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KMC Properties ASA

Investor Presentation • May 13, 2015

3645_rns_2015-05-13_872ca316-6530-4dcd-9a39-0af6aa0b50a4.pdf

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1st quarter 2015 FINANCIAL RESULTS PRESENTATION13 May 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 Q1 2015

Comprehensive income of USD -2.3m

Russia values down, property shares up

3. NAV per share at NOK 16.10

Russian roubles and oil price recently trending upwards

P&L – MAJOR ITEMS

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BALANCE SHEET

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(1) Unaudited.

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

NAV PER SHARE

As at 31 March 2015. Numbers in NOK per share.

DEVELOPMENT OF ASSET VALUE 2009 – 2014

CASH & INVESTMENTS

Source: Storm Capital Management Ltd.

(1) As per 31 March 2015. Includes investment in Storm Bond Fund and direct investments in bonds.

(2) Sector split as per 30 April 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 May 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\$ 700 million in Q1 2015, a low volume, but still higher than Q1 in 2009, 2010 and 2014.
  • Foreign capital constituted over 50% of total investment volume in Q1
  • Russia55% European and American investors (95%) more active than Asian (5%).

Investment volume at a low level, but not the lowest Q1 the last decade

MOSCOW OFFICE MARKET – VACANCY RATE

  • Significant increase in vacancy rates in new class A business centres – in some (Moscow –City) even up to 42%
  • Class B continues to show less volatility in vacancy rates than Class A
  • Negative absorption in Q1 2015, companies are reducing their rented area.

Class B lower vacancy rate than class A buildings

MOSCOW OFFICE MARKET - 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 - 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

ST. PETERSBURG OFFICE MARKET – VACANCY DYNAMICS

Vacancy During Q1 stable at 19% for class A increased 2% to 13% 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"

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

Source: NASDAQ OMX NORDIC. (1) As per 12 May 2015

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
D
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(
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E E E E
2 2 2 2
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1, 2, 6, 6,
7 1 5 4
% % % %
2, 2, % %
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% % 7 5
3, 3, 8, 8,
2 4 8 3
% % % %
2, 2, 6, 5,
5 6 0 9
% % % %

KEY TAKE AWAYS Q1 2015

Comprehensive income of USD -2.3m

Russia values down, property shares up

3. NAV per share at NOK 16.10

Russian roubles and oil price recently trending upwards

APPENDIX

GASFIELD BUILDING, MOSCOW & GRIFON HOUSE, ST. PETERSBURG

PERFORMANCE OF THE RUSSIAN STOCK MARKET INDEX (RTS)

  • The Russian stock market has rebound since march together with a higher oil price and a stronger rouble
  • We have previously stated our opinion that the stock market will stabilise back to pre-Ukraine crisis levels as the situation stabilises. We maintain that opinion.

EUROPEAN OFFICE CLOCK Q2 2010 – Q4 2014

RUSSIA – INDUSTRIAL PRODUCTION

Economic Activity as Measured by Industrial Production Stable Despite Current Economic Environment

MOSCOW OFFICE MARKET – NEW CONSTRUCTION AND ABSORPTION

Negative net absorption in Q1 2015. Companies reducing expenses by office area optimization

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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