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KMC Properties ASA

Investor Presentation • Aug 15, 2014

3645_rns_2014-08-15_dc26e6a1-5666-4cb0-9837-2560d4104c7d.pdf

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2nd Quarter 2014 FINANCIAL RESULTS PRESENTATION15 August 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

Total comprehensive income US\$ 1.0m in H1 2014

Value increase of the investment in TK Development of US\$ 5.9 million (48%) in H1

3. Property values decreased a US\$ 5.4 million to US\$ 97.7 million during H1

NAV per share of NOK 24.83 in Q2 2014 post dividend payment of NOK 1.60 per share

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\$ 1.0 million for H1 2014

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 – H1 2014

CASH & INVESTMENTS

Source: Storm Capital Management Ltd. (1) As per 31 July 2014.

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 17.20 per share (14 Aug 2014)
  • Net Asset Value of 24.83 NOK per share (30 June 2014), a decrease of 3.5% in the quarter, post dividend payment of NOK 1.60 in May

Source: Oslo Stock Exchange, Bloomberg

(1) SRE and OSEBX adjusted for dividends. As per 14 Aug 2014.

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

US\$/RUB Exchange Rate

Source: Bloomberg. (1) As per 14 Aug 2014.

RUSSIA – INFLATION HAS STABILISED AROUND 6.7%

RUSSIA – INVESTMENT VOLUME BY SOURCE OF CAPITAL

  • H1 2014 investment volume reached US\$ 2.4 billion
  • As expected, due to the global macroeconomic situation and political unrest, foreign investments are less than 12% - US\$ 286 million in H1 2014
  • 55% Analysts estimate that Q3 in the investment market will be rather slow, reflecting both negative sentiment and a summer slowdown in business activity

2014 Forecast Remains Unchanged: US\$ 5.0 Billion by the End of the Year

Source: Cushman & Wakefield (July 2014)

RUSSIA – INVESTMENT VOLUME BREAKDOWN OFFICE SECTOR BY REGION

  • Investments are more than ever concentrated in Moscow
  • We anticipate investment market recovery in 2015 back to US\$ 6.5-7.0 billion

MOSCOW OFFICE MARKET – MARKET INDICATORS, STOCK AND VACANCY RATE

Vacancy Rate in Class B Buildings Increased 1.5% in Q2 Due to New Supply

MOSCOW OFFICE MARKET - RENTAL RATES(1)

Source: Cushman & Wakefield (July 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 Q2 2014

ST. PETERSBURG OFFICE MARKET – DYNAMICS OF AVERAGE WEIGHTED RENTAL RATES(1) IN BUSINESS-CENTRES

Source: Cushman & Wakefield, St. Petersburg Research, 2014. (1) Including Utilities and OPEX. Net of VAT.

TK DEVELOPMENT A/S – SHARE PRICE PERFORMANCE

Source: NASDAQ OMX NORDIC. (1) As per 13 Aug 2014

TK DEVELOPMENT'S KEY MARKETS

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Positive Signals from TK Developments Core 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 took a dive in the wake of the Ukrainian crisis and is still c. 19% below the 5 year historical average
  • As stated in Q1 2014 we still believe the stock market will stabilise back to pre-Ukraine crisis levels as the situation stabilises

Source: Bloomberg. (1) As per 14 Aug 2014

EUROPEAN OFFICE CLOCK Q2 2014

RUSSIA – INDUSTRIAL PRODUCTION

Economic Activity as Measured by Industrial Production is Struggling to Gain Pace in Current Situation

RUSSIA – INVESTMENT VOLUME BREAKDOWN BY SECTOR

Office Sector is Increasing in importance as Seen During Previous Crisis's

MOSCOW OFFICE MARKET – NEW CONSTRUCTION AND ABSORPTION

New Construction Still Higher Than Absorption – Limited Absorption so Far in 2014

TK DEVELOPMENT – INVESTMENT UPDATE

The Story Remains:

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

Danish equity brokers revised its rating from Hold to Buy in beginning of April

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 13 August 2014.

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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