KMC Properties ASA

Investor Presentation • Feb 8, 2019

2 nd Half 2018 FINANCIAL RESULTS PRESENTATION 8 February 2019

DISCLAIMER

This document is being furnished for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase any security, future or other financial instrument or product. It is not intended to form the basis of an investment decision and has not been verified. Storm Capital Management Ltd. ("Storm") makes no recommendation or representation as to, and accepts no responsibility or liability for, the accuracy or completeness of the information contained herein or any other information, whether written or oral, made available and any liability therefore is expressly disclaimed. Such information is presented as of the date and, if applicable, time indicated and Storm does not accept any responsibility for updating any such information.

Any simulations, projections, valuations and statistical analyses contained herein have been provided to assist the recipient in the evaluation of the matters described herein; such simulations, projections, valuations and analyses may be based on subjective assessments and assumptions and may utilize one among alternative methodologies that produce differing results; accordingly, such simulations, projections, valuations and statistical analyses are not to be viewed as facts and should not be relied upon as an accurate representation of future events. No representation or warranty is given as to any of the simulations or analyses, or as to the achievement or reasonableness of any future projections or estimates, contained in this document.

This document has been prepared by Storm Capital Management Ltd. and should not be considered impartial research under FCA Rules. The views expressed may not be supported by independent analysis. The author of this document may be remunerated as a result of transactions generated by this information.

Storm Capital Management Ltd. is authorized and regulated in the United Kingdom by the Financial Conduct Authority. Its registered office is at Berger House, 36-38 Berkeley Square, London W1J 5AE, United Kingdom.

KEY TAKE AWAYS

2. NAV per share at NOK 0.26

3. Gasfield occupancy at 86%

4. Despite higher occupancy in the Gasfield building, the group is loss-making given the current financing situation, and there is significant uncertainty related to the going concern assumption

OPERATIONS / FINANCE

1. Gross rental income excl. VAT per month from the Gasfield building, according to signed contracts as at 31 December 2018, was RUB 12.9m

2. The company has entered a short-term agreement with the bank that expires 30 March 2019. The aim is to reach a long-term financing solution for the Group within that period of time.

3. The value of the building is stable, USD 21.3m as at 31 December 2018 (USD 21.2m as at 30 June 2018).

STORM CAPITAL MANAGEMENT STORM CAPITAL MANAGEMENT

P&L – MAJOR ITEMS

mill. USD	H2 2018	H2 2017	12M 2017
Total Comprehensive Income	-1.6	-1.9	-4.2
Summary of major items:
NOI from investment properties	+0.2	-0.3	1.8
Value change investment properties	+0.0	-0.6	-4.5
Other operating costs	-0.6	-0.5	-1.0
Borrowing costs	-0.9	-0.9	-1.9
Currency gains/ losses	-0.1	-0.0	-0.0
Contract- and interest derivatives	+0.4	+0.4	0.6
Taxes	-0.6	0.0	0.5

STORM CAPITAL MANAGEMENT STORM CAPITAL MANAGEMENT

BALANCE SHEET – MAJOR ITEMS

(US\$ '000)	(1) 31/12/18 31/03/07	31/12/17		31/12/18 (1) 31/03/07	31/12/17 Pro Forma
Investment property Total non-current assets	\$21,419 \$26,590	\$26,760 \$26,770	Bank loans Deferred tax	\$18,678 \$112	\$18,136 \$284
Cash	\$500	\$2,247	Other liabilities Total liabilities	\$849 \$19,639	\$1,505 \$19,640
Total current assets	\$852	\$2,865	Equity	\$2,637	\$9,994
Total assets	\$22,277	\$29,634	Total equity and liabilities Equity ratio	\$22,277 11.8%	\$29,634 33.7%

STORM REAL ESTATE SHARE PRICE PERFORMANCE

• The Storm Real Estate share was listed on Oslo main exchange on 6 July 2010.
• Before listing, the Storm share was traded OTC.
• Share prices are adjusted for dividends and changes in number of issued shares.

