PRO KAPITAL GRUPP Investor Presentation August, 2013

Rendering Plan of Peterburi Shopping center Important Notice

This Presentation has been prepared by Aktsiaselts Pro Kapital Grupp (the “Company” or “PKG”) for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment.

This Presentation does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company or any member of its group nor shall it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever.

Unless otherwise stated, PKG is the source for all data contained in the Presentation. All statements other than statements of historical fact included in this Presentation, including, without limitation, those regarding PKG’s financial position, business strategy, management plans and objectives for future operations are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause PKG’s actual results, performance, achievements or industry results to be materially different from those expressed or implied by these forward-looking statements. Forward-looking statements speak only as of the date of this Presentation and PKG expressly disclaims any obligation or undertaking to release any update of, or revisions to, any forward-looking statements in this Presentation as a result of any change in expectations or any change in events, conditions or circumstances on which these forward-looking statements are based. PKG is under no obligation to update or keep current the information contained herein.

This Presentation is not intended for distribution to or use by any person or entity, if the distribution of this Presentation to or its use by such person or entity would conflict with any law or regulation applicable to such person or entity or such distribution or use require any registration, licence or permit thereunder. This Presentation is not intended for publication, release, distribution in or into the United States, Australia, Canada or Japan or to the persons of those countries (as determined in accordance with the laws of such countries). If you have received this Presentation in conflict with any of the foregoing, you are required to disregard the contents hereof.

The information contained in this Presentation has not been independently verified and no representation or warranty, express or implied, is made to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Without prejudice to mandatory laws, none of PKG or any of its respective subsidiaries or affiliates or any of such person’s directors, officers or employees, advisers or other representatives, accepts any liability whatsoever (whether in negligence or otherwise) arising from any use of this Presentation or any part thereof or otherwise arising in connection therewith. Unique Opportunity in the Growing Baltic Real Estate Market…

Opportunity to capitalize on recovering Baltic real estate Track record of market Pure exposure on successful project Baltic macro development recovery

Conservative Strong project balance sheet portfolio

…Providing Baltic Macro Exposure

3 Company Overview Strong Project Development Track Record

. PKG is one of the leading real estate development and management companies in the Baltic region . The Company was established in 1994, making it one of the first major players in the Estonian real estate market . In 1997 and 1998 PKG expanded to Latvia and Lithuania, respectively

. The Company actively accumulated potential development projects (i.e. land plots, amortized buildings) in the period of 1996-1998 . In 1997 the Pro Kapital Business Centre in Tallinn CBD was completed, marking the completion of the first successful development project . The Company still owns some of the attractive projects acquired in late 1990s

Completion of last Start of Ilmarine project Start of Domina Shopping project phase of Ilmarine Completion of PK Business Expansion of Kristiine Centre, a first major project Delisting from TSE Expansion to Latvia Sale of Domina Shopping Centre Sale of Kristiine to Citycon Expansion of Kristiine Listing on TSE Establishment of PKG Domina Shopping Centre opening Listing on TSE Expansion to Lithuania Kristiine opening

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Domina Plaza R üütli 13 PK Parkhotel Kurhaus

PK BC Ilmarine Residences PK Ilmarine Hotel

Demini Vecpilsētas 8A Kuģu 26

Jegorovi Pulkveža Brieža 11 PK Riga Hotel Key projects Ilmarine district World Trade Centre Riga Residential Kristiine Shopping Centre Commercial Vene Street Stabu 19 Domina City Domina Shopping Centre

Length of the bar = time of project development and ownership by PKG

5 PKG is Managed by Experienced Team

Key Personnel

Paolo Vittorio Michelozzi Allan Remmelkoor Ruta Juzulenaite Ervin Nurmela CEO COO CFO Head of the Legal Department . With PKG 18 years . With PKG 15 years . First year with PKG . With PKG 5 years . Previous experience in VP Group, . 30+ years of real estate . Has managed development of . Previous experience in law firm development Kristiine and Domina Shopping the largest pan-Baltic retail company Legalia . Extensive experience of over 30 Centres . Holds BA degree in international years in various real estate . Previous experience in marketing administration from Concordia . Holds Bachelor’s degree in Law development projects in Europe industry International University Estonia from Tartu University Law . General Certificate of Education . Holds Bachelor’s degree in Small (Audentes University) and is Institute (building inspector) from Collegio Business Administration from acquiring MBA (finance) from Tartu Arcivescovile Tallinn Technical University University

