This document provides details on an investment offer to acquire a 50% interest in a construction project called "Business-park" in Perm, Russia. The project involves constructing a commercial and office complex with a hotel, elite apartments, and underground parking. The total area will be 120,000 square meters. The cost of acquiring a 50% interest is 50 million euros. The project is expected to generate a total profit of 363.2 million euros and have an IRR of 39.1% for investors.

1. Acquisition of 50% interest in the
construction project “Business - park”:
Retail and office complex with hotel, elite
apartments and underground parking
in Perm, ul. Kommunisticheskaya 73

2. TABLE OF CONTENTS
§ Summary of investment offer 3
§ Project description 4
§ Marketing concept of the “Business - park” 5
§ Investment offer 6
§ Schedule of investor’s cash disbursment 7
§ Sales plan and exit strategy of the “Business - park” 8
§ Terms of payment of the Project 9
§ Project model of the “Business - park” 10
§ Project status 11
§ Architectural concept and technical planning 12
§ General contractor 13
§ Concept development and market analysis 14
§ Hotel operator 15
§ Location of the land plot 16
§ Neighbouring objects to the land plot 17
§ Plan of the land plot 18
§ Pictures of the land plot 19
§ About Perm 20
§ Contact data 21
2

3. SUMMARY OF INVESTMENT OFFER
OFFER: we offer to acquire 50% interest in construction project “Business - park”: commercial and office complex
with hotel (4-5 stars), elite apartments and underground parking.
Cost of 50% interest in the construction project “Business-park” – 50 million EUR.
PROJECT DESCRIPTION: it is planned to construct qualitative multifunctional complex with total area 120 000 sqm, all
elements of the complex will have synergetic effect:
- Office (area 20 000 sqm), hotel (200 hotel rooms under management of the international hotel operator Sheraton) and
residential areas (elite apartments 15 000 sqm) will attract a large number of solvent customers into the shopping centre
(area 40 000 sqm),
- Office centre will contribute to hotel room occupancy, retail segment will create well-developed infrastructure for the
whole Project.,
- Underground multilevel parking: (area 27 000 sqm) will demanded by hotel guests, visitors of retail and office centres and
apartments owners.
Business-park wil be constructed on the land plot with area 2,05 hectares, located at the address: Perm, ul.
Kommunisticheskaya, 73a.
The land plot is situated in the central part of the city, on the crossing of Kommunisticheskaya and Popova streets, in the
centre of business activity, in the immediate proximity to the Kama bridge.
There are headquarters of many large corporations and city administration, Perm Regional Government, as well as Drama
theatre, Oper and ballett theatre, Art gallery and Exhibition Hall.
Today there are not similar projects and similar land plots in Perm.
-EFFECTIVENVESS OF THE PROJECT:
- Total investment volume of the Project is 196,7 million EUR (including 75 million EUR – funds of
PermGrazhdanStroy, 50 million EUR – funds of INVESTOR, (32,5 million EUR for Projrct realization, 17,5 milion EUR –
funds of PermGrazhdanStroy), 89,2 million EUR – funds of credit institutes
- Profit from sale of all objects of business-park, short term leasing and VAT repayment 363,2 million EUR.
- Net profit from project realization minus all taxes, including VAT repayment 227,9 million EUR (including
investor’s profit – 114 million EUR)
- IRR of the Project for INVESTOR – 39,1% Multiple 2,28.
3

4. PROJECT DESCRIPTION
§ Project: Retail and office centre with hotel, elite apartments and underground parking
§ Total gross area: 120 000 sqm
§ Office area: total area – 20 000 sqm, leasable area - 15 300 sqm
§ Retail area: Total area – 40 000 sqm, leasable area - 31 500 sqm
§ Hotel: 200 rooms, 4-star (area - 15 000 sqm)
§ Elite apartments (area - 15 000 sqm)
§ Underground parking with several parking levels: (area – 27 222 sqm) 1 184 parking places
(extension is possible)
§ Russia, city: Perm
§ Land plot: 2,05 hectares, including 1,7 hectares in freehold, no incumbrances, 0,35 are being
acquired.
§ Location: The land plot is situated in the heart of Perm city, opposite to Lenina Street, one of the main
streets of Perm. There are buildings of Legislative Assembly and Perm Regional Government,
headquarters of many large corporations, bank offices, the Drama theatre, the Organist Hall,
shopping centers, City esplanade in front of the project land plot.
4

