RHDFEstablished by the Government of the Russian Federation

Russian HousingDevelopment Foundation

Established by the Government of the Russian Federation

Achievement of high profits at the minimum risks

RHDF Russian HousingDevelopment Foundation

1

ABOUT RHDF

2

The Russian Housing Development Foundation (RHDF) was established in accordance with the State Law On Facilitation of Housing Construction Development (№161 dated July 24, 2008).

RHDF is a non-commercial organization with the federal status.

The main goal of RHDF as a development institution is to create a comfortable living environment for people and society by assisting in:

further development of housing construction and urban planning; development of transport and utilities infrastructure and social infrastructure; production of construction materials and components; establishment of industrial parks, technology parks and business incubators.

3

OBJECTIVES AND STRATEGIC PRIORITIES

In accordance with the law RHDF has received the right to utilize currently ineffectively used federal lands and bring them into the market.

In accordance with the RHDF Strategy for 2010-2014, as of 2012 RHDF will be the main provider of lands for residential construction purposes in the Russian Federation.

The main two strategic priorities of our work is to stimulate: housing construction, especially low-rise construction of affordable housing; production of modern construction materials, components and equipment.

SIX KEY REASONS TO DO BUSINESS IN RUSSIA IN PARTNERSHIP WITH RHDF

4

Favorable housing market conditions in Russia

Availability of land plots in attractive locations

Strong government support through RHDF

High rates of return on investment in projects implemented in partnership with RHDF

Low-rise residential development is the top priority for RHDF

Excellent opportunities for production of construction materials in Russia

FAVORABLE HOUSING MARKET CONDITIONS IN RUSSIA

5

61%

39%households unsatis-fied with housing conditions

Satisfied with hous-ing conditions

Housing demandBased on the results of 2010 RHDF market research, about 60% of the Russian households want to improve their housing conditions in 2011 – 2015. That equals to around 2,200 million square meters of all types of housing

FAVORABLE HOUSING MARKET CONDITIONS IN RUSSIA

6

Total million sq. meters

2011 2012 2013

165

32 35 2674

17 14 13

239

49 49 39

Satisfactions of Households with Housing Conditions

Affordable housing Luxury housing Total

Effective housing demand

In 2011-2015 about 10% of households (3,3 million households) wishing to improve their housing conditions shall have an effective demand for all types and classes of housing with total living space of 239 million square meters.

With 3-year period the effective demand is estimated reach 137,9 million square meters. About 69% of the overall volume (93 million square meters) is the affordable housing.

7

FAVORABLE HOUSING MARKET CONDITIONS IN RUSSIA

50%

14%5%

29%2%

Structure of Effective Demand for Affordable Housing

Appartments in multi-story buildings (7 stories and higher)

Appartments in multi-story buildings (4-6 stories)

Appartments in multi-story buildings (up to 3 stories)

Detached houses

townhouses

Structure of effective demand for housing

It is estimated that in the next 5 years the share of low-rise affordable housing shall be more than 35% of the overall effective demand. In 2011 the effective demand for low-rise affordable housing could reach 9,6 million sq. meters.

Shifting demand from the secondary housing market

One of the main conditions that allows to shift about 40% of demand from the secondary market to the primary affordable housing market is to provide housing with interior design and household appliances that allows families to quickly move to the new houses

RHDF land plots that have been provided (being provided) for development by the beginning of 2011 (66 land plots in 19 Russian regions with the total area of 1657,8 ha).

The overall amount of land plots that have been provided by RHDF in Russia (280 land plots in 48 Russian regions with the total area of 7452,17 ha).

AVAILABILITY OF LAND PLOTS IN ATTRACTIVE LOCATIONS

8

Kirov RegionThe project “Solnechny bereg” in the city of Kirov is realized on the land plot of RHDF

TumenThe project in the city of Tumen is realized on the lend plot of RHDF

Chuvashia RepublicBuilding of “Universitetsky-2” micro district on the land plot of RHDF

KurskBuilding of “Kursk” realized on the lend plot of RHDF

Vladivostok

In accordance with the State Law On Facilitation of Housing Construction Development RHDF has the right to take land plots away from the state organizations which don’t use them effectively and sell these land plots at the open auctions.

In most cases these land plots are located in very favorable locations within and outside of cities.RHDF provides a number of additional services to ensure that all land acquisition deals are legal, transparent and attractive to the auction participants.

