development corporation plc company presentation · sqm17.1 224 232 171 150 138 35,756 40,000...

Development Corporation Plc

Company Presentation

August 2014

Forward Looking Statements Disclaimer

Proven

business

model

Skilled

management team

Ad- hock

cooperation

with local

partners

Diversified

portfolio

Various

financial

resources

Shareholders’

experience

Transparency

Accountability

This presentation includes statements that are, or may be deemed to be, “forward-looking

statements”. These forward-looking statements can be identified by the use of forward-looking

terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”,

“will” or “should” or, in each case, their negative or other variations or comparable terminology.

These forward-looking statements relate to matters that are not historical facts. They appear in a

number of places throughout this presentation and include statements regarding our intentions,

beliefs or current expectations concerning, amongst other things, our investment objectives and

investment policy, financing strategies, investment performance, results of operations, financial

condition, liquidity, prospects and dividend policy and the markets in which we, directly or indirectly,

will invest. By their nature, forward-looking statements involve risks and uncertainties because they

relate to events and depend on circumstances that may or may not occur in the future. Forward-

looking statements are not guarantees of future performance. Our actual investment performance,

results of operations, financial condition, liquidity, dividend policy and the development of our

financing strategies may differ materially from the impression created by the forward-looking

statements contained in this presentation. In addition, even if our investment performance, results of

operations, financial condition, liquidity and dividend policy and the development of our financing

strategies are consistent with the forward-looking statements contained in this presentation, those

results or developments may not be indicative of results or developments in subsequent periods.

These forward-looking statements speak only as at the date of this presentation. Subject to our

legal and regulatory obligations we expressly disclaim any obligation to update or revise any

forward-looking statement contained herein to reflect any change in expectations with regard

thereto or any change in events, conditions or circumstances on which any statement is based.

2

■ Introduction

■ Strategy & Business Model

■ Russian Economy Overview

& Portfolio Highlights

■ Financials

■ Appendix

Table of Content

3

Residential Retail Offices Logistics

■ The Company was established in

2004, as the real estate vehicle of the

Fishman Group in Russia

■ MirLand diversified portfolio comprises

13 projects across Russia, with a total

rentable/saleable area of ~1.3M sqm

upon completion

■ In 12/2006, the Company successfully

raised net proceeds of US$327M at

the London Stock Exchange

■ To date, the Company raised net

proceeds of circa US$306M in publicly

traded bonds at the TASE

Introduction

Status Public

Traded AIM

NAV $559M*

NAV per Share $5.4*

Market cap. $412M**

Share price $3.98**

31/12/2013 30/06/2014

$893,170k $1,031,692k Total Balance

$331,717k 37% of balance

$326,558k 32% of balance

Total Equity

$357,737k Net debt to balance

ratio- 40%

$424,946k Net debt to balance

ratio- 41%

Total Net Debt

$66,154k $83,150k Cash

(*) As of June 30, 2014, (**) As of August 2014 4

Industrial Building

Corporation

Public

14.1% 45.7%

Jerusalem Economy

incl. Darban Holdings

Fishman Group

MirLand Development

Corporation Plc

40.2%

77.1%

78.2%

■ Yielding

or

■ Sale

■ Opportunity

identification

■ Project analysis

■ Land acquisition

■ Planning

■ Concept

design

■ Permits

■ Financing

■ Construction

■ Marketing

■ Lease/ sale

Strategy & Business Model

Mitigation of risks by maintaining a diversified portfolio

■ Diversification of assets in terms of geographical location, segmentation and development stage

Predetermined realization strategy

■ Residential projects developed for sale

■ Commercial projects retained as yielding assets

Realization of growth opportunities

■ Cautious consideration of new projects

■ Acquisition of land plots with an option for phased development

Optimization & diversification of financial resources

■ Stock issuance

■ Straight bonds issuance at the TSE

■ International and Russian banks loans

Dividend distribution

■ Starting from 2015 in amount of ~$15M, subject to adoption of the

dividend policy

5

■ GDP growth accelerated to 1.2% y/y in

2Q14 from 0.9% y/y in 1Q14 However,

the 0.5% GDP growth outlook for 2014

remain unchanged according to the

Ministry of Economic Trade &

Development, (1% by Alfa Bank)