5. MARKETING CONCEPT OF THE “BUSINESS-PARK”
Area type Target tenant buyer categories
Department store under international brand (anchor): Marc & Spencer, Kaufhof …
Shopping center •
Big clothing store under international brand (anchor): Koenen, Peek & Cloppenburg …
•
Premium supermarket (anchor)
•
Clothing and common articles net stores under international and Russian brands
•
(business class): Zara, Hallhuber, Gizia, Morgan De Toi …
• High-end boutiques: Versace, Dior, Escada …
• Food court (business class)
• Cinema, bowling, entertainment area
Representatives of Russian and international corporations
Office •
Banks, investment companies
•
Law companies
•
Consulting companies
•
Representatives of insurance companies
•
Offices of leading Perm corporations
•
4 – 5 star hotel with 200 hotel rooms under management of international professional
Hotel
operator with international well-known brand
Perm citizens with upper-middle and high income
Elite apartments
Shopping center operator and separate stores tenants
Underground parking •
Office center tenants
•
Hotel
•
Elite – apartments owners
•
Tenants of near-by offices
•
5

6. INVESTMENT OFFER
Investor invests
PGS invests project land 50 million EUR
plot (including 32,5 million EUR in
the project,
(estimated market value
PGS transfers 17,5 million
75 million EUR)
EUR )
50% 50%
Project Joint Venture
with total equity of
107,5 million EUR
Debt financing of the construction cost Export refinancing of around 50% of
89,2 million EUR construction cost through major
46% of the total project cost, Term Sheet currently in international western bank (currently in
advanced negotiations with 3 Russian Banks) negotiations with several German banks)
6

7. SCHEDULE OF INVESTOR’S CASH DISBURSEMENT
Investor equity use (1 435 million EUR):
• Finishing of the relocation and acquisition of additional land plots with area 0,35 hectares – 9,14 million EUR.
• Project documentation (architectural concept, project documentation, construction documentation) 4,6 million
EUR.
• Utilities and infrastructure contracts - 5,16 million EUR.
• Shell and core costs – 6,7 million EUR.
• Payment of interest on debts in construction period – 14,3 million EUR
2009 2010 2011
Name
1 q. 09 2 q. 09 3 q. 09 4 q. 09 1 q. 10 2 q 10 3 q. 10 4 q. 10 1 q. 11 2 q. 11 3 q. 11 4 q. 11
Relocation of the territory (acquisition
4 112 4 112
of the additional land plots)
938 938
Рbuilding permit
938 938
Working draft
2 313 2 313
Infrastructure costs
0 383 765 1 133 1 486 1 824 2 147 2 454 2 747 3 025
Interest on credit
TOTAL 8 300 8 300 0 383 765 1 133 1 486 1 824 2 147 2 454 2 747 3 025
7

8. SALES PLAN AND EXIT STRATEGY OF THE “BUSINESS-PARK”
Maximum profit will be reached through the following exit strategy:
Office building and shopping center will be sold to well - known international institutional fund 2 quarters after the complex
commissioning
• Long term lease contracts with well-known tenants for at least 75% of the lettable area
• Long term lease contracts (5-10 years) with anchor tenants (around 45% - 50% of the whole area) will be signed January 2009 –
December 2009
• Brokerage agreement with professional international broker with great experience in Russian Federation (candidate is JLL)
• Long term lease agreements will be signed all tenants till the end of the construction period
• Sale tender will be managed by well-known international broker with wide experience in Russian Federation (candidate is JLL)
• Sale tender preparations will be done before the building is commissioned
• PGS is already negotiating with several international well-known investment funds potential forward-purchase agreement
• It is possible to sign forward-purchase agreement with international well-known investment fund before the construction works
start.
Sale of the hotel to the well known international institutional fund specializing in hotel real estate in 1-2 years after the complex
commissioning
• Maximum sale profit will be reached after the 1-2 years hotel stabilization period
• It is possible to sign a forward-purchase agreement for the hotel with the discount before the end of construction period (2008 -
2011) to cover the debt interest
• Sale tender will be managed by well-known international broker with great experience in Russian Federation (candidate is JLL)
Elite apartments will be sold to private owners in first 2 quarters after the complex is commissioned
• Pre-sales agreements (with small initial pre-payment) will be signed for about 46% of all units during the construction period (2009-
2011)
• Final sales agreements and rest sales is planned for first 2 quarters after the complex is commissioned
• Sales and marketing through professional well-known local residential broker
• It is possible to use residential pre-sales to cover debt interest
8