THE MARKETING PLAN OF PROVIDING LAND PLOTS IN ACCORDANCE WITH THE RHDF 2010 -2014 STRATEGY

9

Indicator

The area of land plots used for housing development,

thousand ha

Including affordable housing, thousand ha

Including low-rise affordable housing, thousand ha

2010

3

2

1,6

2011

4,7

3,15

2,49

2012

7,5

5,025

3,975

2013

7,5

5,025

3,975

THE PRINCIPLES OF RHDF WORK

10

SUPPURT IN TERMS OF CONNECTING TO

ENGINEERING INFRASTRUCTURE

SIGNING OF THE ACTION PLAN WITH THE HEAD OF THE CONSTITUENT

TERRITORY OF THE RUSSIAN FEDERATION

SCHEDULE OF AUCTIONS

SUPPORT IN TERMS OF ACCESS TO

FINANCIAL RESOURCES

SIGNING OF AGREEMENT

MONITORING OF PROJECT

IMPLEMENTATION

ASSISTANCE IN DEVELOPMENT OF

URBAN PLANNING AND DESIGN

DOCUMENTS

DEMAND ENHANCEMENT

AUCTION

STRONG GOVERNMENT SUPPORT PROVIDED BY RHDF

11

REMOVAL OF

ADMINISTRATIVE

BARRIERS, INTERACTION

WITH REGIONAL AND

LOCAL AUTHORITIES

DURING IMPLEMENTATION

OF PROJECTS

FINANCING SUPPORT,

PROVISION OF FUNDING

THROUGH

ARRANGEMENTS WITH

FINANCIAL INSTITUTIONS

RHDF IS A GUARANTOR

OF ANY LAND DEALS

SUPPORT FOR INVESTORS GUARANTEE OF

OBLIGATION FULFILLMENT

RUSSIAN HOUSING DEVELOPMENT FOUNDATION

WORK IN ALL REGIONS

OF RUSSIA

INTERACTION WITH THE AUCTION WINNERS DURING PROJECT DEVELOPMENT PHASE

12

Quarterly visits, of the lend plot conditions, preparation of reports that include photos

Information on project implementation submitted by the auction winners on the

monthly basis including reports with photos

Information on project implementation submitted by the auction winners on the

monthly basis, including discussion of current problems that require immediate solution

Monitoring of project implementation including the use of Internet-based

technology (Web-cameras)

Visits to the regions in case of circumstances requiring the presence of RHDF employee

Support provided to reduce the time required for development and approval of urban planning documentation and

obtaining permits

Ensuring optimum technical conditions for connection to utilities

Support in development and approval of project documentation

Support provided to reduce time required for obtaining of construction

permits of obligation

Support in other issues related to the land plot development

HIGH RATES OF RETURN ON INVESTMENT IN THE PROJECTS IMPLEMENTED IN PARTNERSHIP WITH RHDF

13

Vladivostok, Patrokl project:

The land area is 162 ha; Lease period is 9 years. The maximum period for housing development

and construction of engineering infrastructure facilities is 8 years;

The initial auction price of the land plot is $903 225;

Lease for the first year is $12 808 per 1 ha; Lease for the following years is $25 617 per 1 ha

per year; Living space is 420,000 m2; IRR – 24% Cheboksaruy project:

The land area is 6,3 ha; Lease period is 5 years. The maximum period for housing development and

construction of engineering infrastructure facilities is 5 years;

The initial auction price of the land plot is $69 032 ; Lease for the first year is $13 661 per 1 ha; Lease for the following years is $30 742 per 1 ha per

year; Living space is 86,400 m2; IRR – 30%

Kursk project:

The land area is 26,9 ha; Lease period is 9 years. The maximum period for housing development and

construction of engineering infrastructure facilities is 8 years;

The initial auction price of the land plot is $480 645; Lease for the first year is $23 268 per 1 ha; Lease for the following years is $49 860 per 1 ha per

year; Living space is 282,320 m2; IRR – 20%

Kirov project:

The land area is16,3 ha; Lease period is 8 years. The maximum period for housing development and

construction of engineering infrastructure facilities is 8 years;

The initial auction price of the land plot is $1 774 193; Lease for the first year is $10 926 per 1 ha; Lease for the following years is $23 415 per 1 ha per

year; Living space is 139,618 m2; IRR – 31%

LOW-RISE RESIDENTIAL DEVELOPMENT IS TOP PRIORITY FOR RHDF

14

Current Russian low-rise housing market is characterized by:• Price range is $400 – $1000 per sq.m.;• Housing quality is low due to low level of competition and lack of quality control standards;• Return on investment is up to 50-100 %.

