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KMC Properties ASA

Investor Presentation • Aug 11, 2017

3645_rns_2017-08-11_ecccc42c-6131-4278-93d7-c7a02f61cbf9.pdf

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2nd quarter 2017 FINANCIAL RESULTS PRESENTATION11 August 2017

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 Berger House, 36-38 Berkeley Square, London W1J 5AE, United Kingdom.

KEY TAKE AWAYS

NAV per share at NOK 1.13.

3. Moscow office vacancy declined during H1

Bank covenants waived until Q3 2018

OPERATIONS / FINANCE

The anchor tenant Gazprom Tsentrremont vacated the building on 31 May 2017. Current occupany rate 30% after re-letting of approx 710 m2 of the vacant space.

The company is actively seeking new tenants to re-let the vacant areas. There is activity in the letting market. The company has held 131 viewings in 2017 and are in continuous dialogue with potential tenants.

  • Rights offering complete, net proceeds of USD 3 million to achieve:
  • extension of the maturity date of the bank loan from September 2018 to June 2019
  • no amortisation until Q4 2018
  • waiving of covenants until Q4 2018,
  • new adjusted covenants from Q4 2018 to maturity, adapted to the changed market conditions in Russia.
  • This gives the company improved cash reserves and better opportunity through the cycle.

Independent valuer reduced value of the building from USD 32.6m to USD 27.2m (-5.4 million in Q2). The valuer has applied a longer expected vacancy than in prior periods.

STORM STORM CAPITAL MANAGEMENTCAPITAL MANAGEMENT

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STORM STORM CAPITAL MANAGEMENTCAPITAL MANAGEMENT

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(1) Grifon sold. Value of Gasfield building as per valuation from independent valuer.

(2) Implied yield = NOI YTD / asset value at closing date. 2015 yield is calculated on the 2015 NOI / Asset value at year end of the Gasfield building only, following sale of Grifon House.

STORM REAL ESTATE SHARE PRICE PERFORMANCE

The Storm Real Estate share was listed on Oslo main exchange on 6 July 2010.

Before listing, the Storm share was traded OTC.

Share prices are adjusted for dividends and changes in number of issued shares.

Source: Oslo Stock Exchange, Bloomberg

(1) SRE and OSEBX adjusted for dividends. As per 2 August 2017.

OIL PRICEvs PROPERTY VALUES vs ROUBLE

RUSSIA– INDUSTRIAL PRODUCTION

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

RUSSIA– INVESTMENT VOLUME BY SOURCE OF CAPITAL

MOSCOWOFFICE MARKET – VACANCY RATE

MOSCOWOFFICE MARKET ‐ AVERAGE 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 (net of op.ex and VAT)

MOSCOWOFFICE MARKET – NEW CONSTRUCTION AND ABSORPTION

Low activity: little new construction, and negative absorption.

Source: Cushman & Wakefield. Absorption = movement in occupied stock (total stock - vacancy). 15

EUROPEANOFFICE CLOCK 2010 –2017

KEY TAKE AWAYS

2.

  • NAV per share at NOK 1.13.

3. Moscow office vacancy declined during H1

Bank covenants waived until Q3 2018

APPENDIX

GASFIELDBUILDING

Gasfield Building

Class BGross Area c. 15,200 m² Occupancy Rate c. 30% Major Tenant Gazprom Tsentrremont

PERFORMANCE OF THE RUSSIAN MICEX INDEX

Source: Bloomberg .

(1) As per close 2 August 2017. The MICEX Index is denominated in rubles, the RTS Index is denominated in dollar.

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

BRENT OIL PRICE ANDOIL PRICE FUTURES

CONTACTCONTACT

Berger House 36-38 Berkeley Square London W1J 5AEUnited Kingdom

E-mail: [email protected] Tel: +44 (0)207 409 3378 Web: www.stormcapital.co.uk

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