Shareholders of the Company

35% Affiliates of Mr. Ernesto Preatoni 45% Mr. Vladimir Maslov Mr. Giuseppe Prevosti 45% free float Free float

12% 8%

6 Share Capital Increase

Share capital increase in 2-3 years range from € 50 to 70 mln

. February 8th 2013 Extraordinary Shareholders Meeting approved a Share Capital Increase  Give the right to the Supervisory Board for 3 years to issue new shares to increase the Share Capital by up to € 5.318.542.2 (nominal value) N. 26,592,711 new shares . Rationale  to strengthen the financial position of the Company  to finalize the launch of the new development projects

. April 5th 2013 a New Extraordinary Shareholders Meeting approved:  New Capital Increase trough an issue of new shares for 1.400.000 (nominal value €0.20)  Excluding the preemptive right, as the shares are just 2,63% of the Company’s current share capital  Subscription share price: €1,80 th th  Subscription period: April 26 to May 10 N. of Issued Nominal Share Up today July 2013 Shares value Capital in € Share Capital 54,106,575.0 0.20 10,821,315.0 . Result of the first Share Capital Increase tranche Future issue (*) 26,592,711.0 0.20 5,318,542.2  Shares subscribed : 921.153  Proceeds: € 1.658.075 (*) The Supervisory Board can still issue without new EGM  CEO Paolo Michelozzi subscribed 87.500 shares

7

Strong Supervisory Council and Corporate Governance

Supervisory Council

Emanuele Bozzone Giuseppe Prevosti Renato Lorenzo Bullani Chairman Member Member . In the Supervisory Council since July 2010 . In the Supervisory Council since July 2010 . In the Supervisory Council since July 2010 . Founder and partner in a number of law and . Since 1981 CEO and as of 2012 Chairman of . Since 1972 acting as a free-lance chartered business consulting firms the Board of Directors of family-owned Preca fiduciary . Holds Degree in Economics and Commerce Brummel, a leading Italian child wear producer . Member of the Board of Directors of several . No ownership in the Company . Holds Diploma in Land Surveying companies in Switzerland and abroad . Mr. Prevosti together with family and through . Holds a federal qualification in economics, controlled entities holds 8.36% of the shares in specialized in financing and accounting the Company . Owns 0.3% of the shares of the Company

Pertti Huuskonen Petri Olkinuora Sari Aitokallio Member Member Member . In the Supervisory Council since April 2012 . In the Supervisory Council since April 2012 . In the Supervisory Council since April 2012 . Chairman of the Board of Directors in . Member of the Board of Directors in BPT and . A Senior Vice President in the field of finance Technopolis (during 2008-2011) other Finnish companies and administration in Metso Automation Inc. . Previous experience as executive and member . Previous experience as CEO of Citycon, Renor . Previous experience in Sponda, Valmet , Metso of the Board in many Finnish companies and Tampereen Kiinteistö Invest . Holds a Master of Laws (LLM) degree . Holds M.Sc. (Eng.) and EMBA degrees . Holds M.Sc. (construction engineering) and . No ownership in the Company . No ownership in the Company MBA degrees . Planning to resign from Council at the end of . No ownership in the Company March due to time constraints

. In 2001 the Company was delisted in relation to alleged breach of information disclosure requirements, which was performed by the CFO of the Company at that time . The CFO left the Company immediately after the event . Current management started their managerial duties at the Company after the delisting and are not associated with that in any way

8 Growing Real Estate Company in the Baltics

. AS Pro Kapital Grupp (“PKG” or “Company”) develops, manages and sells real estate in the capitals of Baltic States mainly focusing on development of Projects in PKG’s portfolio retail and upscale residential properties Project Appraised value . Real estate development experience in the Baltic States since mid 1990s . Most of the properties acquired in late 1990s and early 2000s for attractive valuations Peterburi Rd Shopping Centre €43.9m . Strong track record (20 projects developed, managed and sold) Tondi Quarter (all project) €31.1m . Council members include Pertti Huuskonen (ex-CEO and ex-Chairman of Technopolis) and Petri Olkinuora (ex-CEO of Citycon) Tallinas St. Residential Complex €5.4m . Domina and Kristiine Shopping Centres – successful start-to-finish retail projects

