company presentation at sberbank conference · company presentation at sberbank conference april,...
TRANSCRIPT
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Company Presentation at Sberbank Conference
April, 2013
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Contents
Strategy and corporate overview 3
Market overview 10
Asset portfolio overview 17
2012 Achievements & acquisitions and divestments 21
2013 Initiatives 27
Debt & Liquidity 30
Financial performance – Historical 32
Financial performance – Projections 34
Our equity story 37
Appendix: yielding assets 42
2
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Strategy & Corporate Overview
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Dmitriy Mints
Alexander Ostrovskiy
Michael Stanton
Tomasz Zamiara
Pavel Barbashev
Management Team
4
Chairman of the Board Since 2006 actively involved in the real estate and private equity
investment projects of OTKRITIE FINANCE CORPORATION (“OFC”)
Completed transactions exceeding $3Bn in value
Graduated from Moscow State Institute of International Relations
Chief Investment Officer Joined OFC in 2006 to create its Real Estate Fund for Vivaldi Plaza
25 years of finance experience
MBA from the University of Michigan
Chief Financial Officer CFO of Horus Group from 2006 until 2010
14 years experience in Accounting and Real Estate
MBA from London Business School
Head of Asset Management and Leasing Over 5 years with Horus Capital and 6 years with Hines
Management of the assets that are now part of the O1 portfolio
Over 15 years experience in Real Estate
Graduated from TOURO College of New-York (Moscow Branch)
Chief Executive Officer Previously Managing Director at OFC, which he joined in 2007
Degree in Law from The Russian Customs Academy of Federal Customs Service
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The Idea
100%
Office
100%
Moscow
~ 80/20
Yielding/
Development
~ 50/50
Leverage
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A Moscow Office Pure-Play
6
Investment in high quality office properties located in Moscow
Class A and Class B+/B properties
Top-tier tenants, principally multinationals corporations and leading
Russian companies
Existing yielding real estate portfolio comprised of 10 properties with
total NRA of 426,793 sq. m. of as of 01 February 2013 (2)
Development portfolio includes 50% stake in 1 project
Independent portfolio valuation of US$ 3.7Bn
Yielding: US$ 3.67Bn
Developments: US$0.03Bn (3) (not consolidated)
Total value = US$3.7 Bn
Yielding assets = US$3.67 Bn
Development (not consolidated)
= US$0.03 Bn
Portfolio Structure (1)
O1 - Company Snapshot Internally–Managed Business
Continuous in-depth analysis of development and
acquisition opportunities in Moscow
Highly visible presence in the market (investors,
landlords, developers, occupiers, investment
managers, finance providers…)
Established relationships with Moscow planning
authorities and other relevant government authorities
Experienced in-house team for supervision of
development
Regular interaction with local authorities helps ensure
local needs (for both the O1 and the local authorities)
can be aligned within re-development activities
Top-class franchise of leasing capabilities including
strong relationships with tenant brokers
In-house experience with strong focus on tenant
relationships
Add value to standing assets through specific asset
improvements
Close involvement of O1 professionals ensures
optimal management of the centres and their client
relationships
Full control of asset performance (tenant
performance, etc.)
