RHDF Established by the Government of the Russian Federation Russian Housing Development Foundation

Established by the Government of the Russian Federation Achievement of high profits at the minimum risks RHDF Russian Housing Development 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 , 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  Housing demand Based on the results of 2010 RHDF market research, about 60% of the Russian households want to improve their housing conditions in 2011 – That equals to around 2,200 million square meters of all types of housing

FAVORABLE HOUSING MARKET CONDITIONS IN RUSSIA 6  Effective housing demand In 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  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 Region The project “Solnechny bereg” in the city of Kirov is realized on the land plot of RHDF Tumen The project in the city of Tumen is realized on the lend plot of RHDF Chuvashia Republic Building of “Universitetsky- 2” micro district on the land plot of RHDF Kursk Building 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 , ,73,152, ,55,0253, ,55,0253,975

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 RHDF1 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 1212 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 1313 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 $ ;  Lease for the first year is $ per 1 ha;  Lease for the following years is $ 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 $ ;  Lease for the first year is $ per 1 ha;  Lease for the following years is $ 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 $ ;  Lease for the first year is $ per 1 ha;  Lease for the following years is $ 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 $ ;  Lease for the first year is $ per 1 ha;  Lease for the following years is $ per 1 ha per year;  Living space is 139,618 m2;  IRR – 31%

LOW-RISE RESIDENTIAL DEVELOPMENT IS TOP PRIORITY FOR RHDF 1414 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 %. 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 1515 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 1616

FAVORABLE CONDITIONS FOR PRODUCTION OF CONSTRUCTION MATERIALS, COMPONENTS AND EQUIPMENT IN RUSSIA 1717 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 Bryanskaya oblast 2. Volgogradskaya obast 3. Irkutskaya oblast 4. Kaluzhskaya oblast 5. Krasnodarski krai 6. Krasnoyarski krai 7. Leningradskaya oblast 8. Lipetskaya oblast 9. Moscow 10. Moscovskaya oblast 11. Novgorodskaya oblast 12. Novosibirskaya oblast 13. Permski krai 14. Altai Republic 15. Komi Republic 16. Karelia Republic 17. Tatarstan Republic 18. Repubic of Khakassy 19. Rostovskaya oblast 20. Saint-Petersburg 21. Saratovskaya oblast 22. Sakhalinskaya oblast 23. Sverdlovskaya oblast 24. Stavropolsky Krai 25. Tomskaya oblast 26. Tumenskaya oblast 27. Republic of Udmurtiy 28. Ulyanovskaya oblast 29. Chelyabinskaya oblast 30. Yamalo-Nenetski Autonomous District Russian regions

THE RHDF SUPERVIORY BOARD MEMBERS 19 Alexander Zhukov Deputy Prime Minister of the Russian Federation (Trusteeship Council Chairman) Elvira Nabiullina Minister of Economic Development of the Russian Federation (Trusteeship Council Deputy Chair) Vladimir Dmitriev Chairman of Bank of development and Foreign Economic Affairs (VNESHECONOMBANK) State Corporation Martin Shakkum Chairman of the State Duma Committee on Construction and Land Affairs Arkady Dvorkovich Aide to President of the Russian Federation (Trusteeship Council Deputy Chairman) Svetlana Orlova Deputy Chairman of the Federation Council of the Federal Assembly of the Russian Federation Viktor Basargin Minister of Regional Development of the Russian Federation (Trusteeship Council Deputy Chairman) Gennady Bin’ko Deputy Director General of Interregional Distribution Grid Company Holding Andrei Ivanov Director of the Department of the Ministry of Finance of the Russian Federation Alexander Braverman Director General of the Russian Housing Development Foundation Maxim Sokolov Director 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 for State Registration, Land Registry and Mapping Accounts Chamber of the Russian Federation Federal Service of Financial and Budget Oversight Federal Agency for State Property Management Ministry of Energy of the Russian Federation JSC Federal Grid Company of Unified Energy System of Russia (FSK EES) JSC Gazprom JSC Inerregional Distribution Grid Company Holding The Housing and Public Utilities Reform Assistance Foundation Bank for Development and Foreign Economic Affairs (VNESHECONOMBANK) OAO Agency for Housing Mortgage Lending JSC Saving Bank of the Russian Federation National Agency for Low-Rise and Cluster Housing NPO (NAMIKS)