Potential sectors for foreign companies:• Urban planning and design;• Engineering design;• Project management services;• Residential development;• Property management.

WHAT DOES RHDF OFFER TO POTENTIAL INVESTORS AND DEVELOPERS

15

• Land plots of various sizes in different regions of Russia;

• Government support during the entire period of project implementation (no administrative barriers, no corruption risks);

• Support terms of connecting to engineering infrastructure;

• Support in business planning by using resources of RHDF’s Marketing Information System;

• Guaranteed buyout of up to 35% of low-rise affordable housing from the developer.

THE PROPOSED MOVEMENT OF LOW-RISE AND HIGH-RISE HOUSING RATIO

16

40%

60%

low-rise housinghigh-rise housing

75%

25%

FAVORABLE CONDITIONS FOR PRODUCTION OF CONSTRUCTION MATERIALS, COMPONENTS AND EQUIPMENT IN RUSSIA

17

RHDF provides the following support to the producers of modern construction materials, components and equipment in Russia:

Development of flexible terms of payment (depending on construction scenarios) for the auction-purchased land plots to be used for industrial construction;

Assistance in the development of industrial areas through construction of new utilities and transport infrastructures;

Promotion of construction materials, components and equipment produced in Russia.

RHDF LAND PLOTS TO BE PUT UP FOR AUCTIONS IN 2011

18

1. Bryanskaya oblast2. Volgogradskaya obast3. Irkutskaya oblast4. Kaluzhskaya oblast5. Krasnodarski krai6. Krasnoyarski krai7. Leningradskaya oblast8. Lipetskaya oblast9. Moscow10. Moscovskaya oblast11. Novgorodskaya oblast12. Novosibirskaya oblast13. Permski krai14. Altai Republic15. Komi Republic

16. Karelia Republic17. Tatarstan Republic18. Repubic of Khakassy19. Rostovskaya oblast20. Saint-Petersburg21. Saratovskaya oblast22. Sakhalinskaya oblast23. Sverdlovskaya oblast24. Stavropolsky Krai25. Tomskaya oblast26. Tumenskaya oblast27. Republic of Udmurtiy28. Ulyanovskaya oblast29. Chelyabinskaya oblast30. Yamalo-Nenetski Autonomous District

Russian regions

THE RHDF SUPERVIORY BOARD MEMBERS

19

Alexander ZhukovDeputy Prime Minister of the Russian Federation (Trusteeship Council Chairman)

Elvira NabiullinaMinister of Economic Development of the Russian Federation (Trusteeship Council Deputy Chair)

Vladimir DmitrievChairman of Bank of development and ForeignEconomic Affairs (VNESHECONOMBANK) State Corporation

Martin ShakkumChairman of the State Duma Committee on Construction and Land Affairs

Arkady DvorkovichAide to President of the Russian Federation (Trusteeship Council Deputy Chairman)

Svetlana OrlovaDeputy Chairman of the Federation Council of the Federal Assembly of the Russian Federation

Viktor BasarginMinister of Regional Development of the Russian Federation(Trusteeship Council Deputy Chairman)

Gennady Bin’koDeputy Director General of Interregional Distribution Grid Company Holding

Andrei IvanovDirector of the Department of the Ministry of Finance of the Russian Federation

Alexander BravermanDirector General of the Russian Housing Development Foundation

Maxim SokolovDirector of the Department of Industry and Infrastructure of the Government of the Russian Federation

OUR PARTNERS

20

AUTHORITIES

NATURAL MONOPOLIES

STATE CORPORATIONS

BANKS AND FINANCIAL INSTITUTIONS

NON-COMMERCIAL ORGANIZATIONS

Federal Service forState Registration,Land Registry andMapping

Accounts Chamber ofthe Russian Federation

Federal Service of Financialand Budget Oversight

Federal Agency forState Property Management

Ministry of Energy ofthe Russian Federation

JSC Federal Grid Companyof Unified Energy System of Russia (FSK EES)

JSC GazpromJSC Inerregional DistributionGrid CompanyHolding

The Housing andPublic Utilities ReformAssistance Foundation

Bank for Development and Foreign Economic Affairs (VNESHECONOMBANK)

OAO Agency for HousingMortgage Lending

JSC Saving Bank ofthe Russian Federation

National Agency forLow-Rise and ClusterHousing NPO (NAMIKS)