astra booklet

ASTRA GROUP INVESTMENTSINVESTMENT & DEVELOPMENT IN KIEV

Astra Group Investments Investment & Development in Kiev

Company Overview 2012

ASTRA GROUP INVESTMENTS

INVESTMENT& DEVELOPMENT IN KIEV

Astra Group Investments Ltd.

ASTRA GROUP INVESTMENTS

INVESTMENT& DEVELOPMENT IN KIEV

Overview

History

Business Objectives

Portfolio

Partners & Advisors

Legal Structure

Realized Projects

Ukraine’s Real Estate Market

Kyiv: Office Market

CBD Office Project Pipeline

Kiev Retail Market

Selected Retail Project

Business Outlook 2012

Contacts

4

6

8

10

12

14

16

20

24

26

28

30

32

34

ContentsДавно выяснено

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шаблона

OVERVIEW


10th Floor, Shota Rustavelli 16, Kyiv 01001

4Eller+Eller Architects

XXXXXX??

OVERVIEW

astrainvestments.com.ua 5

Astra is a private-held investment

company registered in Cyprus and

focused on commercial real estate

investment and development in

the Ukraine.

Since 2003, the company has

been investing and developing

in the Ukraine and specifically

concentrates on the capital, Kiev.

The company has a substantial

operational team based in

their office in their city-centre

offices which his responsible for

managing over 20 development

projects across the city.

Astra enjoys good relations with a

network of local banks, agencies

and consultants and the company

now also provides development

services for third-party investors.

The company works with leading,

world-renowned architects,

international technical advisors

and is audited by KPMG.

Astra has a long-term

commitment to Kiev and the

Ukraine. In the medium term,

the portfolio of the company will

grow significantly as projects

are realized and the expanded

portfolio provides opportunities

for further large developments.

In this regard, it is the objective

of the company is to meet the

criteria for a stock exchange

listing on a European exchange in

2015.

OverviewДавно выяснено

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и пробелов в абзацах, которое не получается при простой дубликации “Здесь ваш текст.. Здесь ваш текст..

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прошедшие годы текст Lorem Ipsum получил много версий. Некоторые

версии появились по ошибке, некоторые - намеренно (например,

юмористические варианты).

абзацах, которое не получается при простой дубликации “Здесь

ваш текст.. Здесь ваш текст.. Здесь ваш текст..” Многие

программы электронной вёрстки и редакторы HTML используют Lorem Ipsum в качестве текста

по умолчанию, так что поиск по ключевым словам “lorem ipsum”

сразу показывает, как много веб-страниц всё ещё дожидаются

своего настоящего рождения. За прошедшие годы текст Lorem Ipsum

получил много версий. Некоторые версии появились по ошибке,

некоторые - намеренно (например, юмористические варианты).

Eller+Eller ArchitectsXXXXXX??

Favorite Spa & Wellness

HISTORY



6

Favorite Spa & Wellness

HISTORY


The company began investing in

and developing smaller commercial

projects in Kiev in 2003,

developing one new project each

year between 2004-2008 until the

financial crisis hit. Fortunately,

early in this year the company

realized the sale of two completed

commercial developments and

successfully refinanced a third

completed office development,

so Astra had a very liquid balance

sheet at the outset of the financial

crisis.

The financial crisis affected

the Ukraine in the same way it

affected the global economy.

Many development companies

struggled over the coming years

as banks withdrew funding from

the market, investors took flight

and the valuations for development

projects crashed. By contrast,

Astra actually grew and was able

to cherry pick projects in prime

commercial locations across the

city at very good prices.

Over the past three years, the

company substantially increased

its holdings of development

assets, valued at over $290

million by CB Richard Ellis. Astra

has a development pipeline of

over 500.000m2 with a gross

development value of $2,5 billion

(2011, CB Richard Ellis). The

project team has also grown

considerably over the past years

and Astra now has over 40 staff at

its Kiev headquarters responsible

for planning and permitting, design

and project management, leasing,

financial, legal, fiscal and general

administration of the portfolio.

HistoryДавно выяснено













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ipsum” сразу показывает, как много веб-страниц всё ещё дожидаются своего настоящего рождения. За




Chapman TaylorA1 Offices, Kyiv

BUSINESSOBJECTIVES



8

Chapman TaylorA1 Offices, Kyiv astrainvestments.com.ua 9

Astra focuses exclusively on high

quality developments in prime

locations, working with renowned

international architects, reliable

international project managers

and large general contractors for

the realization of projects. We

are sensitive to trends in our

local market and all new projects

are conceptualized according to

sustainability criteria of BREEAM

or LEED as we believe this will be

the benchmark for tenants and

investors in the medium term.