Source: Oslo Stock Exchange, Bloomberg

(1) SRE and OSEBX adjusted for dividends. As per 5 February 2019.

DEVELOPMENT OF GASFIELD VALUATION 2012-2018

• Gasfield building valued at USD 80.7 million at peak (2013).
• Current valuation USD 21.3 million.
• Decline in valuation of USD 59.4 million (-74% from peak).

OIL PRICE vs PROPERTY VALUES vs RUBLE

RUSSIA – INDUSTRIAL PRODUCTION

Economic activity (as measured by industrial production)

RUSSIA – INVESTMENT VOLUME BY SOURCE OF CAPITAL

US\$ m

• Investment volume low at USD 1.9bn in 2018, 14% foreign investments
• For reference the investment volume in USD was 5.0bn in 2017 and 4.0bn in 2016.
• Russia 55% ▪ For comparison, foreign capital constituted 15% of total investment volume in 2017, and 6% in 2016.

MOSCOW OFFICE MARKET – VACANCY RATE

Vacancy rate (Classes A and B) decreased by 1.8 percentage points since end of 2017

MOSCOW OFFICE MARKET - AVERAGE RENTAL RATES IN RUB (1)

Source: Cushman & Wakefield

(1) Average rental rates is a weighted average rental rate of asking rents of deals closed within the period, RUB / m²/ annum/ triple net (net of op.ex and VAT)

Million m²

MOSCOW OFFICE MARKET – NEW CONSTRUCTION AND ABSORPTION

0,0 0,5 1,0 1,5 2,0 2,5 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 New Construction Absorption

Little new construction, and positive absorption.

Source: Cushman & Wakefield. Absorption = movement in occupied stock (total stock - vacancy). 15

EUROPEAN OFFICE CLOCK 2010 –2018

KEY TAKE AWAYS

1. Total Comprehensive Income of USD -1.6 million in H2 2018

2. NAV per share at NOK 0.26

3. Gasfield occupancy at 86%

4. Despite higher occupancy in the Gasfield building, the group is loss-making given the current financing situation, and there is significant uncertainty related to the going concern assumption

APPENDIX

GASFIELD BUILDING

Gasfield Building

Class	B+
Gross Area	c. 15,200 m²
Net lettable area	c. 11,100 m2
Occupancy Rate	c. 86%

PERFORMANCE OF THE RUSSIAN MOEX INDEX

Annual change in the MOEX index:

• +26,1% in 2015
• +26,8% in 2016
• -5,5% in 2017
• +12.3% in 2018
• The Index is currently (4 February 2019) at an all time high

Source: Bloomberg, Moscow Exchange

(1) As per 4 February 2019. The MOEX Index is denominated in rubles, the RTS Index is denominated in dollar. Previous name MICEX index.

RUSSIA – US\$/RUB AND NOK/RUB EXCHANGE RATE MOVEMENTS AND CBR KEY RATE

BRENT OIL PRICE

Brent Oil Price (US\$)

20,00 30,00 40,00 50,00 60,00 70,00 80,00 90,00 100,00 110,00 120,00 01.05.2013 01.08.2013 01.11.2013 01.02.2014 01.05.2014 01.08.2014 01.11.2014 01.02.2015 01.05.2015 01.08.2015 01.11.2015 01.02.2016 01.05.2016 01.08.2016 01.11.2016 01.02.2017 01.05.2017 01.08.2017 01.11.2017 01.02.2018 01.05.2018 01.08.2018 01.11.2018 01.02.2019 High: 115.06 Average: 67.53 Low: 27.88 Last: 62.51

CONTACT CONTACT

Berger House 36-38 Berkeley Square London W1J 5AE United Kingdom

E-mail: info@stormcapital.co.uk Tel: +44 (0)207 409 3378 Web: www.stormcapital.co.uk