9. TERM OF PAYMENT OF THE PROJECT
TOTAL COMPLEX AREA 120 000 sqm
CONSTRUCTION COST PSQM (VAT) 850 EUR
PROJECT CONSTRUCTION AND SELLING TIME 4 years
TOTAL BUSINESS PRICE OF THE PROJECT quot;BUSINESS-PARKquot; 336 224 750 EUR
TOTAL HOTEL AREA (4-5 STARS) 15 000 sqm
ROOM NUMBER IN HOTEL 200
HOTEL ROOM RATE 180 EUR
PROFIT FROM ADDITIONAL SERVICES PER 1 ROOM 103 EUR
OCCUPANCY RATE 70%
EBITDA (HOTEL) 6 187 775 EUR
PRICE OF BUSINESS HOTEL (CAP RATE 9%) 68 752 750 EUR
TOTAL OFFICE AREA CLASS quot;Aquot; 20 000 sqm
LEASABLE OFFICE AREA 15 300 sqm
RENT PER YEAR PSQM.
400 EUR
(net of VAT, insurance, EBITDA and public utilities)
BUSINESS PRICE OF ALL LEASABLE OFFICE AREAS (CAP RATE 9%) 68 000 000 EUR
TOTAL RETAIL AREA 40 000 sqm
LEASABLE RETAIL AREA 31 500 sqm
RENT PER YEAR PSQM.
425 EUR
(net of VAT, insurance, EBITDA and public utilities)
BUSINESS PRICE OF ALL LEASABLE RETAIL AREAS (CAP RATE 9%) 148 750 000 EUR
SALABLE AREA OF ELITE APARTMENTS 15 000 sqm
NUMBER OF APARTMENTS 100
PRICE OF ELITE APARTMENTS IN 2011 PSQM 2 750 EUR
PRICE FOR SALABLE AREA OF ELITE APARTMENTS 41 250 000 EUR
SALABLE PARKING AREA 27 222 sqm
NUMBER OF PARKING UNITS 1 184
PRICE OF A SALABLE PARKING UNIT 8 000 EUR
PRICE OF ALL SALABLE PARKING UNITS 9 472 000 EUR
9