■ Inflation rate for 2014 is expected to

reach 6.7% and forecasted to show

some slowdown in 2015

■ Unemployment level is 6.2% and is

expected to remain below 7% in the near

future

■ Retail trade turnover growth rate still

exceeds economic growth, so the

consumer market remains a top priority

for business

Russia’s Government debt

amounted to only 13% of

GDP, compared with 87% in

the EU

Real GDP Growth, Inflation and Unemployment, % Foreign Direct Investments, $bn

Macro Economy

Government Debt % of GDP & Reserves, $mil Global Real GDP Growth Risks Comparison, %

14%

80% 93%

132%

106%

36%

57%

92%

70%

94%

80%

43%

538

249

185 182 150

119 109 105 76

51 45 25

0%

20%

40%

60%

80%

100%

120%

140%

0

100

200

300

400

500

600% M$

General government gross debt out of GDP (Right Axis)

Reserves of Foreign Exchange and Gold (Left Axis)

7

4.2% 4.2%

3.4%

1.3% 0.5%

2.0%

8.8%

6.1% 6.6%

6.9% 6.7%

5.1%

7.2% 6.1%

5.6% 5.2%

6.2%

6.3%

2010 2011 2012 2013 2014F 2015F

Real GDP Growth Inflation (CPI, as % of Dec)

Unemployment rate (eop)

2015E 2014E 2013 Real

GDP

% Bull Base Bear Bull Base Bear

4.5 3.7 2.9 3.7 3.2 2.5 3.0 Global

3.0 2.2 1.4 2.2 1.8 1.3 1.2 G10

3.6 2.8 2.2 2.5 2.1 1.7 1.9 US

2.2 1.5 0.7 1.3 1.0 0.5 (0.4) EU Zone

1.7 1.1 (0.2) 1.6 1.1 0.5 1.6 Japan

3.9 2.7 1.8 3.7 3.1 2.6 1.7 UK

5.9 5.2 4.2 5.1 4.5 3.7 4.8 Emerging

markets

7.9 7.2 6.7 7.3 7.0 6.8 7.7 China

7.0 6.3 5.8 5.6 5.2 4.7 4.7 India

1.5 0.9 (1.2) 1.8 1.0 0.1 2.5 Brazil

2.5 1.9 (1.0) 1.5 0.8 (1.5) 1.3 Russia

55.9

74.7

36.6 43.2

55.1 50.7

94.0

41.0

2007 2008 2009 2010 2011 2012 2013 2014F

Real Estate Market

■ The total volume of investments in

1H14 accounted for $2.4bn (almost

half compared to 1H13 $4.63bn). The

forecast for 2014 is $5bn and increase

in 2015 up to $6.5-7.0bn

■ The leading share of investments

belongs to Russian investors – 88%.

While Moscow’s investment deals

comprise more than 90% of total

volume at $2.2bn

■ Prime yields remained stable in 2Q14,

but are expected to grow in 3Q14 by

0.25 pp for all segments: 8.75% for

offices, 9.25% for retail, and 11.25%

for warehouses. This revision reflects

the 0.5pp key rate increase by CBR

Real estate sector continues

to perform well due to strong

consumer market

Prime Yields in Moscow, % bn$Commercial RE, in Accumulated Investment

Investment Split by Source of Capital, %

8

4.9

3.0 3.1

7.4 8.0 8.2

5.0

2008 2009 2010 2011 2012 2013 2014F

8.9%

13.0%

10.0%

8.5% 8.7% 8.5% 8.75%

9.1%

13.0%

10.8%

9.3%

9.5% 9.0% 9.25%

10.1%

14.0%

11.5%

10.5%

11.5% 11.0%

11.25%

2008 2009 2010 2011 2012 2013 2014F

Offices Retail Warehouses

75%

19% 17% 28% 32% 31%

12%

25% 81% 83% 72% 68% 69% 88%

2008 2009 2010 2011 2012 2013 2014

Foreign Domestic

Office Sector

■ The total volume of investments in the

office segment in 1H14 was $1.71bn,

70% of total investments ($2.4bn)

