2016 Year End Investor Presentation

FY 2016 IR Presentation FINANCIAL & BUSINESS RESULTS April 2017

Disclaimer This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of AFI Development Plc (the "Company") or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the document.

This communication is only being distributed to and is only directed at (1) qualified institutional buyers (within the meaning of Rule 144A of the United States Securities Act of 1933, as amended (the "Securities Act") or (2) accredited investors (as defined in Rule 501(a) of Regulation D adopted pursuant to the Securities Act). Any person who is not a "qualified institutional buyer" or "accredited investor" should not act or rely on this document or any of its contents.

This document contains "forward-looking statements", which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions.

Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. 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. These forward-looking statements speak only as at the date as of which they are made, and the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

Neither the Company, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document.

The information contained in this document is provided as at the date of this document and is subject to change without notice.

2

Company Overview SECTION 1

AFI Development at a glance Market Cap, as of 5 April 2017 Mkt price GDR, as of 5 April 2017 Mkt price B share, as of 5 April 2017 NAV (Equity), as of 31 December 2016 NAV per share, as of 31 December 2016 Portfolio Value*

US$220 mln US$0.195 US$0.225 US$776 mln US$0.74 US$ 1.4 bn

BUSINESS

PORTFOLIO VALUE*

HISTORY *Gross Asset Value of Portfolio based on JLL Valuation as for 31 December 2016 and BSV of Land Bank projects, Trading Properties and Hotels (incl. JV)

BRAND

•Full cycle real estate developer •Focus on unique large scale commercial and residential projects •Primary market: Moscow, Russia

•16 years on the market •Admitted to LSE in 2007 •Premium listing from 2010 •Free float – 35.12%

•Strong local and international brand

FINANCIAL STABILITY

• Liquidity position: US$16.7 million as at 31 December, 2016 • Secured financing for on-going projects • 44% Debt to Total Assets ratio**

TRACK RECORD

•14 completed projects with total c.

0.6 mln sqm of space •Market reputation for high quality and professional property management

PORTFOLIO

• Substantial income generating portfolio.

Major project AFIMALL City • 8 Development Projects & land bank

** Bank loans only

4

Key Projects in Moscow Yielding Projects (retail, offices and hotels) Value**

US$956 mn

(JLL, 31 December 2016): Plaza II, Plaza Ib

Riverside Station Riverside St-n

PLAZA SPA Kisl* PLAZA SPA Zhel*

AFIMALL

GLA (excl. hotels), sqm:

193.1K sqm

Aquamarine III

* Outside of Moscow * * Hotels presented at cost value Aquamarine Htl

Paveletskaya I

H2O

Projects Under Development Value**

US$476 mn

( JLL, 31 December 2016): Odinburg**

Paveletskaya II

Plaza IIa

KOSSINSKAYA Kossinskaya

Plaza Ic

B. Pochtovaya

Botanic Garden

Plaza IV

GLA, sqm:

231.4K

GSA, sqm:

730.7K

** Odinburg and Botanic Garden presented at cost value

Land Bank Yielding Projects Value (BSV):

US$4 mn

Projects under Development Completed Assets 5

Project Update. Yielding Projects SECTION 2

AFIMALL City Update

(as of December 2016) Total GBA, sqm

275.0K

Total GLA(shops, offices, storage), sqm

107.2K

Occupancy

(as part of GLA total)

Parking lots

84% 2,022

Terminal NOI (JLL est.)

US$ 84.38 m

MV (JLL est.)

US$ 666.5 m

Loan balance as for end of Q4, 2016

US$ 436 m

 The occupancy level increased to 84% at the end of December 2016, vs. 82.2% at the end of September 2016  A significant number of leases signed during 2011, when AFIMALL opened its doors to the public, expired in 2016. As a result, Mall management invested significant resources during the year in maintaining stable occupancy levels (84% at the end of 2016) through the renewal of leases or re-leasing to new tenants.  A number of new retailers recently opened outlets at the Mall, including a furniture and home improvement hypermarket, Hoff Home (1,200 sq.m); a book shop “Knizhny Labirint” (300 sq.m); an Armani Exchange boutique (170 sq.m) and an innovative confectionary shop “Alenka” (200 sq.m).