10. PROJECT MODEL OF THE BUSINESS - PARK
2008 2009 2010 2011 2012
INDEX IRR Multiple TOTAL
3 Q. 08 4 Q. 08 1 Q. 09 2 Q. 09 3 Q. 09 4 Q. 09 1 Q. 10 2 Q. 10 3 Q. 10 4 Q. 10 1 Q. 11 2 Q. 11 3 Q. 11 4 Q. 11 1 Q. 12 2 Q. 12
1 Total profit from the business sale, thousand
336 225 0 0 0 0 1 238 1 238 1 650 2 063 2 475 2 888 3 300 3 713 4 125 4 538 7 013 301 987
EUR
Business rate
Hotel 68 753 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 68 753
Apartment 41 250 0 0 0 0 1 238 1 238 1 650 2 063 2 475 2 888 3 300 3 713 4 125 4 538 7 013 7 013
Number of sellable apartments 100 0 0 0 0 3,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0 17,0 17,0
Office 68 000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 68 000
Retail 148 750 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 148 750
Parking 9 472 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9 472
Operating activities
2. Total rent(before tax, insurance, EBITDA,
13 231 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 616 6 616
public utilities), thousand ruble
Hotel 3 051 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 526 1 526
Office 3 060 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 530 1 530
Retail 6 694 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 347 3 347
Parking 426 0 0 0 0 0 0 0 0 0 0 0 0 0 0 213 213
3 Total investment costs thousand EUR net of
193 593 75 000 0 7 661 7 661 9 818 9 818 9 825 9 831 9 837 9 843 9 849 9 855 9 862 10 097 105 4 530
VAT
Land plot aquisition 75 000 75 000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Project preparation
Relocation (additional land plot aquisition) 8 224 0 0 4 112 4 112 0 0 0 0 0 0 0 0 0 0 0 0
Construction concept 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Building permits 1 589 0 0 794 794 0 0 0 0 0 0 0 0 0 0 0 0
Working draft 1 589 0 0 794 794 0 0 0 0 0 0 0 0 0 0 0 0
Infrastructure costs 3 920 0 0 1 960 1 960 0 0 0 0 0 0 0 0 0 0 0 0
Total project preparation costs net of VAT 90 322 75 000 0 7 661 7 661 0 0 0 0 0 0 0 0 0 0 0 0
Shell & core 86 441 0 0 0 0 8 644 8 644 8 644 8 644 8 644 8 644 8 644 8 644 8 644 8 644 0 0
Hard cost
Starting 212 0 0 0 0 0 0 0 0 0 0 0 0 0 212 0 0
Cost for construction management 4 080 0 0 0 0 408 408 408 408 408 408 408 408 408 408 0 0
Total hard cost, net of VAT 90 733 0 0 0 0 9 052 9 052 9 052 9 052 9 052 9 052 9 052 9 052 9 052 9 264 0 0
Brokerage 5 043 0 0 0 0 19 19 25 31 37 43 50 56 62 68 105 4 530
Marketing 1 071 0 0 0 0 107 107 107 107 107 107 107 107 107 109 0 0
Soft cost
Financing contract execution 2 141 0 0 0 0 214 214 214 214 214 214 214 214 214 219 0 0
Contingency 4 283 0 0 0 0 427 427 427 427 427 427 427 427 427 437 0 0
Total project soft cost, net of VAT 12 538 0 0 0 0 766 766 772 779 785 791 797 803 810 833 105 4 530
4. VAT Cash flow, thousand EUR (+inflow, -
VAT Cash Flow
-5 245 0 0 -639 -639 -1 767 -1 767 -1 768 -1 770 -1 771 -1 772 -1 773 -1 774 -1 775 -1 817 1 172 12 615
outflow)
Paid VAT 19 866 0 0 639 639 1 767 1 767 1 768 1 770 1 771 1 772 1 773 1 774 1 775 1 817 19 815
VAT repayment 2 382 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 191 1 191
Selling of VAT return from credit, including 12 239 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12 239
discount
5. Project deficit (surplus) (including VAT),
24,2% 1,83 150 618 -75 000 0 -8 300 -8 300 -10 348 -10 348 -9 943 -9 538 -9 133 -8 727 -8 322 -7 917 -7 512 -7 377 14 695 316 688
thousand EUR
Sources of financing
6. Project financing, thousand EUR 85 426 75 000 0 8 300 8 300 10 348 10 348 9 943 9 538 9 133 8 727 8 322 7 917 7 512 7 377 -14 695 -80 644
PGS funds 75 000 75 000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Banking credit 89 165 0 0 0 0 10 348 10 348 9 943 9 538 9 133 8 727 8 322 7 917 7 512 7 377 0 0
Debt repayment -89 165 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -11 397 -77 768
Interest -22 139 0 0 0 0 0 -383 -765 -1 133 -1 486 -1 824 -2 147 -2 454 -2 747 -3 025 -3 298 -2 876
Investor's funds 32 564 0 0 8 300 8 300 0 383 765 1 133 1 486 1 824 2 147 2 454 2 747 3 025 0 0
7. Cash Flow balancing, thousand EUR 236 044 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 236 044
8. Total Cash Flow (before profits tax),
26,3% 2,19 128 479 -75 000 0 -8 300 -8 300 0 -383 -765 -1 133 -1 486 -1 824 -2 147 -2 454 -2 747 -3 025 0 236 044
thousand EUR
Profits tax
9.1 Profit tax (Russia), thousand EUR 2 857 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 857
9.2 Profit tax (off-shore), thousand EUR 5 310 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 310
11.Project Cash Flow (after profit tax),
25,1% 2,12 120 312 -75 000 0 -8 300 -8 300 0 -383 -765 -1 133 -1 486 -1 824 -2 147 -2 454 -2 747 -3 025 0 227 877
thousand EURe
Results
11. Project Cash Flow for Investor, thousand
39,1% 2,28 63 938 0 0 -8 300 -8 300 -17 436 -383 -765 -1 133 -1 486 -1 824 -2 147 -2 454 -2 747 -3 025 0 113 938
EUR
12. Project Cash Flow for Bank, thousand EUR 15,6% 1,30 22 139 0 0 0 0 -10 348 -9 965 -9 177 -8 404 -7 647 -6 904 -6 176 -5 463 -4 765 -4 352 14 695 80 644
10

11. PROJECT STATUS
• 1,7 hectares of project land plot is in freehold
• For the rest, 0.35 hectares of land plot, there are sales and relocation agreements
• Local architects created an architectural concept, we have already received technical
specifications and building permit
• PermGragdanStroy signed a contact with leading German architectural bureau Braun
Schlockermann Dreesen Planungsgesellschaft GmbH for development of architectural concept.
• Currently in negotiations with large western investment funds on the purchasing of the future
complex
• Negotiations with large Russian and western banks on the construction financing are on the final
stage
• Signed the preliminary Term Sheet for general contractor agreement with STRABAG AG
• In June PGS has signed the Term Sheet and LOI with Starwood on hotel and a part of apartments
management contract under the brand Sheraton
• In April 2008 PGS has signed a contract with international real estate broker and consultant Jones
Lang LaSalle. The full analysis of the Perm real estate market and improve the concept of
business-park
11