■ The average vacancy rate has increased

by 2.4pp to 14.1% in 1H14 (23.7% in

Class A and 12.1% in Class B), and is

expected to grow further

■ The rental rates in 1H14: Class A

average rate has decreased from

$870/sqm to $809/sqm (per year, triple

net). Class B average rental rate is

stable at $528/sqm

■ In 1H14, the total volume of office deals

(sale & lease) decreased 32% compared

to 1H13 and amounted to 538Ksqm.

2014 monthly take-up decreased to 80K-

100K sqm compared to 150K in 2012-

2013

■ This year might be a record year of new

construction since 2009

Office Stock per 1,000 ppl Vacancy Rates for Class A&B in Moscow, %

Office Stock in Moscow, mil sqm Rent Rates for Class A&B in Moscow, $/sqm

7,800

5,200

3,600

2,500

2,200

1,900

1,600

1,400

1,000

800

0 2,000 4,000 6,000 8,000

London

Berlin

Madrid

Rome

Prague

Warsaw

Paris

Budapest

Moscow

Sofia

Moscow office stock is only 1

sqm per person, well below

the European countries

9

1.7 2.0 2.4 2.5 2.7 3.2

9.3 9.9 10.3 10.6 11.2 11.4

2009 2010 2011 2012 2013 2014F

Class A Class B

13.9 13.1 12.7

11.9 11

14.6

6.0%

11.1% 10.9% 9.4% 9.6% 10.2%

12.1% 13.4%

12.1%

21.5% 20.8%

15.7% 14.4%

17.9%

23.7%

27.1%

2008 2009 2010 2011 2012 2013 1H14 2014F

Class B

Class A

810

510

420 444 466 530 528 500

1,090

710 645

734 796

870 809 800

2008 2009 2010 2011 2012 2013 1H14 2014F

Class B Class A

■ Land area: 4.43ha

■ Total GLA: 67,871 sqm

■ C&W Valuation*30/0614: $252M

10 Office Sector: MirLand Business Center, Moscow

Annual NOI (MirLand Share), $M OPEX Dynamics $/sqm per Leased Area in sqm

MirLand Business Center

comprises 4 Class B+ office

projects, located in the

northern part of Moscow’s

Novoslobodskiy business

district

■ Ave rent rate per sqm: $454

■ Ave contract duration: 4.5 (y)

■ Tenants: 160

■ Indexation: ~8%

■ Currency: linked to USD

■ Occupancy: 93%

Contracts Data Summary

10 *MirLand share

USD sqm

224 232

171

150

138

35,756

49,188

56,837

65,155 66,513

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

70,000

100

120

140

160

180

200

220

240

2010 2011 2012 2013 2014E

OPEX/sqm (LHS, $)

Leased area (RHS, sqm)

Expected

Actual

60,526

17.1

13.7

10.4

8.7

8.2

6.2

4.9 4.6

2014F2013 2012 2011

Annual H1

Q2

4.2

Q1

4.0

Q2

3.5

Q1

2.7

Retail Sector

■ The average vacancy rate in Moscow

quality shopping centers increased to

3.5%

■ By the end of the year, total stock is

expected to exceed 18M sqm and Russia

will become the 2nd largest market in

Europe after UK (18.2m sq m) and ahead

of France (16.5m sq m)

■ Rental rates remain fairly stable. The

average rent is USD500-1,800/ sq m/year,

according to the premises

■ Regardless of the macroeconomic

conditions, international retailers continue

to target the Russian market (Deichmann,

Harmont & Blaine, Moncler and Norma J

Baker ,Prenatal Milano, Tony Moly).