ITEM, US$ million (1) Revenue (2) Operating expenses (3) NOI

Actual Actual Actual Actual Actual Actual Q1 2016 Q2 2016 Q3 2016 Q4 2016 2016 2015 16.2 15.2 17.3 17.6 66.2 71.3 (2.6) (4.2) (4.1) (5.3) (16.1) (18.0) 13.6 11.0 13.2 12.3 50.1 53.3

Note: the NOI projections are “forward looking statements” based on JLL valuation assumptions and Company estimations and they can be realized or not realized due to factors beyond the Company's control including, among others, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions

7

Yielding Properties Building

AFIMALL

Ozerkovskaya III*

Berezhkovskaya

Tverskaya Plaza II

Tvesrkaya Plaza Ib

Paveletskaya I

Aquamarine Hotel

Moscow

Moscow

Moscow

Moscow

Moscow

Moscow City

CBD

Moscow

CBD

CBD

Retail

Office A

Office B

Office & Street Retail

Office & Street Retail

Office B

Office B

GBA, sqm

283 182

61 579

11 612

5 848

2 338

16 246

GLA, sqm

107 208

46 247

10 274

5 024

2 050

2 022

466

140

-

84%

2%

60%

84.4

29.4

667

199

Location Class

Parking lots (total), # Ocupancy rate (31.12.2016), % NOI term., (JLL est.), US$ mn MV**, US$ mn

Moscow

H2O Moscow

Plaza SPA Kislovodsk

Moscow

Plaza SPA Zheleznovodsk

TOTAL

Caucasus region

Caucasus region

Hotel

Hotel

Hotel

10 080

8 931

25 000

11 701

437K

13 412

8 990

159 keys

275 keys

134 keys

193K

-

86

81

15

46

14

98%

87%

1%

65%

2.9

1.5

0.6

2.6

16.4

9.2

3.5

12.0

CBD

80%***

75%***

76%***

1.8

-

-

-

123

9.3

15.3

11.1

956

13.8****

* GBA and GLA presented after disposal of Bld. 1. ** MV based on JLL valuation as for 31.12.2016. Hotels presented at cost value *** The hotel occupancy is presented as annual average **** MV of the Plaza Spa Kislovodsk is presented as 50% (the Company share in the project)

Note: the NOI projections are “forward looking statements� based on JLL valuation assumptions and Company estimations and they can be realized or not realized due to factors beyond the Company's control including, among others, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions

8

Project Update. Development Projects SECTION 3

Odinburg Residential GBA, 821.1K sqm GSA residential, sqm 462.0K STATUS: Dlivery Bld.#2 SALES STATUS: Bld#1, Bld#2 are on sale Ownership:50%

Other 10

Odinburg Residential OVERVIEW  The ODINBURG residential district is located in the town of Odintsovo, a modern area considered to be one of the best and most environmentally clean towns in the Moscow region. (11 km from MKAD). A new highway to Moscow is in close proximity to the complex.  The entire residential district takes up an area of 33 hectares, which will host eight 8-to-25 story buildings. The residential element will offer 9,285 apartments and a total sellable area of 462K sq.m. (Including city share).

Ownership:50%

CONSTRUCTION STATUS and SALES  As of today, 714 out of 723 contracts for sales of apartments in Building 1 (39.07K sqm) have been signed, while for Building 2 474 out of 706 contracts (28.26K sqm) have been signed. (as of December 2016) Type

Residential

GBA, sqm

821.1K

GSA, sqm/GSA commercial total: GSA resi (Phase I), sqm: GSA resi (Phase II), sqm: GLA commercial, sqm: Apartments, total : Phase 1: •Building 1 •Building 2 Phase2:

462.0/19.6K 154.8K 307.2K 16.8K

9,285 2,712 723 706 6,573

Parking units: Book value, US$ m (including value of unsold apartments):

 Parking units: Building 1: 53 units out of 71 sold to date. Building 2: 33 units out of 71 sold to date.  Construction of Buildings 1 and 2 completed. In Builiding 1 all pre-sold apartments have been delivered. In Building 2 the delivery of apartments started in March 2017.

