy Michurinsky. class country houses residential development. Nearby Mainly the Subject Property is amenities: surrounded by one-floor private Currently the Client is at the stage of houses. development and agreeing new project concept. Construction start is projected Access / egress: The Subject Property is accessible by a for Q2 2012. well-maintained asphalted one-lane road. The general plan of the city envisages the construction of a direct access road to the EKAD and construction of roads connecting the Property and Seraphimy Deryabinoy Street., which will be one of the main thoroughfares of the Akademichesky residential district.

Valuation & Advisory -191-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of April 2012 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2015  Land plot category: Settlement completion: land.  Permitted Use: for agricultural use.

Valuation & Advisory -192-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: Shefskaya, Sovkhoznaya and Taganskaya Streets Kalinovskiy

Picture I. City map with project location

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Tenure: The land plot with a total area 6.58 ha (cadastral numbers 66:41:0108027:50; 66:41:0108027:51; 66:41:0108027:52; 66:41:0108027:53; 66:41:0108027:54; 66:41:0108027:55; 66:41:0108027:58; 66:41:0108027:59; 66:41:0108027:61; 66:41:0108027:62) is held freehold in accordance with the following ownership certificates: 66-AG 798981 dated 17.08.2009; 66-AG 798980 dated 17.08.2009; 66- AG 798982 dated 17.08.2009; 66-AG 798979 dated 17.08.2009; 66-AG 798977 dated 17.08.2009; 66- AG 798988 dated 17.08.2009; 66-AG 798985 dated 17.08.2009; 66-AG798989 dated 17.08.2009; 66- AG 798986 dated 17.08.2009; 66-AG 798978 dated 17.08.2009.

Valuation & Advisory -193-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 6.58 Estimated 2,340,665,241 remaining Projected Economy class residential complex construction property type: costs, RUR: Projected gross 149,724 Average market 51,689 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market 51,509 – office and retail premises underground sale price for 50,000 – sports premises area, sqm: commercial area, RUR per sqm: Net area of the 46,073 Average market 450,921 flats (unsold), sale price for sqm: parking space, RUR: Net 3,632 – office and retail premises Phases: n/a commercial 1,299 – sport premises area (unsold), sqm: Underground 1,298 Current stage Construction parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 805,594,000 Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property represents the land environment: northern part of Yekaterinburg, in the plot with a total area 6.58 ha with Elmash District in the quadrant formed residential complex with a total area by Shefskaya, Sovhoznaya and 149,724 sqm under construction. The Taganskaya Streets. complex is completed by 70%. According to the information provided it Nearby The following amenities are situated in will be completed in summer 2015. amenities: a close proximity to the Subject Property: Kalinovskie Razrezy – a forest/park with bodies of water. Also in the district there are several kindergartens and schools, medical institution, “METRO Cash and Carry” and “Megamart” retail centres. Access / egress: Access to the Subject Property can be realized through Shefskaya Street and Kosmonavtov Avenue which provide easy access onto the EKAD.

Valuation & Advisory -194-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of October 2008 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected June 2015  Land plot category: settlement completion: land.  Permitted use: lands for residential construction.

Valuation & Advisory -195-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: 40-Letiya Komsomola Street, 2B 40-Letiya Komsomola

Picture I. City map with project location

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Tenure: The land plot with a total area 9.36 ha (cadastral number 66:41:07 05 005:182) is held freehold on the basis of Ownership Certificate 66AD 669155 dated 29.12.2010.

Valuation & Advisory -196-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 9.36 Estimated 3,465,771,128 remaining Projected Economy class residential complex construction property type: costs, RUR: Projected gross 149,145 Average market 52,000 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market 55,000 underground sale price for area, sqm: commercial area, RUR per sqm: Net area of the 65,133 Average market 530,000 flats (unsold), sale price for sqm: parking space, RUR: Net 6,308 – office premises Phases: n/a commercial 5,181 – retail premises area (unsold), sqm: Underground 1,376 spaces Current stage Concept development parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 428,632,000

Valuation & Advisory -197-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property represents a environment: Kirovsky District of Yekaterinburg brown-field land plot with a total area within the boundaries of Syromolotova 9.36 ha intended for construction of an – Rassvetnaya - Sorokoletiya economy class residential complex with a Komsomola streets. This district refers total area of 149,145 sqm. Currently the to the first price zone. site is occupied by industrial buildings and storage facilities. Nearby The following amenities are situated in amenities: a close proximity to the Subject The Client develops a project concept Property: “Sibirskiy trakt” shopping and plan to start construction in 2017. centers, “KOR”, “Stroy-Arsenal” hypermarket and “Komsomol” shopping and entertainment centre. “KOR” is the largest complex in the Ural Region of the DIY and construction materials (about 10,000 sqm). Access / egress: The access to the Subject Property can be realized through Syromolotova, Rassvetnaya or 40-letiya Komsomola Streets. The district is connected with the town by the main thoroughfares: Malisheva, Komsomolskaya, Shefskaya Sterets and EKAD. Physical considerations: Start of March 2017 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected April 2021  Land plot category: settlement completion: land.  Permitted use: for complex of buildings of industrial use.

Valuation & Advisory -198-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: Aviatsionnaya Street, 8 Marta Street, 194 Zeleniy Mys

Picture I. City map with project location

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Tenure: The land plot with a total area 1.46 ha (cadastral number 66:41:00 00 000: 0326) is held on short-term leasehold on the basis of the land lease Agreement #5-1257 dated 27.06.2006.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 1.46 Estimated 10,300,881 remaining Projected Business class residential complex construction property type: costs, RUR: Projected gross 56,474 sqm Average market 59,362 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market 70,289 underground sale price for area, sqm: commercial area, RUR per sqm: Net area of the 1,093 sqm Average market 679,398 flats (unsold), sale price for sqm: parking space, RUR: Net 4,814 sqm Phases: n/a commercial area (unsold), sqm: Underground 238 spaces Current stage Completed parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 514,820,000 Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property represents a environment: quadrant formed by 8th Marta, business class residential complex with a Ostrovskogo, Moskovskaya and Shorsa total area 56,474 sqm 99% completed. Streets – the district’s main arterial Total unsold area comprises 5,907 sqm routs. and 238 parking spaces. Nearby The following amenities are situated in amenities: a close proximity to the Subject Property: South Bus Station, park with amusements, “Megapolis” and “Dirigabl” shopping centres. Access / egress: A well-developed system of public transportation and close proximity to the main traffic arteries provides easy and convenient access to the city centre and other districts of Yekaterinburg.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of July 2006 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2012  Land plot category: settlement completion: land.  Permitted use: for construction of multi-section residential building with built-in social, retail, office premises and underground car park.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: Tokarey Street, Tatisheva Street, Suhorukova Tatischeva Street, Nagornaya Street

Picture I. City map with project location

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Tenure: The land plot with a total area of 1.89 ha (cadastral number 66:41:03 03:040:2) is held on long-term leasehold (30 years) according to land lease agreement № Т-244/1132 dated 15.12.2002.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 1.89 Estimated 1,070,093,218 remaining Projected Economy class residential complex construction property type: costs, RUR: Projected gross 47,097 Average market 60,171 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market 60,225 underground sale price for area, sqm: commercial area, RUR per sqm: Net area of the 26,445 Average market 550,000 flat (unsold), sale price for sqm: parking space, RUR: Net 374 – office premises Phases: n/a commercial 1,499 – retail premises area (unsold), sqm: Underground 196 Current stage Construction parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 615,199,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property represents the land environment: West of Yekaterinburg in the Verhh- plot with a total area 1.89 ha with Isetsky District in the quadrant formed residential complex with a total area of by Tokarei, Tatisheva, Sukhorukova 47,097 sqm under construction. The and Nagornaya Streets.The district is complex is 20% completed. According to close to the centre of the town, which the information provided it will be provides a fast and easy access to the completed in spring 2014. town centre. Nearby The following amenities are situated in amenities: a close proximity to the Subject Property: Verkh Isetsky pond, one of the city’s largest bodies of water is situated within one km of the property.. Access / egress: Access to the Subject Property can be realized through Tokarei, Tatisheva, Sukhorukova and Nagornaya Streets. Tatishevskaya metro station is planned to be constructed soon; it will be situated within a short walking distance from the Subject Property. Physical considerations: Start of September 2010 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected March 2014  Land plot category: settlement completion: land.  Permitted use: for residential construction.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: Vosstaniya – Molodezhi – Dostoevskogo - Vosstaniya – Molodezhi Narodnogo Fronta Streets

Picture I. City map with project location

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Tenure: The land plot with a total area of 0.98 ha (cadastral number 66:41:01 06 057:40) is held on freehold on the basis of Ownership Certificate 66 AD 931901 dated 10.06.2011.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.98 Estimated 282,939,261 remaining Projected Economy class residential complex construction property type: costs, sqm Projected gross 17,104 Average market 50,213 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market n/a underground sale price for area, sqm: commercial area, RUR per sqm: Net area of the 4,954 Average market 450,000 flats (unsold), sale price for sqm: parking space, rouble: Net n/a Phases: n/a commercial area (unsold), sqm: Underground 266 Current stage Construction parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 141,441,000 Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property represents an environment: northern part of the city, in the economy class residential complex under Uralmash residential area. construction with a total area of 17,104 sqm which is 50% completed. As of the Nearby The district is characterized by well- date of valuation about 24% of premises amenities: developed infrastructure including 3 have been sold. schools and 2 kindergartens, and large sport complex. There are a few bus stops not far from the Property. Several retail spaces including the Uralmashevsky market and the Kirovsky supermarket are located close by. A forest area and Shuvakish Lake are situated in 20 minutes of walk from the Property. Access / egress: A well-developed system of public transport provides easy and convenient access to the town centre and other districts of Yekaterinburg and beyond the city boundaries via the EKAD.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations:

Start of April 2011 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected June 2015  Land plot category: settlement completion: land.  Permitted use: multi-flats residential buildings more than 5 storeys.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: Bakinskikh Komissarov Street, 109 and Bakinskikh Komissarov_parking Vosstaniya Street, 99

Picture I. City map with project location

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Tenure: The land plot with a total area 0.15 ha is a part of a land plot with a total area 1.8 ha (cadastral number 66:41:00 00 000:0180) is held on short-term leasehold on the basis of Land Lease Agreement #1-685 dated 19.09.2005.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.15 Estimated 11,600,848 remaining Projected Underground car park construction property type: costs, RUR Projected gross 3,225 Average market n/a build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market n/a underground sale price for area, sqm: commercial area, RUR per sqm: Net area of the n/a Average market 450,000 flats, sqm: sale price for parking space, RUR: Net n/a Phases: n/a commercial area, sqm: Underground 94 Current stage Construction parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 22,645,000 Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property represents an environment: northern part of the city, in the underground car park for 94 parking Uralmash residential area. spaces under construction. Projected completion date Q4 2012. Nearby The district is characterized be well- amenities: developed infrastructure including 3 schools and 2 kindergartens, and one of the main sport complexes. There are a few bus stops not far from the Property. Access / egress: A well-developed system of public transportation provides easy and convenient access to the town centre and other districts of Yekaterinburg via the Serovskiy, Verkhnepyshminskiy and Rzhevkiy tracts.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of January 2007 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2012  Land category: settlement land. completion:  Permitted use: for residential complex with social objects and underground car parks.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: Furmanova Street, 123-A Furmanova_parking

Picture I. City map with project location

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Tenure: The land plot with cadastral number 66:41:0403002:0070 is held freehold.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: n/a Estimated n/a remaining Projected Underground parking for 146 parking construction property type: spaces costs, RUR: Projected gross 5,062 Average market n/a build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected 5,062 Average market n/a underground sale price for area, sqm: commercial area, RUR per sqm: Net area of the n/a Average market 599,091 flats, sqm: sale price for parking space, RUR: Net n/a Phases: n/a commercial area, sqm: Underground 33 Current stage Completed parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 16,750,000 Planning considerations: Location / The Subject Property is located in the Site The subject Property represents a single- environment: Yugo-Zapadny residential district of description: level underground car park adjoining to a the town. residential building. Nearby The following amenities are situated in amenities: a close proximity to the Subject Property: recently opened shopping centre “Fan-Fan”, a sports complex and 2 parks. Access / egress: Location of the Subject Property has excellent transport accessibility. Physical considerations: Start of January 2005 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2007  Land plot category: settlement completion: land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: Gotvalda Street, 14A Evropeyskiy

Picture I. City map with project location

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Tenure: The land plot with a total area 0.72 ha (cadastral number 66:41:02 06:019:0025) is held on a common hold collective basis by the flat owners.

Description: Valuation considerations: Site area, ha: 0.72 Estimated n/a remaining Projected Business class residential building construction property type: costs, RUR: Projected gross 14,248 Average market 56,442 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market n/a underground sale price for area, sqm: commercial area, RUR per sqm: Net area of the n/a Average market 800,000 flats, sqm: sale price for parking space, RUR: Net 255 Phases: n/a commercial area (unsold), sqm: Underground 7 Current stage Completed parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 18,404,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in the Site description: The Property comprises a completed environment: west of Yekaterinburg, on the border business class residential building which between 2 residential districts – was put into operation in 2008. Office Vokzalniy and Zarechniy, at the premises extended to 255 sqm with 7 intersection of Gotvalda and parking spaces are unsold at the date of Mashinistov Streets in close proximity valuation. to the nearly completed Evropeyskiy Avenue. It that will connect Cherepanova, Strelochnikov and Cheliuskintzev Streets, which will provide convenient and quick access from the subject site to the city centre. Nearby The following amenities are situated in amenities: a close proximity to the Subject Property: newly built residential buildings, retail, warehouse objects, pond and park. Access / egress: The district is characterized by developed infrastructure with well- developed transport system. Alternatively the Subject Property is accessible from the city centre by railway service – the VIZ railway station is situated close by. Physical considerations: Start of Q3 2003 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected Q3 2008  Land plot category: settlement completion: land.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: Novgorodtsevoy Street, 25 KOSK

Picture I. City map with project location

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Tenure: The land plot with a total area 0.88 ha (cadastral number 66:41:07 05 001:0106) is held on a short-term leasehold until January 2013 on the basis of Land Lease Agreement #7-1041 dated 26.02.2007 and Additional Agreement #1 dated 11.08.2010.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 0.88 Estimated 301,876,374 remaining Projected Three office and retail buildings construction property type: costs, RUR: Projected gross 12,333 Average market n/a build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market 50,000 – office premises underground sale price for 70,000 – retail premises area, sqm: commercial area, RUR per sqm: Net area of the n/a Average market n/a flats, sqm: sale price for parking space, RUR: Net 9,000 – office premises Phases: n/a commercial 2,100 – retail premises area (unsold), sqm: Underground n/a Current stage parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 124,772,000

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Planning considerations: Location / The Subject Property is located in a Site The Subject Property represents free land environment: large microdistrict to the east of description: plot with a total area 0.88 ha intended for Yekaterinburg - ZhBI. construction of three office and retail buildings with a total area 12,333 sqm. Nearby The microdistrict includes the amenities: Kameniye Palatki park, where the The Client is currently developing the typical Ural landscape has been project stage and planning to start maintained: mountain fragments and a construction in Q4 2012. pine forest. The park also includes the Shartash Lake – the favorite recreation zone for local residents. There is also recently opened a retail centre “Komsomol” in the district. The Property is mainly surrounded by residential buildings. Access / egress: The Subject Property is linked with the town centre via EKAD, Malysheva and Komsomolskaya Streets, or the alternative route of the Sibirsky Highway with average commuting time of between 10 – 15 minutes. Physical considerations: Start of December 2012 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected December 2015  Land plot category: settlement completion: land.  Permitted Use: for construction office and retail building and their further operation.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

City: Yekaterinburg Address: Leninskiy District, Akademika Vonsovskogo Vonsovskogo Street - Krasnoles'ya - Shirokorechenskaya

Picture I. City map with project location

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Tenure: The land plot with a total area 7.13 ha (cadastral numbers 66:41:0313004:7; 66:41:0313004:8; 66:41:0313004:9) is held on a short-term lease according to the land lease agreement #3-1764-T dated 26.09.2011.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Description: Valuation considerations: Site area, ha: 7.13 Estimated 1,593,513,877 remaining Projected Economy class residential complex construction property type: costs, RUR: Projected gross 94,688 Average market 48,000 build area, sqm: sale price for residential area, Projected n/a RUR per sqm: ground area, sqm: Projected n/a Average market n/a underground sale price for area, sqm: commercial area, RUR per sqm: Net area of the 50,189 Average market n/a flats (unsold), sale price for sqm: parking space, RUR: Net n/a Phases: n/a commercial area, sqm: Underground n/a Current stage Designing parking: of development: Ground n/a Development Build and sell parking: strategy: Market Value, RUR: 486,483,000 Planning considerations: Location / The Subject Property is located in the Site description: The Subject Property represents a green- environment: south-western part of Yekaterinburg in field land plot with a total area of 7.13 ha the Leninsky Administrative District in intended for the construction of an residential micro-district economy class residential development. “Akademichesky”. Currently the Client is developming the Nearby At the date of valuation local project concept. Construction start is amenities: infrastructure wasn’t well-developed, projected for Q2 2013. but in the future it is planned that several schools, kindergartens, hospitals, objects of retail and commercial real estate will be built. Access / egress: Access to the Subject Property can be realized through Akademika Vonsovskogo, Krasnolesya and Shirokorechenskaya Streets.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Physical considerations: Start of May 2013 Zoning and The subject land plots have the following construction: restrictions: characteristic: Projected September 2015  Land plot category: settlement completion: land.  Permitted use: for complex residential construction.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

19. APPENDIX TWO: MARKET COMMENTARY

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

RUSSIAN ECONOMY

Elections

State Duma elections took place on December 4, 2011. Although dominant party “Yedinaya Rossija” won the elections, its position had weakened significantly. Recently, there were a number of events with key figures that caused political uncertainty: D. Medvedev decided not to run for a new term, veteran Minister of Finance A. Kudrin was fired by Medvedev, V.Surkov, who used to be responsible for all internal politics has now been assigned to control the government’s modernization process. Economic policy uncertainty will last at least until the presidential elections. Prime Minister V. Putin remains in the center of power within the Russian state, to some extent due to the weakening of other key people and state institutions. This means that Russia will most likely follow continue to suffer from inertia and any reforms are very unlikely. Presidential elections will take place on March 4, 2012. There are 10 candidates registered to run. In spite of the fact that Putin is most likely to win this campaign— the key question remains: how will this be achieved? Will he be able to win in the first round and what will the result be? Elections will become a battlefield for the opposition. They will recruit thousands of observers and try to document all possible frauds. As a result there will be a legitimacy issue. Political stability in midterm will depend on how accurate administrative resources will be allocated over the elections. If all resources are wasted for the campaign, the need for political reform may occur by end of year. By the middle of 2012 it is likely that the federal government will have to return some power back to the regions. In general, during the campaign government officials are very reluctant to take any serious decisions.

Taxation

Social tax reform, introduced this year, and WTO accession did not have any serious impact on the economy or business climate. This proves the point that Russian economy is rather solid and can be affected only by strong factors like a liquidity crunch or oil price fluctuations, remaining immune to smaller scale influences. From March until November 2012 the government will be busy formulating new economic policy so this year will remain relatively calm, however, tensions between influence groups in the Russian establishment will increase.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Budget deficit will force government to consider unpopular measures, like pension reform or progressive personal tax. In 2012 a new social tax system has been introduced. Previously, social tax was 34% paid on a salary under 463,000 RUR per year. Everything over this amount was free of tax. The new system consists of a 30% rate up to 512,000 RUR per year and 10% of everything over it. This is paid by employers and directly affects labor costs. Companies in the service and finance sector will be negatively affected, because their labor costs will grow by almost 10%. This may force companies to control their headcount or even cut staff, resulting in the lower demand for office space. Apart from this measure, the State Duma is considering a law that introduces progressive income tax with a 10% to 45% progression as opposed to the current 13% flat rate. It is hard to tell whether this law will be adopted, but the budget deficit may force the government to take unpopular measures.

New Moscow

On December 27 an agreement on borders between Moscow City and the Moscow Region was adopted. This means that Moscow’s expansion has been finalized. However, it looks like there is still no common understanding concerning development in this area within the City Government or the urban community. The government will spend this year trying to formulate tasks and principles for the development of this area. As the result “New Moscow” will be developing even slower than other parts of the Moscow Region. First of all, development will be restricted by unclear regulations. For example, there is no freehold tenure in Moscow, while in “New Moscow” area land plots are available as freeholds. Also, there is no clarity regarding land values. Obviously value has changed, but there is still no consensus between buyers and sellers as to value, as a result, transactions are being delayed. It is likely that in 2012 the market will hear about one or two individual projects in this area but for a complete development plan we may have to wait several years. However, this obscurity may provide unique development opportunities. Properly planned and developed projects may become anchor

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 and attraction points or even development hubs for huge areas that have access to the Moscow City budget.

