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KMC Properties ASA

Investor Presentation • Feb 12, 2015

3645_rns_2015-02-12_91d2fde1-9852-4ec8-b8b1-81b523762244.pdf

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4th Quarter, and Full Year 2014 FINANCIAL RESULTS PRESENTATION12 February 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 Q4 2014

Comprehensive income of USD -21.3m affected by write-downs

Unstable political situation, however, oil price more important than sanctions

3. Property values down, cash flow unaffected

NAV per share at NOK 15.71

P&L – MAJOR ITEMS

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(1) Unaudited.

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

DEVELOPMENT OF ASSET VALUE 2009 – 2014

CASH & INVESTMENTS

Source: Storm Capital Management Ltd.

(1) As per 31 December 2014. Includes investment in Storm Bond Fund and direct investments in bonds.

(2) Sector split as per 31 January 2015.

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 12.25 per share (10 February 2015)
  • Net Asset Value of 15.71 NOK per share (31 December 2014)

Source: Oslo Stock Exchange, Bloomberg

(1) SRE and OSEBX adjusted for dividends. As per 10 February 2015.

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

Source: Bloomberg. (1) As per 11 February 2015.

BRENT OIL PRICE AND OIL PRICE FUTURES

RUSSIA – INFLATION

RUSSIA – INVESTMENT VOLUME BY SOURCE OF CAPITAL

  • Investment volume reached c. US\$ 500 million in Q4 2014, a c. 62% drop compared to Q3 2014
  • Total investment volume in 2014 was c. US\$ 4.2 billion, compared to c. US\$ 8.0 billion in 2013
  • Russia55% Investment market has stalled, in expectation of distress opportunities entering the market
  • Domestic capital continue constitute c. 81% of total investment volume

2014 Investment Volume Came in at c. US\$ 4.2 Billion, c. US\$ 800 Million Below Forecast Presented in October 2014

Source: Cushman & Wakefield (January 2015)

MOSCOW OFFICE MARKET – VACANCY RATE

  • Significant increase in vacancy rates in new class A business centres – in some (Moscow –City) even up to 40%
  • Class B continues to show less volatility in vacancy rates than Class A
  • Absorption in 2014 only c. 25% of the volume delivered

Vacancy Rate in Class B Buildings Stable at c. 13% Q3 to Q4

MOSCOW OFFICE MARKET - RENTAL RATES(1)

Class B Average Rental Rate At US\$408 in Q4 2014, a decrease of 21% since Q3 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

Vacancy During 2014 Increased to 19% and 11% respectively in Class A and Class B Office Buildings

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

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

TK DEVELOPMENT – INVESTMENT UPDATE

The Story Remains:

Discount to NAV offers attractive risk / reward

TK DEVELOPMENT – DEVELOPMENTS SINCE LAST UPDATE

  • TK Development has entered into an agreement to sell "Strædet", a retail project in Køge, to Citycon a leading Finnish real estate company for a selling price expected to be in the DKK 560 million range 28 Jan '15
  • TK Development has entered into a cooperation agreement with AP Pension concerning a residential development project of about 12,500 m2 at Amerika Plads in Copenhagen 26 Jan '15
  • TK Development has handed over the Barkarby project in Sweden to the investor
  • Based on a reassessment of the concept and potential for the Sillebroen shopping centre in Denmark, a writedown for impairment of DKK 44.5 million has been made

23 Dec '14TK Development has today sold its remaining areas at Teglholmen in Copenhagen for DKK 95 million

Today TK Development has entered into an agreement to sell a building lot at Amerika Plads to A.P. Møller - Mærsk A/S. The building lot has been sold at a price of DKK 97.5 million, and TK Development's ownership interest is 50 %. The sale is expected to be completed in mid-2015 and will thus positively impact results in the 2015/16 financial year 12 Dec '14

Together with GE Capital and Heitman, TK Development has conditionally sold the Futurum Hradec Králové shopping centre in the Czech Republic to Meyer Bergman. Futurum Hradec Králové consists of 110 stores covering a total floor space of 28,250 m² and a 14,400 m² hypermarket let to Tesco. The selling price for the whole centre amounts to EUR 87.6 million which is on par with the carrying amount and results in a substantial contribution to the Group's free cash resources. The sale is part of Management's strategy to sell one or more major completed projects. TK Developments ownership interest in the centre represented 20% 4 Dec '14

KEY TAKE AWAYS Q4 2014

Comprehensive income of USD -21.3m affected by write-downs

Unstable political situation, however, oil price more important than sanctions

3. Property values down, cash flow unaffected

NAV per share at NOK 15.71

APPENDIX

GASFIELD BUILDING, MOSCOW & GRIFON HOUSE, ST. PETERSBURG

PERFORMANCE OF THE RUSSIAN STOCK MARKET INDEX (RTS)

  • The Russian stock market has fallen further in the last quarter and is now c. 43% below the 5 year historical average
  • As stated during the last three quarters we still believe the stock market will stabilise back to pre-Ukraine crisis levels as the situation stabilises

EUROPEAN OFFICE CLOCK Q2 2010 – Q4 2014

RUSSIA – INDUSTRIAL PRODUCTION

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

RUSSIA – INVESTMENT VOLUME BREAKDOWN BY SECTOR

  • Total commercial real estate investment volumes reached US\$ 4.1 billion in 2014
  • Investment volume decreased significantly in the 4th quarter from c. US\$ 1.3 billion in Q3 to c. US\$ 500 million in Q4
  • Investment volume similar to the "recovery" year 2010
  • Investment volume expected to decrease to c. US\$ 2.5 billion in 2015

Full year 2015 investment volume expected to be c. US\$ 2.5 billion

MOSCOW OFFICE MARKET – NEW CONSTRUCTION AND ABSORPTION

New Construction Significant Higher Than Absorption – Limited Absorption c. 25% in 2014

TK DEVELOPMENT – GENERAL MARKET THEMES

  • General assessment unchanged since last presentation, ie. rising consumer confidence across TK Developments key markets
  • Expectations for subdued financial growth, varying in strength from country to country
  • 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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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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