In Kiev, returns on commercial

development remain very healthy

for developers who did not over-

pay on land acquisition. As well

as developing our own projects,

we are now actively promoting

development services for

landowners, and in 2011 we secured

a contract to develop a $60

million Class A-office in the Central

Business District. As Astra is

resourced with a large professional

team, we would hope to expand

this business line in the coming

years, with a focus on high-end

office and retail development.

Business ObjectivesДавно выяснено




















PORTFOLIO



10

Project

Development Portolio

Strategic Portfolio

Held for Sale

Description

Retail

Office

Office

Residential

Office

Office

1.

2.

3.

4.

5.

6.

Residential

Residential

Office

Residential

Residential

Commercial

Commercial

7.

8.

9.

10.

11.

12.

13.

Residential

Residential

Office

Residential

Residential

Commercial

Commercial

14.

15.

16.

17.

18.

19.

20.

Studentska St.

Dimitrova St.

Museum St.

Museum St.

A.Barbyusa St.

Desyatinny Alley

Lvov Square

A.Barbyusa St.

Promyslova Bvd.

A.Barbyusa St.

Desyatinny Alley

Lvov Square

A.Barbyusa St.

Promyslova Bvd.

PORTFOLIO


Astra Investment’s real estate

portfolio in Kyiv is a combination

of 23 investments in commercial

and residential projects and income

generating assets which are valued

at $286 million (XII.2010) by CB

Richard Ellis. Astra focuses on

medium-sized projects which can

be delivered in 24-36 months,

typically high-end developments

(<10.000m2) in the Central

Business District and larger retail

developments next to metro

stations outside the periphery of

the Central Business District. The

average development cost for our

commercial projects is $67 million.

Astra has some investments in

residential development and is

presently realizing one city-center

residential development co-

branded with the luxury lifestyle

group, Quintessentially. Our

average residential development

portfolio project is $28 million GBC

and targets the upper-mid market.

For the purpose of IFRS reporting,

our projects are classified as

divestiture assets, strategic assets

and developments.

$18 200 000 $100 725 735

$40 960 000 $552 066 921

$160 200 000 $1 184 383 383

Description

Retail

Office

Office

Residential

Office

Office

Residential

Residential

Office

Residential

Residential

Commercial

Commercial

Residential

Residential

Office

Residential

Residential

Commercial

Commercial

Land GBA CBRE Valuation

$1 100 000

$5 500 000

$4 200 000

$6 400 000

$1 000 000

$8 800 000

$19 200 000

$25 200 000

$27 000 000

$30 000 000

$21 100 000

$3 500 000

$34 200 000

$19 200 000

$25 200 000

$27 000 000

$30 000 000

$21 100 000

$3 500 000

$34 200 000

GDV

$4 725 212

$23 689 116

$19 960 365

$23 011 748

$29 339 294

$34 305 576

$95 574 137

$102 074 326

$527 525 141

$309 635 817

$140 684 662

$8 889 300

$0

$95 574 137

$102 074 326

$527 525 141

$309 635 817

$140 684 662

$8 889 300

$0

PortfolioДавно выяснено













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PARTNERS& ADVISORS



12

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BENOYXXXXXX??

LEGAL STRUCTURE



14

BENOYXXXXXX??

LEGAL STRUCTURE


The Astra investment structure

is made up of the Cyprus holding

which owns special purpose

vehicles incorporated for each,

individual project (‘Project

Companies’). The standard tax

strategy for the portfolio is exit

achieved by sale of the shares.

The project companies are funded

by interest-bearing shareholder

loans which are not liable for

withholding tax and carry a coupon

stipulated by the National Bank.

The mechanism for capitalizing the

project companies is a tax-exempt

fund entity (Ukr-Fund, owns 1% of

shares of Project Co’s and provides

99% of shareholder funding).

Project companies have the

single purpose of owning and

developing an individual asset,

and are not engaged in any other

trading activities. Each project

company has nominee directors

and the companies effectively

have no trading activity outside

of some minimum payments

(consultancy fees) to maintain

VAT-payer status. All project

companies in the portfolio are

incorporated in Ukraine as limited

liability companies with only two

exceptions, both of which are two

Ukrainian joint stock companies

that acquired land under long-lease

from the state.