APARTMENTS DELIVERY Sales completed for 2016 Apartments, quantity Apartments, sq.m Parking places, quantity Comercial premises, sq.m

700 38 746.80 47 438.50

Revenue Cost of sales Net profit Margin

RUB'000 3 620 214 3 288 780 331 435 9.16%

4,563 150

USD'000 54 005 49 061 4 944 9.16%

11

AFI Residence Paveletskaya As of December 2016 GBA (total), sqm:

133.5K

GBA (phase 1), sqm

50.4K

GSA (total), sqm:

78.9K

“Flats” (total), amnt

549

“Flats” (phase 1), amnt

175

“Apartments” (total), amnt

220

“Apartments “ (phase 1), amnt

220

Commercial space, sqm

17.1K

Commercial space (phase 1), sqm

5.8K

Book value, US$ m:

76.5

According to common market practice in Russia and to applicable Russian laws, preliminary sales of apartments during construction are done in the form of “contracts of participation in construction”, which are executed between the developer and purchaser of an apartment.

These contracts are registered with state authorities and enter into legal force after this state registration. However the Company considers that signed contracts have high probability of registration and entering into legal force and reports “units sold” as the number of contracts signed with the apartments purchasers. “Apartments” are premises legally not zoned for housing, but are widely sold for residence (a person cannot register in this address, but the premises cannot be used for housing).

The prices of ‘apartments’ are normally lower than this of similar flats

 Construction of Phase 1 started in December 2015.  As of 5 April 2017, contracts for 172 units (“flats” and “apartments” combined) have been signed.  Parking lots sold: 153 units.

(properly zoned housing units).

12

Development Projects - Residential POCHTOVAYA

BOTANIC GARDEN

Botanic Garden

(as December 2016) Type Resi GBA, sqm 136.6K GSA, sqm 84.9K Parking Status

666 pp

MV, US$

74.1 mil

Pochtovaya

Paveletskaya

Launch of construction in Q1 2017

(as of December 2016) Type Resi GBA, sqm 200.6K GSA, sqm 116K Parking Status

794 pp

MV, US$

21.5 mil

Launch of construction in Q1 2017

Other

13

Development Projects - Commercial PLAZA IC

KOSSINSKAYA

(as of September 2016) Type GBA, sqm GLA, sqm Parking

Office A 61.8K 37.0K 521 pp

Status

Ready for construction launch 66 mil

MV, US$

(as of September 2016) Type GBA, sqm GLA, sqm Parking MV, US$

Plaza IV Plaza IC

Mixed use 108.0K 70.0K 1,200 pp 28.3 mil

Kossinskaya

PLAZA IV*

(as of September 2016)

Other

Type GBA, sqm GLA/GSA, sqm

Office A 108.0K 58.7/2.7K

Parking Status

1,210 pp

MV, US$

Preparing for construction 64.5 mil

*For 100% of the project

Financial update SECTION 4

Consolidated P&L

ITEM, US$ million (1) (2) (3)

Construction consulting/management services Rental income Sale of residential and trading property

(4) TOTAL REVENUE (5) (6) (7) (8) (9)

Other income * Operating expenses Administrative expenses Cost of sales of residential and trading property Other expenses

(10) TOTAL EXPENSES (11)

Actual Actual Actual Actual Actual Q1 2016 Q2 2016 Q3 2016 Q4 2016 2016 0.0 20.0 7.3

0.1 19.8 42.4

0.1 21.7 3.0

0.1 22.0 1.8

0.2 83.6 54.5

0.1 92.9 0.7

27.4

62.3

24.7

23.9

138.3

93.7

2.2 (7.7) (1.7) (6.2) (0.0) **

(13.4)

Share of profit of equity-accounted investees

Actual 2015

0.3 (10.0) (1.7) (39.4) (0.6)

0.3 (9.3) (1.9) (2.7) (0.4)

0.7 (11.8) (1.3) (1.2) (0.4)

3.5 * (38.8) (6.6) (49.5) (1.3)

3.0 (40.5) (10.6) (0.6) (1.6)

(51.5)

(14.0)

(13.9)

(92.7)

(50.4)

1.1

1.2

0.7

0.7

3.7

(12) GROSS PROFIT (LOSS)

15.1

12.1

11.5

10.7

49.4

42.0

(13) (14)

(60.3) -

(40.6) -

(10.5) -

(11.6) -

(123.0) -

(434.4) (12.7)

(15) RESULTS FROM OPERATING ACTIVITIES

(45.2)

(28.5)

0.9

(0.9)

(73.7)

(405.0)

(16) (17) (18) (19)