379 567

400 197 152 232

493

1,516

994 1,235

1,229

1,720

1,203

1,451

2008 2009 2010 2011 2012 2013 2014F

Moscow Regions

580

410

370

340

330

320

300

200

0 200 400 600

Prague

Berlin

Paris

Warsaw

Madrid

Lisbon

Moscow

Rome

Retail Stock per 1,000 ppl YoY%Disposable Income, & Real Turnover Retail

Quality Retail Delivery, '000 sqm Moscow Quality Retail Vacancy Rate, $/sqm, %

Regardless of the

macroeconomic conditions,

leading international retailers

continue to target the

Russian market

11

9.5%

-4.9%

6.4% 7.0%

5.4%

3.9%

0.5% 2.3% 2.1%

5.1%

0.8%

4.2% 3.6%

3.1%

2008 2009 2010 2011 2012 2013 2014F

Retail Turnover Real Disposable Income

5.0%

2.1%

0.4% 0.5%

1.2%

3.5%

2009 2010 2011 2012 2013 2014F

3.1 2.9 2.7 2.4

1.5

7.1

6.5 5.2

3.6

H1/2014H1/2013H1/2012H1/2011

Vernissage New acquisition Triumph Mall

■ Land area: 2.2 ha

■ GLA: 27,305 sqm

■ Completed: Q4 ‘10

■ Rights from freehold: 100%

■ Average monthly footfall: 524K

■ C&W Valuation 30/06/14: $137.3M

■ NOI 2013: $13.7M

■ Land area: 12 ha

■ GLA: 34,090 sqm

■ Completed: Q2 ‘07


■ Average monthly footfall: 252K

■ C&W Valuation 30/06/14: $102.8M

■ NOI 2013: $11.9M

Retail Sector: Regional Retail

Federal 73%

International 20%

Local 7%

NOI Development, $mil Tenants’ Mix

Vernissage Mall, Yaroslavl

Triumph Mall, Saratov

■ Annual ave. rent per sqm: $411

■ Ave contract duration: 11.5 (y)

■ Tenants: 260

■ Indexation: ~4%

■ Currency: linked to USD

■ Occupancy: 100%

Contracts Data Summary

12

11.7

6.0

7.9

9.4

Our Tenants: International, Federal and Local Brands

13

Residential Sector

■ In Russia the average area per capita totals

at circa 23 sqm

■ 35% of the existing stock is in poor

condition and therefore should be replaced

within the next 5-7 years

■ Market prices slightly increased in 2Q14.

The price change varies according to the

project’s segment: business is up by 1.3%,

economy by 0.8%, compared to 1Q14

■ The mortgage market amounts to only 3%

of GDP . It continues its positive trend, with

643.8bn RUB of mortgages granted during

the first 5 months of 2014, which is higher

by 1.3 than the same period in 2013. The

average lending rate was ~12.2%

■ 2Q14 delivery of residential projects totaled

in ~394K sqm., 18% higher than 2Q13.

Most of which was in the mass-market

segment (81%)

The residential sector in

Russia presents one of the

best opportunities for

growth due to low living

space per capita

Residential Sector

65

50

42

41

39

38

35

30

25

23

0 20 40 60 80

US

Denmark

UK

Germany

Austria

France

Hungary

Czech

Latvia

Russia

Average Living Space Comparison, sqm/capita St. Petersburg’s Primary Housing Prices, ‘000 RUB/sqm

Delivery in St. Petersburg and Outskirts, ‘000 sqm Russia’s Mortgage Lending market