Kliversala Residential Complex €29.9m . Listed on Tallinn Stock Exchange since November 2012

. Appraised portfolio value of €180.0 million as of April 20121 Kalaranna Residential Complex €26.1m

. Conservative financing strategy ca. 50% debt and 50% equity Saltiniu Namai Residential Complex €17.3m

PK Parkhotel Kurhaus €7.5m

PK Ilmarine Hotel €7.2m Breakdown of the portfolio (€m) PK Riga Hotel €7.2m 7.5 17.3 21.9 Estonia Zvaigznes Centre €3.4m Residential Latvia 45.9 43.9 Retail Ilmarine Quarter €1.1m 109.4 Lithuania 114.3 Hotel Germany Total: €180.0m

Source: Newsec Source: Newsec 1 Investment value of PKG’s portfolio as appraised by Newsec using RICS Valuation Standards. Portfolio also includes one hotel asset in Germany, appraised in April / June 2012

9 Actual PKG Portfolio

. The current project portfolio is listed in the table below

Project Type GSA/GLA Development Description Means of exit

Peterburi Rd Development of a large commercial project located in Tallinn Lasnamäe Sale of the property after Shopping Centre Commercial 77,880 m2 2012 – 2017 commercial district near the junction of St. Petersburg and Tartu road (the ownership and stabilization (whole project) highest passenger traffic in Tallinn) phase

Tallinas St Development of residential and commercial property in Riga next to the Residential / Sale of apartments and Residential 18,845 m2 2013 – 2017 border of Riga’s historical City Centre between two major streets (Brivibas commercial commercial premises Complex and Valdemara)

Tondi Quarter Residential / Development of primarily residential and secondarily commercial property Sale of apartments and 83,462 m2 2012 – 2023 (whole project) commercial in Kristiine borough in Tallinn City Centre periphery commercial premises

Saltiniu Namai Residential Residential 19,040 m2 2012 – 2020 Development of residential property located in Vilnius Old Town Sale of apartments Complex

Kliversala Development of residential and commercial property in Riga at the at the Residential / Sale of apartments and Residential 49,920 m2 2014 – 2020 waterfront of river Daugava and enjoying views to the Old Town on the commercial commercial premises Complex opposite bank

Kalaranna Development of residential property in North-Tallinn borough – a Residential Residential 33,013 m2 2013 – 2019 residential and industrial area very close to Tallinn Old Town, the Sale of apartments Complex passenger port and City Centre of Tallinn

Zvaigznes Residential / Development of residential and commercial property in Riga next to the 17,949 m2 2013 – 2017 Sale of apartments Centre commercial border of Riga’s historical city centre facing the major Brivibas street

PK Parkhotel Continued operations until Hotel 3,383 m2 NA Hotel in the historical centre of Bad Kreuznach Kurhaus attractive exit possible

PK Ilmarine Continued operations until Hotel 3,985 m2 NA Hotel in the Ilmarine Quarter at the outskirts of the Tallinn Old Town Hotel attractive exit possible

Continued operations until PK Riga Hotel Hotel 2,705 m2 NA Hotel in the quiet centre of Riga attractive exit possible

10 Priority Projects to be Developed by PKG

1 2 3

Parameter

Peterburi Rd Shopping Centre Tondi Quarter Tallinas St. Residential Complex

Location Tallinn, Estonia Tallinn, Estonia Riga, Latvia

Project scope Shopping centre Residential / commercial Residential / commercial

Tondi Quarter is a large premium residential Tallinas is a premium residential project Peterburi is a large commercial project located in project consisting of renovated buildings and located in the centre of Riga, right next to the Tallinn Lasnamäe commercial district near the Description new apartment houses in Tallinn Kristiine border of the historical centre. The location junction of St. Petersburg and Tartu road (the district near one of the main crossroads in has good access by private and public highest passenger traffic in Tallinn) Tallinn transport