Asset
Management
and Leasing
Sourcing /
Business
Development
Acquisitions
Development
Supervision
Notes
1. Cushman & Wakefield valuation report as of 31 December 2012; assets ownership as of 01 February 2013
2. NRA including only yielding assets; except development projects (incl. White Square but excl. Olympia park )
3. O1 stake in development project is 50%
Excellent track record in the acquisition of attractive
assets and development projects
Approval of all material investments and disposals at
the Board of Directors level
99%
1%
Yielding Assets Development Projects
Fully Integrated Office Real Estate Platform
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Asset Quality: Diversified Portfolio Across Moscow
Yielding Assets
Avion
Krugozor
Le Fort
Stanislavsky
Development Projects
Lighthouse
Vivaldi Plaza
Sheremetyevskaya
Lesnaya Plaza
Value: $0.03 Bn
NRA: 31 171 sq m
Current Portfolio (1)
Completion: 2016
100% Moscow Office
Avion
$107 MM Le Fort
$261 MM
Stanislavsky Factory
$256 MM
Lighthouse
$237 MM
MKAD
Ring Road
Sheremetyevskaya
$29 MM
Vivaldi Plaza
$423 MM
Lesnaya Plaza
$280 MM
Sheremetyevo
Airport
Domodedovo
Airport 5 km
Kremlin
Yielding Asset
Development Project
Vnukovo
Airport
Notes
1. Olympia park was sold in Feb 2013, all data are given without Olympia park
2. Annualized full occupancy NOI as of Feb 2013 incl. parking
3. O1 owns a 50% interest in Sheremetyevskaya
Krugozor
$359 MM
Silver City
Silver City
$361 MM Ducat III
$380 MM
Ducat III
Yielding Assets make up 99% of Portfolio Value
Feb 2013
Value (US$ Bn.) 3.7
NRA (sq. m) 426,793
Occupancy 98%
LOI’s 0,2%
Annualized 2013 NOI
($ MM) (2) 336
Weighted Average ERV
(US$) 752
White Square
White Square
$1 002 MM
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Strong Board
8
Value-Add Board Members and Strong Corporate Governance
The composition of the Board of Directors is well balanced; 3 out of 7 Board members are independent non-executive directors, all are active industry
participants with significant experience in real estate and real estate finance
All three committees (audit, nomination and remuneration, strategy and development) are headed by independent directors
Corporate Governance
Executive Directors
Alexander
Ostrovskiy
Chief Operating
Officer
Tomasz
Zamiara
Chief Financial
Officer
Michael
Stanton
Chief Investment
Officer
Dmitriy Mints
Chairman of the
Board and
Chief Executive
Officer
Independent Non-Executive Directors
Richard Gregson
Former Real Estate Leader of
PWC, Russia
Appointed to the Board in
June 2012
Chairman of audit committee
John Nacos
Former Global Head of
Real Estate, Deutsche Bank
Joined in August 2011
Chairman of O1 Strategy and
Development committees
Timothy Fenwick
Former Head of Jones Lang
LaSalle, Russia
Joined in July 2011
Chairman of remuneration
committee
Founding shareholder (Boris Mints) remains committed to the ongoing business strategy
Strong Alignment of Shareholder Interests
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Group structure chart (pro-forma)
85%
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Market Overview
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Key Highlights Market Position
4) Moscow –Investment into Real Estate Rising
5) Leading Class “A” Office Player in Moscow Market
3) Moscow market has particularly attractive characteristics for office real estate
2) Within Russia, Moscow demonstrates position of economic concentration
1) Russian Economy demonstrating strong macroeconomic position
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1) Macros: Lowest debt levels
12
Source: The Economist (Global debt guide September 2012)
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2) Moscow: Russia’s Office Market
13
Moscow Office Market 5 times larger than St Petersburg
Source: Cushman & Wakefield, as of Feb 2013
9.34 MM sq m
2.14 MM sq m
1.20 MM sq m
(11.4% of Class B)
0.42 MM sq m
(16.6% of Class A)
Moscow Office Stock & Vacancy Breakdown
Total Stock (sq m): 13.1 MM
Class A
Class B
Vacant class B
Vacant class A
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3) Moscow Office Market: Low Levels Class A Stock
14
New office Construction
Source Cushman & Wakefield, as of Feb 2013
Moscow’s Stock & Vacancy
Source Cushman & Wakefield, as of Feb 2013
Million sq.m.