Market Cycles

Obviously there are cycles in the Russian real estate market. However, thus far the market was maturing and evolving and was not subject to cyclical development. Now that quality build stock is present in the market and supply and demand are balanced, we can consider Y2011 as the beginning of a new cycle that starts at its peak. The real estate cycle in Russia is much shorter than in other countries and lasts for 3-5 years. This is not only because the market is so young. It is also caused by planning and financing terms in Russia, which rarely exceed 5 years. However, such short cycles do not necessarily mean higher risk. While in EU a downturn may last a decade, whereas Russia may emerge from downturns within 1-2 years. Therefore, landlords can wait until the market improves. This was demonstrated in 2009 when the market fell by 50%, but there were almost no distressed sales—most owners managed to wait until the situation improved.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Economy

In Q3 2011 GDP growth amounted to 4.1%, according to the Ministry for Economic Development. Rosstat’s industrial production index totaled 2.5% YoY in December (compared to 3.9% in November) and 4.7% YoY for the whole 2011. Fixed investments showed a 4.8% growth as the result of Q1-Q3. In general, all macro indexes are positive, however a strong slowdown trend was also observed. A record-breaking 6.1% CPI (the lowest number in Russia’s history) was caused by low food inflation (3.9%) whereas non-food inflation (6.7%) and services, especially and traditionally, the services of state monopolies (8.7%) contributed to the CPI increase. Despite Rosstat’s optimistic forecast of 5.1% in 2012, one may hardly believe that CPI will keep this year’s low level in 2012. Retail sales grew by 8.6% YoY in November, cumulating in 6.9% YoY during January- November (compared to 6.3% in January- November of 2010) however, despite low inflation the consumer confidence index shows -7%, which is a result showing consumer caution - despite promises of wages increases and the limitation of state monopoly tariff growth, consumers are pessimistic or unsure about their post-elections future, the results of which could cause changes in consumer behavior patterns in 2012 in favour of savings.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

2012-2015 Real estate market forecast

In 2012 the market will remain under pressure from external factors (uncertainty in Europe, Russian elections). In most segments there is an adequate level of supply. Construction is likely to be limited both by a lack of finance and by the Moscow Administration in 2012. The Moscow Government is attempting to limit construction in order to preserve infrastructure. Demand will remain low. Outstanding demand that accumulated over 2009-2010 was largely met in 2011. Projected moderate economic growth will not be sufficient to bring demand for business space to high levels. Also, social tax increases will force corporations to control headcount and decreases the need for office space.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

The market will remain in balance and a slight decrease in business activity will not lead to collapse. We expect that in certain sectors (class A and B offices located outside recognized business areas and shops on unpopular streets) rental rates may decrease by 5-10%. In the middle segment (successful office buildings and warehouses) rents will either remain stable or decrease by 5%. Prime buildings and the best shopping centers will demonstrate rental growth. Altogether this will mean a 5% rental rate decrease for the whole market. We expect the market to pick up in 2013, when construction will still remain limited but corporations will adapt to the new economic and political reality and initiated their long-term construction plans. Maximum build rates are expected in 2014-2015.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

SAINT-PETERSBURG RESIDENTIAL MARKET OVERVIEW

Residential Premises under Construction. Tendencies

In 2011 a total area of 2,610,000 sqm of residential premises (excluding individual private residential construction) was commissioned by different construction companies in St Petersburg, which is 3% more than recorded in the 2010 index. The 2011 figure does not include residential premises commissioned outside the city borders. One of the most significant events of 2011 was the return of the customer to the primary residential market segment. During 2011 2,530,000 sqm (45,100 flats) sales were realized in the Saint- Petersburg and satellite markets. To compare, the sales volume of the economically traumatic year of 2009 reached only 1,600,000 sqm. Thus, for the past two years (2010-2011) the market showed a 58.1% increase in demand. This revival of demand entailed a decrease of supply on the primary market by the end of 2011. As of 01 January 2012 the volume of supply in the primary market of residential premises of all categories and locations totaled 2,180,000 sqm or 39.8% of the market volume. To compare, the volume of supply in the primary market of residential premises of all categories and locations as of the end of QI 2011 was at the level of 2,260,000 sqm, which is 8% more than as of 01 January 2012. Positive changes in the market have taken place in 2011 and are reflected in average supply prices, the annual increase of which was fixed in the range of +5.32% to +16.95% depending on category and location. To compare, the inflation rate in Saint-Petersburg in 2011 was 5.9%. As of 01 January 2012, the average base supply sales prices in established residential districts of Saint-Petersburg amounted to:  Mass market category – 76,336 rubles per sqm (a +6.73% annual increase in price);  Business category – 112,579 rubles per sqm (a +16.87% annual increase in price);  Elite category – 211,060 rubles per sqm (a +5.32% annual increase in price). It should be noted that these prices are averages between primary market and secondary market residential prices, particular complexes and buildings have had sales at higher and lower rates. As before, the main purchaser preference focused on the mass market category, the share of which in the supply volume was 86.2% as of 01 January 2012, and 93.7% in the supply volume for 2011. The lower price segments of the mass market category still remain the most promising. This fact is confirmed by demand shifting towards cheaper projects in satellite and secondary areas. To compare, the average price for residential premises in the mass market category in established residential districts was 76,300 rubles per sqm, while in satellite and secondary areas it was approximately 57,700 rubles per sqm, which is 24.3% lower. In Q1 2011 the share of satellite and secondary areas in the demand volume was 16.3%, in QIV 2011 the same index was at a level of 20.5%. In general, in 2011 the satellite, mass market share of total sales volume amounted to 19.0%. As for volumes of completed mass market residential premises, “North Valley” residential complex (Glavstroy SPb) takes the leading position. The average price within this project was 67,300 rubles per sqm as of 01 January 2012. As of the same date, the average supply price for an economy class sqm in the more established and central residential premises was fixed at the level of 68,500 rubles.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Residential Construction Commissioning

A total area of 2,610,000 sqm of Dynamics of residential construction comissioning in 2011 residential premises (excluding individual 3 000,0 private residential construction) was 2 610,0 commissioned by different construction 2 500,0 companies, which is 3% more than the 2 000,0

2010 index. The main volume was 1 500,0 1 190,5 realized in QIV, totaling 45.6% of the 1 000,0 582,3 annual volume. 478,0 500,0 359,3 221,301.6 sqm (8.5%) of housing 0,0 commissioned in 2011 falls in secondary 1Q 2011 2Q 2011 3Q 2011 4Q 2011 2011 IN ALL St Petersburg Administrative districts. In the structure of commissioning, the main share is constituted by mass market housing (94.3%).

Established Residential Districts of Saint-Petersburg

2,388,733 sqm (excluding individual Structure of residential construction comissioning in 2011 residential constructions) was "Business" "Elite" commissioned in the established 140,300 sq m 32,100 sqm 5,4% 1,2% residential districts of Saint-Petersburg in 2011. The maximum volume of commissioning falls to the Vyborgsky (35.9%) and Primorsky (21.9%) districts, which are characterized by active construction.

75.8% of premises in the Vyborgsky "mass‐market" District were commissioned by two large 2,437,600 sqm 93,4% developers: 42.8% of premises by the

Ministry of Defense in QI and QIII, i.e. Structure of residential construction comissioning on groups in 2011 the housing of military community #1 in Budget residential spase Osinovaya Roshcha, and 33% - 7 640,400 sq m 24,5% buildings of the “North Valley” development. Apartment commercial building 24 100 sq m In the Krasnoselsky District, almost half 0,9% of the volume of commissioned premises was also completed by two developers: the residential block commissioned in QIV by the Construction Committee in Apartment commercial building; Krasnoye Selo totaled 33.7% of the total 1,945,500 sq m 74,5% volume, and 20.2% comprised the “Admiral” and “South Lighthouse” residential complexes by the “Leader Group” company. In the Nevsky District the “Temp” company appeared to be the leading developer of 2011, with a share of 47.8% of the volume of commissioned housing in the district. At the beginning of 2011 the Construction Committee announced plans for the next three years to increase the volume of economy class housing up to 15-20% of the total construction volume. Compared to 2010, when the volume of economy class housing commissioned totaled 8.99% of

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 total volume, the 2011 result reached 21.0% of total commissioning volume (22.4% of which was made up by mass market completions).

District Q1 2011 Q2 2011 Q3 2011 Q4 2011

Established Districts: Vasileostrovskoy 77.7 8.9 62.7 Vyborgskiy 269.7 299.9 116.5 171.5 Kalininskiy 48.4 59.3 88.0 Kirovskiy 13.9 7.2 23.3 Krasnogvardeyskiy 8.8 4.9 10.6 Krasnoselskiy 4.1 64.8 245.0 Moskovskiy 52.1 46.3 31.8 Nevskiy 62.7 21.9 Petrogradskiy 13.4 19.3 Primorskiy 5.1 29.6 140.2 349.0 Frunzenskiy 27.7 Central 4.2 Districts secondary to the administration: Kurortniy 15.3 16.9 Petrodvortsoviy 1.8 1.2 Pushkinskiy 12.8 28.4 144.9 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Districts secondary to the administration of Saint-Petersburg

In 2011 a total area of 221,301.6 sqm of Territorial structure of residential construstion comissioning in residential premises (excluding individual established districts in 2011 Centralniy 4,2 (0,2%) residential construction) was commissioned in Krasnogvardeyskiy 24,3 (1,0%) Frunzenskiy 27,7 (1,2%) secondary St Petersburg districts. Petrogradskiy 32,7 (1,4%) Kirovskiy 44,5 (1,9%) As regards the housing commissioned in all these Nevskiy 84,6 (3,5%) Moskovskiy 130,1 (5,4%) secondary administrative districts , the Vasileostrovskoy 149,3 (6,3%) Kalininskiy 195,7 (8,2%) Pushkinsky District occupies the leading position Krasnoselskiy 314,0 (13,1%) with its 84.1% share of total commissioned Primorskiy 524,0 (21,9%) Viborgskiy 857,7 (35,9%) space. 0,0 200,0 400,0 600,0 800,0 1 000,0 The main share in this district in 2011 was constituted by the premises of 27 buildings of the “Slavyanka” residential complex by the Construction Committee (the whole project is owned by the company ZAO “Baltros”) commissioned in QIV, which made 74.9% of the annual volume of housing commissioned in the district. In the period under analysis, economy class housing was commissioned in four districts:  Vyborgsky (366,700 sqm – 42.8% of the housing volume was commissioned in this district),  Krasnoselsky (74,500 sqm – 23.7%),  Primorsky (36,100 sqm – 6.9%),

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 Nevsky (23,600 sqm – 27.9%). In the structure of commissioning, the main share in the secondary districts is constituted by mass market housing – 90.7% of all commissioned in 2011 premises. The share of economy class housing made 63.0% (69.5% from the volume of mass market commissioning).

Supply in the Primary Market

As of the end of QIV 2011, 293 projects were Territorial structure of residential construstion comissioning in being developed in the primary residential districts secondary to administrative in 2011 apartments real estate market, including 237 in the Saint-Petersburg market (established and Pushkinskiy 186,1 (84,1%) secondary districts) and 56 in the satellite market (refer to Appendix I). Kurortniy 32,2 (14,6%) As of 01 January 2012 the volume of primary apartment housing in Saint-Petersburg and Petrogradskiy 3,0 (1,4%) satellite areas totaled 5,480,000 sqm including 0,0 50,0 100,0 150,0 200,0 4,620,000 sqm (84.3%) in the city district territories and 860,000 sqm (15.7%) in the Structure of supply of residential area on the primary market satellite territories bordering Saint-Petersburg. depending on segment

"Elite"; As of 01 January 2012, the volume of supply in "Business"; 0,71 thousand; 2,27 thousand; 1,8% the primary market of apartment housing totaled 5,8% 2,180,000 sqm, including 1,760,000 (80.7%) in the city districts territories and 420,000 sqm (19,3%) in the neighbouring satellite territories.

"Mass‐market"; As at the end of 2011, the volume of apartment 36,5 thousand; 92,4% supply from all locations according to categories is distributed as follows:  Mass market: 4,570,000 sqm, 1,880,000 sqm of which is in the pipeline or in the course of development. Pipeline and development properties totals 41.1% of the market volume of the subject category;  Business: 630,000 sqm, 200,000 of which is in the pipeline or in the course of development. The volume of pipeline/development properties makes 31.7% of the market volume of the subject category;  Elite: 290,000 sqm, 100,000 of which is in the pipeline or in the course of development. The volume of supply makes 34.5% of the market volume of the subject category.

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Dynamics of supply volume on the primary market in 2011 Period Established Districts Total on SPb, Downtown, mln Total, mln Districts, mln secondary to mln sqm sqm sqm sqm administrative, mln sqm

Q1 2011 1.67 0.26 1.92 0.34 2.26 Q2 2011 1.85 0.28 2.12 0.35 2.47 Q3 2011 1.69 0.32 2.01 0.37 2.38 Q4 2011 1.51 0.25 1.76 0.42 2.18 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Main indicators of market and supply volumes as of Q4 2011 Indicator Value Change for Q4 2011, %

Number of Properties on the 293 ↓ -1.68% market, items Market volume, mln sqm 5.48 ↓ -0.90% Supply volume, mln sqm 2.18 ↓ -8.40% Supply volume, 000 flats 39.49 ↓ -6.36% Supply volume to market 39.78 ↓ -3.26 value, % Average area of mass-market 56.5 = 0.00% segment supplied flat, sqm Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

135 projects with a total area of 2,555,110 sqm Top‐10 Mass‐market projects, 000 sqm (50,600 flats) were offered for sale during 2011 in Saint-Petersburg and its satellite areas. Yubileyniy kvartal 274,6 Among them: Severnaya dolina 261,1 London Park 119,9  In the established residential Dom u metro Zvezdnaya 113,6 districts – 1,758,630 sqm (34,030 Orbita 105,2 YE'S flats); 94,8 Leninskiy park 92,8

 In secondary districts – 222,220 Avrora 90,3 sqm (4,460 flats); Komplex v Shusharakh 90,2  In satellite areas – 574,270 sqm Badaeva/Kollontay 86,5 (12,110 flats). 0,0 50,0 100,0 150,0 200,0 250,0 300,0 The leader in the volume of housing released in 2011 is the satellite area of the Vsevolozhsky District (501,260 sqm). It is followed by the Vyborgsky District (370,980 sqm), the Primorsky (361,660 sqm), Nevsky (342,030 sqm), Kalininsky (239,330 sqm), and Krasnoselsky (213,510 sqm) districts. The largest project in the established and secondary districts released in 2011, are:  “North Valley” (261,140 sqm) in the Vyborgsky District. In May-June sales began in 8 buildings of Phase III; Other projects include:  “Jubilee Quarter” residential complex (114,180 sqm) in the Primorsky District;

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 “Lenin park” residential complex by the “Gorod” company (92,790 sqm) in Krasnoselsky District. Here the first three buildings were offered for sale;  “Avrora” residential complex by “GDSK” company (90,340 sqm) in the Nevsky District. The first six buildings were offered for sale;  “Complex in Shushary” by the “Dalpiterstroy” company (88,940 sqm) in the Pushkin District. Three more buildings were offered for sale here;  “Ladoga park” residential complex (80,680 sqm) in the Nevsky District. Sales have opened in the remaining three buildings (by developer “Kvartira.ru”, contractors “Kapstroy” and “Promremstroy”). Mass-market supply volume break-down depending on the territory District Area, 000 sqm

Established Districts Frunzenskiy 5.5 Kirovskiy 6.9 Petrogradskiy 11.6 Krasnogvardeyskiy 33.6 Vasileostrovskoy 39.0 Kalininskiy 134.5 Krasnoselskiy 141.1 Nevskiy 158.9 Moskovskiy 175.1 Vyborgskiy 226.8 Primorskiy 313.0 Total on Etablished Districts 1,246.1 Districts secondary to administrative Petrodvortsoviy 28.9 Kurortniy 44.5 Kolpinskiy 48.4 Pushkinskiy 91.8 Total on Districts secondary to administrative 213.6 Downtown zone, Leningradskiy Region Lomonosovskiy 50.22 Vsevolzhskiy 373.08 Total on downtown zone 423.29 TOTAL 1,883.01 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

As at the beginning of 2012, the main supply volume of mass demand housing (48.5%) is concentrated in the Primorsky and Vyborgsky Districts of Saint-Patersburg, as well as in the satellite area of the Vsevolzhhsky District.

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Business-class supply volume break-down depending on the territory District Area, 000 sqm

Established Districts Kirovskiy 1,1 Krasnoselskiy 7,3 Vasileostrovskoy 7,7 Admiralteyskiy 9,6 Vuborgskiy 11,8 Moskovskiy 12,5 Primorskiy 15,3 Cemtral 16,2 Petrogradskiy 47,3 Krasnogvardeyskiy 50,4 Total on Etablished Districts 179,2 Districts secondary to administrative Kurortniy 3,1 Pushkinskiy 10,4 Petrodvortsoviy 11,0 Total on Districts secondary to administrative 24,5 TOTAL 203,65 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

The following projects of the top-10 rating Top 10 Business‐class projects, 000 sqm are located in the Vyborgsky District: “North Valley”, “London-Park” (“L1”), Platinum 52,2 “YE’S” (“Pioneer” Group of companies). Premier Palas 42,1 Imperial 35,0 The territory of the Primorsky District Lumiere 32,5 houses “Jubilee Quarter” residential complex Neyshlotskaya Krepost 24,5 (“LenSpecSMU”). Two of the top-10 Aleksandriya 24,4 Noviy Gorod 24,0 projects are located in Nevsky District, i.e. Dom blagorodnikh … 20,6 “Avrora” residential complex (“GDSK”) Kosmos 20,3 and the residential complex located at the Egorova, 25 16,4 intersection of Badaeva and Kollontai streets 0,0 20,0 40,0 60,0 (“Temp”). As far as the top-10 projects are concerned, besides the projects represented in the rating; there are other large projects in the Saint-Petersburg market with open sales in smaller properties. However, the total area of such projects (which are at different stages: some at the sales stage, some onlt at the design stage) may be larger than the total area of some complexes represented in the rating. Among such projects the following can be mentioned:  The “Kamenka” residential complex by SU-155 in the Primorsky District;  The “Swallow’s nest” residential complex by “LenSpecSMU” in Nevsky District;  “Baltic pearl” residential complex by the “Baltic pearl” company in Krasnoselsky District. The project offers mass market flats as well as business class flats under the brand of “Duderhof Club House”;

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 “Slavyanka” residential complex by “Baltros” in the Pushkin District (APR);  “Seven capitals. Vienna” by “Setl City” in the Kudrovo Settlement of the Vsevolzhsky District. Business-class supply volume break-down depending on the territory District Area, sqm

Established Districts Vyborgskiy 0,1 Petrogradskiy 37,1 Central 43,2 Total on Etablished Districts 80,4 Districts secondary to administrative Kurortniy 14,9 Total on Districts secondary to administrative 14,9 Total 95,25 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

The main share of business class housing is Top 10 Elite class projects, 000 sqm concentrated in the Krasnogvardeisky and Petrogradsky Districts of Saint-Petersburg – Paradniy Kvartal 32,9 Smolniy park 21,8 48.0%. Ansambl na Krestovskom 18,4 Venetsiya 15,0 The Krasnogvardeisky District houses only Kristalli Krestovskogo 14,7 two projects of the top-10, i.e. “New City” Diadema Club House 14,5 residential complex (“Arena”) and Idealniy mir 12,3 Kamennoostrovskiy, 64 9,7 “Platinum” residential complex Sovremenniy aristokrat 9,6 (“Kvartira.ru”). Petrogradsky district houses Stremyannaya, 15 4,6

“Premier Palace” residential complex (“L1”), 0,0 10,0 20,0 30,0 40,0 “Lumiere” residential complex (“Basis SPb”), and “The house of noble families “Sobraniye” residential complex “RBI”, also represented in the top-10 rating. It’s worth mentioning that the Petrograd Island of the Petrogradsky District is the Top 5 Developers on market volume, 000 sqm traditional location for business class LenSpetsSMU 424,8 projects. Two such developments represented in the top-10 are being L1 390,1 constructed on the territory of Moskovsky CDS 323,4 District, i.e. the “Imperial” residential complex (“L1”), the “Kosmos” residential Setl City 281,0 complex («Setl City»). The Vyborgsky GK "LSR" 262,8 District houses the “Neishlot castle” residential complex (“Rant”), the prestigious 0,0 150,0 300,0 450,0 Central District houses the “Alexandria” residential complex (“RBI”) and the Admiralteisky District houses “25, Egorova” (“BEST”). The main volume of elite class supply falls in the prestigious Central and Petrogradsky Districts – 84.3%. The Central District houses the following top-10 projects: “Paradny Quarter”, “Smolny Park” (“LSR”), “15, Stremyannaya” (“SoyuzGenStroy”). Krestovsky Island of the Petrogradsky

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District is the location of “Venice” (Vozrozhdeniye SPb”), “Crystals of Krestovsky. Lazurite. Malachite.” (“Petrotrest”), “Diadema Club House” (“Credo”), “Modern Aristocrate” (“Prime Group”), “Ensemble on Krestovsky” (“Stroyinvest”). The Petrograd Island of the Petrogradsky District houses “Ideal World” (“Torus”), “64, Kammennoostrovsky” (“Stroycomplect”). Here are the developers who commissioned the largest areas in 2011:  Glavstroy SPb (261,140 sqm – 1 project);  LenSpecSMU(213,920 sqm – 3 projects);  TSDS (174,330 sqm – 5 projects);  Setl City (160,830 sqm – 4 projects);  GDSK (144,670 sqm – 5 projects);  DalPiterStroy (106,12 sqm – 3 projects).

Demand in the Primary Market

During 2011 2,530,000 sqm (45,100 flats) were realized in the Saint-Petersburg and satellite primary market, including:  Saint-Petersburg (established and secondary districts) - 35,300 flats (2,050,000 sqm);  Satellite area - 9,800 flats (470,000 sqm).