116,040 m2 (project total) Gross buildable area above ground 130,400 m2 (including underground parking) 25,307 m2 9,300 m2 (Stage 1 of Phase 2)

Gross leasable area / Net sellable 83,462 m2 (project total) 17,650 m2 residential 55,000 m2 retail area 6,700 m2 (Stage 1 of Phase 2) 1,195 m2 commercial

Parking 1,600 units 1,450 units (project total) 355 units

Estimated development period 2012-2017 2012-2023 (project total) 2013-2017

Estimated project costs €87m (only shopping centre) €11m for (Stage 1 of Phase 2) €29m

Starting apartment price (excl. VAT) n/a €1,750 per m2 €1,800 per m2

€11.0 per m2/month office Estimated average rent €15.7 per m2/month retail n/a €12.0 per m2/month retail

Estimated exit year and yield 2019; 7.0% yield n/a 2017; 8.5% yield

Lease with anchor tenant signed. Building permit Building permit received for Phase 2 of the Architectural project submitted for approval to Status obtained, construction to start in 2013 project city council

11 Tallinn

Kalaranna

Ilmarine District1

PK Ilmarine Hotel CBD

Jegorovi Pro Kapital Business Centre Old Town Rüütli 13 Vene 19

Domina City Hotel Demini

Kristiine Shopping Centre

Peterburi Rd Shopping Centre

Tondi Quarter

Map: Google Maps Completed projects Development projects 1 Ilmarine district includes on-going projects Ilmarine Hotel and Ilmarine Quarter Source: Company

12 Riga Zvaigznes

Tallinas

Domina Shopping Centre Domina Inn Riga

Pulkveža Brieža 11

Stabu 19

Old Town

Kliversala Vecpilsētas 8A

Kuģu 26

Map: Google Maps Completed projects Development projects Source: Company

13 Vilnius

Old Town

Domina Plaza Saltiniu Namai1

Saltiniu Namai 2

Map: Google Maps Completed projects Development projects Source: Company

14 Balance Sheet 1 Q 2013 vs. 1 Q 2012 & FY 2012 vs. FY 2011

. Inventories and investment property, which include finished real estate and real estate under construction, represent the largest part of the Company’s balance sheet (69% as of March 31, 2012) € thousand FY 2012 FY 2011 1 Q 2013 1 Q 2012

Non-current assets 48,166 48,784 47,983 48,166 . Leverage is low compared to industry average. The Company uses Current Assets 52,096 64,688 51,615 52,096 conservative project financing approach, using high proportion of Total assets 100,262 113,472 99,598 100,262 equity Equity 66,127 72,058 65,205 66,127 of which minority 1,552 1,597 1,538 1,552 Debt details and split Non-current liabilities 17,728 23,597 16,673 17,728 Current liabilities 16,407 17,817 16,720 16,407 Debt 1 Q 2013 FY 2012 € thousand Total Liabilities & Shareholders 100,262 113,472 98,598 100,262 Equity Current debt, financial institutions 5,965 4,237 Non-current debt, financial institutions 7,630 7,695 Non-current debt, related parties 4,204 4,153 Lenders 1 Q 2013 FY 2012 Interest % Convertible debt- various shareholders 11,272 11,272 € thousand Total Debt 29,071 27,357 Swedbank AS (EE) 1,704 1,731 2% + 6m Euribor Swedbank AS (EE) 214 605 2,5% + 6m Euribor Cash and Cash equivalent 1,170 707 Swedbank AS (EE) 2,959 565 1,95%+ 6m Euribor AS Swedbank (LV) 4,214 4,284 3,0% + 3m Euribor NFP 27,901 26,650 “Swedbank” AB (LT) 4,497 4,736 2,4% + 6m Euribor Volksbank Bad Kreusnach 7 10 5,1% Debt 1 Q 2013 FY 2012 Svalbork Invest, related party 4,204 4,153 5,0% € thousand Convertible debt- various shareholders 11,272 11,272 7% Due within 1 year 13,430 13,500 Total Debt 29,071 27,357 Due between 2 to 5 years 15,641 13,857 Total Debt 29,071 27,357

