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KMC Properties ASA

Investor Presentation • Aug 13, 2015

3645_rns_2015-08-13_a69e668e-9e8e-4687-be26-ae09c5adf874.pdf

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2nd quarter 2015 FINANCIAL RESULTS PRESENTATION13 August 2015

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 100 New Bond Street, London W1S 1SP, United Kingdom.

KEY TAKE AWAYS Q2 2015

Total Comprehensive Income of USD -5.5m

Russia values and property shares down

3. NOI from properties USD 2.4m vs 2.7m last year

NAV per share at NOK 13.28

P&L – SUMMARY OF MOST MAJOR ITEMS

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(1) Unaudited.

(2) Includes cash invested in liquid securities for cash management purposes.

NAV PER SHARE

As at 30 June 2015. Numbers in NOK per share.

DEVELOPMENT OF ASSET VALUE 2009 – 2014

CASH & INVESTMENTS

Source: Storm Capital Management Ltd.

(1) As per 30 June 2015. Includes investment in Storm Bond Fund and direct investments in bonds.

(2) Sector split as per 30 June 2015.

OVERVIEW OF STORM BOND FUND

Low Duration and High Yield

STORM REAL ESTATE SHARE PRICE PERFORMANCE

Source: Oslo Stock Exchange, Bloomberg

(1) SRE and OSEBX adjusted for dividends. As per 12 August 2015.

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

BRENT OIL PRICE AND OIL PRICE FUTURES

RUSSIA – INFLATION

RUSSIA – INVESTMENT VOLUME BY SOURCE OF CAPITAL

  • Investment volume reached c. US\$ 1.3 billion in H1 2015.
  • Domestic capital constituted 60% of total investment volume in H1
  • Russia55% Of foreign investors, European and American investors (98%) more active than Asian (2%).

Investment volumes low

MOSCOW OFFICE MARKET – VACANCY RATE

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

Source: Cushman & Wakefield

(1) Average rental rates is a weighted average rental rate of asking rents of deals closed within the period, US\$ / m²/ annum/ triple net

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

Class A up in RUB terms on positive absorption - Class B down on negative absorption

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

ST. PETERSBURG OFFICE MARKET – VACANCY DYNAMICS

Vacancy During Q2 stable at 19% for class A increased 2% to 15% for Class B buildings

ST. PETERSBURG OFFICE MARKET – DYNAMICS OF AVERAGE WEIGHTED RENTAL RATES(1)

Source: Maris, Part of the CBRE Affiliate network, 2015. (1) In rub/sq m/month including VAT and OPEX.

CBRE – VISION OF POTENTIAL "MARKET BOTTOM"

EUROPEAN OFFICE CLOCK Q2 2010 – Q2 2015

TK DEVELOPMENT A/S – SHARE PRICE PERFORMANCE

  • Storm Real Estate ASA holds 11.1% of the voting rights in TK Development
  • Our average purchase price is DKK 8.00 per share

TK DEVELOPMENT – INVESTMENT UPDATE

The Story Remains:

Discount to NAV offers attractive risk / reward

TK DEVELOPMENT – GENERAL MARKET THEMES

  • General assessment unchanged since last presentation, ie. GDP growth and rising consumer confidence across TK Developments key markets
  • Increase in private consumption is still anticipated
  • Easing in restraints when procuring financing of projects
  • Economic growth is subject to an increased risk due to the geopolitical uncertainty in Ukraine
  • May result in more difficult market conditions in Poland, in particular
  • Diminishing uncertainty in the property markets
  • However decision-making processes remains lengthy and carefully considered
  • Historically low interest level fuelling property demand
  • Investment market showing increasing optimism and appetite for development projects
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1, 2, 6, 5,
8 1 2 9
% % % %
2, 2, 7, 7,
5 8 7 6
% % % %
3, 3, 8, 7,
3 4 4 9
% % % %
2, 2, 5, 5,
5 6 6 5
% % % %

KEY TAKE AWAYS Q2 2015

Total Comprehensive Income of USD -5.5m

Russia values and property shares down

3. NOI from properties USD 2.4m vs 2.7m last year

NAV per share at NOK 13.28

APPENDIX

GASFIELD BUILDING, MOSCOW & GRIFON HOUSE, ST. PETERSBURG

PERFORMANCE OF THE RUSSIAN STOCK MARKET INDEX (RTS)

  • The Russian stock market has fallen again after an upturn earlier in the year since march together with a higher oil price and a stronger rouble
  • The RTS index is up 5,2% in 2015 (1)

RUSSIA – INDUSTRIAL PRODUCTION

Economic activity (as measured by industrial production) showing a downward trend

MOSCOW OFFICE MARKET – NEW CONSTRUCTION AND ABSORPTION

New construction at low levels, absorbtion increased in Q2

CONTACTCONTACT

100 New Bond Street London, W1S 1SP United Kingdom

E-mail: [email protected] Tel: +44 (0)207 409 3378 Fax: +44 (0)207 491 3464

Web: www.stormcapital.co.uk

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