New York
Budapest
Prague
Warsaw
Frankfurt
Milan
Madrid
Moscow
London
Paris
0.0
5.0
10.0
15.0
15.0 30.0 45.0 60.0
Total Office Stock (sq m MM)
Low Relative Stock Per Capita
Population (MM)
Source Cushman & Wakefield, as of June 2012
0
500
1 000
1 500
2 000
2 500
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Class B (B+ and B-) Class A
Attractive Yield Dynamics
8,5
6,3 6,0
7,3
4,5 4,0
2,9
4,5
5,8
6,4
2,1 1,8
0
2
4
6
8
Moscow(Russia)
Warsaw(Poland)
Madrid(Spain)
Budapest Paris (France) London (UK)
Office yield Government bonds yield
%
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4) Increasing Investments into Real Estate
15 Source: Cushman & Wakefield as of Feb 2013, Jones Lang LaSalle Feb 2013
Foreign Participation Small But Rising
Name Market YEAR Rentable area,
sq m Investor
Estimated Value, US$
MM
Metropolis Shopping Center Moscow 2013 200,000 Morgan Stanley (MSREF) $1 200
Galleriya St Pete 2012 192,000 Morgan Stanley (MSREF) $1 100
Actor Gallery Moscow 2012 18,000 SOFAZ $133
Metropolis Bldg B Moscow 2012 25,000 Heitman $250
Nagatino I-Land Moscow 2012 24,995 Raiffeisenbank $95
Bakhrushina House Moscow 2012 4,159 Sponda Plc $47
Mercury City Moscow 2012 10,000 Japan Tobacco International N/A
Golden Babylon Moscow 2012 240,000 Immofinanz $250
Pushkino Logistics Moscow 2012 212,600 Raven Russia $220
G - 11 Moscow 2011 9,000 Hines $94
Recent foreign investment transactions
• In 2007, Russian investors and foreign
investors reach represented roughly
half of the investment market
• In 2009, foreign investment was
largely absent
• Foreign investors gradually returning
to the market but market still driven by
local market participants
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5) O1 is The Leading Player in Moscow Office Market
16
O1 Investment Portfolio Increase
O1 has 426,793 sq. meters of completed and yielding Class A and B+ Office Space with an additional 100,000
sq meters under development
We estimate 4 – 5 million of total office stock would be classified as Class A or B+, with the remainder being
lower quality Class B
Our potential market share in Class A / B+ segment is probably in the range of 10% - 12%
321
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396 427
2 105
2 525
2 982
3 665
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1 000
1 500
2 000
2 500
3 000
3 500
4 000
-
50
100
150
200
250
300
350
400
450
HY 2012 3Q 2012 4Q 2012 1Q 2013
NRA, thous. sq. m GAV, MM USD
Source: Company data
Thous. sq. m MM USD
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Asset portfolio overview
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High Quality Cash-Generating Asset Portfolio
18
Strong Rent-Generating Assets and Selected Development Exposure
Portfolio Description (1)
All Properties Class A and Class B+ (except for LeFort which is
Class B)
Top-tier tenants, principally multinationals corporations and leading
Russian companies
Existing yielding real estate portfolio comprised of 10 properties with
426,793 sq. m. NRA as of Feb 2013
Independent yielding portfolio valuation of US$ 3.7Bn
18
Properties (1)
Avion
Yielding Assets (99% of GAV)
Krugozor
Lesnaya Plaza
Le Fort
Valuation: $255.5 MM
NRA: 34,345 sq m
WAULT: 3.0 years
Occupancy: 100.0%
Valuation: $106.7 MM
NRA: 18,429 sq m
WAULT: 0.9 years
Occupancy: 100%
Stanislavsky Factory
Vivaldi Plaza
Valuation: $422.5 MM
Total NRA: 48,051 sq m WAULT: 6.9 years
Occupancy: 100% Completion Date: 4Q 2011
White Square
Valuation: $1001.9 MM
NRA: 76,542 sq m WAULT: 6.2 years Occupancy: 99,4%
Lighthouse
Valuation: $280.3 MM
NRA: 39,710 sq m
WAULT: 4.5 years
Occupancy: 91%
1. Notes
Asset portfolio excludes Olympia park since it was sold in Feb 2013. Valuation based on Cushman & Wakefield valuation report as of 31 Dec 2012.
WAULT – weighted average unexpired lease term as of Feb 2013. Company information as of Feb 2013
Silver City
Valuation: $360.8 MM
NRA: 41,766 sq m
WAULT: 3.0 years
Occupancy: 98%
Valuation: $261.4 MM NRA: 56,169 sq m WAULT: 3.4 years
Occupancy: 100%
Valuation: $380.1 MM
NRA: 33,333 sq m
WAULT: 2.8 years
Occupancy: 98%
Ducat III
Lease Expiration Profile, % of NRA
41 316 35 119
55 311
40 440
73 892
36 975 31 284
83 736
6 192 8 055
9,88%
8,40%
13,22%
9,67%
17,66%
8,84%
7,48%
20,02%
1,48% 1,93%
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
90 000
100 000
0,00%
5,00%
10,00%
15,00%
20,00%
25,00%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Total Expired NRA from total signed tenants m²
Total Expired NRA from total signed tenants %
Valuation: $358.9 MM
Total NRA: 50,951 sq m
WAULT: 3.6 years
Occupancy: 100%
Valuation: $237.1 MM NRA: 27,405 sq m WAULT: 6.9 years Occupancy: 93% Completion Date: 1Q
2012
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Well Diversified Yielding Portfolio
19
Notes
1. Property valuation as of 31 Dec 2012 by Cushman & Wakefield
2. White Square Project legally consists of two separate buildings, each of them is located on its own land plot. The FY2012 Cushman&Wakefield valuation
is divided between the buildings proportionally based on NRA.