15 Income Statement

1 Q 2013 vs. 1 Q 2012 & FY 2012 vs. FY 2011

€ thousand FY 2012 FY 2011 1 Q 2013 1 Q 2012 . Due to the nature of the development business, revenues and profit of the Company fluctuate and will continue to do so over the coming Recurring Revenues 16,078 17,449 3,016 7,108 years Costs on Revenues (12,750) (16,407) (2,702) (5,739) . In 2011 the Company recorded the sale of Kristiine Shopping Centre Gross Profit 3,328 1,042 314 1,369 and booked €50.1m of net profit (before minority adjustments) Reveunes from sales 411 54,280 81 60 3 EBITDA (3,794) 48,449 314 1,369 . As a result of Estonian tax legislation the Company has paid out dividends just once in the past Operating Result (4,613) 47,858 (324) (1,008) . After the listing and realization of some of the Company’s Net Result (5,866) 50,102 (636) (911) developments the dividend payout ratio is expected to increase4

3 Estonian legislation does not impose tax on reinvested profits. However, income tax at a rate of 21/79 must be paid on the net amount of dividends or other profit € thousand FY 2012 FY 2011 1 Q 2013 1 Q 2012 distributions (21% of the gross amount of distribution) Recurring Revenues 4 The Company has tax break to distribute tax-free dividends in the amount of ca. Real Estate 7,347 7,795 1,097 5,178 €118m Rents 1,021 3,751 282 248 Hotels 6,336 3,496 1,141 1,261 Others 1,374 2,407 496 421 Total 16,078 17,449 3,016 7,108

16 Real Estate Market Background Baltic Macro Environment is Improving…

. Baltic economies are recovering Sovereign debt levels are under control (2012) . Increasing exports together with internal devaluation and regained competitiveness have been driving growth 180% Government’s debt, % of GDP . Foreign investors’ attitude towards Baltic assets has improved 150% significantly with Baltic CDS level normalizing and Latvia regaining investment grade 120% 90%

. GDP growth is moderate and driven by fundamentals 60% . Growth rate is well below excessive two-digit rates that led to bubble 30% formation before the crisis . The growth is driven by improved competitiveness and exports 0% EE LV SE LT CZ FI PL HU DE UK FR IE PT IT GR . GDP growth in all three Baltic countries is exceeding the EU average Source: IMF estimate

CDS prices have decreased significantly… …while GDPs are recovering

1,400 135 Real GDP, 2005 indexed to 100 Estonia Latvia Estonia Latvia Lithuania Germany 130 1,200 Lithuania EU27 5-yr. CDS prices, bps 125 1,000 120 800 115 600 110 400 105 100 200 95 0 90 2009 2010 2011 2012 2013 2005 2006 2007 2008 2009 2010 2011 2012 Source: FactSet Source: Eurostat …as Baltic Economies have Returned to Steady Growth Path

18 Baltic Real Estate Market Presents Growth Opportunities…

. Activity in the Baltic real estate market is mainly concentrated in the Average apartment price in city centre (€/m2, 2012)1 capitals – Tallinn, Riga and Vilnius . Premium locations for residential projects include city centres of Tallinn, 8,000 Riga, Vilnius, as well as Jurmala (premium resort in Latvia, adjacent to Riga) 6,000 . Retail space is mostly developed in capitals due to high concentration of population and business activity 4,000

2,000 . Real estate market in the Baltics is significantly less developed compared to the Nordic region and EU average 0 . Market has started to recover at the end of 2010 but is still fundamentally under-priced in comparison to Nordic and other European countries

1 Price of a re-sale 120 m2 apartment in the city centre Source: Global Property Guide . The market is recovering from a significant correction . Real estate market was the first to contract amid downturn in the economy, Retail space and rent levels (2012) and activity was close to zero in 2009 1000 200 . Along with the economic recovery, activity in the real estate market has GLA per '000 inhabitants, m² (lhs) Prime shopping centre rent, €/m²/month (rhs) picked up in the second half of 2010 and 2011-2012 800 160

600 120 . Household income level in the Baltics decreased substantially during economic downturn in 2008-2009, stabilizing in 2010-2012 400 80 . In 2013 average real wage in Estonia is expected to grow by 2.8%, in Latvia 200 40 – by 2.7% and in Lithuania – by 1.6% 0 0