Astra’s auditor is KPMG. Project

companies prepare for fiscal and

statutory accounts according to

Ukrainian Accounting Standards,

while the holding presents its

accounts under IFRS.

Legal StructureДавно выяснено




















UKR Fund(1%)

SPV #1 SPV #2 SPV #3 SPV #20

ASTRACYPRUS

(99%)

Holding Companies

Project Companies

REALIZED PROJECTS



16

This unique prestige office building

is one of the very few new office

buildings realized in the Central

Business District over the past

decade. Located at one of the

most elite destination in the city,

the Sofiyska Square, these elite

offices feature a grand entrance

with rich natural stone tiling,

elegant German elevators and

highly-representative reception

areas on each floor. Neighbors

in the area include two five-star

hotels, three of the Big 4 audit

firms, several bank HQ’s, numerous

embassies, and several UNESCO-

protected national monuments and

important government buildings.

Tenants include Royal Dutch Shell,

Sumito Corporation and Troika

Dialog.

Rilska Lane 6Давно выясненоДавно выяснено, что при оценке дизайна и композиции читаемый






используют Lorem Ipsum в качестве текста по умолчанию, так что поиск по ключевым словам “lorem ipsum”

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REALIZED PROJECTS


Favorite is the most elite spa and

wellness in Ukraine and is on the

same street as the project. This

award-winning project successfully

targeted demand in Kyiv for a high-

end wellness centre was completed

in 2003. The development

incorporates a fitness centre,

spa and leisure facilities and has

established a loyal following among

top politicians, business leaders,

and media personalities and the

development is the benchmark in

its category against which all other

projects are measured.

Favorite Spa & WelnessДавно выясненоДавно выяснено, что при оценке дизайна и композиции читаемый







REALIZED PROJECTS



18

Delivered in 2008, this 7.400m2

commercial and residential

complex is located in one of the

most elite neighborhoods of

Kyiv in immediate proximity to

the Kreschatyk boulevard and

Independence Square. As would

be expected in this architecturally

sensitive area, the building style

was consistent with the classical

style preferred by the city planners

who were responsible for Central

Business District at the time. It is

an appropriate reflection of the

quality of the location and product

delivered by Astra that - in spite

of a uniquely difficult market -

the group successfully sold the

development at a significant profit

in 2009 to a EMEA fund.

Luteranskaya 14Давно выясненоДавно выяснено, что при оценке дизайна и композиции читаемый






используют Lorem Ipsum в качестве текста по умолчанию, так что поиск по ключевым словам “lorem ipsum”

сразу показывает, как много веб-страниц всё ещё дожидаются своего

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REALIZED PROJECTS


Sport-hotel “Selena” is situated in

the most beautiful virgin territory

of Cherkassy region, amidst 19

hectares of picturesque forest

on the banks of the Dnieper

River. The complex is created for

those who appreciate active rest,

sport entertainments, comfort

and beauty of wild nature. The

tennis club is well known on the

professional tour and hosted many

professional tennis tournaments

of the Futures series, Challenger

series “UTC open by Selena” and

Davis Cup matches.

SelenaДавно выясненоДавно выяснено, что при оценке дизайна и композиции читаемый







UKRAINE’S REAL ESTATE MARKET



20

“In Asia Pacific and in the Americas investors became

more cautious in Q3. In contrast, in some of the large

markets of Western Europe (France and Germany),

and in Central and Eastern Europe (CEE), volumes

continued to grow. In fact, year-to-date overall CEE

volumes are almost back to pre-crisis levels, led by

Russia which is now Europe’s fifth largest market.”

Jones Lang Lasalle, Global Survey, Q3.2011



With a population of 45 million,

Ukraine is a major European

economy which is recovering

strongly from the global financial

crisis with projected GDP growth

of 4,5%-5,5% for 2012 and 2013.

Rich in under-exploited resources

including natural gas, coal,

minerals, agriculture, forestry, etc.

the country has an educated work

force, large industrial base provides

enormous potential for growth.