Source: Rosstat, AHML, Peterburgskaya Nedvizhimost, 14

68.5 70.7 71.9 72.9 76 76.7 77.5 77.9 78.7 79.6

114.8

120.5

127.2

130.0

134.6

138.7

141.8

144.5

147.2

149.2

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Economy Business

30%

380

717

1,032

1,354

1,500

2010 2011 2012 2013 2014F

13.1%

11.9%

12.3% 12.4%

13.0%

Average mortgage lending rate

359

478 582

1,190

247 255

849

1,117

577

332

953

546

890

394

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

2,609 2,468

2,408

1,284

■ Land area: 41 ha

■ Total saleable area: 560,000 sqm (9,000 apt)


■ C&W Valuation 31/12/13: $323.2M

Phase I Phase II Phase III Phase IV

Commencement Q3/2011 Q3/2012 Q3/2013 Q3/2014

Completion Q4/2013 Q4/2014 Q1/2016 Q2/2017

Number of apt 510 630 1,346 1,244

Total sqm 27,700 34,100 63,200 ~60,600

Ave. sale price, RUR 81,700 92,000 100,000 104,000

Total income, USD mil 71 98 194 205

Profit , USD mil 12 26 58 66

% Profit NET 20% 24%-28% 26%-30% 28%-31%

Cash flow projected

from Phase, USD mil 12.5 14 60 70

Residential Sector: Triumph Park, St. Petersburg

15

Phased development of a residential

neighbourhood with commercial and public areas.

Phases I-IV are in process, further development of

additional 370K sqm is in planning


Sales & Inventory by Phases, apt Projected Price vs Initial Sale Price, RUB/sqm

Last 3 Months (May – July) Sales by Phases, apt 7 Months (Jan – July) Sales by Phases, apt

Phase II Payment Spread

Phase III Payment Spread

16

66,700

77,600 84,100 81,700

91,100 99,300

Phase I Phase II Phase III

Innitial ave. sale price Phase's ave. sale price

Contract (cash) 47%

Mortgage 42%

Payments in installments

11%

Contract (cash) Mortgage Payments in installments

Contract (cash) 53%

Mortgage 26%

Payments in installments

21%

507 575 558

3 55

788

1244

Phase I Phase II Phase III Phase IV

Sold Inventory

1,346

630 510

1,244

210

17

170

73

334

2012 2013 2014


407

187 210

78

10 22

47

122

2012 2013 2014


144

57 78

~1,600 apt

Sold

~1,000 workers on site


17

~$190M

Sales

~100K sqm under

construction

Phase I

delivered

■ Triumph Park is a winner of Green

Awards 2012 и 2013, the Russian

Federal Competition on sustainable

development and energy efficiency

BREEAM

0044-7724

Triumph Park – the 1st

residential BREEAM

certified project in Russia

Transportation scheme Recreation area

Shuttle bus to the metro station

Parking for Bicycles

Smoking free territory

Built-in retail infrastructure Kids and sports playgrounds


18

■ Land area: 22.5 ha

■ Saleable area: 65,629 sqm

■ Phase 1: 77 houses (out of 163)


C&W Valuation 30/06/14:

■ Project Value: $51.5M

Project Status:

■ Total sales: 33 houses

■ Infrastructure construction completed

■ Completion Certificate obtained

■ Delivery is in process

Residential Sector: Western Residence, Moscow Outskirts

19

Western Residence is a

neighbourhood of cottages

and town houses, targeting

the middle class segment.

Located in the prestigious

western outskirts of Moscow

- Perkhushkovo settlement

545

554

557

559

31/12/2012 30/06/2013 31/12/2013 30/06/2014

2.1 3.7 0.9

17.8

21.1 21.5 24.8

26.3

2.0

H1 2011 H1 2012 H1 2013 H1 2014

Residential Commercial New acquisition

4.6 4.9 6.2 8.2

6.1 7.9

9.4

10.2

1.5

H1 2011 H1 2012 H1 2013 H1 2014

Office Retail New acquisition

1.1

5.6 6.9 10.5

1.5

H1 2011 H1 2012 H1 2013 H1 2014

EBITDA New acquisition

NOI, USDml

EBITDA, USDml Nav, USDml

Revenues, USDml

20

12.0

19.9

15.5

12.8 10.7

46.1

25.7 25.2 23.2

Key Performance Indicators (MirLand Share)

