4Q 2015INVESTMENT

OPPORTUNITIES

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Entering Kiev’s market in 2–3Q 2015 (Podol Grad by UkrBud) we expected to gain benefits from the cease-fire, political and economic situation in the coming months. Hryvnia has been the most predictable and stable currency for the last 6 months with the National Bank's firm control and inflow of foreign currencies through IMF.

As a result market sentiments have been slowly changing today from the “bottom-state-of-mind” to a “slight optimism”. Developers are not too ready for bargains as they used to be, prices are not as negotiable as 3–5 months ago. We expect a “bottom-push-up” to take place in the nearest future.

Meanwhile, the B-Club's price for chosen prop-erties still has a lot of upside and potential to double within the next 3 years amid political and economic stabilization. First winners as always would be top downtown locations and newly built ready-to-move-in projects.

In our opinion, Podol Grad by UkrBud is one of that kind of projects with an outstanding mixture of characteristics (location, middle-rise construction, newly created area with a wide range of facilities).

The main risk for investors is whether the sit-uation in Ukraine is sustainable enough in the long-term (cease-fire, exchange rate, economic reforms).

Introduction

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MOSCOWSince 2010 the residential market in Moscow has been growing in price. Prices grew on aver-age 10 % a year. It was hard to make a deci-sion for true bottom-searches whether to buy property in Moscow for the last 3 years.

In 2015 the situation significantly changed. After the ruble depreciation amid oil price at 50$/barrel, demand’s slowdown and a new crisis, we assume it’s time to step in the win-dow of opportunity. With a proper risk/benefits balance, proper partner developers, proper size of stakes.

Not to forget that Moscow is still one of the top markets regarding the volumes of trans-actions and annual delivery of residential real estate.

Nowadays the market offers to gain benefits (in 3-years term) of a number of “kickers”:

■ Market upside: overall improvement of mar-ket and economic situation in 2016–2018;

■ Stage of construction upside: cost of money for local developers (the 5-years high) — the discount included at pricing for off-plan properties;

■ Asset upside: proper choice of investment assets with the max upside and minimum developers’ risk;

■ Currency upside along with oil prices re-bound (by 2018).

Meanwhile political risks in the coming years are high and would affect investment senti-ments. Ukraine, sanctions and 2018 president elections are the most acute issues.

Billion Estate’s team is encouraged to provide full support and offer the best off-plan deals on the residential markets in Kiev and Moscow.

Podol Grad by UkrBud at Podol, Kiev and apart-ment complex Match Point at Park Pobedy, Kutuzovsky prospect, Moscow are our “stocks-in-trade” for the 4Q 2015. Welcome on board!

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Investment opportunity Podol Grad, Kiev Match Point, Moscow ZilART (Zil), Moscow

Status Flats, shell&core Apartments with fit-out Flats, shell&core

Unit size (recommended), sq.m. 55–100 30–62,5 45–65

B-Club’s price, $/sq.m. Staring $1 100 Starting $2 500 Starting $2 500

Budget From $60 000 From $100 000 From $110 000

3-year upside (Billion Estate’s estimate), % Up to 90 % Up to 80 % Up to 55 %

Rental yield on initial investment (estimate), % Up to 7.5 % Up to 10 % Up to 6 %

Upside structureMarket Undervalue pricing Stage of construction

Stage of construction Undervalue pricing

Stage of construction Future facilities and project area development

Hand-over 2016–2017 2019 2017–2018

Tax (at cadaster’s value) — 0.5 % 0.1–0.2 %

Developer UkrBud (state-owned) VTB Bank (co-developer) LSR

Risks Slow delivery Market weakness

Slow construction Low quality (incl. fit-out)

Slow construction Slow development of the whole area

Risk of non-delivery (estimate), % 5 % 2 % 3 %

Table1. Opportunities overview

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Property description

Match Point Residential Complex

Match Point is a new mixed-use complex with apartments and a vol-leyball court. The business-class building that features two sections of different stores and an underground three-level parking, will be located within ten-minute drive from the center of Moscow. The complex will be built in accordance with the latest construction technologies while natu-ral materials will be used for the facades. Match Point offers a variety of amenities for comfortable living right on the site.

5.4 km

1.9 km 2 km

PoklonnayaHill

MoscowCity

Vremena Goda

Vremena Goda

MoscowCity

Poklonnaya Hill

■ Number of units: 1 642

■ Total build-up area: more than 200 000 sq.m

■ Infrastructure: a volleyball court (30 000 sq.m), a dozen of kindergartens and shops, restaurants on the first floor; unique panoramic views at Poklonnaya and Park Pobedy from upper levels (15 floor+)

■ Location: – 9 km to the shopping

mall Vremena Goda – 4 km to Poklonnaya Hill – 6 km to the business cen-

ter Moscow City

Property description

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Podol Grad Residential Complex

Podol Grad is a modern middle-rise residential estate made with bricks in Art Nouveau style with a touch of XIX century romanticism and constructivism. It features exquisite facades, spacious layout and well-developed internal infrastructure. The community will be arranged and landscaped in accordance with up-to-date standards and world trends. The residential complex stands out with its proximity to cultural sites of the capital and to road interchange.

■ Number of units: club houses with 25–40 apartments

■ Total build-up area: 30 000 sq.m

■ Infrastructure: shops, cafes, restaurants, boutiques, drug stores, beauty shops, fitness centers, animal clinics, supermarkets, etc.

■ Location: – 1.5 km to Hyatt Regency

Kiev Hotel – 1.2 km to Mychailivska

square – 3 km to Khreschatyk

Mychailivs-ka square

Khre-schatyk

Hyatt Regency

KievHotel

1.5 km

852 m

863 m

Property description

ZilART Residential Complex

ZilART is a perfect area for those people who appreciate the comfort, business opportunities, creative experience and inspiration from variety of cultural events. The business-class residential property is located just 5 km from the city center and the Kremlin. The complex will occupy the area of 65 hectares and include public spaces, almost a million square meters of residential space as well as social, cultural, educational and entertainment facilities held in the same architectural style. A star team of architects who created the project gives special attraction and inter-national significance to the new residential estate.

■ Number of units: >10 000

■ Total build-up area: 1.5 million sq.m

■ Infrastructure: business centers and shopping malls, unique educational center, kindergartens, schools, cultural establishments, recreational areas, play-grounds, an esplanade

■ Location: – 5 km to the Kremlin – 1.8 km to the Moscow

Paveletskaya train sta-tion

– 1.5 km to the Garden Ring

3.2 km5.6 km

1.8 km

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Kremlin

Moscow Pavelets-kaya train

station

Garden Ring

B-Club membership privileges

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All on a turnkey basis — purchase and sale

Complete legal support of real property business

Tax advice for non-resident investors

Special prices for our investors

The possibility of arranging a meeting with developers/

top management

Different options of payment for the transaction

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B-Club

B-club — #bottom-searchers & #billion-makers club is a private real estate investor club.

The Club's strategy is to search and acquire highly liquid assets with outstanding value upside worldwide.

Sincerely yours,

Vladimir TribratManaging Partner, PhDB-CLUB