12. ARCHITECTURAL CONCEPT, TECHNICAL AND ECONOMIC EVALUATION
PermGrazhdanStroy signed a contact with leading German architectural
bureau
Braun Schlockermann Dreesen Planungsgesellschaft GmbH
for development of architectural concept (stage PP).
Delivery date:
Architectural concept (stage PP) – 2008.
Project, technical and economic evaluation (stage P) - 1. q. 2009.
Specification technical documents (stage RD) – 1.q. 2009.
We cooperate closely with Russian architects for their regional know-how.
12

13. GENERAL CONTACTOR
Signed the preliminary Term Sheet for general contractor agreement
with
STRABAG AG
• PermGragdanStroy approached leading European construction
companies.
• Discussed the conditions of the LOI for future general contract
agreement.
• We appreciate experience and know-how of our western partners
and entrust them execution and quality control of construction
work.
13

14. CONCEPT DEVELOPMENT AND MARKET ANALYSIS
In April 2008 PGS signed a contract with international real estate broker
and consultant Jones Lang LaSalle.
Jones Lang LaSalle
Jones Lang LaSalle analysed and increased the effectiveness of the market
strategic of the “Business-park”
Jones Lang LaSalle analyzed Perm commercial and residential real estate
market for improvement of Project concept
Jones Lang LaSalle questioned potential anchor tenants of our Project
and recognized a great interest in our Project among western and Russian
large tenants. In the middle of 2009 we will sign notes of intent with most of
anchor tenants of our Project.
Professional western brokerage and consultant agency will carry out rent
brokerage of office and retail areas of our Project.
14

15. HOTEL OPERATOR
• PGS has signed Term Sheet and LOI with Starwood on hotel management contract
under the brand Sheraton
• Sheraton Hotels & Resorts is the Starwood’s largest brand serving the needs of luxury
and upscale business and leisure travelers worldwide. Sheraton offers the entire
spectrum of comfort. From full-service hotels in major cities to luxurious resorts by the
water, Sheraton can be found in the most sought-after cities and resort destinations
around the world.
• Average room rate growth in
Perm in 2007: 10,5%
Number of Properties Rooms
• Currently there is only one
North America 450 153,700
hotel in Perm with official
Europe, Africa and the 264 64,600 certification
Pacific 124 41,800
• At this moment there is no
Latin America 58 12,400
hotels in Perm under
Total 896 272,500
professional international
management with
international brand
Number of Properties Rooms
Managed and unconsolidated joint venture hotels 426 142,000
Franchised hotels 360 95,800
Owned hotels(a) 85 27,800
Vacation ownership resorts and residential properties 25 6,900
Total properties 896 272,500
15

16. LOCATION OF THE LAND PLOT
The only bridge in the center of the city to the other side
of the river – very heavy trafficed
–
2nd train station
Bridge
Kama - river
Land plot
Main
ul . Lenina –
train station
one of the main
streets of Perm Komsomolsky prospekt
one of the main
–
streets of Perm
16

17. NEIGHBOURING OBJECTS TO THE LAND PLOT
The only bridge in the
center of the city to the
Office other side
of the river – very heavy
trafficed
Shopping centre
Land plot
Park
Drama theatre
Park
Park
Komsomolsky
prospekt – one
of the main streets
ul. Lenina – one
of Perm
of the main streets
of Perm
17

18. PLAN OF THE LAND PLOT
ул. Советская
Sovetskaya str.
Участок
ул. Попова
ул. Осинская
Project land plot
Osinskaya str.
Popova str.
ул. Коммунистическая
Kommunisticheskaya str.
18

19. PICTURES OF THE LAND PLOT
19

20. ABOUT PERM
§ Perm is one of the biggest industrial centres of the Russian Federation
§ Population: more than 1 million people (The Perm Region population amount to more than 3
million people)
§ City area: 800 sq. km., length of the city along the river is 65 km
§ Personal income increase in 2007: 30,2%
§ Industrial production increase in 2007: 17,3%
§ Average income in 2007: 600 USD per person (monthly)
§ New construction in Perm in 2007: 485 000 sq. m. (+12% increase)
City direct investment volume in 2006: 85,6 million € (+8% increase)
§
§ Key industries: aircraft, electrical, chemical and oil-refining industries, mechanical engineering
20