Dynamics of demand volume on the primary market, mln sqm Period Established Districts Total on SPb, Downtown, TOTAL on Districts, mln sqm secondary to mln sqm mln sqm the market, administrative, mln sqm mln sqm

Q1 2011 0,37 0,04 0,41 0,08 0,49 Q2 2011 0,42 0,02 0,44 0,08 0,52 Q3 2011 0,53 0,05 0,58 0,16 0,74 Q4 2011 0,56 0,06 0,62 0,16 0,78 Total 1,88 0,17 2,05 0,48 2,53 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Dynamics of demand on the primary market depending on the segment, mln sqm Period Mass-market, Business-class, Elite class, Total, mln sqm mln sqm mln sqm mln sqm

Q1 2011 0,46 0,02 0,01 0,49 Q2 2011 0,48 0,02 0,01 0,52 Q3 2011 0,70 0,03 0,01 0,74 Q4 2011 0,73 0,03 0,02 0,78 Total 2,37 0,1 0,05 2,53 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

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Structure of sales depending on the type of flats on 2011, % Segment Mass-market

Period Studio 1 room 2 room 3 room >3 room Q1 2011 10,1% 53,3% 26,0% 10,5% 0,1% Q2 2011 11,5% 56,2% 24,1% 8,1% 0,1% Q3 2011 11,8% 56,5% 24,3% 7,3% 0,1% Q4 2011 12,2% 56,8% 23,8% 7,1% 0,1% Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Main indicators of demand on residential market in Q4 2011 Indicator Value Change for Q4 2011, %

Sales volume, mln sqm 0,78 ↑ +5,41%

Flats’ sales volume, 000 sqm 14,3 ↑ +6,72% Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

According to the Russian Register Service 24,900 shared construction contracts were registered in Saint-Petersburg in 2011, which totals 57.6% of total number of flats realized on the market (as estimated by the Setl Group). Demand increased in 2011 as compared to 2010 by 37.6%. Most projects with a variety of flat sizes on offer also showed significant increases in sales. The highest sales rates were observed in the following projects: “North Valley”, “Avrora”, “Southern” (“GDSK”), “Jubilee Quarter”, “Orbit” (“LenSpecSMU”). In secondary and satellite districts the following projects were in high demand – “Complex in Shushary” (“Dalpiterstroy”). The leaders in demand in the satellite territories included – “Seven capitals. Vienna” (“Setl City”), “Dudergof line-3” (“Lenrusstroy”), “Capital” (“Construction Trust”), “Devyatkino” (“Arsenal-Nedvizhimost”) and“New Murino” (“TSDS”). The average rate of sales among all mass market projects realized in saint-Petersburg in 2011 totaled 22 flats per month, the same index in satellite areas totaled 18 flats per month. We define the umbrellas term ‘projects’ as including all sections, phases, and buildings under one brand in one location. The sales rates in the top projects exceed average market rates of sales 3.5-12 times. This shows that where demand for particular schemes was particularly strong over 100 flats were sold per month, an average of over 4 flats each working day.

Prices in the Primary Market

In QIV 2011 an increase of average sale prices was observed (as compared to QIII 2011) of +0.6- 4.8% (an average of +2-4%) depending on category and location. Increases were observed in all the categories and locations, with the exception of business class in the secondary areas, where an insignificant decrease in sales prices (-1.5%) was caused by changes in the supply structure.

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In general in 2011 average prices in the mass Established Districts supply price dynamics on the primary market category in the established districts of market, 000 RUR per sqm 250,0 Saint-Petersburg and in the satellite territories 204,6 210,1 210,2 211,1 200,4 202,9 202,9 202,1 197,0 199,5 199,2 199,7 203,1 exceeded the inflation rate registered at the level 200,0 of 5.9% in Saint-Petersburg and 6.1% in Russia, 150,0 108,9 110,4 111,7 112,6 101,2 102,9 104,1 106,5 107,3 108,1 but only very slightly. Increase of average prices 92,2 97,4 97,9 for 2011 was 6.73% and 6.87% in the established 100,0 districts and in the satellite area correspondingly. 50,0 69,8 71,6 72,0 72,4 72,8 72,3 72,6 73,9 74,4 74,8 75,1 76,0 76,3 The subject index is also close to the inflation 0,0 rate in the secondary market, totaling an annual increase of 8.39%. "mass‐market" "Business" "Elite" As for 2011, a significant increase in sales prices Districts secondary to administrative supply price dynamics on (16.95%) in the mass market category was the primary market, 000 RUR per sqm 99,1 observed in the primary market in secondary 96,2 98,2 96,6 97,5 97,6 100,0 92,1 94,1 93,9 districts. This increase is caused by the growth of 88,7 90,0 85,0 85,7 sales prices in the Pushkinsky District (an 79,6 80,0 66,8 67,1 increase of 19.8% in the period of January to 64,6 65,9 70,0 62,1 59,4 61,3 56,2 57,9 57,1 58,3 57,9 58,3 December 2011, totaling 66,500 rubles per sqm 60,0 as at the end of the year). 50,0 The structure of supply itself in secondary areas changed during the year. Projects with low average prices quickly reduced in availability and "mass‐market" "Business" left the supply category, e.g. the sales of flats in Downtown supply price dynamics on the primary such projects as “Architect Danini/2A market, 000 RUR per sqm Lomonosova” (“Imperial-StroyInvest”), and the 65,0

5thand 8-10th buildings of “Lensovetsky” 60,0 57,5 57,7 56,5 56,8 56,8 56,8 56,9 57,0 56,6 57,3 55,3 (“Titan”) were closed as all the flats in these 54,0 54,5 development sold out. The list of projects with 55,0 final flats offered for sale, which are not taken 50,0 into account according to the above 45,0 methodology for the calculation of average prices, includes such projects as Buildings 54-55 of Phase III, Building 61 of Phase IV and Building 67 of Phase II in the residential complexes “Complex in Shushary” (“Dalpiterstroy”), “Pushkinsky-1” (“Philin”) and some others. Additionally, in a number of projects an increase in prices has been observed. For example, in Pushkin town, the average price in the project at 16/8 Glinki increased from 86,200 up to 105,000 rubles per sqm from January until December 2011. In contrast to mass market housing, the average supply prices in the business class category demonstrated an increase significantly higher than the inflation rate. This totaled an increase of 16.87% and 10.06% in the established residential areas and secondary districts correspondingly. A significant annual increase of average prices in the business category is connected with low average prices in the segment at the beginning of the year (a low calculation base), which in its turn is connected with a slower recovery of the business segment as compared to the mass market segment in 2010. The growth of demand and prices in the mass market category stimulated the growth of prices in the business segment.

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As of January 2012, the average supply price in business class residential in the established residential districts was 97,400 rubles per sqm. Due to the growth of demand by December 2011, the same level of average prices and higher was already fixed in a number of projects of the lower price category, i.e. in “comfort” developments (the higher segment of mass market category). Thus, for example, as of December the following prices in comfort category projects were observed: “Parkovy” (“TSDS”) – 98,400 rubles per sqm; “14/2, 14/4 Badaeva” (“Temp”) – 101,200 rubles per sqm, “Solo” (“YUIT Saint-Petersburg”) – 102,600 rubles per sqm, “New Dynasty” (“First design company”) – 107,800 rubles per sqm. The only segment in which the increase of average sale prices for 2011 proved lower than the inflation rate was the segment of elite projects realized in the established residential districts, which was a price increase of 5.32%.

Main indicators of prices on the primary market in 2011

Established Districts Segment Average price as at December 31, 2011 Change for last year, %

Mass-market 76 336 ↑ +6,7%

Comfort 85 170 Economy 68 497 Business 112 579 ↑ +16,9% Elite 211 060 ↑ +5,3% Deluxe 286 591 Lux 185 406 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

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Districts secondary to administrative Segment Average price as at December 31, 2011 Change for last year, %

Mass-market 67 097 ↑ +17,0%

Comfort 75 322 Economy 53 390 Business 97 609 ↑ +10,6% Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Downtown, Leningraskiy Region Segment Average price as at December 31, 2011 Change for last year, %

Mass-market 57 749 ↑ +6,9%

Comfort 59 367 Economy 57 736 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Key Events and Medium-term Forecast of Tendencies

Index Values

2012 2013 2014 Residential construction comissioning - all sources of financing, 000 sqm 2 750,0 2 850,0 2 950,0 - city budget, 000 sqm 457,4 460,5 510,0 Total area of residential premises in average in resident, sqm 25,1 25,5 26,0 Average nominal salary per persin, 000 RUR 34,7 38,9 43,6 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

 According to the program of social and economical development of Saint-Petersburg, 2012-2014 introduced by the Committee of Economical Development of Industrial Policy and Trade, it is planned to commission 2,750,000 sqm of residential premises in 2012, including 16.6% at the cost of Saint-Petersburg budget.   Subject to a stable macro-economic and political situation in 2012 an increase of 10- 15% in demand can be expected. Forecast of price dynamics, RUR per sqm Segment December 2011 December 2012 Growth, %

Mass-market 76,3 82,5 8,1% Business 112,6 119,6 6,2% Elite 211,1 223,1 5,7% Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

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 The increase of average base supply prices can be forecast at the level of 2-3.5% per quarter depending on category and location.  The volume of new supply during 2012 won’t significantly exceed the levels of 2011 and by the end of 2012 will total 2,500,000 sqm.  The number of projects announced for commissioning in Q1 2012 is insignificant in terms of large projects with sales beginning in the initial or first phases. The only large project the first phase of which may be commissioned in QI 2012 is the “On Tsarskoselskiye hills” residential complex. Sales commencement in this project was planned for QIV 2011. In the last quarter of 2011 the project suffered some changes: “SAND”, the project’s developer, was replaced by investment and construction company “Petrotrest”. The sales opening in the first five large-scale residential complexes “Yuntulovo” by “Glavstroy SPb” announced for QIV 2011 were postponed until QII 2012.

New Projects in 2012

A similar situation is occurred with the project “Kronshtadt fort”, where initial sales were planned for the end of 2011. However, recently, the developer stated that information the start of sales will appear in February 2012. Two new projects were planned in the Vasileostrovsky District. The commencement of sales was announced for spring 2012 for the “Ayno” residential complex by “Lemminkeinen Rus” with a total area of 35,000 sq. : a project of 6 buildings with 13-storey block of flats. The project comprises 450 flats with a total area from 46 sqm to 156 sqm. The second project “House on Line” by the “Solo” group of companies is expected to enter the market from the 15th February 2012. This project, with a total area of 2,800 sqm, is designed for only 33 flats. Also in February 2012, a new project “Aura” by “YUIT Saint-Petersburg” is expected in the Vyborgsy District. This scheme comprises a 9-storey block of flats with a total area of 10,800 sqm and is designed for 198 flats. The unusual feature of this project is that it offers not only one-room flats of 32.5 sqm, but also studios of 28 sqm unusual for the developer. The company “Construction Trust” will also present to the market its new project “Golden Middle”, which comprises a 20-storey block of flats designed for 20,000 sqm of residential premises. The main feature of this project is its high level of construction readiness. Another apartment scheme by the “Aksioma” company is expected to enter the market in Q1 2012. The “Shalyapin” project is a 4-storey block designed for 6,200 sqm (56 flats). It’s also necessary to mention that in the coming quarter the market is going to be enriched by new phases of already existing projects, such as “North Valley”, “Avrora” and “Antei” (“GDSK”), and “Seven Capitals. Vienna”.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

LENINGRADSKIY REGION RESIDENTIAL MARKET OVERVIEW

Key trends in the out-of-town property market (cottage settlements, townhouses)

As at the end of Q4 2011, there are 298 cottage settlements and 30 additional phases available for sale. Also 50 townhouse development projects and 8 additional phases are offered for sale. Number of cottage settlements and townhouses in 2007-2011 (end of year) 400

298 300 235

200 170 144

90 100

66 56 0 39 47 50 2007 2008 2009 2010 2011

Cottage settlements Townhouses

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

The size of the market1 of cottage settlements is 25,036 units. The supply2 of cottage settlements is 16,359 units, 18% of which make up the cottages and land plots with construction contracts, and the rest (82%) are land plots without contracts. Compared to Q4 2010, the supply has increased by 9.2%. The size of the townhouse market makes up 2,363 units. The supply of townhouses totals 1,358 units and has decreased by 28.4% (compared to Q4 2010), due to the fact that there was high demand for them in 2011 (especially in H2 2011).

1 Size of primary market - announced total number (units) of cottages/lots/townhouses in projects offered for sale. This does not include projects, where sales of cottages/lots/townhouses have finished, stopped or not begun. 2 Size of supply - aggregated total number (units) of unsold cottages/ townhouses in projects available for sale.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Supply structure of out-of-town market of St. Petersburg and Leningrad Region, Q4 2011

Land plots (with or w/o contracts) Cottages, land plots with contracts Townhouses

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

The year of 2011 had a lot of deliveries of new cottage settlements. Since the beginning of 2011 the out-of-town market has increased by 108 new cottage settlements and 14 townhouse development projects. The peak of cottage settlements’ deliveries was in September, October and November of 2011, when 45 new cottage settlements were delivered, where cottages, townhouses and land plots with construction contracts are offered for sale. The number of projects offering townhouses has increased by 4%. In 2011, 10 new townhouse projects were offered for sale. Supply structure of new cottage settlements offered for sale in 2011 (St. Petersburg and Leningrad Region)

Land plots without contracts Land plots (with or w/o contracts) Cottages, land plots with contracts Townhouses

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

In Q4 2011, 33 new cottage settlements and 7 townhouse projects were offered for sale.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Key out-of-town development projects (top-10)

Area of Average Average the Type of Average Average cottage price per lot/# of District develop- Name Company Class area, lot area, price, sotka, lots / ment sqm sotka million thousand houses , RUR RUR units

Economy и comfort class cottages, townhouses, Neva Invest 71 ha- Vyborgsky Kivennapa economy 140 10 6 - duplexes, Proekt 1,000 flats 32 ha- cottages, Golden Start Gatchinsky economy 533 (1 115 5 4 - townhouses Keys Development ph.)

PetroMarDevel cottages, 50 ha- Vsevolzhsky Five Hills opment economy 108 10 4,5 120 lots 421 Progress

cottages, comfort/ 85 ha - Vyborgsky Harmony Stinkom 200 15 12,5 170 lots business 297

cottages, Petrovsky PetroMarDevel 100.9ha- Vsevolzhsky economy 160 11 6 120 lots Gardens opment 279

8.6 ha- Kurortny townhouses Kantele CDS comfort 181 3 9 240 Business and elite class 108 ha- around Okhtinskoe ISK Splav Business Vsevolzhsky lots 360 lots - 25 - 426 Razdolie /Vertikal /elite (1ph. - 118)

Petergof- 106 ha- Lomonosovsky cottages Petrozemproekt business 220 14 17,8 - City 351

Onegin 62.5 ha- Tosnensky cottages IFK BSPB business 220 12 15 - Park 274

cottages, Etiсa 40 ha- Vsevolzhsky Yukkovskoe business 211 15 14 484 lots Development 200

62.5 ha- 142 +99 cottages, Tareal villas Lomonosovsky lots, city- Vanino (Technomar business 230 15 12 375 (houses villas Adrem LTD) with flats) Izumrudny Gorod / Parabola/ 27.6 ha- Vsevolzhsky cottages business 242 20 20,9 - Chistye Nittis 115 Prudy 31.4 ha - Vsevolzhsky cottages Uvarovo Dinasty elite 622 20 62,2 - 77 13.6 ha - Vsevolzhsky cottages Medovoe Petrostil elite 507 40 70 - 24 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Supply in the cottage settlement market in Saint Petersburg is several times higher than demand. However, the projects under real construction are few, while most of the projects represent sale of land enjoying little demand, which was bought by unprofessional developers before the crisis. In this

Valuation & Advisory -245-

Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 situation the developers, which are successfully operating in the out-of-town market, continue analyzing the market situation and creating concepts and designs for their future projects. As a result, at the end of 2011 the competition between market players increased. In spite of this, market analysts expect the prices for cottages will be growing by 5%-20% (depending on the level of completion), but this is unlikely to reflected in the average price on the market. Analysts also expect the increase of demand for quality properties (finished homes/ homes at a high level of completion or land plots with all necessary utilities), but a boom in sales is unlikely, unless mortgage loans become more available for mass market (which is very unlikely in the current economic situation). New projects are expected to appear in the market, but the majority will represent sale of land plots. This, in turn, means that the market is not developing comprehensively – only in a minor share of cottage settlements the cottages are developing according to concept (for the past 0.5-1.5 years average prices for such homes have decreased). As of now, the number of cottage settlements on the market is significant, therefore potential buyers should be very careful, because when they buy a cheap land plot, there is a risk that it will not be eligible for construction of a country house (and only agricultural uses of the land plot will be possible). The elite-class segment of the market for expensive cottages is in crisis at the moment. The number of properties sold is very low. In the premium segment many projects cannot be sold even after a half-year exposure. Therefore many market players have to take measures to keep sales going (for example, they might offer decreased prices for smaller homes and smaller land plots, or they might choose better construction technology, etc.). On the contrary, the market of townhouses has shown good results in sales in the autumn of 2011, so analysts project further development of this segment in 2012 (considering it as an alternative to accommodation in the city).

Geography of construction of cottage settlements/ townhouses

As of the end of Q4 2011, 298 cottage settlements (and 30 phases) and 50 townhouse projects (and 8 phases) were offered for sale in the out-of-town market of Saint Petersburg and the Leningrad Region, which makes up 348 projects in total. The total size of the primary out-of-town market was at the level of 27,399 units, where 91% represented cottages and land plots with or without contract and the other 9% represented townhouses. The total number of unsold properties makes up 17,717 units (65% of the market). Compared to 2010, the market of cottages has increased by 44% and the market of townhouses has increased by 14%. Market Size Supply Sold Properties units % units % units %, of the market Cottages, land 25,036 91% 16,359 92% 8,677 65% plots with or without contract Townhouses 2,363 9% 1,358 8% 1,005 43% Total 27,399 100% 17,717 100% 9,682 100% Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Most sale offers of cottages/ land plots with or without contracts are located in Vsevolzhsky District (31% of all cottage settlements), Vyborgsky District (16%) and Lomonosovsky District (14%).

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Distribution of cottage settlements by districts, units

4 4 21111 9 8 11 11 92 27

36 49 41

Vsevolzhsky Vyborgsky Lomonosovsky Priozyorsky Gatchinsky Kurortny Tosnensky Kirovsky Luzhsky Volosovsky Kingissepsky Volkhovsky Kirishsky Petrodvortsovy Primorsky Pushkinsky

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

District # of settlements # of cottages and land plots

Vsevolzhsky 92 8,95 Vyborgsky 49 2,802 Lomonosovsky 41 3,971 Priozyorsky 36 1,589 Gatchinsky 27 2,226 Kurortny 11 301 Tosnensky 11 1,574 Kirovsky 9 2,015 Luzhsky 8 542 Volosovsky 4 198 Kingissepsky 4 488 Volkhovsky 2 23 Kirishsky 1 148 Petrodvortsovy 1 51 Primorsky 1 45 Pushkinsky 1 8 Total 298 25,036 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

The majority of townhouse projects’ sales are carried out in Vsevolzhsky District of the Leningrad Region and Kurortny, Primorsky and Vyborgsky Districts of Saint Petersburg (70% of all projects).

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Distribution of townhouse projects by districts

1 1 1 1 2 12 3 3

10 6

Vsevolzhsky Kurortny Vyborgsky Primorsky Vyborgsky Krasnoselsky Lomonosovsky Gatchinsky Kirovsky Luzhsky Petrogradsky Pushkinsky

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

District # of projects # of townhouses 12 515 Vsevolzhsky 10 729 Kurortny 7 65 Vyborgsky 6 196 Primorsky 3 495 Vyborgsky 3 39 Krasnoselsky 3 53 Lomonosovsky 2 176 Gatchinsky 1 61 Kirovsky 1 6 Luzhsky 1 7 Petrogradsky 1 21 Pushkinsky 50 2,363 Total Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Since the beginning of 2011, 108 new cottage settlements and 10 new townhouse projects have been offered for sale. For the last two years (2010 and 2011) the market of cottage settlements has been actively developing – thus, over 200 cottage settlements have been offered for sale (100 units in 2010 and 108 units in 2011).

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

The majority of cottage settlements offering cottages, land plots with or without contracts and townhouses are located in the zone of conditionally-permanent residence3 - they make up 47% (of the total number of projects), or 46% (of the total number of projects offered for sale). Distribution of cottage settlements by functional use, % 50 47 46 45 40 40 40 35 30 25 20 14 15 13 10 5 0 Permanent Conditionally‐permanent Seasonal

Market Size Supply

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

l p , Fu nct ion al use # of set tle me nts Ma rke t siz e, uni ts Su p y uni ts 45 3,836 2,480 Permanent 164 12,604 8,150 Conditionally- permanent 139 10,960 7,087 Seasonal 348 27,399 17,717 Total Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

3 Cottage settlements for permanent residence – the permitted use of the underlying land is always “individual residential construction”. These properties are located within 30-40 km from city boundaries. They usually have central (or sometimes central/local) utilities.

Cottage settlements for conditionally-permanent residence – these properties are located within 30-40 km from city boundaries, but the permitted use of the underlying land is “garden noncommercial partnership”, which excludes the possibility of permanent residence. These settlements usually have central (or sometimes central/local) utilities.

Cottage settlements for seasonal residence – these properties are located more than 40-50 km away from the city boundaries. The permitted use of the underlying land might be either “individual residential construction” or “garden noncommercial partnership” (more seldom). The utilities are usually local (but sometimes they can be partially central).