(0.0) 0.7 (10.7) 20.5

1.7 0.5 (11.1) 16.3

0.0 0.4 (11.3) 7.4

0.0 0.4 (11.5) 19.6

1.8 2.1 (44.6) 63.7

0.1 4.2 (46.2) (110.3)

10.5 (34.7)

5.7 (21.0)

(3.5) (2.6)

8.5 7.6

21.2 (50.7)

(152.3) (557.2)

(0.1) 2.9

(0.1) (0.4)

(0.1) 0.2

0.8 (0.6)

(31.9)

(21.4)

(2.4)

7.7

Valuation gain (loss) on investment property Impairment loss for trading property and hotels Profit on sale/disposal of properties/investment Finance income Finance expenses FX Gain/(Loss)

(20) Net finance income/(costs) (21) PROFIT BEFORE INCOME TAX (22) (23)

Current income tax Deferred income tax

(24) PROFIT (LOSS) FOR THE PERIOD

0.6 2.2

(47.9)

(1.3)

* Other income mainly due to property tax repayment in Q1 ** Penalties for delay in delivery of apartments in Odinburg

(0.8) 91.3

(466.7)

16

Balance Sheet as of 31 December 2016 #

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25) (26) (27) (28) (29) (30) (31) (32)

Investment property Investment property under development Property, plant and equipment Long-term loans receivable Inventory of real estate Total non-current assets Trading property Trading properties under construction Inventory Short-term loans receivable Trade and other receivables Current tax assets Cash, cash equivalents and tradable securities Total current assets TOTAL ASSETS Equity Share capital Share premium Translation reserve Capital reserve Retained earnings TOTAL EQUITY Minority interest Long-term loans and borrowings Deferred tax liabilities Deferred income Total non-current liabilities Short-term loans and borrowings Trade and other payables Advances from customers Income tax payable Total current liabilities

(33) TOTAL LIABILITIES (34) TOTAL EQUITY AND LIABILITIES

Change YoY 31.12.2016 30.09.2016 31.12.2015 US$ mn US$ mn US$ mn US$ mn % 915.3 904.4 1 933.7 (18.4) (2%) 232.9 231.9 238.9 (6.0) (3%) 31.2 30.1 26.3 4.9 19% 15.8 15.3 14.3 1.4 10% 0.0 22.7 18.6 (18.6) (100%) 1 195.2 1 204.4 1 231.8 (36.7) (3%) 6.9 7.4 1 2.1 4.8 232% 246.7 203.4 204.4 42.3 21% 0.7 0.6 0.5 0.2 40% 0.0 0.0 0.1 (0.1) (93%) 39.0 37.4 29.0 10.0 35% 2.5 1.6 1.6 0.9 57% 16.7 20.4 42.4 (25.8) (61%) 312.5 270.8 280.1 32.4 12% 1 507.7 1 475.2 1 511.9 (4.3) (0%) 1.0 1763.4 (311.3) (9.2) (667.8) 776.0 (3.8) 627.1 2 14.9 10.5 652.5 0.7 31.0 51.3 0.0 83.0

1.0 1763.4 (313.1) (9.2) (675.6) 766.5 (3.9) 620.8 16.0 9.8 646.6 0.7 3 29.5 35.8 0.0 66.0

1.0 1763.4 (339.0) (9.2) (620.8) 795.5 (3.9) 389.8 25.6 8.5 423.9 224.3 18.2 54.0 0.0 296.5

0.0 0% (0.0) (0%) 27.6 (8%) 0.0 (47.0) 8% (19.5) (2%) 0.1 -2% 237.3 61% (10.6) (42%) 1.9 22% 228.6 54% (223.6) (100%) 12.8 70% (2.7) (5%) 0.0 (213.4) (72%)

735.5

712.6

720.4

15.1

2%

1 507.7

1 475.3

1 512.0

49.2

(0%)

Notes:

1.

Delivery of Building 1 in Odinburg

2.