Recent political developments at a

global level have been positive for

Ukraine, including:

• Agriculture: the rise of

the emerging markets has

seen Ukrainian public-listed

agribusinesses expand their export

activities in Asia and Africa

• Mining & Energy: the phasing

out of German nuclear power

stations is precipitating a boom in

Ukrainian coal exports while stable

oil prices at $100/barrel means that

Russian banks are highly liquid and

continuing to finance aggressively

in Ukraine

• Services & FMCG: While the

Ukrainian market has been

previously focused on traditional

industries, in recent years there has

been greater diversification into

services and a boom in FMCG.

Eller+Eller ArchitectsMirax Plaza, Kyiv


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не получается при простой дубликации “Здесь ваш текст..

Здесь ваш текст.. Здесь ваш текст..”

Многие программы электронной вёрстки и редакторы HTML используют Lorem Ipsum в

качестве текста по умолчанию, так что поиск по ключевым словам “lorem ipsum” сразу показывает, как много веб-

страниц всё ещё дожидаются своего настоящего рождения.

За прошедшие годы текст Lorem Ipsum получил много версий.

Некоторые версии появились по ошибке, некоторые - намеренно

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по умолчанию, так что поиск по ключевым слов




22



The recovery of the wider economy

is having a knock-on effect for the

real estate market with increasing

demand for office space, retail

outlets and residential units across

the country and most especially

in Kiev. The resurgent demand

for office is absorbing the over-

supply that has existed for two

years in the market, and allowed

the completion of stalled projects.

However, the lack of financing over

the past three years means there

is a lack of planned projects with

permitting coming to the market

2013-2015. All segments of the

Kiev real estate market – office,

retail, logistic and residential

– are characterized by chronic

undersupply, but the very small

size of the Ukrainian banking sector

means very little project financing

available from the local economy

and this will remain a major

obstacle to the future expansion of

the local real estate market.














Ian Bryan ArchitectsKharkov Residential Development

KYIV: OFFICE MARKET



24

GDP Growth (Constant Prices, National Currency)

GDP (Current Prices, US Dollars)

Fiscal Year Gross Domestic Product, Current Prices

Total Government Net Debt (National Currency)

Total Government Net Debt (% of GDP)

Current Account Balance (US Dollars)

Population

Unemployment Rate (% of Labour Force)

GDP Per Capita (Current Prices, US Dollars)

GDP Per Capita (PPP), US Dollars

Gross National Savings (% of GDP)

Inflation (Average Consumer Price Change %)

Export Volume of All Items Including

Goods and Services (Percent Change)

For Ukraine in year 20124.9 %

US$ 171.371 Billion

UAH 1,441.30 Billion

UAH 613.271 Billion

42.55 %

US$ -6.435 Billion

45.024 Million

7.245 %

US$ 3,806.20

US$ 7,616.29

18.79 %

8.321 %

7.575 %

KYIV: OFFICE MARKET


Kyiv has 1,2 million m2 of modern

office stock with 240.000m2

due for delivery 2012-2014. This

represents a level of supply at

approximately 20% the supply

levels of Central European capitals

such as Prague or Warsaw.

Generally, new office developments

poorly located with bad access

and characterized by extremely

weak design. Very low construction

standards are typical because

projects are routinely realized

under the supervision of technically

unqualified or financially under-

motivated personnel. To date, not

one single office project in Kiev has

met any internationally recognized

sustainability norms and, according

to local agencies, only three

developers have projects in

development which incorporate

BREEAM/LEED design standards.

With a 13,5% vacancy rate, tenant

demand in Kiev is weak but

recovering after the crisis, and

demand for smaller city center

locations is strong but there is

very little supply (vacancy rate

close to 0%). A major factor

in the evolution of Kiev office

stock is that quality tenants are

very reluctant to make pre-lease

commitments to local developers

because of the poor quality of

product, regular delays in delivery

and high insolvency rate among

local developers.

Kyiv: Office MarketДавно выяснено

















CBD OFFICE PROJECT PIPELINE



26

This 7.600m2 prestige Central

Business District development is in

immediate proximity to transport

hub, Postovna ploschta, and

important business and political

offices. The contemporary-design,

A-Class office has 2.200m2 of

parking and received planning

permission in December, 2011.

Construction will start summer

2012 and with delivery in summer

2014. Award-winning German

architects, Eller + Eller designed

the project and Gleeds are project

managers.

Borichev Descent

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CBD OFFICE PROJECT PIPELINE


This 8.400m2 prestige Central

Business District development

is immediately adjacent to

major state offices including the

house of parliament, Ukrainian

National Bank, President’s Office.