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Pricing on the market of cottage settlements/ townhouses

Average house prices in cottage settlements, by classes, Q4 2010-2011 140 128 118 121 120 119 120

100 76 76 77 80 70 70

60 50 50 48 51 50

20 32 32 36 32 32 0 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011

economy middle business elite

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Average prices for cottages (and underlying lots of land) have not changed significantly in 2011 (compared to Q4 2010). In 2011 the prices have been changing within +(-) 1%-8%, which can be explained by seasonal factors. At the year-end the prices for business-class cottages have dropped by 8%. Average prices for townhouses (duplexes) in cottage settlements, by classes, Q4 2010-2011 180 153 155 150 160 145 149 140 114 109 120 102 104 107 100 83 77 81 78 77 80 59 51 55 54 52 60 40 45 44 20 42 42 39 0 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011

middle comfort business elite luxury

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Prices townhouses market have also been stable in 2011. Average prices for townhouse sections in “comfort” and “elite” classes have slightly increased (by 2%-4%, compared to Q4 2010), as some new projects have been offered for sale. In the “luxury” segment the average prices have decreased by 2%, and in the “business” segment prices remained stable.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

The average prices for townhouse sections in the “middle” segment have decreased most significantly (by 7%, compared to Q4 2010), due to the fact that some new projects have been offered for sale (e.g. “Traditsiya” and “Petrovskaya Melnitsa” settlements). In the out-of-town market of land plots in 2011 the average prices per sotka have generally decreased. Thus, the highest price per sotka of land (divided into lots) has been registered in Vsevolzhsky District and has been equal to 327,000 rubles (which is by 4.7% lower than in 2010). The most significant price decrease has been registered in the segment of land plots without division, which is due to the growth of supply and increase of competition. The most significant decrease has been registered in the Priozyorsky District (by 35%, compared to Q4 2010). In all other southern districts of the Region the average prices have dropped by 10%-25% (and in the northern districts – by 15%-25% respectively).

Average prices of land plots without a contract in cottage settlements, Q4 2011 350 327 330 300 250 217 211 200 157 153 150 117 174 97 100 129 124 50 80 83 0 Vsevolzhsky Vyborgsky Gatchinsky Lomonosovsky Priozyorsky

Price of sotka of land with all utilities Price of sotka of land with some utilities Price of sotka of land without utilities

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Land plots without contracts for construction

Supply structure of out-of-town market in St. Petersburg and Leningrad Region, Q4 2011

24%

66%

33%

Land plots without contracts Cottages, land plots with contracts Townhouses

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

As of the end of Q4 2011, there are 298 cottage settlements (and 30 additional phases) and 50 townhouse projects (and 8 additional phases) available for sale. The size of the market4 of cottage settlements makes up 25,036 units. The supply5 of cottage settlements makes up 16,359 units, 18% of which make up the cottages and land plots with construction contracts, and the rest (82%) are land plots without contracts.

4 Size of primary market - announced total number (units) of cottages/lots/townhouses in projects offered for sale. This does not include projects where sales of cottages/plots/townhouses have finished, stopped or not begun. 5 Size of supply - aggregated total number (units) of unsold cottages/ townhouses in projects available for sale.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Supply structure of new cottage settlements offered for sale in 2011 (St. Petersburg and Leningrad Region)

14%

50%

27%

Land plots without contracts Land plots with / without contracts Cottages, land plots with contract Townhouses

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

New projects are expected to appear on the market, but the majority will represent sale of land plots. Analysts also expect the increase of demand for quality properties (finished homes/ homes at a high level of completion or land plots with all necessary utilities), but the boom in sales is unlikely, unless mortgage loans become more available for the mass market (which is very unlikely in the current economic situation).

24%

43%

33%

Land plots without contracts Land plots with / without contracts Cottages

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Only 24% of the whole number of cottage settlements are offered for sale with cottages or land plots with construction contracts. The rest (77% of the total number of cottage settlements) is the market of land plots, where 44% representp lots without contracts and 33% represent lots that are sold either with or without contracts for construction. Compared to Q4 2010, the share of supply of cottages has decreased by 8%, the share of plots without contracts has increased by 2% and the share of plots with or without contracts has increased by 6%.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Distribution of market segments in Q4 2011 50% 47% 44% 45% 40% 35% 32% 30% 30% 25% 20% 17% 15% 15% 10% 5% 4% 5% 3% 3% 0% Elite Business Middle Economy Land plots

Market Supply

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Segment # of settlements Market size, units Supply, units 25 834 486 Elite 31 1,241 722 Business 50 3,782 2,710 Middle 64 7,493 5,175 Economy 128 11,686 7,266 Land plots 298 25,036 16,359 Total Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

In 2011 the average price of a sotka of land has been decreasing. Thus, as the result of 2011, the highest price for a sotka of land with utilities is in Vsevolzhsky District and makes up on average 327,000 rubles, which is 4.7% higher than that of 2010. Also the highest price of land sotka (with utilities) was registered in the northern districts of the Leningrad Region, namely, in Vsevolzhsky, Vyborgsky and the Primorsky Districts (in the latter the price per sotka has decreased by 8%, compared to 2010). Prices for land plots that are not divided into smaller plots have decreased significantly, due to an increase in supply and anintensification of competition. The most significant price decrease (by 35%, compared to Q4 2010) has been in the Priozyorsky District of the Leningrad Region. In other southern districts of the region, prices of land per sotka have decreased by 10%-25%. In the northern districts of the region land prices have decreased by 15%-25%.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Average price of the sotka of land in cottage settlements, where land plots without construction contracts are offered for sale, Q4 2011 350 327 330 300 250 217 211 200 157 153 150 117 174 97 100 129 124 50 80 83 0 Vsevolzhsky Vyborgsky Gatchinsky Lomonosovsky Priozyorsky

Price of sotka of land with all utilities Price of sotka of land with some utilities Price of sotka of land without utilities

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Size and structure of demand in the market of cottage settlements/ townhouses

Structure of demand for cottages and townhouses, 2011, %

9% 11%

80%

Land plots with or without contract, land plots without contract Cottages/land plots with contract Townhouses

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Overall, in 2011 more than 4,700 properties (cottages/ land plots with contract/ land plots without contract/ townhouses) were sold, which is 35% higher than the number of properties sold in 2010. Land plots (with or without contract) were most in demand – they make up 80% of the total amount of sales (in units). Cottages and land plots with contracts made up 11% of the total amount of sales (whereby the economy and middle class were most demanded). 77% of all cottage sales comprised properties located in zones of permanent residence (within 30 km of the city boundaries); the rest (23%) represent properties located in seasonal residence zones. Despite a high number of sales of townhouses in September – October 2011, the share of townhouse sales increased by 9%, which is a good indicator, while in 2010 the respective share hardly reached 5%.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Land plots without construction contracts were most in demand (they accounted for 67% of all sales of land plots with or without contract). There were land plots’ sales in all districts of the region, but the highest number of sales was in Vsevolzhsky District (26% of all sales of land plots without contract), where the average price per sotka was 185,000 rubles. Also there was demand for land plots in the Lomonosovsky District (20% of all sales of land plots without contract) – where the average price per sotka was at the level of 90,000 rubles. The third most popular district was Vyborgsky District (14% of all sales of land plots without contract) – average price per sotka was at the level of 225,000 rubles. The majority of land plots with contract were sold in Vsevolzhsky District (43% of all sales of land plots with contract) – the average price per sotka was at the level of 200,000 rubles. Also there were a lot of sales in Lomonosovsky District (40% of all sales of land plots with contract).

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

SAINT-PETERSBURG OFFICE MARKET OVERVIEW

Supply

Overall data, 2011 GBA GLA Total volume of supply, sqm 2,202,000 1,526,000 Class A 633,000 (29%) 468,000 (31%) Class B 1,569,000 (71%) 1,058,000 (69%) Supply growth in 2011 11% 12% Supply growth in H1 2011 5% 5% Supply growth in H2 2011 6% 6% Completions in Q1 2011, sqm 57,900 47,300 Completions in Q2 2011, sqm 35,000 26,000 Total, H1 2011, sqm 92,900 73,300 Completions in Q3 2011, sqm 73,300 52,900 Completions in Q4 2011, sqm 44,500 36,300 Total, H2 2011, sqm 117,800 89,200 TOTAL AMOUNT OF CONSTRUCTION COMISSIONING 2011 210,700 162,500 Ratio between supply in 2011 and in 2010 116% 120% Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

The consequences of the crisis are also expressed in a decrease in the number of new projects. Previously in Saint-Petersburg the volume of new projects announced for construction increased annually, therefore the volume of real completions increased only slowly. Thus we witnessed a snowball effect – more and more of the projects declared to be going ahead were postponed, which led to higher than expected volumes of postponed projects and an annual decrease of the number and share of completed properties.

Dynamics of completion of leasable office premises, 2007-2011 350 307 300

250 231

200 162 137 136 150

100

0 2007 2008 2009 2010 2011

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

The office real estate market in Saint-Petersburg is slowly recovering after the crisis. Growth of completion of office premises was witnessed in 2011 – 163,000 sqm against 136,000 sqm in the

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 previous year. By contrast, 2010 was notable for a substantial decrease in the volume of completions in comparison with all previous periods. The market has not yet reached pre-crisis figures on completion volumes. Growth tempos are still significantly lower, which can be explained not only by the crisis’s consequences, but also by a near saturation in the market. Dynamics of completion volumes in relation to announced completion volumes, 2004-2011,% 100% 8% 90% 80% 41% 40% 51% 52% 70% 56% 62% 60% 83% 50% 92% 40% 30% 59% 60% 49% 48% 20% 44% 38% 10% 17% 0% 2004 2005 2006 2007 2008 2009 2010 2011

the share of commissioned facilities the share of the objects, which input transferred for the next period

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Supply of office space is still concentrated in business activity zones – from 14 properties completed in 2011 only 2 complexes are located outside of cluster territories. On the whole 89% of supply is accumulated in business activity zones which can characterize Saint-Petersburg as a developed business city. The highest increase of office area supply volume was recorded in the new business clusters – Okhta and Pulkovo-3. Three buildings of the Saint-Petersburg Plaza development with a total area of 104,000 sqm in the Okhta cluster were put into operation and the share of this cluster in the geographical structure of supply increased from 4% up to 9%. Two office buildings forming part of the office complex Airportcity with a total area of 16,000 sqm (Jupiter and Airport) were commissioned in Pulkovo-3.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Geographical areas’ distribution, GLA

16% 14% 14% 13% 11% 11% 12% 10% 10% 7% 8% 6% 6% 6% 5% 5% 6% 4% 4% 2% 2% 1% 0%

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Key projects # Title Class District Address Office area GLA Cluster Completion

Key projects completed in 2011 1 Saint-Petersburg А Krasnogvardeyskiy Maloostankinski 43,200 34,500 Okhta Q1 Plaza, 1st phase(bank) y Avenue, 64, lit. A, B, C 2 Saint-Petersburg A Krasnogvardeyskiy 22,308 20,000 Okhta Q3 Plaza, 2st phase 3 Saint-Petersburg A Krasnogvardeyskiy 28,643 16,420 Okhta Q3 Plaza, 2st phase 4 Airportcity 1st phase, A Moskovskiy Pulkovskoe Hw. 10,590 7,950 Pulkovo-3 Q4 Jupiter 5 Airportcity 1st phase, A Moskovskiy Pulkovskoe Hw. 5,450 4,100 Pulkovo-3 Q4 Airport 6 Senator-10 3rd phase, A Vasileostrovskoy 31 18th line of 16,560 12,500 Vasilievskiy Q2 2nd stage Vasilevskiy Ostrov Ostrov Key project announced to be completed in 2012 1 Ovental Tkachi В+ Frunzenskiy 47 Borovaya St. 12,000 9,500 Obvodnoy 2012 / 60 Obvodnoy channel channel 2 Airportcity 2nd phase, А Moskovskiy Pulkovskoe Hw. 20,000 14,600 Pulkovo-3 2012 Zeppelin 3 26 Liteyniy В Central 26 Liteyniy Av. 10,000 7,000 Centre-1 2012 4 U Krasnogo Mosta А Admiralteyskiy 73, 75, 77, 79 13,000 10,500 Zolotoy 2012 river Moyka Treugolnik Emb. Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Demand

Occupancy and vacant areas

The average level of vacany in Q4 2011 amounted to 13.2% which is 0.6% more than in Q1 2011. In H1 2011 the occupancy level increased and in the middle of the year demand and supply reached equilibrium point. By the end of 2011 the level of demand decreased due to unstable political and economic developments. Tenants have chosen a wait-and-see strategy. Overall the increase in vacancy rates was due to new completion volumes, which resulted in increases in vacant areas. The occupancy level in operational and stabilized properties is at a level of 90-95%.

Change in level of vacant areas, 2010-2011, depending on completion dates, % from GLA 50,0%

45,0% 45,0% 40,0% 44,2%

35,0% 35,4% 30,0%

25,0%

20,0% 13,2% 15,0% 12,6% 11,7%

10,0% 11,1% 10,1% 5,0% 8,2%

0,0% The end of 2010 First half of 2011 The end of 2011

operating more than a year operating less than a year average for all objects

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Differing occupancy levels in business centers of various classes still remains: The level of vacant areas in class A has increased by 5.5% and amounts to 23% of GLA. This was caused by the large volume of completion in business centers of this class in H2 2011. Transactions on medium and large sized office blocks (more than 200 sqm) prevail in this class due to resurgent demand since 2010. The level of vacant areas in class B decreased in 2010 by 9%. Office premises in this segment are in high-demand – 35-50% of incoming requests. Moreover, in 2011 only 58,000 sqm of office space of class B business centers were commissioned.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Change in vacant areas in business centers of class A and B, % from GLA 25,0%

20,0%

15,0%

23,0% 10,0% 17,5% 18,0% 12,6% 13,2% 10,9% 11,7% 5,0% 8,9% 9,0%

0,0% The end of 2010 The first half of 2011 The end of 2011

A B average level

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Difference in the occupancy level depending on the business zone Cluster 2010 H1 2011 H2 2011 Comments Bounded by Makarova Emd., Universitetskaya Emb., Shevchenko St., Maly Av. And reki Smolenki Emb.

Vasilievskiy Increase of vacancy is due to commissioning of the 3rd phase of Senator-10 12.1% 19.2% 15.0% Ostrov business center (GLA 12,500 sqm, class A). In H2 2011 it was slowly occupied and Elizavetinskiy-2 business center completed in this period and was fully occupied by a single tenant.

Bounded by Dvortsovaya Emd., reki Fontanki Emd., Izmaylovskiy Park Zolotoy 7.0% 4.3% 4.0% Treugolnik This is a traditionally prestigous office cluster differing from others by high- level of occupancy and rental rates. No new completions. Moskovskiy Av. and the nearby territory on the land plot from Ligovskiy Av. to Dunayskiy Av., bounded from the East by U. Gagarina Av., from the West – Narodnogo opolcheniya Av. and Kubinskoy St.

Moskovskiy 25.0% 6.0% 20.0% In H1 there was a significant growth of occupancy in this office cluster, the level of vacant areas decreased due to the successful letting of Kontinent Business Centre near Zvezdnaya metro station. In H2 3 properties were commissioned and their leasable area amounted to 18,000 sqm which resulted in vacancy growth.

Bounded by Zvenigorodskaya St., Obvodnogo kanala Emb. And reki Fontanki Emb. Obvodnoy kanal 11.7% 4.4% 4.0% No new completions. Bounded by Pesochnaya Emb., Petrogradskaya Emb., Petrovskaya Emb., Kronverskiy Av., Dobroliubova Av. and Zhdanovkaya St. Petrogradskaya 16.3% 7.9% 7.5% storona As with Zolotoy Treugolnik, this is considered a popular and prestigious cluster and lacks problems with occupancy. 2 properties with a total leasable area of 10,500 sqm were commissioned in 2011.

Bounded by Primorskiy Av., Begovaya St., Parashutnaya St. And Kolomyazhkiy Av.

Staray Derevnya 43.1% 17.5% 16.8% The vacancy level in Staraya Derevnya office cluster decreased in comparison with 2010 due to the letting of Atlantic City business center and MDTS Reso.

Bounded by Kutuzova Emb., Robespiera Emb., Potemkinskaya St., Kirochnaya St., Nevskiy Av., Obukhovskoy oborony Av., Obvodnogo kanala Emb., Zvenigorodskaya St. and reki Fontanki Emb. Center-1 9.2% 15.7% 13.4% The vacancy rate changes in Center-1took place due to Renessans-Forum business center, which was put into operation. Part of the premises in the properties of the Senator network became vacant.

Bounded by Kantemirovskaya St., Lesnoy Av., Akademika Lebedeva St., Pirogovkaya Vyborgskaya 13.9% 16.1% 14.0% Emb. and Vyborgskaya Emb. Emd. No new completions. Bounded by Izmaylovksiy Av., reki Fontanki Emb. and Angliyskaya Emb. Kolomna 14.5% 5.8% 5.2% No new completions. Bounded by Sverdlovskaya Emb., Malookhtinskiy Av., Shaumayna Av., Okhta 22.8% 20.6% 24.0% Sredneokhtinskiy Av. and Kondratievskiy Av.

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Cluster 2010 H1 2011 H2 2011 Comments The volume of supply in this cluster has increased by 76,500 sqm but there was no sharp increase in the vacancy level. One of the reasons was that the 1st phase of Saint-Petersburg Plaza (GLA 34,500 sqm) was fully occupied by bank Saint-Peterburg’s structures. Other properties entered the market with a good occupancy level.

Bounded by Pulkovskoe Hw., Sheremetievskaya St. and Shturmanskaya St.

Pulkovo-3 45.3% 32.6% 36.0% Operating business centers are slowly being occupied in this cluster. Marketing campaign completed in H2 2011 building related to Airportcity business center, which started in the beginning of the year and resulted in the commissioning of properties with a good occupancy level.

Bounded by Smolnaya Emb., Sinopskaya Emb., Nevskiy Av., Suvorovsnkiy Av., Center-2 9.0% 9.8% 9.5% Kirochnaya St. and Potemkinskaya St. No new completions. Bounded by Kantemirovskaya St., Ushakovskaya Emb. and Tozhkovskaya St., Chernaya rechka 10.0% 17.4% 14.3% In H1 the new property was put into operation with an occupancy level of 50%. The vacancy level in other properties has remained unchanged.

2 properties with a total leasable area of 24,000 sqm were commissioned in Out of clusters 11.0% 8.4% 10.8% 2011. Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Rental rates

There is a continuing trend of slight increases in rental rates which is mainly connected to contracted indexation. In comparison with 2010, the rental rates for office premises increased by 3% for class A and by 7% for class B. Dynamics of rental rates in office premises of class A and B in 2011, rubles per sqm per month 1500

1400 1455 1465 1420 1300

1200 1065 1100 1030 1000 1000

900

800 2010 The first half of 2011 2011

A B

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

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Rental rates for parking spaces in Business centers Parking type Central Districts, rubles per Suburbs, rubles per month month Underground parking 9,000 – 15,000 4,000 – 8,000 Surface parking 5,000 – 9,000 3,000 – 5,000 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Supply and demand forecast, rental rates forecast

In the successful real estate market of 2007-2008 a great number of office centers and office premises in mixed-use complexes were announced to be delivered in 2009-2012. Due to the crisis, completion of many projects were either postponed for a later periods or put on hold. It is undesirable to make any forecast based on the planned volumes of completion, and the forecast below is created by an item-by-item forecast of properties under construction.

Index GBA, 000s GLA, 000s Total projected volume of completions in 2012 (without transfers from 999.3 758.4 previous periods) Total volume of construction completion transfers from previous periods 641 508.7 Total projected volume of completions 1,640.3 1,267.1 Projected volume of construction commissioning in 2012 340 270 Share in the project volume 21% 21% Projected amount of supply as at the end of 2012 2,542 1,796 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

The growth of market rental rates in business centers is forecasted according to the following scenarios: Pessimistic scenario – the continuing economic crisis, political storm due to the elections, a drop of oil prices as a consequence of decrease of other economic indices and business activity. A new decrease of demand for office premises, decrease of rental rates, increase of vacancy rates. According to this very pessimistic scenario we foresee a decrease of rental rates in 2012 of between “-5%” – “-10%”. Optimistic scenario – This scenario is predicated on a transition from the stabilization stage to a growth stage in the economy in the beginning of 2012. The beginning of stabilized growth. A gradual increase of occupancy as a result of growth in demand , rental rates, which have largely been stable, now begin rapid growth once more, as a result, in this scenario we forsee achange of rental rates in 2012 of between “+10%” – “+15%”. Realistic scenario – Some uncertainty in the first half of 2012, an expensive debt market, but the continuing stabilization of the economy toward the end of 2012. Fluctuations and smooth growth of the main economic indices and rental rates when examined over the whole year. A return to a “landlords’ market” in the middle of 2012. Possible indexation of rental rates following the results of 2011, resulting in a growth of rental rates in 2012 of “+8%” – “+10%”.

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SAINT-PETERSBURG STREET-RETAIL MARKET OVERVIEW

Volume and characteristic of supply

Supply of commercial premises on the ground floors of office and residential building can be divided into premises situated in retail corridors and premises situated out of retail corridors.

Premises in retail corridors.

