Market Update June 2009 Research Department

2 SUMMER 2009 Period of uncertainty 2 Oil Prices Inflation RUR Stock Market Production Retail Negative GDP growth: Q1 GDP -9.5% Industrial production – down 15% (4 months 2009/2008) $19 Bn is total debt in Moscow office market

3 Retail trade turnover in USD 25% down

4 Average Salary 22% down

5 Income structure shift Population % by income groups, RUR/month +9% -12.5%

6 Footfall evolution March-June 2009

7 Economy drivers Mining/extraction Exports Growth/StableDecrease Imports Retail Construction Where investment idea will come from?

8 Labor market Large business is pessimistic FMCG IT Services STABLE DOWN Finance, insurance Retail Construction and real estate Big business will continue to free office space. Personnel plans of businesses Source: HeadHunter survey of 220 companies, May 2009

9 New construction in 2009 Market Inertia

10 Office market collapse Further rents decrease may bring back deals to the market

11 Outlook for July August Offices Significant decrease in rents can bring deals back to the market Target level $200 - $350 for a mass segment Retail Seasonal decrease in sales, decrease in footfall Rents slightly decreasing Prohibition of gambling will bring significant retail space to the market. September/October will be critical for retail Warehouses Stable rents, poor activity