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KMC Properties ASA

Investor Presentation • May 7, 2014

3645_rns_2014-05-07_2d8dd8cb-f255-4a21-bc99-b8de9142aff6.pdf

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First Quarter 2014 FINANCIAL RESULTS PRESENTATION7 May, 2014

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 2014

Total comprehensive income US\$ 0.9m

3. NAV marginally down to NOK 25.73 in the period (NOK 25.79 per 31.12.2013)

FINANCIAL HIGHLIGHTS 2009INCOME STATEMENT – IFRS

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(1) Unaudited

(2) Comprehensive income includes the currency effect of asset revaluations. Storm Real Estate ASA's buildings are revalued by an external valuer. The local functional currency is RUB, the effect of value change in RUB is presented over the income statement. The residual effect in USD is allocated to equity and presented over Other Comprehensive Income.

MAJOR ITEMS

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Total Comprehensive Income US\$ 0.9 m in the Quarter

BALANCE SHEET

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A Solid Balance Sheet

(1) Unaudited

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

DEVELOPMENT OF ASSET VALUE 2009 – Q1 2014

CASH & INVESTMENTS

OVERVIEW OF STORM BOND FUND

Low Duration and High Yield

STORM REAL ESTATE SHARE PRICE PERFORMANCE

  • The Storm Real Estate ASA share is listed on Oslo main exchange since 6 July 2010
  • Current share price of NOK 18.30 per share (5 May 2014)
  • Net Asset Value of 25.73 NOK per share (31 March 2014), a decrease of 0.2% in the quarter

Source: Oslo Stock Exchange, Bloomberg

(1) SRE and OSEBX adjusted for dividends. As per 5 May 2014.

RUSSIA – US\$/RUB EXCHANGE RATE MOVEMENTS SINCE 1 JANUARY 2014

US\$/RUB Exchange Rate

Source: Bloomberg.

(1) As per 5 May 2014.

RUSSIA – INFLATION HAS STABILISED AROUND 6.5%

RUSSIA – INVESTMENT VOLUME(1) BY SOURCE OF CAPITAL

2014 is Expected to be a Hesitant Year for Foreign Investment

Source: Cushman & Wakefield (March 2014)

RUSSIA – INVESTMENT VOLUME BREAKDOWN OFFICE SECTOR BY REGION

  • Moscow still the most important office market and expected to remain so
  • We expect investment activity to be even more centred around Moscow during the short term

MOSCOW OFFICE MARKET – MARKET INDICATORS, STOCK AND VACANCY RATE

  • Construction level similar to previous years with 209,000 sq. meters delivered in Q1 2014
  • Supply expected to be higher than demand in 2014
  • Vacancy rate in Class A stock continue to be high at 20.9% in Q1 2014, while the vacancy in Class B stock remains relatively stable around 10% (10.6% in Q1 2014)

Vacancy Rate in Class B Buildings Stable Around 10%

MOSCOW OFFICE MARKET - RENTAL RATES(1)

Source: Cushman & Wakefield (March 2014)

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

ST. PETERSBURG OFFICE MARKET – VACANCY DYNAMICS

Class B Vacancy Rate Continued to Fall in Q1 2014

ST. PETERSBURG OFFICE MARKET – RENTAL RATES(1) DEVELOPMENT

Source: Knight Frank St. Petersburg Research, 2014. (1) excluding VAT (18%), including operational expenses.

TK DEVELOPMENT A/S – SHARE PRICE PERFORMANCE

Source: Bloomberg. (1) As per 5 May 2014

TK DEVELOPMENT'S KEY MARKETS

SITUATION UPDATE - UKRAINE

An update on the situation in Ukraine with our view .

APPENDIX

GASFIELD BUILDING, MOSCOW & GRIFON HOUSE, ST. PETERSBURG

PERFORMANCE OF THE RUSSIAN STOCK MARKET INDEX (RTS)

The Russian stock market has taken a slight hit from the crisis, however we believe the stock market will stabilise back to pre-Ukraine crisis levels as the situation stabilises

Source: Bloomberg. (1) As per 5 May 2014

EUROPEAN OFFICE CLOCK Q1 2014

RUSSIA – INDUSTRIAL PRODUCTION

The last year we have seen a slow down in the Russian economy

Source: Bloomberg (2014)

RUSSIA – INVESTMENT VOLUME BREAKDOWN BY SECTOR

Potential that the office sector will increase in importance as seen during the previous crisis

MOSCOW OFFICE MARKET – NEW CONSTRUCTION AND ABSORPTION

New Construction

Absorption

New construction still higher than absorption – negative absorption in the quarter

TK DEVELOPMENT – INVESTMENT UPDATE

Realising true value in the portfolio takes time as expected, we have now passed our break-even purchase price

We reiterate that we still believe TK offers an attractive risk reward

TK DEVELOPMENT A/S – NET ASSET VALUE PER SHARE – Q4 2013/14

Source: Company data. Copenhagen Stock Exchange. (1) As per 5 May 2014.

TK DEVELOPMENT A/S – EXPECTED TIMING OF ASSET SALES(1)

  • TK Development announced the conditional sale of Fashion Arena Outlet Prague in Q1 2014
  • The sale price came in at DKK 400 million, DKK 25 million above Nordea's estimates, and slightly above TK Development's book value
  • Nordea has slightly revised its valuation of investment properties and completed projects downward by DKK 33 million (-2.3%) from last quarter
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Source: Nordea Markets.

(1) Nordea Research Report dated 3 April 2014.

(2) Transaction conditional on buyer obtaining financing for transaction.

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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