Financial Highlights

Cash and cash equivalents

8%

Real estate assets 89%

Other assets 3%

Assets

Liabilities & Equity

22

30/06/2013 31/12/2013 30/06/2014

$859,389K $893,170K $1,031,692K Total Balance

$328,808K

38% of balance

$331,717K

37% of balance

$326,558K

32% of balance Total Equity

$792,588K 92% of balance



Property & Land

$328,498K Net debt to balance

ratio- 38%


ratio- 40%


ratio- 41%

Total Net Debt

$4,000K $6,206K $324K Net Income

$45,757K $66,154K $83,150K Cash (end of the period)

Loans from

Banks 24%

Bonds 25%

Equity 32%

Other liabilities

19%

43.3 46.6

39.3

13.3 12.9 12.3

26.0 33.7 31.0

G&A Financial expenses

Financing of Yielding Assets

Project/ Data, $mil Valuation

as of

30/06/14

Financing Loan to

Value

Asset

Cost NOI 2014F Loan terms

Retail Triumph Mall – Saratov 137.3 89.4 65% 75.7 14 7% USD,7(y), 53% balloon

Vernissage Mall – Yaroslavl 116.0 45.8 39% 46.0 12 7.75% USD,7(y), 49% balloon

Total retail 253.3 135.2 121.7 26

Offices

Hydro, MAG, Tamiz – Moscow 198.9 65.2 33% 142.9 13 9.5% USD,7(y), 50% balloon

MAG (b.26)- 8.75%, 6.5(y), quarterly payment

Century Buildings – Moscow 95.3 38.2 40% 62.9 8 Libor+6.85%-7.7% USD,5-7(y), 50% balloon

Total offices 294.2 103.4 205.8 21

Total 547.5 238.6 44% 327.5 47

Office Projects NOI vs Debt Service*, $mil

Retail Projects NOI vs Debt Service*, $mil

Gross Profit vs G&A and Financial Expenses, $mil

23 (*) Principal and Interest (2) Incl. outstanding credit line (3) 100% of the project (4) Possibility of income recognition in H1/2016

33.4 42.8 44.7

12.0

25.0

58.0

2013 2014 2015

NOI Residential

102.7

67.8

45.4

(4)

(2)

(3)

19.7

25.7 26.8

38.4

8.3

15.9 18.1

26.6

2013 2014 2015 2016

NOI Debt service

13.7

17.1 17.9 19.1

8.4

12.3 14.3

15.7

2013 2014 2015 2016

NOI Debt service

(3)

Portfolio Assets

Triumph park residential

33%

Triumph Mall 14%

Vernissage Mall 11%

Century 10%

MAG 8%

Hydro 7%

Western Residence

5%

Tamiz 5%

Other 7%

Residential , 38%

Retail, 30%

Office, 32%

Moscow & Moscow Region

35%

St. Petersburg 36%

Other regional cities 29%

Portfolio Segment Distribution by Value, %

Portfolio Assets Distribution by Value,%

Portfolio Geographic Distribution by Value, %

24

■ Total Portfolio as of 30/06/14: $939 (MirLand share)

816 868 870 881 939

48 75 80 102

137

30/06/2012 31/12/2012 30/6/2013 31/12/2013 30/6/2014

Value Residential Sales

■ Consecutive growth in C&W

valuation as well as in Net Asset

Value of the Company

C&W Valuation of Assets

NAV Calculation as of 30/06/14, $mil

C&W Valuation (MirLand share), $mil NAV Development, $mil

983 943

25

$mil

Market value of the Company’s beneficial share in the Properties 939.0

Advances from buyers in residential projects 136.6

Non-property non-current assets 17.1

Non-current liabilities (438.7)