Low Asset Concentration underpins Stable Cash Flows
As of 30 Sep 2012 As of April-2013
Total Value: $2.6 Bn Total Value: $3.7 Bn
+ White Square
+ Ducat III
- Olympia Park
Avion 4% Krugozor
14%
Le Fort 10%
Stanislavsky Factory
10%
Lesnaya Plaza 11%
Lighthouse 9%
Vivaldi Plaza 16%
Olympia Park 12%
Silver City 14%
Avion 3%
Krugozor 10%
Le Fort 7%
Stanislavsky Factory
7%
Lesnaya Plaza 8%
Lighthouse 6%
Vivaldi Plaza 12%
Silver City 10%
Ducat III 10%
White Square Bld.1 (PWC headquarter)
12%
White Square Bld.2 15%
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Secure Cash Flows Due to High Quality Tenants
20
Mostly : Multinational Tenants or Russian RTS/LSE Listed
Key Tenants (as of 01 Feb 2013, including White Square, Ducat III and excl. Olympia Park)
# Tenant NRA, m² NRA, %
1 PwC 33 151 7,93%
2 EurAsEC 23 875 5,71%
3 Deloitte 15 946 3,81%
4 Nomos Bank 10 622 2,54%
5 SUEK 10 096 2,41%
6 Citibank 9 706 2,32%
7 Volkswagen Group 9 470 2,26%
8 General Electric 8 098 1,94%
9 Slavneft 7 917 1,89%
10 McKinsey & Company 7 722 1,85%
11 LG Electronics 6 236 1,49%
12 Mail.ru 6 217 1,49%
13 Weatherford 5 702 1,36%
14 Arguments&Facts 5 561 1,33%
15 Nokia Siemens Networks 5 370 1,28%
16 ABB 5 160 1,23%
17 Alacatel 4 831 1,16%
18 Rolf Import 4 756 1,14%
19 Regus 4 587 1,10%
20 CHTPZ Group 4 395 1,05%
21 Toyota Bank 4 393 1,05%
22 Europa Media Group 4 322 1,03%
23 McDonalds 3 981 0,95%
24 Roche Diagnistics 3 853 0,92%
25 Orgenergogaz 3 763 0,90%
# Tenant NRA, m² NRA, %
26 Swedbank 3 708 0,89%
27 Clifford Chance 3 690 0,88%
28 FESCO Transportation Group 3 595 0,86%
29 TimService 3 486 0,83%
30 IBM 3 428 0,82%
31 Nike 3 383 0,81%
32 Sistematika 3 382 0,81%
33 BNPP 3 265 0,78%
34 Goldman Sachs 3 182 0,76%
35 Kvartal stroy 3 148 0,75%
36 Bacardi 3 113 0,74%
37 Agropromkredit 3 101 0,74%
38 REPUBLIKA 3 017 0,72%
39 Cordiant 3 016 0,72%
40 Canon 2 993 0,72%
41 Jones Lang LaSalle 2 831 0,68%
42 John Deere 2 766 0,66%
43 Olympus 2 748 0,66%
44 Syngenta 2 680 0,64%
45 Marsh Insuarance 2 579 0,62%
46 Boston Consulting Group 2 466 0,59%
47 Sovcomflot 2 463 0,59%
48 Cushman & Wakefield 2 463 0,59%
59 ConocoPhillips Russia, Inc. 2 400 0,57%
50 VNIIR 2 385 0,57%
1. The list excl. O1 Properties rented space of 3 110 sq. m
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2012 : Achievements, Acquisitions &
Divestitures
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64 356
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1 002
318
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3 500
4 000
30 June 2012 CAPEX &Valuationchanges
Silver Cityacquisition
30 September2012
CAPEX &Valuationchanges
Ducat IIIacquisition
31 December2012
Olympia Parkdisposal
White Squareacquisition
30 March 2013
Mln
US
D
22 22
2012 Achievements
1) UK Listing: Approved by UKLA for meeting LSE Listing Eligibility requirements and issued Prospectus (though IPO was later
deferred)
2) Acquisitions : Acquired Ducat III, Silver City and White Square
3) Leasing: Leased over 120,000 sq meters and finished the year 98% leased
4) Disposals: Olympia Park was sold to end-user (Kaspersky Lab)
5) Hedging : Locked in Low Interest rates on Ducat, Silver City and White Square Acquisitions
6) Financing : Extended maturities of key debt (Aareal loan matures 2017)
7) Capital Base: Supplemented Capital base by issuing $170 mln of Pref Stock to our Parent Company
-
Gross Asset Value growth
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2012 Acquisition 1