11 retail corridors can be identified in Saint-Petersburg. They can be also divided into groups depending on their location: Prestigious – historically the most attractive and the premium segment, these retail corridors are located in the central districts – Nevskiy Avenue, Bolshoy Avenue, Sredniy Avenue. Total volume of supply in the prestigious corridors has increased in 2011 by 3,680 sqm. However the area of offered for lease premises has decreased only in the Bolshoy Avenue. The quantity and area of supplied premises on Nevskiy Avenue decreasing until the middle of 2011, but since then there has been a significant increase. Firstly, it is due to rental growth. During the crisis period in 2008-2009 the rental rates on Nevskiy Avenue were seriously understated. This led to the arrival of a great number of mass-market and food-chain retailers and after real estate market recovery it became economically unprofitable to rent a space here. Volume and quantity dynamics in the prestigious retail corridors Area, sqm Quantity, items 14000 45 12000 40 40 12000 35 10000 30 7068 24 8000 25 20 17 6000 15 4500 3590 15 4000 10 8 10 2500 2000 2320 3 5 3 350 500 1000 6 0 0 The end of 2010 The first half of 2011 The end of 2011 The end of 2010 The first half of 2011 The end of 2011

Nevskiy prospekt Bolshoy pr. P.C. Sredniy pr. V.O. Nevskiy prospekt Bolshoy pr. P.C. Sredniy pr. V.O.

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Central – these retail corridors are also situated in the central part of the city but are considered less prestigious – Sadovaya Street, 6th and 7th line of Vasilievskiy Ostrov, Vladimirskiy Avenue. The increase of the supplied premises in 2011 is negligible and amounted to 1,350 sqm and +10 supply offers.

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Volume and quantity dynamics in the central retail corridors Area, sqm Quantity, items 3000 11 10 2500 10 10 2500 2000 9 1800 2000 8 1700 7 7 1500 66 1100 1100 6 5 1000 700 5 5 850 500 4 4 4 400 3 0 2 The end of 2010 The first half of 2011 The end of 2011 The end of 2010 The first half of 2011 The end of 2011

6‐7 line V.O. Sadovaya st. Vladimirskiy pr. 6‐7 line V.O. Sadovaya st. Vladimirskiy pr.

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost Suburban – Moskovskiy Avenue, Prosvesheniya Avenue, Leninskiy Avenue, Bolshevikov Avenue, Komendantskiy Avenue. During 2011 in the suburban retail corridors the volume of supply increased by 1,500 sqm or 25 supply offers. The most increase was witnessed at Leninskiy Avenue (1,300 sqm) and the most amount of supply offers at Komendantskiy Avenue (8 offers).

Volume and quantity dynamics in the suburban retail corridors Area, sqm Quantity, items 12000 11000 30 28 25 10000 25 21

8000 20 17 15 16 13 6000 5100 5000 12 13 10 3700 9 4000 3800 10 3500 2500 3700 5 3200 6 5 2000 1750 4 1200 1500 0 500 700 The end of 2010 The first half of 2011 The end of 2011 0 The end of 2010 The first half of 2011 The end of 2011 Moskovskiy prosp. pr. Prosvesheniya Leninskiy pr. Moskovskiy prosp. pr. Prosvesheniya Leninskiy pr. pr. Bolshevikov Komendantskiy pr. pr. Bolshevikov Komendantskiy pr. Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

The characteristic of demand

Main characteristics of demand for street-retail premises:  Food-chains still remain the most active segment in the leasing street retail premises. High level of demand is shown by supermarkets both single and network. The required area of the premises is from 250 sqm to 500 sqm and the favorable location is in residential districts with a high level of activity in new residential construction, areas near metro stations, places with high pedestrian footfalls.  The second place is occupied by sole proprietors working in the service sector. They require premises with an area in the range of 50-80 sqm.  The demand for and consequently presence of chain retailers (clothes, shoes, accessories) has decreased. These companies are gradually moving to retail centers.  More and more regional banks and food chains are renting premises.  During 2011 there was an increase in demand for owner occupier retail premises on the ground floors of buildings. The customers are represented by food chains but there is also a high share of investment transactions when the premises are bought for future rent. The most preferable area amounts to 500-1,500 sqm.

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011

Average rental rates

At the end of 2011 the most expensive premises were located in the following corridors: Nevskiy Avnue (average rental rate – 7,000 rubles per sqm per month), Bolshoy Avenue (average rental rate – 5,000 rubles per sqm per month), Vladimirskiy Avenue (average rental rate – 4,300 rubles per sqm per month). The rental rates in the above mentioned corridors are higher (20-25%) than the rental rates as at the end of the previous year:  The rental rates in the following corridors – 6th and 7th line of Vasilievskiy Ostrov, Sadovaya Street, Sredniy Avenue are in the range of 2,000-5,000 rubles per sqm per month.  The average rental rates at Prosvesheniya Avenue, Leninskiy Avenue and Bolshevikov Avenue amount to 2,000-4,000 rubles per sqm per month.  The rental rates at Komendantskiy and Moskovsiy Avenues are in the range of 1,500- 4,000 rubles per sqm per month.  The rental rate for retail premises outside of the historic city center and main retail corridors is in the range of 800 – 1,200 rubles per sqm per month.  Sales prices vary depending on location. The most expensive is Nevskiy Avenue in the range of 250,000 – 800,000 RUR per sqm. The sale prices in the central districts are in the range of 150,000-350,000 rubles per sqm, in the secondary districts – 110,000- 200,000 rubles per sqm, outside of retail corridors – 80,000-120,000 rubles per sqm

Dynamics of average rental rates in prestigious retail corridors, rubles per sqm per month including OPEX and VAT 8000 7500

7000 6000 6000 5500

4750 5000

4000 3500 3650

3750 3000 3500 3000 2000 The end of 2010 The first half of 2011 The end of 2011

Nevskiy prospekt Bolshoy pr. P.C. Sredniy pr. V.O.

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

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Dynamics of average rental rates in prestigious retail corridors, rubles per sqm per month including OPEX and VAT Corridor End of 2010 H1 2011 H2 2011

Nevskiy Avenue 3,000 – 9,000 1,700 – 9,300 4,000 – 11,000 Bolshoy Avenue 2,500 – 4,500 2,500 – 4,800 2,500 – 7,000 Sredniy Avenue 2,500 – 3,500 2,000 – 5,000 2,500 – 5,000 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Dynamics of average rental rates in central retail corridors, rubles per sqm per month including OPEX and VAT

5500 5000 5000 4500 4250 4350 4000 3700 3500 3500 3000 3200 3400 2500 3000 2500 2000 1500 1000 The end of 2010 The first half of 2011 The end of 2011

6‐7 line V.O. Sadovaya st. Vladimirskiy pr.

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Dynamics of average rental rates in central retail corridors, rubles per sqm per month including OPEX and VAT Corridor End of 2010 H1 2011 H2 2011

6-7 lineo f V.O. 3500 - 6500 2000-3000 2500-4500 Sadovaya Street 2500 - 6200 1800-5600 1800-5000 Vladimirskiy Avenue 1800 - 4200 1500 -4900 3000-5500 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

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Dynamics of average rental rates in suburban retail corridors, rubles per sqm per month including OPEX and VAT 4500 4100

4000

3500 3300 3100 3250 3000 3000 3000 3000 2750 2450 2500 2300 2250 2250 2000 2150 The end of 2010 The first half of 2011 The end of 2011

Moskovskiy prosp. pr. Prosvesheniya Leninskiy pr. pr. Bolshevikov Komendantskiy pr.

Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Dynamics of average rental rates in suburban retail corridors, rubles per sqm per month including OPEX and VAT Corridor End of 2010 H1 2011 H2 2011

Moskovskiy Avenue 2000 - 6200 1600 - 5000 1500-4000 Prosvesheniya Avenue 1000 - 3500 1300 -3000 2000-4000 Leninskiy Avenue 1100 - 3500 900-3600 1000-5000 Bolshevikov Avenue 2000 - 4000 2500-3500 3000-3500 Komendantskiy Avenye 1200 - 5000 900 - 4000 1500-4000 Source: Konsaltingoviy Tsentr Peterburgskaya Nedvizhimost

Supply dynamics forecast and rental rates forecast

Unlike the office market and the market of premises in retail centers the street-retail premises market is more fast-moving and flexible and adapts faster to changes in the economy. If the current economic and political trends remain the same there will be following change in supply in 2012:  Prestigious corridors – gradual occupancy of vacant premises on Nevskiy Avenue, decrease of volume of supply to 3,000-5,000 sqm. Average volume of supply for this segment will amount to 1,500-2,000 sqm.  Central corridors – average supply volume for this segment will amount to 1,000-1,500 sqm.  Suburban corridors – average supply volume – 700-1,500 sqm if the current trends in the growth of demand remain the same. Growth of rental rates is expected at 10-15% in 2012.

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MOSCOW MARKET OVERVIEW

Overview

2011 was an exceptionally good year for every sector of commercial real estate. However, in H2 2011 the market began to slowdown and by the end of theyear the market became becalmed. According to our analysis, in 2011 the commercial real estate market reached the top of the cycle and in 2012 it will be subject to a downturn. While the overall market correction will not be deeper than –5%, secondary properties will be highly exposed to risks, while prime properties will become even more expensive, supported by development restrictions in the city centre. Tenant activity will remain high, but Net Absorption will be under pressure. So, it is likely that the current 13% vacancy rate will remain unchanged for some time.

Structure of Moscow office stock and Available space Class A 2.3 mn sq m

Vacant (Classes A and B)

Class B 10.3 mn sq m

Source: Cushman & Wakefield

Supply

New construction in 2011 was the lowest since 2003. But this is good news for the market, because it means that there is a balance between supply and demand and that a large portion of incomplete projects started during the construction boom are already delivered. During 2011 construction activity has remained low, this trend will continue and the threat of oversupply will diminish. Deliveries of class A and B offices became almost equal - another sign of market maturity. We expect that in future class A deliveries will outpace class B. For 2012-2015 new construction will be approximately 500 000 sq. m per year. This will be sufficient to balance the market.

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New construction in Moscow. Actual and forecast, ‘000 sq m

2 100

1 800

1 500

1 200

900

600

300

0 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 F2012 2011 2011 2011 2011 Class B (B+ and B-) Class A Source: Cushman & Wakefield

Restrictions placed by the Moscow Administration have influenced this process to some extent, however, the construction slowdown is driven mainly by market forces. The development of “New Moscow” may boost construction, but this will not take place before 2014.

A and B class vacancy rate in Moscow Vacancy rate (%) and availability (sqm)by submarkets

25% Class A 6% SUB 18% Class B 20,0% 19,0% SW 16% 18,2% 19,0% 20% 17,8% 16% NW 15% 87% NE 13% SE 23% 15% 12,0% 12,3% 11,3% 11,4% 11,0% KUT 17% 11% SOK 16% 10% 9% SCH 14% 35% BAS 7% 5% 16% NOV 9% 0% FRU 6% TAG 17% 0% 21% CTY 11% 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 F2012 25% ZAM 3% 2011 2011 2011 2011 7% BEL 6% 21% CBD 6% Class A Class B (B+ and B-) 100K 75K 50K 25K 0K 0K 25K 50K 75K 100K 125K 150K 175K 200K

Source: Cushman & Wakefield

Demand

In 2011 we saw a major shift in office space demand. For years net Absorption was 80-100% of Gross Absorption, or Take-Up. Presently most tenants already reside in quality buildings, so even if they change offices they free up older space. On other hand, there are over 11 million sq. m of occupied office space in Moscow with average lease lengths of 3-5 years, which means a relatively high rotation of tenants and significant Take-Up volume. We expect that in coming years take up will be well over 1.1 million sq. m and net absorption will account for less than one half of this figure.

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A high rotation rate will mean that even with a 13% overall market vacancy rate landlords will have a chance to lease their buildings. Landlords will need to be more flexible and creative in the competition for tenants in the market.

Office take up and net absorption in Moscow, mln Take-up by submarkets, sqm sqm

Class ASUB Class B 1,91 SW 1,77 1,72 NW NE 1,52 SE 1,26 KUT 1,19 SOK SCH 0,97 BAS 0,74 NOV 0,67 ` ` FRU 0,45 TA G CTY ZAM BEL 2007 2008 2009 2010 2011 CBD Take-up Absorption 150K 125K 100K 75K 50K 25K 0K 0K 25K 50K 75K 100K 125K 150K

Source: Cushman & Wakefield

Rental Rates

Rental rates in 2011 demonstrated 11% growth with 13% in A class and 10% in B Class. While availability on the market is high, quality product remain scarce. As a result class A offices in the CBD became 18% more expensive. Offices located outside the Moscow Ring Road became 10% cheaper. In 2012 the trend will probably change and the market will show a 5-10% correction with class A on the lower end and B—on the higher. Prime buildings will outperform the market by 5-10% growth due to scarcity of supply. Class B offices in secondary locations will be exposed to correction risk. We anticipate that in 2013 the market will start recovering and by 2014 we will see strong rental growth, supported by increasing demand and diminishing vacancy rates.

A and B Class weighted average net rental rate, USD per sqm

$1 200

$1 000

$800

$600

$400

$200

$0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 F2012 2011 2011 2011 2011 Class A Class B (B+ and B-) Source: Cushman & Wakefield

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Moscow office submarkets

Source: Cushman & Wakefield

Prime Central Other Trade Areas CBD Central Business FRU Frunzensky NW North-West CTY Moscow City SCH Shabolovka NE North-East BEL Belorussky SOK Sokol SW South-West ZAM Zamoskvorechie TAG Tagansky SE South-East NOV Novoslobodsky SUB Suburbs BAS Basmanny KUT Kutuzovsky

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MOSCOW RESIDENTIAL MARKET OVERVIEW

Summarizing the results of 2011, about 62.3 million square meters of residential premises were put into operation in Russia (source – Rosstat), which practically corresponds to planned volumes and is 7% higher in comparison with the last year. The leader for 11 months of 2011, in terms of Russian residential construction, is the Moscow Region, where about 4.9 million square meters of residential premises were built and put into operation. Second place is taken by the Republic of Tatarstana and the third place is taken by Saint- Petersburg. For the January-November of 2011 about 1.2 million square meters of residential premises were built in Moscow. At the end of 2011, according to preliminary data of the Committee of Urban Policy and Construction of Moscow, this indicator amounted about 2 million square meters, which was only 80% of the planned volumes. During 2011 the market of new residential buildings was actively replenished by new objects of primarily economy class and comfort class. Business class residential buildings entered the market at low rates. As at the end of 2011 the volume of supply in the market amounted to 218 schemes, or about 1 million square meters, including the segment of apartments and luxury buildings. There were no fundamental changes in the structure of supply compared to the previous periods. Demand for residential real estate market of Moscow in 2011 was high, but the excitement was not observed in any segment: in spite of the decline in residential construction and projections about the future shortage of supply, buyers were rather quiet. The main driver of demand in 2011 was mortgage lending, which is easily explained: the rates declined, but the prices have not grown to pre- crisis price levels. One of the notable trends in 2011 was the activization of investors. However, investment demand in the Moscow market was not speculative in nature: it was quite difficult to earn on a rapid increase in prices in Moscow in 2011. Investors were focused on long-term investments, including savings, especially against the background of growing instability in financial markets. The average offer price in the market of new residential buildings as of the end of 2011 comprised 182,250 rubles per sqm (or $5,730). As a result of 2011 the average price of new residential buildings in Moscow grew by 15.2% and amounted 238.9 thousand rubles per sqm, including the elite class. High prices for new residential buildings in Moscow are explained by the low level of new supply and a consistently high level of demand, as well as a large share of elite real estate, which was significantly higher all other segments. As of December 2011 the average price in the primary market amounted to 66,900 rubles ($2,104) per square meter.

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Business Class Residential Market Overview

Overview

During 2011 six new complexes of business-class with apartments and flats with total area of about 80 thousand square meters (more than 800 apartments and flats) came into the market. Two of the six new projects are implemented in the format of apartments for temporary accomodation. For comparison in 2010 five new complexes entered the market (source: IntermarkSavills). By the end of the year 9 projects were completely sold out. Thus, at the end of December 2011, the primary sales in the segment of business-class residential buildings were conducted in 29 residential complexes, which together comprise about 14.1 thousand flats with a total area of approximately 1.5 million sqm. According to the geographic structure of the new construction, the largest volume of business class flats is represented in the South-West Administrative District of Moscow - about 25%. This is followed by the Western Administrative Districst and the South Administrative District - 20% and 15% of flats, respectively.

Distribution of business class projects under construction by districts, Dec 2011

Source: IntermarkSavills

To date, 40% of business-class complexes for sale have already been built or are at the final stages of construction. The sales in three earlier frozen projects remain suspended. Other sites are under active construction and installation works.

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Distribution of business class projects by construction stage, Dec 2011

Source: IntermarkSavills

According to IntermarkSavills, in 2011 the actual capacity of the primary city market of business- class residential real esate (taking into account only the actual deals) was about 157 thousand square meters, or about 1,615 of sold apartments in new residential buildings. Thus, the money turnover of this market segment for the year amounted to about $0.95 billion (together with parking spaces - more than $1 billion). Compared to last year the average monthly number of transactions within primary business-class residential objects increased by 28%, compared to 2009 - by 52%. According to the geograpic structurу of business class flat transactions, the South Administrative District is dominates due to quick sales of the project “Sky Fort” together with the North-West Administrative District - 25% and 23% of transactions, respectively. In the Central Administartive District the following projects were popular - “Nikolaevskiy Dom” and “Clerkenwell House” – more than 40% of all transactions in the district. Another leader of demand for business-class accommodations in the Central District is the residential complex “Angliyskiy kvartal”. This complex entered the market in 2010 and is currently almost sold out.

Demand

Analysis of the distribution of consumer preferences on the number of rooms shows that the most purchased business class flats in 2011 were 2 - and 3-room flats with an area up to 120 sqm.

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Demand structure by flats area, 2011

Source: IntermarkSavills

In 2011 consumers continued to choose ‘functional’ flats without ‘excessive square footage’. In 2010 the average area of purchased business class flat comprised 109 sqm, in the past year - 97 sqm. One of the main reasons of the ‘compaction’ of business-class housing – was activization of demand for one-bedroom flats. Almost one of five deals in the segment of business-class housing in 2011 was completed with one-bedroom flat purchases. Currently the existing supply for such apartments does not cover the potential annual demand. Another factor explaining the decrease in the area of purchased flats, is the enterance to the market of apartment complexes, which offer a large number of small apartments – compact analogues of flats. At the same time apartments might be significantly cheaper - the average price per square meter is 20% lower compared with apartments in the same area.

Supply

According to IntermarkSavills, at the end of 2011 the volume of primary supply for business-class housing in Moscow amounted to about 2,190 flats and 160 apartments. Taken together, this is about 261 thousand sqm. In 70% of business-class complexes about 40% of available units remained unsold. To date, approximately one third of the primary supply is concentrated in four large projects (there are 29 projects in the market in total). In the budget structure of the primary supply, the majority of premises are those from $250 to $750 thousand. Flats with a budget of less than a quarter of a million US dollars in the primary business class housing market – are a great rarity. The average price of business class flat in Moscow is $754 thousand - a quarter more than in 2010. According to the geographic structure of the current supply the South-Western Administrative District of Moscow is leading - a third of all apartments in new buildings is located in the district. Leadership of the district in the geographic structure is explained by traditional popularity among buyers and the active construction in the area.

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The primary supply in the Central Administrative District in 2011 was supplemented by new apartment’s project on Komsomolskiy Avenue (“Nikolaevskiy Dom” and “Clerkenwell House”) and by one complex on Mytnaya Street (“Sky House”).

Geographic structure of supply by districts, Dec 2011

Source: IntermarkSavills

The largest number of flats offered for sale – 3-bedroom, then 2-bedroom flats. Average number of rooms in the flats offered for sale comprised 2.7 rooms as of the end of the year.

Structure of supply by number of rooms, Dec 2011

Source: IntermarkSavills

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Prices

At the end of the year the weighted average price of all business-class projects was around $6,800 per sqm. During the year, growth in average prices comprised 15%. Fast-moving price growth in 2011 is explained by the growing confidence of developers in a further increase of purchasing power. In addition, price growth is supported by technical factors – the "removal" of the most liquid and low-cost supply and the increase in the number of completions of the majority of construction projects in the market. In the current pricing structure of supply more than half of the flats are offered at $3,500 - $6,000 per sqm. Compared to 2010, the price structure changed significantly - in the past the share of these offers comprised 77%. During the year none of the developers announced a decrease of prices, which is explained by growing demand. In order to increase the pace of sales some developers offered small discounts in the traditionally active spring and autumn months. The highest average prices for business class flats today may be found in new buildings in the Central District - about $8,700 per sqm. In this district the growth was about 29% due to the release of projects with a high level of completion and corresponding price level. However, prices in this area did not overcome the pre-crisis level (while the average price of new buildings in the center was $9,600 per sqm). The second highest price level for business-class buildings is in the South-Western Administrative District.

Forecasts

In 2012, the demand for city business class residential premises will be fairly stable, and in the first two quarters will remain at the average indicators of the year (130-140 transactions per month). The main reason is the diversity of the existing supply, which provides a choice of flats and apartments in a wide price range. In the second half of 2012, it is possible that the market will begin to accelerate, and the number of transactions will increase up to 160-200 sales per month. This will be supported by new projects entering the market with a wide choice of flats and reasonable pricing. The growth potential for the weighted average dollar price of supply for 2012 is estimated at 15- 20%. At the same time, demand in this segment is much less price elastic than for economy-class housing. However, together with the recovery of demand we do not see in the market the so-called “Projects-discounters”, where customers at the early stages of construction are offered very large discounts. The actual primary supply will be increased by 20-25% compared with the end of 2011. New supply will be added by both reserved volumes in projects already under construction, as well as new release. During 2012 the market will see 8-10 new complexes (at least 4 of them – apartment’s projects) - in the Central District, the South-Western Administrative District, the Western Administrative District and the North District. Rising demand and prices are reviving the interest of developers for construction of large business class projects (more than 300 apartments). In the coming year at least two large projects will enter the market.