The project received planning

permission in December 2012

and will be delivered 2014.

Internationally renowned firm,

Chapman Taylor, are the project

architects.

This 5.500m2 GLA project is

located on the periphery of

the Central Business District

adjacent to an old business park

with excellent tenants (Erikson,

Motorola, De Longhi, etc.). The

location has excellent transport

infrastructure and the Class-B

development is designed to appeal

to multinationals with larger teams

of service staff who require a high

level of technological specification.

The development will meet

BREEAM sustainability criteria.

Muzeyniy 8

Studenska 10



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KYIV: RETAIL MARKET



28

KYIV: RETAIL MARKET


The Kiev retail market remains

significantly underdeveloped

compared to neighbouring

Central & Eastern European

markets. To date, less than 5

retail developments which meet

the expectations of international

retailers have been delivered

representing 300.000m2 of quality

retail space. Rents have fallen

significantly from their pre-crisis

levels due to increased level of

supply, but a relative lack of retail

space has led to relatively high

rents similar to those achieved in

St. Petersburg. Several projects

are due to be delivered in 2012

including Ocean Plaza (72.000m2)

Silver Breeze (16.000m2) and

phase 2 of Domosfera (22.000m2)

and Rayon (22.000m2). As

more modern retail space with

professional management

becomes available, international

brands - which previously only

appeared under local franchises

– are opening up their own

stores. Consequently, visitors

to new shopping malls such as

Dreamtown can experience a range

of promotions such as shopping

nights, children’s entertainment

and seasonally-themed events,

and have a choice of brands such

as Mothercare, Apple iStores,

Swarovski, BGN, Collins, Lee

Cooper, Marks & Spenser, Guess,

Marc O’Polo, Benetton, Zara,

Echo, Geox, Sketchers, Puma, and

Timberland.

Kyiv: Retail MarketДавно выяснено

















BENOYAk. Paladina

SELECTED RETAIL PROJECT



30

SELECTED RETAIL PROJECT


The 40.000m2 NLA development

enjoys a unique location on one of

the city’s main traffic arteries at the

end of the B-metro line in a densely

populated residential suburb. The

development received planning

permission in December 2011 and

construction will be realized over

the period Q3.2012-Q2.2015. The

development incorporates two

levels of retail (incl. supermarket)

and one level of recreation space

(multiplex cinema, restaurants,

etc.) A number of major retailers

have already indicated that

they wish to take space in the

development. The architects for

the project are internationally-

renowned mall architects, BENOY.

of retail

Ak. PaladinaДавно выясненоДавно выяснено, что при оценке дизайна и композиции читаемый








прошедшие г

BUSINESS OUTLOOK 2012



32

BUSINESS OUTLOOK 2012


We have a positive view on the

continuing positive economic

evolution of the Ukrainian economy

thanks to its growing demand for

Ukrainian exports and a positive

sentiment toward emerging markets

around the world. Although the

country faces political challenges,

we believe that the momentum of

economic growth is sustainable

and will translate into a positive

business environment for real

estate developers. An awareness

of the importance of environmental

requirements of multinational

tenants, the recent elimination

of many bureaucratic obstacles

to getting build permits and the

increasing willingness of local general

contractors to use FIDIC as a basis

for construction agreements all

mean that the quality of commercial

projects can be expected to improve

in the coming years.

Astra has survived and thrived

during the financial crisis and has an

excellent track record in Kyiv which it

looks forward to building upon in the

coming years. In 2011, we concluded

our first developer agreement to

develop properties for third parties

(a 5.000m2 office by Eller + Eller

in the CBD), and we look forward

to building this business element

in 2012, especially in the area of

shopping mall development. While

project financing will be a problem

for larger commercial projects in

marginal locations in the short-term,

Astra’s pipeline of smaller, high-end

office projects in Central Business

District and shopping mall projects

over metro stations are products that

we are confident will perform well

in the coming years, commanding

the support of banking partners

and attracting good demand from

tenants and investors.

From Astra’s perspective, the future

in Kyiv is bright.

Business Outlook 2012Давно выяснено

















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CONTACTFor further details, please contact:

Charles Bergen, MRICS

Chief Financial Officer,

[email protected]

Mob: +380 675 546 724

Tel.: +380 442 070 337

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