23
Silver City: Value-add Opportunity in Core Asset Class: A
ERV 2013: $700
NRA: 41,766 sq m (1)
Parking slots: 446
Occupancy: 98%
WAULT: 3.0 years
Valuation: $360.8 MM (31.12.12 by Cushman&Wakefield)
Rationale of the acquisition:
Prestigious location inside the Garden Ring
Newly build class A office property with major international and
Russian tenants
Short WAULT to be managed by the asset management
department
Latest Acquisition of Standing Assets (Recent Independent Appraisal $360.8MM)
Source Company data as of Feb 2013
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2012 Acquisition 2
24
Ducat III: Core Asset
Rationale of the acquisition:
“Trophy” class A office property in Moscow: top international
companies as tenants, superior location and building quality.
Currently under-rented as initially leased were signed during
construction phase in 2005-2006.
Rent ramp-up due to coming lease expirations would create
significant additional value
Class: A
ERV 2013: $1,100 - $1,300
NRA: 33,333 sq m
Parking slots: 474
Occupancy: 98%
WAULT: 2.8 years
Valuation: $380.1 MM
Trophy Class “A” Property (Recent Independent Appraisal $380.1MM)
Source Company data as of Feb 2013
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2012 Acquisition 3
25
White Square: Core Asset
Rationale of the acquisition:
Trophy Class “A” Property considered by some to be the finest
office building in Moscow.
The property is fully occupied, high quality multinational
tenants, long term secured lease agreements
Winner of the Commercial Real Estate Moscow Awards 2010
for best Class A Business Center
Excellent transport accessibility to the city centre of Moscow as
well as to the Garden Ring (GR), Third Transport Ring (TTR)
and Moscow Ring Road (MKAD), proximity to the next metro
station – Belorusskaya metro station is next to the property;
The construction and fit-out of the subject property complies
with high quality standards which will ensure a maintaining
long-term value of the property;
Modern buildings – capital expenses are not required
Class: A
ERV 2013: $1,000
NRA: 76,542 sq m
Parking slots: 802
Occupancy: 99,4%
WAULT: 6.2 years
Valuation: $1 001.9 MM
Trophy Class “A” Property (Total Value $1 001.9MM)
Source Company data as of Feb 2013
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Olympia Park divestment
26
Lo
cati
on
North Administrative District
Close to Vodny Stadion metro station
(5 minute walk)
Close to Leningradsky Prospect
which is a principal route from
Moscow city centre to Sheremetyevo
airport
Class A office complex
Consists of 3 buildings, 5 stories
each
Buildings are located on the bank
of Khimkinskoe lake
New development completed in
late 2011
Olympia Park
MKAD
Ring Road
Descri
pti
on
(1)
Olympia Park is a Class A office building located in “Leningradsky corridor”, half way from the Kremlin to Sheremetyevo airport.
O1 acquired the property in a semi-developed state in December 2010 for $96.1 MM.
Since the acquisition, O1 invested a further $105 MM into the property and the construction was substantially completed by December 2011.
Another $42 MM have been required to finalize works (approx. $17 MM for fit-out) and buy out the City of Moscow’s interest (approx. $25 MM).
During the construction phase, O1 was able to successfully lease up the property to four major tenants, including Kaspersky and BMW, that together take up 96% of
the NRA.
