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KMC Properties ASA

Investor Presentation • May 15, 2018

3645_rns_2018-05-15_45ad5c32-6322-4812-8e38-e62fe5723598.pdf

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1st quarter 2018 FINANCIAL RESULTS PRESENTATION15 May 2018

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 utilise 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 authorised 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

Total Comprehensive Income of USD -0.6 million in Q1.

NAV per share at NOK 0.83.

3. Gasfield occupancy at 60%.

Vacancy rates are falling and yields showing signs of compression after sustained period of low supply and high take-up.

OPERATIONS / FINANCE

The anchor tenant Gazprom Tsentrremont vacated the building in 2017. Current occupancy rate 60% after re-letting of >4,000 m2 of the vacant space across 25 new tenants.

The company is actively seeking new tenants to re-let the vacant areas. There is activity in the letting market. The company held over 350 viewings in 2017-2018 and are in continuous negotiations with potential tenants.

Independent valuer reduced value of the building from USD 26.6m to USD 26.4m in Q1 (-0.2 million).

STORM STORM CAPITAL MANAGEMENTCAPITAL MANAGEMENT

P&L – MAJOR ITEMS

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STORM STORM CAPITAL MANAGEMENTCAPITAL MANAGEMENT

BALANCE SHEET – MAJOR ITEMS

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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 8 May 2018.

DEVELOPMENT OF GASFIELD VALUATION2012‐2018

  • • Gasfield valued at USD 80.7 million at peak (2013).
  • • Current valuation USD 26.4 million.
  • • Decline in valuation of USD 54.3 million (-67% from peak).

OIL PRICEvs PROPERTY VALUES vs ROUBLE

RUSSIA– INFLATION

RUSSIA– INDUSTRIAL PRODUCTION

Economic activity (as measured by industrial production)

RUSSIA– INVESTMENT VOLUME BY SOURCE OF CAPITAL

  • Investment volume low at EUR 0.2 bln in Q1 2018.
  • For reference the investment volume in was EUR 4.0 bln in 2017 and 3.1 billion in 2016.
  • No foreign capital in Q1 2018.
  • Russia55% For comparison, foreign capital constituted 15% of total investment volume in 2017, and 6% in 2016.

MOSCOWOFFICE MARKET – VACANCY RATE

Vacancy rates falling on low supply

MOSCOWOFFICE 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)

MOSCOWOFFICE MARKET – NEW CONSTRUCTION AND ABSORPTION

Million m²

Little new construction, and negative absorption.

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

EUROPEANOFFICE CLOCK 2010 –2018

KEY TAKE AWAYS

Total Comprehensive Income of USD -0.6 million in Q1.

NAV per share at NOK 0.83.

3. Gasfield occupancy at 60%.

Vacancy rates are falling and yields showing signs of compression after sustained period of low supply and high take-up.

APPENDIX

GASFIELDBUILDING

Gasfield Building

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PERFORMANCE OF THE RUSSIAN MOEX INDEX

  • The MOEX index was up
  • +26,1% in 2015
  • +26,8% in 2016
  • -5,5% in 2017
  • +7.0% YTD 2018
  • The Index reached an all time high in January 2018

Source: Bloomberg, Moscow Exchange

(1) As per 8 May 2018. 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 LAST 5YEARS

Brent Oil Price (US\$)

CONTACTCONTACT

Berger House 36-38 Berkeley Square London W1J 5AEUnited Kingdom

E-mail: [email protected] Tel: +44 (0)207 409 3378 Web: www.stormcapital.co.uk

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