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Apartments Market Overview

Apartments are premises for temporary living and according to their characteristics tend to differ little from the usual flats. The main differences lie in the legal status (from a legal point of view apartments are non-residential premises) and the impossibility of obtaining a residence permit. Often, apartments are included into multifunctional complexes, together with office, hotel or retail premises. However, there are also separate apartment’s complexes.

Dynamics of prices for apartments in MMBC “Moscow – City” 2010 – 2011 years

Source: IntermarkSavills

Budget structure of demand for apartments in MMBC “Moscow – City” 2010 – 1011 years

Source: IntermarkSavills

Apartments as part of multifunctional complexes are very attractive to developers. First of all, developers can sell them without waiting for construction completion, which is greatly improving the economics of the project. Secondly, apartments are not subject to regulatory restrictions on building density, insolation and social infrastructure provision, which are usually applicable to residential buildings. Other things being equal on the same land plot it is possible to build 1.5-2 times more apartments than flats.

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Those who buy luxury apartments or suites of business-class do not worry about their special legal status. More over these kinds of buyers do not worry also about the problem of registration. Much more important is the status of the residential building, living in comfort and a homogeneous social environment. According to IntermarkSavills, in December 2011 the primary market accounted for about 300 apartments of premium and business class with a total area of 40 thousand sqm. In the total supply more than 60% are business class apartments, about 40% - premium class apartments. Regarding the number of premium class apartments in the market, the leading position is taken by the MIBC “Moscow-City”, which currently offers about 120 apartments in the primary and secondary markets. There is also another complex of premium class – “Residence Znamenka”, which offers for sale 6 apartments with a total area of 1,000 sqm. As of today, the “Moscow-City” premium class apartments are available in three complexes: “Capital City”, “Federation Tower”, “Imperia Tower”. The bulk of the current supply in the primary market of apartments in the “Moscow City” is formed by the complex “Capital City”. As a result of 2011, the take-up volume of apartments in the primary market amounted to 20,000 sqm. Currently, the total amount of apartments in completed buildings or in projects under construction in “Moscow-City” comprises 200,000 sqm. 30,000 of these are presented in the primary market, more than 115,000 sqm are sold. Apartments areas differ widely. At this point in the projects structure, apartments with an area between 150 to 250 square meters dominate (76%), and the average area of the apartment is about 190 sqm. Apartments are offered at prices ranging from $10,000 to $30,000 per sqm (the weighted average price is about $13.2 thousand per sqm). Most apartments are sold with finishings. In December 2011 the primary market of business-class apartments offered six projects, with a total area of almost 14 thousand sqm. In autumn 2011 the primary market was bolstered with a new project – a complex of the ‘loft style’ located at the Komsomolskiy Avenue, 42. One of the main advantages of apartment complexes of business class is the presence of a large number of compact flats up to 80 sqm (69% of all apartments in the primary market). The average area of an apartment is about 77 sqm, while the average size of flats in residential complexes of business class - 114 sqm (more than 48%). In the budget structure the leading position is taken by apartments with prices up to $0.75 million (83% of total supply).

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Supply structure by apartment’s area, Demand structure by apartment’s area, Dec 2011 Dec 2011

Source: IntermarkSavills

Budget structure of supply, Dec 2011 Price structure of demand, Dec 2011

Source: IntermarkSavills

Future prospects for this segment are impressive. In the next two years, apartments supply may increase significantly – it is expected that sales will start in at least 3 large-scale apartment projects in Moscow-City. In the first half of 2012 it is expected that the entrance to the market of about 20,000 sqm of “Mercury City Tower” project. Prior to 2015, more than 250 thousand square meters is expected to enter the market.

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Economy Class Residential Market Overview

Overview

The Moscow real estate market in 2011 was eventful, but poor in terms of results. It would seem that this year there were many reasons for the resumption of real estate and construction activity as it was in the past, in the pre-crisis years. This is the theme of the expansion of Moscow, and the beginning of the pre-election race, and the “fever” in the financial markets, the sharp jump of the dollar exchange rate and the consequent escape from risk, and the fear of a second wave of crisis, and many other things. In general, there were a lot of reasons for the increased interest in real estate in 2011, but it has not resulted in any significant increase in the number of transactions, or in a substantial increase in prices. According to analytical center www.irn.ru, price growth for residential real estate in Moscow in 2011 comprised 9.5%. The price index increased from $4,548 per sqm in December 2010 up to $4,979 per sqm in December 2011. Real estate magazine www.metrinfo.ru shows very similar figures: the ruble prices for flats in Moscow expanded during the year from 140,000 rubles per sqm to about 155,000 rubles. In other words, the increase of prices this year amounted to about 10%, which is above the estimated inflation rate. According to other analysts (Miel), a significant growth was indicated in the segment of economy class new residential premises - 29.3% in ruble terms. This is explained by a continuing shortage of supply and an increase in the quality of new buildings of this class. Moscow is already experiencing a shortage of new residential buildings, especially in the economy class segment. Given the decline in construction volumes, the market did not see new projects in 2011. Now, the volume of supply of the economy class flats is no more than 3,000 units. Analysis of the price dynamic depending on the types of flats, districts and micro-districts of Moscow allows for drawing conclusions about what were the market drivers in 2011. The leaders of growth are the modern monolith-brick houses, and then there are panel residential buildings, either modern or late-Soviet period. The price dynamic depending on the number of rooms is also interesting: price for large flats, three-room flats and multi-room flats outrun prices for the small units – two- and one- bedroom flats. So, the driver of growth this year was modern high-quality residential premises in good buildings with a large area rather than the most liquid and most affordable small flats.

Flats in Moscow Dec 11 Dec 10 1-bedroom flats 4,919 rouble 8.1% 2-bedroom flats 4,937 rouble 9.3% 3-bedroom flats 4,850 rouble 9.5% Multi-bedroom flats 5,304 rouble 12.5% Source: www.irn.ru

So, investments flowed primarily into good residential projects, which looks more prospective and corresponds to needs of people with available funds. This further increased the gap between ‘expensive’ and ‘cheap’ residential real estate, and, apparently, in the future this gap will only increase.

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Apartments of elite class & low-priced flats, Moscow Dec 11 Dec 10 Price index of ‘expensive’ residential real estate (20% of the most expensive flats) 7,238 9.5% Price index of ‘cheap’ residential real estate (20% of the low-priced flats) 3,761 8.9% The bundle index (ratio of the price index of ‘expensive’ residential real estate to the price 1.92 0.6% index of ‘cheap’ residential real estate) Source: www.irn.ru

The leader in the increase of prices in 2011 was the Western District of Moscow, where the most expensive buildings and iconic residential projects of business class are located. This district became a point of attraction for wealthy people in recent years. The second place is taken by the South-Eastern District. In terms of price growth the leading districts are those where a concentration of modern new buildings is high, no matter which class it is –elite class or good economy class. Among these areas are Khamovniki, Frunzenskaya, Sportivnaya, Yakimanka, Novokuznetskaya, Polyanka, Tretyakovskaya, Krylatskoye, Yugo-Zapadnaya, Troparevo-Nikulino, Octyabr’skoe Pole, VDNKh, Medvedkovo, Teply Stan, Marino, Bratislavskaya, Novokosino, Kosino-Ukhtomsky and others.

Moscow Region. Supply

Last year, the Moscow market of new residential construction overcame post-crisis effects and has continued its active development. The areas of the Moscow Region in 2011 were characterized by high construction volumes and activity, which was based on the realization of large-scale residential projects of various formats, including low- rise and middle-rise construction. During the year, the overal supply in the Moscow Region increased by 1.7 times, new supply accounted for more than 500 addresses, including projects of the “New Moscow” also. As of December 2011 the volume of supply comprised more than 900 residential buildings (an increase over Q4 2011 is 19%) or 38,350 flats (25%, respectively), or more than 4.2 million sqm in total. Comfort-class residential buildings (70%) dominate among the new projects entering the market, a quarter of new supply (25%) belongs to new economy class, mostly located in areas adjacent to the MKAD, the share of business class properties accounted to 5%. Despite the substantial input of new residential properties, the structure of supply by classes has not changed significantly.

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Supply structure of supply of new residential premises in the Moscow Region by classes, Dec 2011

Business: 4% Econom: 28%

Comfort: 68%

Source: Blackwood

Substantial construction activity is being conducted on the territories of Moscow vicinity, where major projects are of complex development. In the segment of low-rise buildings (up to 6 storeys) sales started in large residential complexes such as “Aristovo-Mitino” (Krasnogorskiy District, Aristovo Village), “Vostochniy” (Istra town), “Right riverside -2”( Khimki). During the year the number of low-rise buildings increased by more than 2.5 times. Middle-rise houses (6-10 storeys) are presented in residential complexes “Gorod Naberezhnykh” and “Lesnoy Ugolok” (Khimki), “Kvartal Gal’tchino” (Domodedovo). The largest volume of new supply is presented in the segment of multistorey buildings, including new projects entering the market in the 4th quarter of 2011 “Garden Park Edalgo” in Kommunarka village, “New Domodedovo” in the Domodedovo town and “Schitnikovo B” in Balashikha town. The majority of new residential properties are concentrated within a distance of 25-35 km from the MKAD. The highest construction activity is concentrated in Vidnoe town, Odintsovo town, Krasnogorsk town, as well as on the territory of “New Moscow”.

Moscow Region. Demand

During the past year the residential real estate market of the Moscow Region was characterized by high buying activity - annual rates of registered transactions are substantially higher than the values of the past years. During the year, the number of registered transactions was growing; maximum values were recorded in Q4 2011 - 104,408 transactions, including 18,638 equity transactions on equity participation agreements. Total number of transactions reached 361,708, including mortgages - 120,207 deals (33% of the total). The number of transactions in accordance with equity participation agreements comprised 40,284. The increased activity is caused by various factors, among which are the following:  increase of the attractiveness of residential real estate in the Moscow Region, in the context of increasing lack of supply in the city;  start of gradual price growth;  liberalization of mortgage lending;

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 activization of private investors against the background of uncertainty in financial markets;  growth of demand in residential building of the“New Moscow” area.

Moscow Region. Prices

The price dynamics in the primary market of the Moscow Region during 2011 was different. In the first half of the year ruble prices for new residential premises remained generally stable, but since the end of summer growth comprised 1-2% per month. At the end of last year ruble prices in new residential buildings of the Moscow Region grew by 7-8% and came close to pre-crisis levels. As of December 2011 the average price in the primary market amounted to 66,900 rubles ($2,104) per square meter. Growth in dollars comprised 4% (source – Blackwood).

Moscow Region. Supply volumes and average weighted price by direction, Dec 2011

Source: Miel

Moscow Region. Supply volumes and average weighted price by types of buldings, Dec 2011

Source: Miel

The increase in asking prices for new residential premises was recorded in all market segments. The largest growth was observed in economy class flats (an increase of 10%), and as of December 2011 the average asking price was 68,200 rubles per sqm. Prices in comfort class actually remained the same, corresponding to 65,400 rubles per sqm; in comparison to December 2010 these prices increased by 2%. Prices for business class apartments increased by 7-8%, and amounted about 115,500 rubles per sqm.

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The increase in the asking price during the year was noted in all territorial zones of the Moscow Region - the annual price growth was recorded at the level of 2-9% depending on distance from Moscow. Announcement of the accession of territories between the Kievskoe/Borovskoe Highway and the Varshavskoe Highway to the capital has caused increased interest in new residential buildings of “New Moscow” - for the summer months, the asking prices on average rose by 18%, individual projects showed an increase of up to 23%. However, the price increase was one-time-only, and since September there were no significant changes in price dynamics. The most expensive towns of the Moscow Region, among which are traditionally - Khimki (85,700 rubles per sqm), Reutov (84,900 rubles per sq), Mytishchi (81,100 rubles per sqm) and Krasnogorsk (77,900 rubles per sqm) - were supplemented by another towns of the “New Moscow” - Moscovskiy town (80,200 rubles per sqm) and Troitsk (90,000 rubles per sqm).

Moscow Region. Forecasts

In 2011 a high degree of development activity in the residential market of Moscow Region resulted in a significant increase in supply. We observe increasing development of small- and middle-storey construction. Together with a growth in buying activity in the second half of the year, the price dynamic was positive, despite the substantial appearance of the new offers in the market. With a large choice and variety of offers the prices for new residential properties had been growing because of the progress of construction, and high rates of realization of the most liquid residential projects. Changing of the status of being connected new areas to the capital area in 2012 will not significantly affect the volumes of the primary market of the Moscow Region. Supply of new residential buildings of “New Moscow” comprises only 8% of the total volume. In addition, the potential of the Moscow Region allows the implementation of large-scale residential projects; it is expected that several new residential projects will enter the market - and the active development of Moscow Region areas will continue. Considering the price situation in the primary market of Moscow Region, it is likely that the trends of the past year will persist. Demand for residential premises in the Moscow Region will remain at a relatively high level, and together with a large choice and variety of offers, this will ensure the growth of prices in the range of 5-10%. Miel company also states that in 2012 new large-scale projects will enter the market. The decline of construction volumes within the existing boundaries of Moscow led to a shift of demand to the residential market of Moscow Region, especially for the build segments of economy class and middle class. In the future, it is expected that the current trends will remain the same and the price dynamics will remain positive at 1-2% per month.

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YEKATERINBURG RESIDENTIAL PRIMIARY MARKET OVERVIEW

General Information

At the end of 2011 a gradual recovery of the volumes of residential premises under construction continued after a significant reduction in the beginning of the year. However, even together with a steadily high demand for new residential buidings, the pace of this process has remained rather modest. During the year, many developers have shifted their activity to new projects that came to the market. Currently, however, we observe a substitution effect, not an increase in residential construction volumes.

Volumes of residential premises under construction, thousand sqm

Source: Analytical department RITS UPN The total volume of residential premises at different stages of construction in Yekaterinburg as of 4th Q 2011 comprises 1,780 thousand square meters. The share of the "frozen" projects decreased to 8%, which means 138 thousand square meters. The volume of active construction projects increased up to 1,643 thousand square meters. For the last 2-3 years many companies reduced the pace of their development, and decreased the amount of residential projects under construction because of economic problems and the downturn in the housing market in 2008-2009. The current increase in activity of individual market participants can be attributed to a phase of recovery and return to the previous volumes of construction. In the second half of 2011 the market was faced with a noticeable shortage of supply in many local areas. Limited choice in new residential buildings and a reduction of supply in the secondary market led to an acceleration of prices. Some companies (mostly market leaders) in 2011 demonstrated a high rates of construction activity. Activization of construction activity from their side was balanced by passive behavior of another group of developers who were not ready to increase volumes of construction. As a result, construction volumes currently are in the range of 1.2-1.7 million square meters. Commissioning of a significant number of residential projects under construction at the end of 2011 will reduce this figure to the lower boundary of this corridor.

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Volumes of residential premises under construction by types, thousand sqm December March June September December Change per year, % 2010 2011 2011 2011 2011 Total 1,720 1,285 1,463 1,561 1,643 -4 Economy 944 651 761 859 1,003 6 Comfort 688 573 641 641 597 -13 Business 88 62 62 62 43 -51 Elite 0 0 0 0 0 - Source: Analytical department RITS UPN The share of "comfort" and "business" class residential complexes continue to decrease because of an increase of projects oriented toward mass market buyers. This increase of economy class projects might be explained not only by market demand, but also by the territorial development of the market. As individual projects in existing developed areas of the town cannot provide the required increase of supply, construction volumes and activity have gradually moved to the suburbs, where the main factor for attracting buyers is the price. In general, the present structure of supply meets market demand.

Structure of residential premises under construction by types, Q4 2011, %

Source: Analytical department RITS UPN In 2011, the number of "frozen" projects declined and returned to the pre-crisis level. An important indicator for the current development of Yekaterinburg residential market is the fact that the share of projects with a stable rate of construction activity has increased significantly. It is likely that major new construction projects initiated in the past two years will be completed in time, developers will fulfill their obligations. This demonstrates once again that domestic factors are favourable for the development of the market.

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Structure of residential premises under construction by construction stages, %

Source: Analytical department RITS UPN In recent years a notable decline in residential construction has been observed in the center of Yekaterinburg. A certain increase of supply is notable in the areas of price zone 2. Decentralization of residential projects under construction is one of the stable trends in recent years. Developers reclaim available land plots which are the most convenient for construction activity. The process of replacement of dilapidated housing and complex development of already built-up areas is progressing very slowly.

Structure of residential premises under construction by price zones, Q4 2011, %

Source: Analytical department RITS UPN

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Distribution of residential premises under construction (active sites) by districts, December 2011, sqm District Total area Ekaterinburg 1,642,831 Avtovokzal 241,307 Akademicheskiy 339,660 Botanicheskiy 13,138 VIZ 103,357 Vokzalniy 5,968 Vtuzgorodok 73,980 Gorniy Schit 7,200 ЕЛИЗАВЕТ 3,192 ZhBI 5,712 Izoplit 2,000 Kompressorniy 24,560 Lechebniy 24,728 N.Sortirovka 27,885 Parkoviy 32,741 Pionerskiy 72,416 S.Sortirovka 31,922 Uktus 113,142 Unts 59,947 Uralmash 68,778 Center 88,549 Chermet 62,803 Shirokaya rechka 30,461 El’mash 102,528 Ugo-Zapadniy 106,857 Source: Analytical department RITS UPN As a result of a number of delayed completions toward the end of 2011, the Yekaterinburg residential market was faced with a lack of supply. In some local areas there was little choice for purchasers, they had to seek alternatives in the secondary market. In general we can say that there is a lack of residential projects, as well as great qualitative diversity thereof. A lot of residential buildings under construction have a limited number of available apartments. This fact allows many developers and sellers to adjust prices upward even at the initial stages of construction.

Pricing

In 2010, prices in the residential market in Yekaterinburg finally stabilized, and some segments were marked by a slight increase in prices at about 5%. In 2011 prices continued increasing. On average, prices in town increased by 15% in the secondary and 10% in the primary residential markets. The low growth rate of the average town indicator is explained by the change in the structure of the sample. In recent months, the percentage of projects being built outside the central areas and the number of buildings at the initial stages of construction has significantly increased.

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Dynamics of average asking prices per sqm, rubles

Source: Analytical department RITS UPN At the same time, price growth for a substantial number of projects comprised 25-35%. This increase includes the growth associated with a change in the construction phase (from foundation to interior fit- out). Significant reductions and discounts are now in in the past. Discounts from developers in recent months are offered only for the parking spaces, which are still not in demand. In the secondary market transaction prices differ from asking prices by a small amount - from 0% to 5%. During 2011 we observed supply declining in the primary housing market. Significant contribution to the increase in activity in the residential market during 2010-2011 belongs to a mortgage lending. Due to the growth of buyer’s activity, the residential market reached a new higher level in terms of the number of transactions at a relatively stable level of prices.

Dynamics of average asking prices per sqm on the primary market by zones

Source: Analytical department RITS UPN

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Average asking price per 1 sqm of residential premises under construction (by districts), rub/sqm Districts 4 Q 2010 4Q 2011 Change per year, % Center 63,982 68,802 8 1 zone 52,434 55,821 6 2 zone 44,047 49,750 13 3 zone 41,528 44,763 8 Source: Analytical department RITS UPN As we noted above, the relatively low average growth rates are explained by the changes in the structure of the sample. By the end of 2011 the choice of apartments in residential buildings at the final stages of construction declined significantly, substantial supply was observed in the projects at the initial stages. Considering the price differentiation depending on the stage of construction, we may see that the highest increase in prices took place mainly in completed projects.

Average asking price per 1 sqm of residential premises under construction (depending on the degree of construction stage), rub/sqm Construction stage 4 Q 2010 4 Q 2011 Change per year, % Ditch, foundation 47,723 49,206 3 Installation of walls 45,604 49,556 9 Internal finishing 50,692 57,809 14 Completed/Put into operation 55,807 65,676 18 Source: Analytical department RITS UPN

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Estimates of the volume of sales in the primary housing market

In early 2010 there was a noticeable increase in the number of equity participation agreements. This fact is explained by an increasing number of projects where the sales are conducted in accordance with the Federal Law № 214. So in the middle of 2009, the share of these projects comprised 25%, and at the end of 2011 comprised 49% of all residential projects offered for sale. The number of transactions in the market of newly constructed buildings in 2011 showed a growth from quarter to quarter. A slight decrease at the end of this year is explained primarily by a general reduction in the number of new buildings with available apartments. Therefore many buyers, who did not find a worthy apartment on the primary market, had to search for an option on the secondary market.

Change of sales volume on the primary market, number of deals

Source: Analytical department RITS UPN

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Forecasts

Construction volumes forecast

After a significant decline of construction volumes during the crisis period, the market has not been able to return to stable growth and stay within the range of 1,300-1,700 sqm.

Forecast of construction volumes, thousand sqm

Source: Analytical department RITS UPN Among the reasons why the market of new residential construction cannot go to the next stage of its development and demonstrate a significant increase are the following:  The prospects for rapid growth of supply are limited by available land resources of existing players and by a lack of significant progress in solving this issue in the medium term.  Instability in the financial markets does not contribute to the new flow of investment funds to the real estate market. Many market participants today are cautious and do not take strategic steps to develop large-scale long-term projects. Most market participants are focused on the individual, local projects that do not allow for significantly increasing volumes in the medium to long term.  There are no new entrants and participants in the Yekaterinburg residential market, competition is not fierce, and rather, existing market leaders increase their presence in it. In the medium and long term perspective, analysts are of the opinion that Yekaterinburg has a great opportunity to increase housing construction volumes. The market has to become not only more sizeable but also more differentiated by different quality groups. Several conditions are required for that:  A favorable economic climate  Removal of administrative and infrastructural constraints for the development of the real estate and construction markets.