As at 31 December 2012 Cushman & Wakefield valued the property at $318.3 MM with $17 MM remaining to be spent. In December 2012 we signed SPA with
Kaspersky Lab for the sale of Olympia Park.
The sale price of $345 mln was almost 10% higher than 31 Dec 2012 independent valuation.
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206 27
Initiatives for 2013
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Bolshevik Development Underway
28
Bolshevik Factory
Redevelopment project:
Bolshevik Factory asset is 19th century industrial building and used to
be a Kraft Foods factory
Redevelopment will perfectly utilize the capabilities of the former Horus
employees that are now part of the O1 team (Horus used to be
specialized in the redevelopment of industrial assets into quality office
space)
The asset is located between the Garden Ring and the Third Transport
Ring and is expected to be re-developed into a class A-/B+ office asset
The development will take place in two phases of equal size, with
expected completion in Q4 2013 and Q2 2015 respectively
Class A-/B+
ERV, US$/sq m/year 600
Valuation, USD$MM 88.5
O1 share Option to acquire
100%
NRA, sq m Circa 75,000
Completed (phases I and II) 2013 and 2015
GAV, $MM (100% share) 88.5
Total outstanding development cost, $MM (Phase I) 50.0
O1 has an Option to acquire a Low risk and highly profitable refurbishment project
Notes: Company estimates as of 30 September 2012 (based o Cushman & Wakefield valuation report as of 30 June 2012)
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Sheremetyevskaya: Starting 2H 2013
29
Sheremetyevskaya
Development project:
O1 has been closely following the status of the project since three
years ago when it was already offered to O1 by the previous owner
Sheremetyevskaya will become a class B+ office in the northeast
administrative district of Moscow
O1 has acquired a 50% JV stake in the development for $9.6MM in
June 2011 and increased its stake to 85% in March 2013.
Management anticipates significant increases in office demand in the
respective area and expects the property to generate a very high yield
on the acquisition/ development costs
Class B+
ERV, US$/sq m/year 500
Valuation, USD$MM 29.3
O1 share 50%
NRA, sq m 31,000
Completed 2015/16
GAV, $MM (100% share) 29.3
GAV, $MM (O1 share) 14.65
Total outstanding development cost, $MM 125.0
Total outstanding development cost, $MM
(O1 share) 62.5
Development Project
Notes: Company estimates as of 30 Feb 20123 (based on Cushman & Wakefield valuation report as of 01.12.2012)
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206 30
Debt and Liquidity
0 130 200
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Debt Maturity Profile
31
$ MM
Outstanding Debt (incl. White Square, excl. Olympia as of Feb 2013)
Vivaldi debt was
refinanced with a loan
from Sberbank to mature
in 2020
Total debt: US $2,4 Bln
(incl. White Square)
Note: debt repayment in 2017 in total sum of $877 MM includes Aareal bank loan - $441MM (Krugozor, Stanislavsky, Lefort), VTB loans -
$139MM (Lesnaya Plaza); $110MM (Lighthouse) and Bank of Moscow (VTB Group) – $187MM (Silver City)
Avion
Alfa Bank loan
maturity
47 59 64 69 60 40 40 9 3
217 127
184
882
0
567
230
0 45
0
100
200
300
400
500
600
700
800
900
1000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Principal Ammortization
0 130 200
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128
128
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217
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206 32
Financial Performance - Historical
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128
128
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206 33
Equity & Capital Structure
+ Ducat III + Silver City
31 Dec 2011 31 Dec 2010 30 Sep 2012 30 Jun 2012 30 Jun 2011 31 March 2013 (pro forma)
Note: Equity of 1,078 as of year end 2012 includes issuance of preferred stock of $171mln (for Ducat acq.)