Current assets less current liabilities (94.8)

Adjusted Net Asset Value 559.2

523

545

554 557

559

30/06/2012 31/12/2012 30/06/2013 31/12/2013 30/06/2014

864

1,076

950

Cushman & Wakefield Valuation of Assets

■ Strong potential upside in

case of decrease in discount

and cap rates

■ Conservative C&W approach

to valuation of assets,

implementing relatively high

discount and cap rates

Internal Revaluation Sensitivity Analysis

Residential Projects Weighted Ave Discount Rate , % Commercial Projects Weighted Ave Discount Rate, %

26

Sensitivity analisys (M, $) Discount rate

Mirland share market value 0.50% 0.25% 0.00% -0.25% -0.50%

0.50% $469.9 $473.7 $477.7 $482 $486

0.25% $476.8 $480.7 $484.6 $489 $493

0.00% $483.9 $487.9 $492.1 $496 $500

-0.25% $491.5 $495.5 $499.7 $504 $508

-0.50% $499.3 $503.6 $507.8 $512 $517

Sensitivity analisys (M, $) Discount rate

Mirland share market value 0.50% 0.25% 0.00% -0.25% -0.50%

0.50% -$22.2 -$18.3 -$14.3 -$10.3 -$6.3

0.25% -$15.3 -$11.4 -$7.4 -$3.3 $0.8

0.00% -$8.1 -$4.1 $0.0 $4.1 $8.2

-0.25% -$0.6 $3.4 $7.7 $11.9 $16.2

-0.50% $7.3 $11.5 $15.8 $20.1 $24.6

Cap

rate

Cap

rate

21.85%

19.19%

18.23% 18.43% 18.51% 18.51%

31.12.09 31.12.10 31.12.11 31.12.12 31.12.13 30.06.14

12.68%

11.33%

10.98% 10.80% 10.75% 10.75%

31.12.09 31.12.10 31.12.11 31.12.12 31.12.13 30.06.14

■ Strong cash balance projection

■ Possible dividend distribution,

subject to adoption of the

dividend policy

■ Decrease of Net Debt/Balance

ratio to 35% by June 2016

■ Decrease of Net Debt/Net Cap

ratio to 51% by June 2016

Cash Flow Projection

28

In ‘000 USD

Six months

ending on

December 2014

Twelve months

ending on

December 2015

Six months

ending on June

2016

Cash balance at the beginning of the period

83,150

29,254

26,048

Refinancing of yielding assets

-

22,363

-

Receipt of construction loans

17,496

35,269

13,200

Cash flow from sale of residential units

62,928

144,966

58,026

Cash flow from ongoing operations

13,509

28,249

15,066

Total sources

93,933

230,846

86,292

Interest payments to banks and bonds holders

(8,750)

(14,528)

(5,777)

Repayment of bonds

(45,788)

(45,788)

(11,145)

Repayment of interest and loans from banks granted

to the subsidiaries

(33,188)

(44,564)

(17,771)

Investments in projects

(60,103)

(114,172)

(51,349)

Dividends

-

(15,000)

-

Total uses

(147,829)

(234,052)

(86,042)

Cash balance at the end of the period

29,254

26,048

26,298

Cushman & Wakefield Valuation 30/06/14

29

Ref. City Property Name and

Address

Portfolio

Market Value as

of 30th of June

2014

Percentage

Owned by

MirLand

MirLand

Market Value as

of 30th of June

2014 (Rounded)

Total sqm of

Land

Projected Net

Leasable /

Saleable Area in

sqm upon

Completion (excl.

Parking)

Market Value

per sqm of

Projected Net

Leasable Area

Discount Rate Projected

Exit Date

Projected Exit

Capitalisation

Rate for

Commercial

Projected Exit

Sales Price

(Uncompleted

Only)

Projected Exit

Sales Price per

sqm of Net

Leasable

Commercial

Area

(Uncompleted

Only)

Total Outstanding

Investment (excl.