In Q1 2016 AFIMall loan was reclassified from the non-current to current liabilities. With execution of addenda to the loan agreements in Q3, both the Ozerkovskaya III and the AFIMALL loans were reclassified back to noncurrent liabilities (long-term loans and borrowings)

17

Loans and cash position as of 31 December 2016  Gross balance of the bank loan portfolio (as of 31 December 2016) – US$ 628 million  Total cash balance and deposits (as of 31 December 2016) – US$16.7 million (including marketable securities)

Project

Bank

Historical debt limit

VTB AFIMALL TOTAL AFIMALL

TOTAL/AVERAGE RATE

Available (US$ mn)

Nominal Interest rate

Currency

$159

-

9.5%

RUB

$277

-

3m Libor + 5.02%

USD

$436

$0

7.20%

$0

3m Libor + 8% from 24.01.15 to 20.03.15 3m Libor + 7% from 21.03.15 to 26.01.18

RUR 21 bn VTB

Ozerkovskaya III

Balance as of 31 December, 2016, (US$ mn)

VTB

$220 mn

Maturity

01.04.2018

$192

$628

USD

26.01.2018

7.44%

Financial covenants On 27 July 2016 Krown, Bellgate, AFI Development and Semprex LLC entered into addenda to the loan facility agreements and respective security agreements with VTB, according to which the due date for the Principal Payments has been deferred to 30th December 2016.

On 27 September 2016 Krown, Bellgate, AFI Development and Semprex LLC executed addenda to the loan facility agreements and respective security agreements with VTB, according to which the due date for the Principal Payments have been deferred to maturity date and the covenants in the Ozerkovskaya III facility (the LTV covenant and the DSCR covenant) were removed.

18

Gross/Net Asset Value PROJECT

Book Value

Book Value Bank Loan

Net Company Share

31.12.2015

31.12.2016

31.12.2016

31.12.2016

685 16 12 9 199 3 9 1 934 66 2 69 28 71 4

667 16 12 9 199 3 9 0 915 66 0 65 28 74 0

(436)

231 16 12 9 7 3 9 0 288 66 0 65 28 74 0

TOTAL INVESTMENT PROPERTY UNDER DEVELOPMENT:

239

233

0

Ozerkovskaya Phase II (26) Odinburg Aquamarine Hotel Plaza SPA Zheleznovodsk Pyatigorskaya (Park Plaza Kislovodsk) Plaza Spa Kislovodsk (JV) (50%) TOTAL PROPERTY PLANT AND EQUIPMENT: Odinburg Botanic Garden Paveletskaya II

2 0 2 13 9 3 12 37 148 19 56

2 5 7 15 11 4 14 44 145 22 77

TOTAL TRADING PROPERTY UNDER DEVELOPMENT:

223

243

0

243

1 435

1 443

(628)

815

AFI Mall Berezhkovskaya (100%) Paveletskaya I Plaza H20 Ozerkovskaya III Plaza Ib Plaza II Sadovaya -Samotechnaya TOTAL INVESTMENT PROPERTY: Plaza Ic Plaza II a Plaza IV (100%) Kossinskaya Bolyshaya Pochtovaya Ruza

TOTAL TRADING PROPERTY:

TOTAL PORTFOLIO:

(192)

(628)

0

0

Loans To Assets Value = 43% (LTV ratio) Loans To Equity (LTE ratio)

= 81%

233 2 5 7 15 11 4 14 44 145 22 77

CASH AND CASH EQUIVALENTS DEFFERED TAX LIABILITY TOTAL OTHER ASSETS AND LIABILITIES

17 (15) (41)

TOTAL EQUITY:

776 19

Market Update SECTION 5

Macro Overview and RE Investment Market RUSSIAN MACROECONIMIC OVERVIEW • Russian economic growth: Oxford Economics have further improved their Russian GDP forecast to -0.5% in 2016 (from 0.8%), stating that the economy “likely exited recession in Q4 2016”. The 2017 GDP forecast is 1.2% growth.

• Exchange rates: The rouble has been supported by rising oil prices for the most part of the year. The spot RUR/USD rate during 2016 fluctuated between 60 and 83 with a tighter range of 60-66 in Q4. The rate at 31.12.2016 was RUR60.66 (vs.

RUR63.16 on 30.09.2016).

• The Central Bank of Russia (“CBR”), has lowered the key lending rate to 9.75% on 27 March 2017, reflecting further stabilisation in the macroeconomy.

• Inflation: The consumer prices inflation in December 2016 was at 5% (annualised) (with CBR target at 4%).

RUSSIAN REAL ESTATE INVESTMENT MARKET • In 2016, about US$4.2 billion (JLL) were invested in Russian commercial real estate (74% growth year-on-year). US$1.1 billion were invested in Q4.