Source: Colliers, DTZ …as it Recovers from Deep Correction

19 Residential Real Estate in Tallinn, Riga and Vilnius…

. Residential real estate market in Tallinn, Riga and Vilnius is recovering, Average apartment price (€/m²)1 with the number of transactions and prices gradually increasing . Average apartment price in Tallinn increased by 9% in 2010, by 16% in 2011 2,500 and by 6% in 2012 2,000 . Prices of newly developed apartments in Riga increased by 12% in 2010 and continued to rise in 2011 – by 6% in the city centre and 15% in suburbs; 1,500 in 2012 the prices stayed flat . In Vilnius the average apartment prices bottomed out in 2010 and increased 1,000 by 1% in 2011, while decreasing by 1% in 2012 500 Tallinn Riga Vilnius . There is a shortage of modern residential developments across Baltics 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 . Most of the population is still living in the old Soviet era residential block 1 Including Soviet era residential block buildings, constituting Source: Ober-Haus buildings that are deteriorating rapidly most of the market . The market for new residential developments picked up in early and mid 2000s as increasing income and availability of mortgage loans fuelled New residential space (thousand m²) demand 600 . Market activity dried out and the number of new–built apartments decreased Tallinn Riga Vilnius significantly in 2009– 2011 after the financial crisis 450

. The supply of upscale projects in premium locations is limited 300 . In Riga there is a lack of apartments with area of 70-120 m2 in price range of €150,000-350,000 150 . In Vilnius the supply of upscale projects is practically non-existent as the majority of new apartments are relatively poor in quality and/or have a bad 0 location, and are sold without final finishing 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Central Statistics Bureau, the Company …is Fuelled by Fundamental Demand and Undersupply

20 Affordability of Residential Real Estate in Baltics…

1 . Increasing affordability of residential real estate in the Baltics implies Housing Affordability Index1 high potential of the residential real estate market in these countries . Households in Tallinn have the highest purchasing power for apartments 200 among the Baltic capitals 160

. Average apartment prices have the strongest effect on affordability of real 120 estate 80 . Affordability dropped during the peak economic growth years (2006-2008) following the rising apartment prices 40 . As prices adjusted during the crisis in 2009-2010, affordability has increased Tallinn Riga Vilnius considerably 0 2005 2006 2007 2008 2009 2010 2011 2012 Source: Swedbank . Declining mortgage interest rates have had a considerable impact on affordability of real estate Average long-term interest rates

8%

6%

4%

2% Tallinn Riga Vilnius 0% 1 Affordability Index measures the proportion of household disposable income that can be used to service the mortgage 2004 2005 2006 2007 2008 2009 2010 2011 2012 loan. The Index is calculated assuming average apartment price in the market, household income as 1.5 times the average income per person in the capital city, loan period of 30 years, 15% down payment and average long-term interest Source: Central Banks of Estonia, Latvia and Lithuania rate on the loan. …Has Increased Substantially

21 Retail Real Estate Market in Tallinn…

. Retail sales have picked up in Estonia Rent levels in shopping centres in 2012 (€/m2/month) . In 2012 retail trade increased in real terms by 7% 50 . The total retail space in Tallinn has seen marginal increases lately 42 40 . The total supply of retail space in Tallinn increased by 44,000 m2 in the period 2 29 of 2010 - 2012, reaching almost 500,000 m (Kristiine Shopping Centre was 30 expanded by 12,200 m2 in 2010) 20 . In spring 2011, Kristiine Shopping Centre (PKG indirectly owned 52%) was 20 15 bought by Citycon for €105m 10 15

8 . Most of the retail trade in Tallinn is concentrated in shopping centres as the 0 high street is virtually non-existent Up to 100 m² 150-350 m² Over 350 m² Source: Colliers, The Company . Rent levels remained fairly stable throughout the crisis, decreasing only by 5-8% yoy in 2010 and stabilizing in 2011 and 2012 Retail space dynamics in Tallinn (thousand m2) . Demand for retail space in major shopping centres in Tallinn still exceeds supply, resulting in vacancy rates close to zero in prime locations 600 Existing stock New developments 500

