Company presentation June 2016 Table of contents Section 1 - PowerPoint PPT Presentation

Company presentation June 2016

Table of contents Section 1 Summary 3 Section 2 Market Overview 8 Section 3 Resilient Operations 15 Section 4 Achievements and Plans 23 Section 5 Financial Performance 27 Section 6 Appendix: Financial Statements 31 2

Section 1: Summary

Summary Brief Description Financial Parameters O1 Properties owns 13 yielding assets situated in the main business 2012 2013 2014 2015 2016** districts of Moscow, Net Rentable Area - 501m²* NOI 144 292 351 325 307 Development ~ 2% of GAV G&A -31 -32 -33 -15 -14 EBITDA 113 260 318 310 293 Independent portfolio valuation as of 31 Dec 2015 - $3,739 Bln. Cash interest expenses -129 -173 -193 -198 -187 High quality tenant base: 70% of NOI - international tenants with Operational Profit -16 87 126 112 106 Revaluation gain 4 90 -282 -363 -75 higher credit rating than O1 Properties Profit -12 177 -156 -251 31 Credit Rating: S&P B+ Debt amortization (on schedule) -30 -35 -45 -51 -60 FFO (EBITDA-Interest-Debt -46 52 81 61 46 Boris Mints is a main shareholder – 69.7% of total capital, ICT Group Amortization) - 15.2%, Goldman Sachs – 9.6%, Minorities – 5.9%, 0.9% - top management Investment Property 2,640 4,172 4,020 3,742 3,667 Cash and equivalents 55 76 187 210 149 Business Model Assets 3,171 4,681 4,440 4,162 4,087 Equality capital 1,077 1,685 1,349 1,075 1,107 Financial Debt 1,684 2,798 2,801 2,852 2,661 Net debt 1,629 2,722 2,614 2,642 2,511 100% 100% GAV (IP+ JV+ Loans issued) 2,674 4,202 4,071 3,916 3,841 Moscow Office LTV (Net Debt + Equity) 60.9% 64.8% 64.2% 67.5% 65.4% Net Debt\ (Net Debt+ Equity) 60.2% 61.8% 66.0% 71.1% 69.4% Net debt\ EBITDA 14 10 8 9 9 ICR 0.87 1.50 1.65 1.57 1.57 DSCR 0.71 1.25 1.34 1.25 1.19 ~ 90/10 ~ 50/50 Yielding/ Leverage Development *Includes Bolshevik phase 1 – 17 thousands m², which is not consolidated into O1P IFRS perimeter. Excl. Avion which was deconsolidated in Dec 2015 4 **NOI 2016 calculated excl. Bolshevik and potential deals effects

O1 Properties Assets Value Changes in gross asset value (US$ MM) 4 500 114 114 82 82 75 75 119 119 274 274 4 000 416 416 52 52 363 363 3 500 1 001 3 000 Mln USD 318 318 2 500 2 000 2987 4220 4060 3739 1 500 1 000 500 0 YE 2012 Olimpia White Square Greendale & Legend CAPEX & YE 2013 Icube Revaluation YE 2014 Zarechie acq. Avion sale Revaluation FY2015 park disposal acquisition Kutuzov acquisition Valuation acquisition acquisition changes Revaluation losses due to negative market conditions in 2014 and 2015 is more than $600M Effect from negative revaluation was partially reduced by new acquisitions (Icube and Zarechie $233M) 5

NOI and EBITDA NOI and EBITDA (US$ mln) 400 351 350 325 318 310 307 292 293 300 260 250 200 144 150 113 100 32 33 31 50 15 14 0 2012 2013 2014 2015 F2016 NOI G&A EBITDA EBITDA Margin grew from 80% to 95% during 5 years; EBITDA for 2015 year was $310M and expected to be $293M in 2016; G&A expenses expected to decrease due to increased cost efficiency and ruble devaluation. Notes: *NOI 2016 calculated on cash basis and doesn’t include Bolshevik NOI. Avion is sold in Dec 2015 6