• According to JLL, in 2016 59% of the volume was invested in the office segment, 13% in retail and 12% in hotels. 6% were invested in warehouses. Almost all of the capital (97%) was of Russian origin.

• The year 2016 has been marked by investments made by stateowned companies and banks (Transneft, Rosselhozbank, Sberbank, VTB). Among the notable transactions in Q4 is the acquisition of KRouta chain by Lenta.

Forecasted Investment Volume in 2017 (USD billion)

JLL

CBRE

C&W

4.5 *

5

4.5

* JLL estimation excludes acquisitions by end-users and joint ventures

CBR policy rates and inflation

Source: CBR, Oxford Economics 21

Source: CBR, Oxford Economics, C&W, JLL, CBRE

Office and Retail Markets Overview OFFICE MARKET OVERVIEW

RETAIL MARKET OVERVIEW

• The take up in 2016 was 1.06 million sq.m, a 0.5% increase vs 2015 (JLL). The take-up was led by end-user acquisitions by state-owned banks (Sberbank, VTB, Rosselhozbank). The delivery of quality space amounted to 317 thousand sqm for the year, a 56% decrease y-o-y.

• 3 new shopping centres were opened in Q4 2016, among them Butovo Mall and Fashion House outlet centre (second phase).

• The vacancy rates in class A and B remain high: In Class A the vacancy was recorded at 18.1% (vs 22.8% in Q4 2015) and in Class B at 16.0% (no change over the quarter).

• In Q4 2016 the rents remained relatively stable. Asking rents for Class A non-prime central premises were at US$600750 psqmpa. Asking rents for off-centre Class A office buildings were US$400-600 and for Class B $200-400. Rouble denominated rents prevail in Class B space and in non-prime Class A.

Base Rent, US$ psqmpa

Key indicators

Units

Base rent Class A (Prime), US$ psqmpa

600-750

Base rent Class A, US$ psqmpa

400-600

Base rent Class B, US$ psqmpa

200-400

• 47 international brands entered the market in 2016, Victoria’s Secret, KidZania and Superdry being the most notable.

• The vacancy rate across Moscow shopping centres as of the end of Q4 2016 was at 12% (C&W).

• Turnover rent with a low minimum rent continues to be the most common lease structure. Fixed exchange rates are commonly provided to tenants.

C&W Prime rental rate indicator, US$ psqmpa

Key indicators

Prime rent, RUR psqma (prime shopping

Units

195,000

centre gallery)

Overall vacancy,%

15.5%

Vacancy rate, Class A, %

18.1%

Source: CBRE Marketview Moscow Office Q4 2016, C&W MarketBeat Q4 2016, JLL Moscow Office Market Q4 2016

Average rent, RUR psqma

74,000

Vacancy rate,%

12%

Source: JLL Moscow Shopping Centre Market Q4 2016, CBRE Moscow Retail MarketView Q4 2016, C&W 22

Residential Market Overview RESIDENTIAL MARKET MOSCOW AND MOSCOW REGION

Average weighted asking price in primary residential market of “old” Moscow, by districts, end of December 2016 (RUR psqm)

MOSCOW:

Zelenograd

• At the end of Q4 2016 the supply on the “Old Moscow” primary residential market (excluding “apartments”) was about 2.4 million sqm (about 37,692 residential units), an increase of 2% compared to the end of Q3 2016. The supply in “New Moscow” was about 588.2 thousand sqm.

• By the end of Q4 2016 the weighted average asking price in the newly built business class residential market in Moscow amounted to RUR249,599 psqm (US$3,962, USD/RUB = 63).

Compared with the end of Q3 2016, the prices increased in average by 1% in roubles. In the comfort class the weighted average asking price was RUR151,137 psqm (US$2,399, USD/RUB = 63).

North North-East

East North-West

Central West

MOSCOW REGION:

• At the end of Q4 2016, the primary market supply (newly built residential units) in the Moscow region amounted to 4.04 million sqm (an increase of 1.4% vs Q3 2016).

• As of the end of Q4 2016 the weighted average price per sqm in the Moscow region was RUR75,700 (US$1,202, USD/RUB = 63), a 2.9% decrease compared to end of Q3 2016.

Source: Miel Real Estate, Azbuka Zhilya

South-East

South South-West

Source: NDV Real Estate 2 3