VAT & Land for

commercial

properties and incl.

VAT for residential

projects)

Total Commercial

NOI as of 2014/2015

Market Rental Values

(Assuming 100%

Occupancy and Fully

Completed)

001 Moscow Hydromashservice $71,100,000 100% $71,100,000 12,237 16,696 $4,259 12.50% Completed 9.00% Completed Completed Completed $7,547,000

002 Moscow MAG $81,800,000 100% $81,800,000 21,940 18,535 $4,413 12.50% Completed 9.00% Completed Completed Completed $8,884,000

003 Moscow

Region Western Residence $51,500,000 100% $51,500,000 225,300 56,876 $905 14% /18% 2016 Residential Residential Residential $27,928,000 Residential

004 Saratov Triumph Mall $137,300,000 100% $137,300,000 22,000 27,241 $5,040 12.50% Completed 10.50% Completed Completed Completed $15,975,000

005 Moscow Skyscraper $0 100% $0 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

006 Saint

Petersburg

Triumph Park,

Residential $324,600,000 100% $324,600,000 326,651 484,167 $670 19.00% 2013-20204 Residential Residential Residential $797,697,000 Residential

007 Saint

Petersburg Triumph Park, retail $31,700,000 100% $31,700,000 81,663 117,775 $269 25.00% 2021 10% /10% $412,677,000 $3,504 $142,698,000 $41,268,000

008 Yaroslavl Vernissage Mall $102,800,000 100% $102,800,000 120,000 34,092 $3,015 12.50% Completed 10.50% Completed Completed Completed $11,040,000

009 Yaroslavl Vernissage Ph II $13,200,000 100% $13,200,000 180,000 55,000 $240 20.00% 2017 10.50% $119,741,000 $2,177 $62,152,000 $11,332,000

010 Moscow Tamiz $46,000,000 100% $46,000,000 4,500 11,737 $3,919 12.50% Completed 9.00% Completed Completed Completed $5,046,000

011 Moscow Century Buildings $95,300,000 51%/61% $53,100,000 5,800 20,904 $4,559 12.50% Completed 9.00% Completed Completed Completed $10,459,000

012 Kazan Triumph House $12,200,000 100% $12,200,000 22,000 16,783 n/a 16.00% 2019 10.00% $58,214,000 $3,469 $24,051,000 $5,237,000

013 Saratov Logistics Complex $7,200,000 100% $7,200,000 260,000 n/a n/a n/a n/a n/a n/a n/a n/a n/a

014 Novosibirsk Logistics Complex $6,500,000 100% $6,500,000 406,752 n/a n/a n/a n/a n/a n/a n/a n/a n/a

Total $981,200,000 $939,000,000 $590,630,000 $1,054,500,000

30

Portfolio at Glance

30

Moscow

Kazan

Saratov

Yaroslavl

St. Petersburg

Vernissage Mall

• Phase I - 34,090 sqm SC

• Phase II – 30,000 sqm in advanced planning

• Phase III – 25,000 sqm (pipeline)

Triumph House - DIY

• 17K sqm in advanced planning

Logistics Centre - 26 ha (pipeline)

Novosibirsk

Logistics Centre - 40.7 ha (pipeline) Triumph Mall

• 27,250 sqm SC & entertainment

Western Residence

• Phase I: 77 houses - competed

• Phase II: 86 houses (pipeline)

Triumph Park neighborhood

• Phases I-IV in process

• Phases V-VIII in planning

MirLand Business Center

• Class B office complex 67,870 sqm

Notes

Cypriot Office Russian Office

Nicolaou Pentadromos Centre,

Thessalonikis Street, 3025 Limassol, Cyprus

Tel : +357 25850025

Fax: +357 25850055

2nd Khutorskaya st. 38A, bld. 9

Moscow, Russia

Tel : +7 495 7874962

Fax: +7 495 7874965

31

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