400

300

200

100

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Colliers …Provides Room for Quality Developments

22 Main Shopping Center in Tallinn

Viru Keskus . Opened in 2004 . GLA of 23,000 m2 . Owned by a group of investors CBD Panorama Rocca Al Mare Old Town . Opened in 1999; expanded in 2009 . Planned shopping centre with GLA of . GLA of 53,000 m2 55,000 m2 . Owned by Citycon . Status: Start of construction in 2013

Kristiine Shopping Centre . Opened in 1999; expanded in 2002 & 2010 Peterburi Rd Shopping Centre . GLA of 42,000 m2 . Planned shopping centre with GLA . Owned by Citycon of 55,000 m2

. Status: Start of construction in 2013

Ülemiste Keskus . Opened in 2004, extension planned in 2014 . GLA of 37,000 m2 Järve Keskus . Owned and managed by Linstow

. Opened in 1998; expanded in 2000 & 2002 . GLA of 32,000 m2 . Owned by a private individual

Map: Google Maps Existing shopping centres Planned shopping centres Source: Porta Finance, based on public information

23 Appendices Basics of Real Estate Accounting

. Real estate is classified in the following way according to IFRS . Inventories include buildings completed and construction in progress (residential developments) . Tangible assets include land and buildings used in a company’s operations (offices, hotels) . Investment property includes commercial properties under development . Real estate held for sale include the real estate that has been acquired and developed to be sold in the short term

. Applying IFRS the real estate properties in the books of the Company are accounted in the following way . Inventories are recognized at a lower of the cost value or net realizable value (net realizable value – the selling price less all estimated costs of making the sale) . Tangible assets are recognized at fair value (fair value is determined using either 1) DCF method or 2) comparative transaction price method) . Investment property is initially recognized at cost and subsequently to initial recognition measured using the fair value method . Real estate held for sale is recognized at the lower of cost value or net realizable value

Therefore, the book value of the Company’s portfolio significantly differs from appraised value because of differences in valuation methodologies applied

. Appraisal of the Company’s property portfolio by Newsec is based on investment value (calculated using DCF method), which represents each project’s value to the developer . Book value is calculated based on IFRS as described above using the cost value for a significant portion of the Company’s properties . In the case of PKG the cost value of properties is significantly lower than the value as appraised by Newsec as the Company has acquired most of its properties in the late 1990s and early 2000s for comparatively low costs . The larger properties in the portfolio are recorded under inventories

25 Book Value and Appraised Value of PKG Property

. The figure below represents a reconciliation of Company’s portfolio appraised value by illustrating the difference between net book and net appraised values of the portfolio

Bridge From Book to Appraised Value of Property1

200,000

180,000

160,000 3,135

140,000 17,890

120,000 21,031

100,000 20,894

80,000 21,173 153,876

60,000

40,000 69,753 20,000

0 Net book value of Kalaranna Residential Tondi Quarter Kliversala Residential Peterburi Shopping Other Net appraised value of portfolio Complex Complex Centre property

1 Net book value of portfolio includes balance sheet value of tangible assets, investment property and inventories less net debt (€26.2m) as of September 30, 2012. Net appraised value is Newsec’s appraisal of the portfolio (€180.0m) less net debt as at September 30, 2012 Source: Newsec, Porta calculations

26 History and Track Record

. The completed (e.g. exited) projects are listed in the table below

Project Type GSA/GLA Development Description Means of exit

Domina Domina Shopping was one of the largest shopping centres in Riga when Sold to German investors in Commercial 48,500 m2 2001-2007 Shopping Centre opened in 2003 2007 for €147m

Kristiine Kristiine Keskus was the largest shopping centre in Tallinn when opened Sold to Citycon in 2011 for Commercial 42,000 m2 1997-2011 Shopping Centre in 1999. The centre was expanded in 2002 and in 2010 €105m

Ilmarine involved the development of a residential complex and a hotel in Sale of apartments in 3 stages; Ilmarine district Residential 19,000 m2 1998-2008 three stages in North Tallinn Ilmarise Residence not sold