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 Creating a system based on the strategic objectives of the development of living environment for residents. Allocation of priority areas of development and consistent movement to designated landmarks. The market of the new residential construction will not reach the pre-crisis levels in terms of construction volumes in the near future. The total volume of delivery of new residential premises in 2011-2012 will comprise 1,300-1,500 sq. m assuming a steady development of the market.

Pricing forecast

In 2011 the rates of construction activity began to raise, the crisis of confidence faded into insignificance. Customers began to buy apartments actively, including projects at the initial stages of construction. The market of new residential buildings in many local areas became scarce. Mortgage lending terms become more diverse, and the availability of credit opportunities for the purchase of apartment under construction increased. But in the second half of 2011 the problems of stability of the global financial system, a slowdown in GDP growth in Europe prevailed again. But according to the results of 2011, we can say that these tendencies were ignored by potential buyers. The number of transactions has increased significantly. Price growth for the year comprised 15%. There are local and global factors which affect the real estate market of Yekaterinburg. Local factors are primarily related to the limited supply in the residential market against a background of stable high demand and affordable mortgage loans. Despite the growth of volumes of residential premises under construction which took place in recent months, new buildings are not able to satisfy the existing volume of demand. Currently potential buyers actively improved living conditions and chose the primary residential market to find an apartment more often. These factors move prices up atthe moment and so far prevail over global risks. Global factors are also associated primarily with the unstable global economic recovery after the crisis. The risk of recession is a serious problem for the Russian economy, which entirely depends on the situation on the commodity markets. In addition, the increase of financial risks might lead to another crisis of confidence. Thus, the current price growth in the residential market is unstable, although it is based on objective reasons. In this regard, the most likely scenario for the market development in 2012 is the stabilization of prices at the existing level.

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Expert forecast of pricing dynamic in Yekaterinburg residential market, rub/sqm Period Primary market Secondary market 1 Q 2007 58,939 69,007 2 Q 2007 56,027 68,743 3 Q 2007 54,211 67,407 4 Q 2007 56,116 65,834 1 Q 2008 56,549 64,499 2 Q 2008 58,211 63,860 3 Q 2008 57,296 64,404 4 Q 2008 55,240 62,191 1 Q 2009 52,969 58,210 2 Q 2009 49,511 54,640 3 Q 2009 47,860 52,545 4 Q 2009 49,164 52,959 1 Q 2010 49,326 53,433 2 Q 2010 48,171 52,893 3 Q 2010 49,096 53,661 4 Q 2010 49,121 55,427 1 Q 2011 50,413 57,120 2 Q 2011 51,789 58,128 3 Q 2011 52,250 59,870 4 Q 2011 53,084 63,836 1 Q 2012 F 53,500 63,500 2 Q 2012 F 54,500 63,500 3 Q 2012 F 54,000 63,000 4 Q 2012 F 54,500 63,500 Source: Analytical department of RITS UPN F – Forecast In the long term, Yekaterinburg has considerable potential for development of residential construction. The low supply of residential premises and poor quality of housing stock are the basis for relatively high prices. It is possible to overcome this problem through significant renewal of existing housing stock and maintaining a high level of construction. In addition, the residential market has extensive capabilities for quality differentiation. In recent years, the residential market demonstrated growth in construction volumes, but did not offer significant quality alternatives. Qualitative development of the residential market and the creation of a modern living environment, are the long-term trends that will sooner or later come to the fore and will be the dominant factors in the development of the residential market.

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Parking spaces market overview

The average price of an underground parking space in the residential complexes in Yekaterinburg comprises 800 thousand rubles. In 2011 there was a clear trend of increasing value, after some decline during 2009-2010. At the same time there are no similar tendencies in the market of capital garages, except for seasonal fluctuations. Outside the first price zone in the secondary market, underground parking is practically not represented, so to estimate the possible level of prices in these areas it is worth considering the market of capital garages, together with an adjustment of 25-35%, as underground parkings are traditionally more expensive than capital garages.

Dynamics of average asking price for underground car park spaces, rub/parking space

Source: Analytical department RITS UPN

Together with the commissioning of new residential buildings in the first price zone, the average price of underground parking around the town more and more is related to the price indicators of this zone as the secondary market consists mainly of real estate from the first zone.

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Dynamics of average asking price for capital garages, rub/parking space

Source: Analytical department RITS UPN

Table. Dynamics of average prices for underground parking spaces and garages in Yekaterinburg, thousand rub per property Period Middle of End of 2009 Middle of End of 2010 Middle of End of 2011 Area 2009 2010 2011 Underground parkings Town 799 819 734 715 726 814 Center 954 945 891 947 1,004 1,057 1 zone 671 761 675 606 637 769 Garages (all) Town 661 616 563 573 551 596 Center 860 774 697 730 732 754 1 zone 667 633 607 592 577 612 2 zone 502 489 439 427 391 465 3 zone 405 424 422 403 394 436

Source: Analytical department RITS UPN The primary residential market is gradually moving farther and farther from the town center, and along with it - the primary parking market. The bulk of supply remains in the areas of the first price zone.

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Built-in commercial premises market overview

Built-in premises are often offered in the market as commercial premises of free use. In this regard, we consider the primary market of these premises as a whole, without distinguishing the retail segment, but we assume that the share of retail premises in the total built-in premises volume is not less than 50-60%. In the last quarter of 2011 construction activity in the market remained at the same level. The construction of several new schemes started, and as a result of that the volume of active construction increased from 1,561 thousand sq. m to 1,643 sq. m. At the same time the share of the "frozen" construction decreased from 157,000 sq. m to 138,000 sq. m. Today, the volume of construction of built-in commercial premises grew by 18% in comparison to the previous year. This increase is explained by the appearance of new construction sites and resumption of works on the previously "frozen" sites.

Geographical structure of supply for built-in commercial premises in the primary market, sqm

Source: Analytical department RITS UPN

As a result, about 96,000 sq. m of built-in commercial premises are being constructed currently in the city. Until recently, the major part of the built-in commercial premises (approximately 20-25%) has been constructed in the town center. Today, we observe an increase of construction activity in the areas of the second price zone. However, the bulk of construction (60%) is still represented in the areas of the first price zone. Construction of residential buildings with built-in commercial premises in the fourth price zone is not common. The supply for the built-in commercial premises in the primary market in the last 3-4 quarters also increased - by more than 1.5 times. The reason for this was not only the appearance of new sites, but also the emergence of supply in projects where commercial premises were earlier held by

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 developers for different reasons. Such significant changes in volumes impact on market structure and its price indicators. Despite the fact that the volume of supply has shown a positive dynamic and amounted to about 20% of the total construction volume, it still remains limited, especially in the territorial aspect. On the whole about 20,000 sq. m in 30 residential buildings under construction is currently offered for sale. Developers still have some volume of premises which they hold for one reason or another. But, they will come to the market in portions and will have little impact on the overall situation. In addition, some premises in completed buildings continue to be offered for sale. Most often these are expensive premises for which the price is too high relative to similar projects under construction. In the near future, most likely, a declining trend in supply in the primary market will not occur. Despite the fact that existing objects will be gradually sold before or after commissioning, the market will slowly become saturated due to the appearance of new buildings, and due to the return of previously held premises. In recent months, the primary market of built-in commercial premises was characterized mostly by positive changes in asking prices. Over three quarters of 2011 the growth accounts 6.9%. This trend is explained by two causes: firstly, the reduction in the number of "cheap" offers, and, secondly, the increase in the proportion of objects at the higher stages of construction. However, in the last two quarters we have also noted a marked increase in the asking price for individual projects, not connected with the release of the next stage of construction or the acceleration of the pace of work. It can be assumed that such actions were a response of developers to increasing demand for individual areas and properties.

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Dynamics of asking prices in the primary market of built-in premises, rub/sqm

Source: Analytical department RITS UPN

Table. Dynamics of average asking prices for commercial premises in residential buildings under construction, rub/sqm Period I Q 2011 II Q 2011 IIIQ 2011 IVQ 2011 Change per 1 Change per 3 Area quarter, % quarters, % Town 66,494 73,533 73,741 71,090 -3,6 +6,9 Center 81,639 86,185 88,448 86,165 -2,6 +5,5 1 zone 64,158 74,554 76,546 75,872 -0,9 +18,3 2 zone 60,688 58,098 61,088 66,888 +9,5 +10,2 3 zone 50,481 – 65,986 47,186 -28,5 -6,5

Source: Analytical department RITS UPN

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Country houses market overview

Currently, the vast majority of developments related are at the ‘design’ stage or at the ‘under construction’ stage. This fact clearly indicates the low level of development in the country house or cottage segment, which remains in its infancy near Yekaterinburg. At the same time, during 2011, many country house settlements moved from the category of the ‘project’ stage to the ‘under construction’ stage. However, most of these projects are realized in the form of "land without a contract" and the main construction activity is concentrated on road building, laying, installation of communications and the fencing of the settlement.

Structure of country houses market by construction stages of the projects, Q4 2011

Source: Analytical department RITS UPN Among significant changes that occurred over the past 3 years, is the large increase in the number of offers of the format "land without a contract." Today the share of this segment comprises about 80%.

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Change of market structure depending on type of supply

Source: Analytical department RITS UPN In actual fact, for the last few years the market of organized country houses not only has not evolved, but also degraded to some extent. The vast majority of companies that develop country houses settlements do not have sufficient resources to develop long-term projects. Today, many market participants prefer to exit projects as quickly as possible by selling bare land plots. Currently the most popular territorial direction in the market of country house settlements is the Tyumenskiy tract. Here is the largest amount of supply, including both houses (construction contracts), and land plots. There is also some supply within the town limits and on Polevskoy tract. The remaining areas are represented by separate settlements.

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Supply structure by directions, including announced projects, Q4 2011

Source: Analytical department RITS UPN Over the past four years, the saturation of the market by completed projects only took place rather slowly. In 2010, the development activity was low. Only isolated projects were put into operation. That time many developers adjusted the strategy of their projects and began to sell the land plots without contract. In 2011 there was some increase in the number of settlements put into operation. A marked increase in the segment of semi-detached houses was provided by the project "Svetlorechensky", which was realized with the help of the Administration of Yekaterinburg. In general, the market of completed individual country houses in the organized settlements is quite narrow, especially in the format of semi-detached houses (townhouses).

Table. Change of country houses volumes in organized projects * 2009 2010 2011 Total 1,107 1,150 1,499 Semi-detached 140 159 309 houses Cottages 967 991 1,190

* The widespread practice of selling land plots without a contract complicates the registration of the objects. Source: Analytical department RITS UPN

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Number of houses in organized country houses settlements

Source: Analytical department RITS UPN

Change of declared volume of supply in organized country houses settlements

Source: Analytical department RITS UPN In spring 2011, many companies stepped up their activities and began to market their estates more actively. Partly this is explained by the seasonal intensification of construction and partly by an increase in market demand. However, at the end of 2011 the volume of supply in the market fell back again. The share of semi-detached houses comprises about 12%. Many of the townhouse projects were frozen in previous years and still have not returned to the market. In some projects developers abandon this format in favor of the multi-family housing (“Bukhta Queens”) and cottages (“Nikolin Klyutch”). An important result of the crisis period was the fact that most developers changed the strategy of country house settlement implementation. Many developers turned to selling land plots without

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 construction contracts, allowing the buyer to choose their own contractors, house design and construction technology. Such offers appeared even in the most expensive projects – “Karaseozersky-2”, “Palniks” and some others. This fact once again shows that country houses market in Yekaterinburg remains narrow and is not structured. There are no large companies with sufficient financial resources and experience in developing large-scale projects.

Pricing

In the middle of 2008 the country house market was faced with decreasing buying activity. The first price adjustments there were noted at the end of 2008, when some developers started to lower prices for ongoing projects. By 2010, after a significant price reduction, supply reduction and freezing of a large number of projects, prices stabilized. The activity of the market participants remained low. A market revival began only in 2011. Construction works were resumed, supply increased and buyers began to show interest in country houses projects. Compared with the end of 2010, some developers significantly adjusted their prices upwards. However, the process of increasing the average level of prices that began in early 2011 has not received a significant impetus for development in the second half of the year. This is explained by a relatively low increase of buyer’s activity on the one hand and the seasonal decline in demand at the end of the year on the other hand.

Change of average price per property, rub/sqm

Source: Analytical department RITS UPN

Despite the small volume of supply, the prices for semi-detached houses shows greater stability. Their change over the past two years fits into the range between 41,000 to 46,000 rubles. At the same time, the average prices for the cottages vary from 34,500 to 43,000 rubles per 1 sq. m.

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Considering pricing dynamics by direction, it may be noted that many of them do not show a distinct and stable trend due to limited and mixed supply. Stable price indicators can be found only on Moskovskiy / Chusovskoy, Tyumenskiy tracts and in "urban" projects.

Table. Average asking price per 1 sqm of country house (house, land plot with utilities), 4 Q 2011, in Yekaterinburg and suburbs (up to 35 km), rub/sqm Cottages 40,614 Semi-detached houses 45,718 Source: Analytical department RITS UPN Herewith all the directions / tracts may be grouped as “expensive” and “mass” directions. Expensive directions are the Moskovskiy, Chusovskoy and Chelyabinskiy tracts. Major part of country houses settlements being realized in these directions are positioned in the price segment “above average”.

Change of average price per property by direction, rub/sqm

Source: Analytical department RITS UPN In the medium term, it is expected that the market will be expanded by the projects in the middle and lower price ranges in many directions. It is necessary to mention about the settlements located in the town. The price level for such projects is traditionally high. Based on the fact that the majority of houses are purchased for a permanent residence, there are several factors of great importance today - accessibility and the proximity of the settlement to social infrastructure: kindergartens, schools, hospitals, shops, etc.

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Currently there are no such projects with their own infrastructure in the market. That is why the buyers prefer to choose settlements located within town limits or close to the town. Today we can say that after some recovery in prices after a fall during the crisis period, the market has stabilized. The rise in prices has stopped, and some decline in prices is primarily explained by the appearance of new cheaper offers. In the short term there are no any domestic reasons for significant price movements. Medium-and long-term factors will be predetermined mainly by external macroeconomic factors, which remain highly uncertain.

Price zones in Yekaterinburg

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Center Boundaries of the streets: Moskovskaya, Chelyuskintsev, Vostochnaya, Dekabristov, Belinskogo, Bolshakova

1 zone Residential districts: Avtovokzal, VIZ, Parkoviy, Yugo-Zapadniy, Botanicheskiy, Zarechniy, Vtuzgorodok, Shartashskiy Rynok, Yuzhniy, ZhBI, Pionerskiy, Vokzalniy

2 zone Residential districts: Uralmash, El’mash, Zavokzalniy, Novaya Sortirovka, Sibirskiy, Sinie Kamni, Uktus, Shirokaya Rechka

3 zone Residential districts: Shinniy, Chermet, Apparatniy, S.Sortirovka, Khimmash, Lechebniy, Compressorniy, Elizavet, UNTs.

4 zone Residential districts: Shartash, Izoplit, Koltsovo, Ptitsefabrika, N-Isetskiy, Sem’ Klyuchey, Rudniy, Istok, Verkhnemakarovo, Pyshma, Sadoviy, Shabrovskiy, Palkino, Shuvakish, Medniy, Chusovskoe ozero, Sovkhoz, Gorniy schit, Palniks, Kalinovskiy, Severka

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20. APPENDIX THREE: PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS

1. Preliminary

1.1. These general terms and conditions (the “Terms and Conditions”) shall apply to all forms of professional services, other than agency services (to which separate terms will apply), provided by Cushman & Wakefield (“C&W”, “we”, “us” or “the Firm”) to the client to whom the instruction confirmation letter is sent (“you”). They shall apply separately to each service provided to you. 1.2. The Terms and Conditions are to be read in conjunction with the instruction confirmation letter (the “Letter”) sent by us to you. In the event of any ambiguity or conflict between the Letter and these Terms and Conditions, the provisions in the Letter shall prevail. These Terms and Conditions and the Letter may only be varied in writing by agreement between the parties.

2. Performance of the Services

2.1. We undertake to use all reasonable skill and care in providing the services and advice described in the instruction given by you (the “Services”). We will inform you if it becomes apparent that the Services need to be varied or external third party advice is required. Any variation is to be confirmed in writing. 2.2. We may need to appoint third party providers to perform all or part of the Services and we shall agree this with you in advance which shall not increase the Consultant’s fee. 2.3. Where matters beyond the control of ourselves cause delay to the performance of the services we will notify the client as soon as we become aware of the situation attaching relevant confirming document issued by the relevant authority. The client agrees that we will not be held responsible for such delay.

3. Basis of Fees

3.1. The basis of our fees for our Services is set out in the Letter. 3.2. When applicable, VAT shall be payable by you in addition to any fees or disbursements invoiced at the applicable rate. 3.3. You shall pay our fees on completion of our Services (whether or not additional work is still to be carried out by third parties) or, where the fees are in relation to an ongoing instruction or an instruction of a duration of more than three months, at least quarterly in arrears upon submission by us of quarterly fee accounts. Payment is due within 30 days of the invoice date. 3.4. Where valuations are undertaken for a lender for loan security purposes and it is agreed that a borrower will pay our fee, you shall remain primarily liable to pay our fee should such borrower fail to meet its liabilities to us in full. Payment of our fees is not conditional upon the loan being drawn down or any of the conditions of the loan being met. 3.5. If you do not dispute with us an invoice or any part thereof within 30 days of the date of such invoice or do not claim your protest, you shall be deemed to have accepted the invoice in its entirety. 3.6. If we are required by you to undertake additional work in relation to an instruction, you shall pay additional fees based upon our usual rates. We will notify you of the amount of such additional fees. 3.7. Where there is a change to the stated purpose for which our valuation is being commissioned and

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 in our sole opinion we deem this to result in an increase in our liability (for example a valuation for annual accounts being used for loan security purposes), we reserve the right to charge an additional fee. 3.8. In the event that you withdraw our instructions prior to completion of a valuation, you shall be liable to pay us for a fair and reasonable proportion of our fees and any agreed disbursements. If we have sent you a draft valuation report, such fees shall be subject to a minimum of 80% of the fee originally agreed between us. 3.9. We will advise you in advance if it is necessary or convenient to instruct a third party to provide advice or to act as an expert or arbitrator and provide an estimate of the likely cost. If you approve, either verbally or in writing, that the third party be instructed, we will instruct the party as agent on your behalf and request that all the third party's invoices be addressed to you care of us. If we are requested by you to advance payment of the third party invoices, you shall be obliged to reimburse the advance payment made and pay a handling charge.

4. Associated/Related Entities of the Client

4.1. Where we are instructed to provide Services to one of your subsidiaries or associate/related entities or should you subsequently request that another entity be substituted for you at a later stage and we are unable to seek or obtain payment of any outstanding monies for whatever reason, you shall remain primarily liable to pay those outstanding monies if the subsidiary, associate/related or other entity does not meet its liabilities in relation to the Services.

5. Interest

5.1. You shall pay interest on the amount of any invoice for fees or other disbursements that remain unpaid for 30 days after the date of the invoice. Interest shall be payable at the statutory rate in accordance set forth by the Central Bank of the Russian Federation, from the date of the invoice until payment is made whether after or before judgement.

6. Disbursements

6.1. You shall reimburse disbursements incurred in the provision of the Services quarterly in arrears from the date they were incurred. These include, for example, maps, plans, research, photography, copying of documents or plans, messenger delivery, costs of obtaining external information on companies, properties, demographic or other similar information, any reproduction, copying or other royalties incurred, additional bound copy reports, costs of external information/references obtained and key cutting, travel and subsistence expenses at their actual cost and car mileage at the standard AA scales.

7. Information Received from the Client

7.1. We will take all reasonable steps to ensure property information is accurate where we are responsible for its preparation. Where you provide us with any information on a property that is necessary or convenient to enable us to provide the Services properly, you are aware that we will rely on the accuracy, completeness and consistency of any information supplied by you or on your behalf and, unless specifically instructed otherwise in writing, we will not carry out any investigation to verify such information. We accept no liability for any inaccuracy or omission contained in information disclosed by

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you or on your behalf, whether prepared directly by you or by a third party, and whether or not supplied directly to us by that third party and you shall indemnify us should any such liability arise. If our valuation is required for the purpose of purchase or loan security, you accept that full investigation of the legal title and any leases is the responsibility of your lawyers.

8. Conflicts of Interest

8.1. We have conflict management procedures designed to prevent us acting for one client in a matter where there is or could be a conflict with the interest of another client for whom we are acting. If you are aware or become aware of a possible conflict of this type, please raise it immediately with us. If a conflict of this nature arises, then we will decide, taking account of legal constraints, relevant regulatory body rules and your and the other client’s interests and wishes, whether we can continue to act for both parties (e.g. through the use of separate teams with appropriate Chinese Walls), for one only or for neither. Where we do not believe that any potential or actual conflict of interest can be managed appropriately, we will inform you and consult with you as soon as reasonably practicable. Should you have any queries on this, you should contact your client partner.