Awards The Moscow Times Best Office The Moscow Times Best Office CRE Awards Awards Awards Awards Awards Bolshevik White Stone White Square Lighthouse Lighthouse Business centre Best Business centre Best Class A of the year Atrium of the year Atrium business centre 2015 2014 2013 2013 2013 CRE European Property Civic Trust CRE RIBA Awards Awards Awards Awards White Square Lighthouse Stanislavsky Factory Stanislavsky Factory Portfolio Deal Highly Best Business centre Deal of the year commended renovation of the year of the year 2013 2012 2012 2012 2011 7

Section 2: Market Overview

Supply Office space supply by submarkets in 1Q2016 New delivery, mln sq.m 35% 600 30% 500 1,5 25% 400 20% 300 15% 200 1 10% 100 5% 0 0% 0,5 0 2011 2012 2013 2014 2015 2016 F Class A Class B- Class B+ Vacant space,% Q1 Q2 Q3 Q4 Vacancy in CBD is the lowest among other submarkets while remains high in absolute value (CBD is the largest office submarket with about 5 mln sq.m of office premises). O1 Properties vacancy in CBD assets is in line with the market and stands at around 9%. Estimated new office delivery in 2016 is three times lower than in 2014. That leads to inevitable reduction in office vacancy in future. Source: Colliers Research, 1Q 2016. 9

Demand Take-up by submarkets Vacancy dynamic by classes 30% 300 27,3% 25,3% 25% 250 21,9% 17,4% 20% 200 16,1% 13,9% 14,9% 12,5% 13,6% 15% 150 13,7% 10,6% 10,9% 10,0% 9,3% 10% 100 6,6% 7,2% 6,0% 3,5% 5% 3,4% 50 1,7% 0% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Class A Class B 2014 2015 In 2015 volume of deals in CBD was a little lower than in 2014 and comprises 25% of total take-up . T ake-up in CBD area is higher than new delivery due to restriction of the new office construction in CBD area. Vacancy in Class A overall stock is going down replicating market behavior after the previous crisis. Overall market vacancy including class B is 13.4% in 1Q2016 in comparison to 13.9% in FY2015. Vacancy in Moscow City reduced from 31% in FY 2015 to 17.6% due to closed major transactions in 1Q2016 (Eurasia Tower sale to VTB and Evolution tower sale to Transneft). Source: Colliers Research, 1Q 2016 . 10

Rental rates and key market indicators Key market indicators $1 200,00 Indicators Q1 2015 Q1 2016 Total stock, million sq m 16.0 16.8 $1 000,00 Class A 3.5 3.8 Class B 12.5 12.9 900-1000 $800,00 800-900 Completions, thousand sq m 115.1 63.1 700-800 700-800 600-900 650-700 Take-up, thousand sq m 255.0 163.0 $600,00 600-750 400-6 50 Vacancy rate, % 14.3 13.4 $400,00 Class A 27.3 21.9 Class B 10.6 13.9 $200,00 Weighted average rental rates 590 445 in CBD, $/sq m/year $0,00 Class A 740 520 2012 2013 2014 2015 Q1 2016 Class B 445 350 Prime class A Class A CBD Prime Class A asking rental rates in the segment are at $600 – 900 /sq m/year, net of OpEx and VAT. Class A asking rental rates for office space in the city centre are at $400 – 650. The level of rental rates depends on quality of the building, its location and vacancy in the building. Source: CBRE Q1 2016, Colliers Q1 2016 11

Real estate and bond yields Russian vs USA sovereign 7 year Eurobond yields, % 8,0 7,5 7,0 6,5 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 сен .13 Sept.13 Jan 14 May 14 Sept 14 Jan 15 May 15 Sept 15 Jan 16 May 16 янв .14 май .14 сен .14 янв .15 май .15 сен .15 янв .16 май .16 Russian yield US yield Real Estate prime yields, % Russian Eurobond yield reduced to lower than mid 2014 levels – 3.8%. This 14 13 indicates that Capitalization rates should also go back to mid 2014 levels in 12 the next several months, if macroeconomic situation is stable. 11 Moscow office yield is two times higher than in Western Europe cities. 10 9 8 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2010 2011 2012 2013 2014 2015 2016 Office Retail Industrial Source: Bloomberg, CBRE 1Q2016 12