Pro Kapital converted an old office building situated on the banks of river Kuģu street 26 Residential 11,400 m2 2001 - 2006 Sale of apartments Daugava in Riga into apartments

Pro Kapital Pro Kapital Business Centre was one of the first modern office space Office 11,400 m2 1997-1999 Sale of office spaces Business Centre developments in the CBD of Tallinn

Residential / Pro Kapital renovated a historic Art Nouveau building in Riga into Stabu street 19 5,500 m2 1999 Sale of apartments Office apartments and office spaces

Pro Kapital renovated a historic building with 23 apartments situated next Jegorovi Residential 4,700 m2 1997 - 2001 Sale of apartments to Town Hall square in Tallinn

Commercial / Pro Kapital renovated a historic building in Tallinn Old Town into a Demini 4,100 m2 1997 - 1998 Sale of developed property Residential shopping gallery and apartments

Pulkveža Brieža Pulkveža Brieža street 11 is an apartment building developed in the same Residential 3,980 m2 2002 - 2004 Sale of apartments street 11 complex with Domina Hotel Riga

Domina City Pro Kapital acted as a project manager in the renovation of a hotel in Hotel 2,200 m2 2000 - 2001 Hotel Tallinn Old Town

Vene street 19 Residential 2,170 m2 1997 - 1998 Pro Kapital renovated a historic building situated in Tallinn Old Town Sale of apartments

Domina Plaza Residential 1,900 m2 1999 - 2000 Pro Kapital renovated a historic building situated in Vilnius Sale of apartments

Rüütli street 13 Residential 1,560 m2 2001 - 2002 Pro Kapital renovated a historic building situated in Tallinn Old Town Sale of apartments

Vecpilsētas 8A Residential 940 m2 1999 - 2001 Pro Kapital renovated a historic building situated in Riga Old Town Sale of apartments

27 Selected Completed Development Projects (1)

Domina Shopping Centre Kristiine Shopping Centre

. Domina Shopping Centre is one of the first and largest shopping . Kristiine Shopping Centre is the one of the first and largest centres in Riga, located on one of Riga’s main streets shopping centres in Tallinn, located in the proximity of the CBD . The centre fully opened in 2004 . After acquisition of industrial land plot in 1998, PKG rebuilt the old . The shopping centre was opened in 1999 VEF factory, developing it into a shopping mall . Total construction costs amounted to €57m . Total construction costs amounted to €60m 2 . Kristiine Shopping Centre offers 42,000 m of retail space . Domina offers 42,500 m2 retail and 5,800 m2 office space . There are around 170 shops and catering points in the centre . There are more than 160 shops and catering points, as well as a bowling area and fitness club in the centre . PKG exited Kristiine Shopping Centre in 2011 with IRR of 18% . The shopping centre was sold to shopping centre operator . PKG exited Domina Shopping Centre in 2007 with IRR of 21%1 Citycon (Finland) in 2011 for €105m . The shopping centre was sold to real estate investment fund . PKG indirectly owned 52% of Kristiine Shopping Centre KanAm Grundinvest (Germany) in 2007 for €147m . PKG indirectly owned 67% of Domina Shopping

1 IRR – internal rate of return of the project, calculating blending all the equity and debt related incoming and outgoing cash flows

28 Selected Completed Development Projects (2)

Kuģu street 26 Pulkveža Brieža street 11

. Kuģu street 26 is a residential building situated next to the . Pulkveža Brieža street 11 is an apartment building developed river Daugava with an exceptional view of the classical Riga in the same complex with Domina Hotel Riga, situated in the Old Town skyline premium embassy district of Riga

. PKG converted an old office building situated on the banks of . PKG reconstructed two old residential buildings river Daugava in Riga into apartments . Development of the project took place between 2002 and 2006 . Development of the project took place between 2001 and 2006 2 . Pulkveža Brieža street 11 has 3,980 m of GSA in 44 . Kuģu street 26 has 11,400 m2 of GSA1 in 99 apartments apartments and commercial premises

. The Company achieved IRR of 20% on the project . The Company achieved IRR of 27% on the project . Almost all of the premises were sold by the end of 2011 . All premises were sold by the end of 2005

1 GSA – gross sellable area

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