9. Management of the Property

9.1. We shall not be responsible for the management of the property nor have any other responsibility (such as maintenance or repair) in relation to the property. We shall not be liable for any damage that may occur while the property is unoccupied. The property shall be your sole responsibility. You are aware that while a property is unoccupied, the property is likely to suffer from adverse weather conditions and frost damage may occur to water and heating systems and sanitary appliances. You are strongly recommended to take all necessary actions to protect the property from such risks and to ensure that adequate insurance cover is in force.

10. Valuation Bases and Assumptions

Date of Valuation

10.1. Unless we have said otherwise within the Letter, the date of valuation will be the date of our report. Basis of Valuation

10.2. Unless we have said otherwise within the Letter, the valuation will be prepared in accordance with the RICS Valuation Standards 6th Edition as amended (“The Red Book”) by valuers conforming to its requirements, acting as external valuer. 10.3. Each property will be valued on a basis appropriate to the purpose of the valuation, in accordance with the Red Book. The basis of valuation that we will adopt for each property is specified in the Letter. The definitions are as follows: Market Value

PS 3.2 defines Market Value as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper

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Market Rent

PS 3.3 defines Market Rent as “the estimated amount for which a property, or space within a property, should lease (let) on the date of valuation between a willing lessor and a willing lessee on appropriate lease terms in an arms length transaction after proper marketing wherein the parties had acted knowledgeably, prudently and without compulsion.”

Existing Use Value

UK PS 1.3 defines Existing Use Value as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction, after proper marketing wherein the parties had acted knowledgeably, prudently, and without compulsion, assuming that the buyer is granted vacant possession of all parts of the property required by the business and disregarding potential alternative uses and any other characteristics of the property that would cause its Market Value to differ from that needed to replace the remaining service potential at least cost.”

10.4. When assessing either Existing Use Value or Market Value for balance sheet purposes, we will not include directly attributable acquisition or disposal costs in our valuation. Where you have asked us to reflect costs (as required under FRS15), they will be stated separately. Specialised Property

10.5. In the case of Specialised Properties (where valuation methods such as market comparison or an income (profits) test cannot be reliably applied), we may use Depreciated Replacement Cost (“DRC”) as a method of estimating Market Value. The valuation using this method of a property in the private sector will include a statement that it is subject to the adequate profitability of the business, paying due regard to the value of the total assets employed. If the property is in the public sector, the valuation will include a statement that it is subject to the prospect and viability of the continued occupation and use. Any writing down of a valuation derived solely from the DRC method to reflect the profitability/viability of the entity in occupation is a matter for the occupier. Specialised Trading Property

10.6. Where appropriate, specialised trading properties (such as self storage properties, hotels and marinas) will be valued on the basis of Market Value as a fully equipped operational entity, having regard to trading potential. 10.7. Where we are instructed to value an operational property with regard to its trading potential, we will take account of any trading information that either the operator has supplied to us or that we have obtained from our own enquiries. We will rely on this being correct and complete and on there being no undisclosed matters that could affect our valuation. The valuation will be based on our opinion as to future trading potential and the level of turnover and net operating income likely to be achieved by a reasonably efficient operator. 10.8. Unless we have said otherwise within the Letter: (i) the valuation will be made on the basis that each property will be sold as a whole including all fixtures, fittings, stock and goodwill;

(ii) we will assume that the new owner will normally engage the existing staff and the new management will have the benefit of existing and future bookings or occupational agreements

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(which may be an important feature of the continuing operation), together with all existing statutory consents, operational permits and licences;

(iii) we will assume that all assets and equipment are fully owned by the operator and are not subject to separate finance leases or charges;

(iv) we will exclude any consumable items and stock in trade; and

(v) we will assume that all goodwill for the properties is tied to the land and buildings and does not represent personal goodwill to the operator.

Valuation Assumptions

10.9. Unless otherwise advised by you in writing, we will provide the Services in relation to any property on the assumption that: (i) the property and any existing buildings are free from any defect whatsoever;

(ii) all buildings have been constructed having appropriate regard to existing ground conditions or that these would have no unusual effect on building costs, property values or viability of any development or existing buildings;

(iii) all the building services (such as lifts, electrical, gas, plumbing, heating, drainage and air conditioning installations and security systems) and property services (such as incoming mains, waste, drains, utility supplies, etc) are in good working order without any defect whatsoever;

(iv) roads and sewers serving the property have been adopted and that the property has all necessary rights of access over common estate roads, paths, corridors and stairways and to use common parking areas, loading areas and other facilities;

(v) there are no environmental matters (including but not limited to actual or potential land, air or water contamination, or by asbestos or any other harmful or hazardous substance) that would affect the property, any development or any existing buildings on the property in respect of which the Services are provided or any adjoining property, and that we shall not be responsible for any investigations into the existence of the same and that you are responsible for making such investigations;

(vi) any building, the building services and the property services comply with all applicable current regulations (including fire and health and safety regulations);

(vii) the property and any existing building comply with all planning and building regulations, have the benefit of appropriate planning consents or other statutory authorisation for the current use and no adverse planning conditions or restrictions apply (which includes, but is not limited to, threat of or actual compulsory purchase order);

(viii) appropriate insurance cover is, and will continue to be, available on commercially acceptable terms for any building incorporating types of construction or materials which may pose an increased fire or health and safety risk, or where there may be an increased risk of terrorism, flooding or a rising water table;

(ix) items of plant and machinery that usually comprise part of the property on an assumed sale are included in the property but items of plant and machinery that are associated with the process being carried on in the property or tenants trade fixtures and fittings are excluded from the property;

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and

(x) in reflecting the development potential of any property, that all structures will be completed using good quality materials and first class workmanship;

(xi) any occupational leases are on full repairing and insuring terms, with no unusually onerous provisions or covenants that would affect value;

(xii) in respect of any lease renewals or rent reviews, all notices have been served validly within any time limits;

(xiii) vacant possession can be given of all accommodation which is unlet or occupied by the borrower or its employees on service tenancies;

(xiv) any mineral rights are excluded from the property.

Structure

10.10. We will not carry out a structural survey of any property nor will we test services. Further, no inspection will be made of the woodwork and other parts of the structures which are covered, unexposed or inaccessible. In the absence of information to the contrary, the valuation will be on the basis that the property is free from defect. However, the value will reflect the apparent general state of repair of the property noted during inspection, but we do not give any warranty as to the condition of the structure, foundations, soil and services. Our report should not be taken or interpreted as giving any opinion or warranty as to the structural condition or state of repair of the property, nor should such an opinion be implied. 10.11. If we give the age of a building in our report, this will be an estimate and for guidance only. Measurements

10.12. Where we are required to measure a property we will generally do so in accordance with the Royal Institution of Chartered Surveyors (“the RICS”) Code of Measuring Practice. However, you should specifically note that the floor areas contained in any report we may publish are approximate and if measured by us will be within a 3% tolerance either way. In cases where the configuration of the floor plate is unusually irregular or is obstructed, this tolerance may be exceeded. 10.13. We will not be able to measure areas that we are unable to access. In these cases we may estimate floor areas from plans or by extrapolation. Where we are required to measure land or site areas, the areas will be approximate and will be measured from plans supplied or from Ordnance Survey plans. They will not be physically checked on site. 10.14. The areas we report will be appropriate for the valuation purpose, but should not be relied upon for any other purpose. Planning and Statutory Regulations

10.15. Unless specifically instructed in writing to make formal searches with local planning authorities, we shall rely in the provision of our Services on the information provided informally by the local planning authority or its officers. We recommend that your lawyers be instructed to confirm the planning position relating to the property and review our comments on planning in the light of their findings. 10.16. We may consider the possibility of alternative uses being permitted. Unless otherwise notified by

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you in writing, we shall assume that the property and any existing buildings comply with all planning and building regulations existing uses have the benefit of appropriate planning consent or other statutory authorisation, and that no adverse planning conditions or restrictions apply. Tenure and Tenancies

10.17. We will not inspect title deeds and we will therefore rely on the information supplied as being correct and complete. In the absence of information to the contrary, we will assume the absence of unusually onerous restrictions, covenants or other encumbrances and that the property has a good and marketable title. Where supplied with legal documentation, we will consider it but we will not take responsibility for the legal interpretation of it. Unless agreed we will not obtain information from The Land Registry. 10.18. You should confirm to us in writing if you require us to read leases and if so, provide all the relevant documentation within a reasonable time for consideration bearing in mind the date for receipt of our report. You should not rely upon our interpretation of the leases without first obtaining the advice of your lawyers. 10.19. We will take into account any information that you provide concerning any tenants’ improvements. Otherwise, if the extent of tenants’ alterations or improvements cannot be confirmed, we will assume that the property was let with all alterations and improvements evident during our inspection (or, in the case of valuation without inspection, as described within the information that you provide). Covenant

10.20. Our valuation will take into account potential purchasers’ likely opinion of the financial strength of tenants. However, we will not undertake any detailed investigations on the covenant strength of the tenants. Unless informed to the contrary by you, we will assume that there are no significant arrears and that the tenants are able to meet their obligations under their leases or agreements. Other

10.21. Any plans we provide to you indicating the site of a property are for identification only. We will rely on our inspection and information that you provide in outlining the extent of each property, but you should not rely upon our plans to define boundaries. 10.22. 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. 10.23. For a recently completed development property, we will not take account of any retentions or outstanding development costs. For a property in the course of development, we will reflect your advice on the stage of construction, the costs already incurred and those still to be spent at the date of valuation, and will have regard to any contractual liabilities. 10.24. We will not make any allowance in our Services for the existence of any mortgage or other financial encumbrance on or over the property nor take account of any leases between subsidiaries. 10.25. Any valuation figures provided will be exclusive of VAT whether or not the building has been elected.

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10.26. We will not make any allowance in any valuation advice provided for the expenses of realisation or any taxation liability arising from the sale or development of the property. 10.27. Unless we have said otherwise in the Letter, each property will be valued individually; in the case of a portfolio, we will assume that the properties would be marketed in an orderly way and not placed on the market at the same time. 10.28. We will value in the local currency. If we are to report to you in another currency, unless we have agreed otherwise we will adopt a conversion rate equivalent to the closing rate (“spot rate”) on the date of valuation. 10.29. Our valuation does not make allowance either for the cost of transferring sale proceeds to another state, or for any restrictions on doing so. 10.30. In instances where we are instructed to provide an indication of current reinstatement costs for fire insurance purposes, this will be given solely as a guide without warranty. Formal estimates for insurance purposes can only be given by a quantity surveyor or other person with sufficient current experience of replacement costs.

11. Regulated purpose valuations

11.1. 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 (otherwise defined as a “Regulated Purpose Valuation” by the RICS), the RICS requires us to state our policy on the rotation of the surveyor who prepares the valuation and the quality control procedures that are in place. 11.2. Irrespective of the purpose of the valuation, we will select the most appropriate surveyor for the valuation having regard to his/her expertise and the possible perception that independence and objectivity could be compromised where a valuer has held the responsibility for a particular client for a number of years. This may result in us rotating the surveyor responsible for repeat valuations for the same client although we will not do so without prior discussion with the client. 11.3. For all Regulated Purpose Valuations we are required by the RICS to state all of the following in our report: 11.4. the length of time the valuer continuously has been the signatory to valuations provided to you for the same purpose as the report, together with the length of time we have continuously been carrying out that valuation instruction for you; 11.5. the extent and duration of the relationship between you and us; 11.6. in relation to our preceding financial year the proportion of the total fees, if any, payable by you to our total fee income expressed as one of the following: 11.7. less than 5%; or 11.8. if more than 5%, an indication of the proportion within a range of 5 percentage points; 11.9. where, since the end of the last financial year, it is anticipated that there will be a material increase in the proportion of the fees payable, or likely to be payable, we shall include a further statement to that effect in addition to (iii) above.

12. Termination by notice

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12.1. Unless a fixed period has been agreed, either party may terminate the instruction by giving 14 days’ notice in writing to the other party. In the event of termination by notice, you shall be obliged to pay forthwith all the fees accrued in relation to the Services and work performed up to the date of termination (and any agreed abort fee) (the "Termination Fees") plus any expenses or disbursements incurred by us or to which we are committed at the date of termination.

13. Professional liability

13.1. In case you violate terms and conditions of using of the Report set forth by clause 4.1. of the Agreement, we shall not be responsible for any losses incurred in connection with the Services, including: (xv) any direct loss of profit;

(xvi) any indirect, special or consequential loss whatsoever howsoever caused including without limitation:

 indirect loss of business;  loss of goodwill;  loss of use of money; and  loss of opportunity,  loss of profit; and the parties agree that the sub-clauses of this clause shall be severable.

13.2. You acknowledge and agree that the exclusions contained in Clause 12.1 are reasonable in all the circumstances and that you have had the opportunity to take independent legal advice. 13.3. Where a third party has contributed to the losses, damages, costs, claims or expenses, we shall not be liable to make any contribution in respect of the liability of such third party. 13.4. Save in respect of third parties directly instructed by us and not on your behalf, we shall not be liable for the services or products provided by other third parties, nor shall we be required to inspect or supervise such third parties, irrespective of the third party services or products being incidental to or necessary for the provision of our Services to you. 13.5. Subject to the provisions in these Terms and Conditions and the Letter, our total aggregate liability (including that of our partners and employees) to you in contract, tort (including negligence or breach of statutory duty), misrepresentation, restitution or otherwise, arising in connection with the performance or contemplated performance of the Services shall be limited to an aggregate sum not exceeding twenty times the fee paid for each instruction accepted. 13.6. We shall be released from our obligations to the extent that performance thereof is delayed, hindered or prevented by any circumstances beyond our reasonable control (examples being a strike, act of God or act of terrorism). On becoming aware of any circumstance which gives rise, or which is likely to give rise, to any failure or delay in the performance of our obligations, we will notify you by the most expeditious method then available. 13.7. To cover any liability that might be incurred by us, we confirm that we will maintain professional indemnity insurance, so long as such insurance is available at commercially acceptable rates and terms, with insurers of good standing and repute of up to $1 million on an each and every claim basis in Russia.

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Cushman & Wakefield additionally maintains insurance on the same basis of not less than £10 million on an each and every claim basis. 13.8. Our pricing structure has been established by reference to these limitations on our liability and our level of professional indemnity insurance in respect of the Services we provide. If you feel that it is necessary to discuss with us a variation in these levels, then please raise the issue with your client partner who will be able to let you have proposals for a revised pricing structure to reflect the agreed level of our liability and/or professional indemnity cover. 13.9. Responsibility for our valuation extends only to the party(ies) to whom it is addressed. However in the event of us being asked by you to readdress our report to another party or other parties or permit reliance upon it by another party or other parties, we will give consideration to doing so. Where we consent to reliance on our report by another party or other parties, we do so on the basis that these terms and conditions will apply to the new addressee(s) as if it/they had been a party to the original letter of instruction between us. Where we consent to such reliance, you agree to furnish the addressee with a copy of any reliance letter issued by us and/or a copy of these terms and conditions.

13.10. Where you provide a copy of and/or permit another party or parties to rely upon our valuation report without obtaining our express written consent (in accordance with clause 12.10 above), you agree to indemnify us for any and all liability which arises from the use of or reliance upon our report by such unauthorised party. 13.11. Save where we have consented to another party or other parties relying on the valuation report in accordance with clause 12.9, where a valuation report is prepared or where we consent to a valuation report being used for the purpose of a public offering in accordance with any stock exchange listing rules, you agree to indemnify us for any liability whatsoever that we have to any party or parties which exceeds our aggregate cap on liability (referred to at clause 12.5) which arises from their use and/or reliance on the valuation report.

14. Quality of service

14.1. Our valuation procedures are certified as ISO9001:2000 compliant. 14.2. All our valuation reports are signed by an Equity Partner of the Firm whose responsibility it is to ensure that all relevant quality control procedures have been complied with. In particular, for valuations of properties with an individual value of $20m or over, the valuer is required to present and explain his methodology to another member of the Valuation Advisory Team unconnected with the instruction and who is a Partner of the Firm. 14.3. While we seek to provide high quality Services, if a client has cause for complaint we have a standard complaints procedure, a copy of which is available on request. This is in accordance with requirements of the Royal Institution of Chartered Surveyors

15. Data protection

15.1. We (including any of our international partnerships, group companies and affiliated organisations) are a data controller of all personal data collected during the provision of the agency services. We shall use such personal data and information we obtain from other sources for providing the agency services, for administration and customer services, for marketing and to analyse your preferences. We may keep such personal data for a reasonable period for these purposes. We may need to share personal data with our

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 service providers and agents for these purposes. We may disclose personal data in order to comply with a legal or regulatory obligation and you may request, in writing and upon payment of a fee, a copy of the details held about you by us. 15.2. To help us to make credit decisions about you, to prevent fraud, to check identity and to prevent money laundering, we may search the files of credit reference agencies and we may also disclose details of how you conduct your account to such agencies. 15.3. We may share personal data within our international partnerships, group companies and affiliated organisations and with our business partners for marketing purposes, which may be to countries or jurisdictions which do not provide the same level of data protection as the country in which you are based, or we may send you and your employees information about other organisations' goods and services. We or any business partners may contact you and your employees, directly or via our agents, by mail, telephone, fax, email, SMS or other electronic messaging service with offers of goods and services or information that may be of interest. By providing us with your or your employees' personal data (whether that data is deemed sensitive or not) including fax numbers, telephone numbers or email addresses, you and your employees consent to being contacted by these methods for these purposes.

16. Money laundering regulations

16.1. You are aware that legislation of the Russian Federation and related guidance as updated from time to time, has imposed on us obligations for mandatory reporting, record keeping and identification procedures. We may be required to verify certain particulars of our clients and may need to ask you to assist us in complying with such requirements. Where such information is requested, you will provide such information promptly to enable us to proceed to provide our Services. We shall not be liable to you or any other parties for any delay in the performance or any failure to perform the Services which may be caused by our duty to comply with such requirements.

17. Freedom of information

17.1. Where you are a public authority for the purposes of the Freedom of Information Act 2000 (the "Act"), you shall notify us within five business days of receiving a request pursuant to the Act requesting information which relates to the business arrangements between us and you and/or any information we have provided to you at any time. In recognition of the fact that we may be providing you with genuinely confidential or commercially sensitive information, you agree to consult us and seek our views on all such requests prior to making a decision on whether any information should be publicly disclosed.

18. Electronic communications

18.1. We may communicate with each other by electronic mail, sometimes attaching electronic data. By consenting to this method of communication, we and you accept the inherent risks (including the security risks of interception of, or unauthorised access to, such communications, the risks of corruption of such communications and the risks of viruses or other harmful devices). In the event of a dispute, neither of us will challenge the legal evidential standing of an electronic document and our system shall be deemed to be the definitive record of electronic communications and documentation.

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19. Confidentiality and intellectual property

19.1. We owe our clients a duty of confidentiality. You agree, however, that we may, when required by our insurers or other advisers, provide details to them of any engagement on which we have acted for you, and that we may also disclose confidential information relating to your affairs if required to do so for legal, regulatory or insurance purposes only. 19.2. Both parties agree never to disclose sensitive details of transactions or our advice without the other’s consent. Unless we are expressly bound by a duty of confidentiality which otherwise overrides this, both parties shall be entitled to mention to third parties (e.g. in the course of presentations, speeches or pitches) and/or publish (e.g. in brochures, marketing or other written material) that we provide our services to you. 19.3. We shall provide the Services to you only for your sole use and for the stated purpose. We shall not be liable to any third party in respect of our Services. You shall not mention nor refer to our advice, in whole or in part, to any third party orally or in annual accounts or other document, circular or statement without our prior written approval. The giving of an approval shall be at our sole discretion. 19.4. We will not approve any mention of our Services unless it contains sufficient reference to all the special assumptions and/or limitations (if any) to which our Services are subject. For the avoidance of doubt our approval is required whether or not we are referred to by name and whether or not our advice is combined with others. 19.5. We may make the approval of any mention of our Services, or re-address to third parties our Services, subject to the payment of an additional fee to cover additional work and professional liability. 19.6. All intellectual property rights (including copyrights) in the documents, materials, records, data and information in any form developed or provided to you by us or otherwise generated in the provision of our Services shall belong to us solely.

20. Third parties rights and assignment

20.1. No term of the Letter or these Terms and Conditions is intended to confer a benefit on or to be enforceable by any person who is not a party to the same. The application of the Contracts (Rights of Third Parties) Act 1999 is expressly excluded. 20.2. We shall be entitled to assign or transfer this contract and any rights and obligations arising from it to any party which comprises of substantially the whole of our business, including any limited liability partnership, by giving appropriate notice. 20.3. Subject to clause 19.2 above, neither party shall be entitled to assign this contract or any rights and obligations arising from it without the prior written consent of the other, such consent not to be unreasonably withheld.

21. General

21.1. If any provision of the Terms and Conditions is found by any court, tribunal or administrative body of competent jurisdiction to be wholly or partly illegal, invalid, void, voidable, unenforceable or unreasonable it shall to the extent of such illegality, invalidity, voidness, voidability, unenforceability or unreasonableness be deemed severable and the remaining provisions of the Terms and Conditions and the

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Report and Regulated Purpose Valuation the LSR Group Property Portfolio as at December 31, 2011 remainder of such provision shall continue in full force and effect. 21.2. Failure or delay by us in enforcing or partially enforcing any provision of these Terms and Conditions shall not be construed as a waiver of any of our rights under these Terms and Conditions. 21.3. The Letter and these Terms and Conditions shall be governed by and be construed in accordance with Russian law. Any dispute arising out or in connection with the Services shall be submitted to the exclusive jurisdiction of the Courts of Russian Federation.

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