Equity as of 31 March 2013 includes $202 MM preferred stock for White Square
31 Dec 2012 (est)
+ White square
- Olympia Park
$ MM
1 459 1 604
2 012 2 105
2 508
2 984
3 665
37 71
60 72
73
69
79
197 173
224 97
83
127
129
661 749 775 850 901 1 078
1 295 195
201 291 142 137
200
191 836
897
1 230 1 282
1 626
1 902
2 388
54% 53%
58% 60%
63% 62% 63%
0%
10%
20%
30%
40%
50%
60%
70%
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
Investment Property Other Non-current Assets Current Assets Equity Other liabilities Debt Net debt /GAV
0 130 200
14
86
155
133
168
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255
105
21
235
192
154
128
128
128
204
204
255
0
102
204
217
217
217
0
130
206 34
Financial Performance - Projections
0 130 200
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128
128
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204
255
0
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217
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206 35
Net Debt / EBITDA (x)
Secured rental income underpins material improvement in credit metrics
Interest Coverage Ratio (ICR) (x)
Loan to Value (Net debt to GAV)
Key Credit Metrics
Note: 1) EBITDA for the year / Interest expenses (and amortisation) paid for the year
2) Assumes acquisition of 100% of Bolshevik project in 2015 for $361 million (less assumed debt)
Note: Net debt at the end of the year / GAV at the end of the year Note: Net debt at the end of the year / EBITDA for the year
1,67x 1,84x 1,87x 1,96x
1,30x 1,37x 1,40x 1,46x
0,00x
0,50x
1,00x
1,50x
2,00x
2,50x
2013 2 014 2 015 2 016
ICR DSCR excl. PIK
8,63x
7,28x 7,53x 6,58x
0,00x
2,00x
4,00x
6,00x
8,00x
10,00x
2013 2 014 2 015 2 016
62% 61%
58%
56%
52%
46%
48%
50%
52%
54%
56%
58%
60%
62%
64%
2012 2013 2 014 2 015 2 016
0 130 200
14
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168
202
255
105
21
235
192
154
128
128
128
204
204
255
0
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204
217
217
217
0
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206 36
Our Equity Story
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206 37
IPO Timing May 2012 – Market Conditions Awful
Russia ETF down 20% over 90 day period coinciding IPO Roadshow / Bookbuilding
Go / No Go
Decision
Decision to
defer IPO
EEM : Global Emerging Markets ETF
RSX: RTS Index ETF
Source: NYSE Data
Sunday
May 6, 2012
French &
Greek elections
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206 38 38
Valuation: Cash Flow & NAV Growth drive Valn.
Price / NAV – driven by NAV growth
1. GAV – Gross Asset Value, LTV – Loan to Value
2012 O1 NAV:
18% yoy growth
X
2012 IPO Roadshow
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206 39 39
Property Stocks Recover
2013 / 2014 Time to IPO ?
1. Source Morgan Stanley : November 2012 Monthly Chartbook
X X
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Company Highlights
40
Strong and
Resilient Cash
flows
Majority of tenants are multinationals or Russian companies with high quality credit standing
Resilient assets: evidenced by the resilient rental income and high occupancy rates through the 2008 crisis
No receivables collection delays
High quality
assets
As of March 2013, O1 assets are 98% leased
Modern assets: most of the portfolio is brand new or refurbished within the last 5 years
Prime locations: on transport arteries or walking distance to metro station as demonstrated by the low vacancy
rates compared to the market
Active
management of
estate
Strong track record of asset management as evidenced by consistently strong portfolio metrics (occupancy ratios,
WAULT, retention)
Asset management team is a multinational team with local language, local knowledge and local expertise
Tight risk
management
policy
Minimal exposure to developments (currently 1%, maximum 20% of GAV)
Strong emphasis on high standards of corporate governance
Debt Service Coverage Ratios above 1.1 X even under “crisis” scenario analysis
Long lease
expiry profile
Portfolio WAULT of approximately 4.3 years (as of March 2013), which compares well to industry peers
High Retention Rate
Demonstrated
access to
capital
Meaningful relationship with key international and domestics banks
Demonstrated willingness and ability to use equity capital to reduce financial leverage
Strong Liquidity Strong and positive FFO generation (after interest and dividend payments) and long debt maturities and low
Capex.
Strong market
and low
competition
Exceptionally strong market for high quality buildings and within 3rd ring (Moscow’s central business district) with
limited stock of prime quality office properties as reflected by rising rents since the 2008 crisis
GAV – $3,7 Billion (incl. White Square, excl. Olympia Park)
Low tenant
concentration
Total of ca. 240 tenants as of March 2013
PwC, Eurasian Economic Community (EEC) and Deloitte are the only tenants accounting for more than 3% of
Total NRA
0 130 200
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255
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128
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102
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217
217
0
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206 41
Appendix: Yielding Assets
0 130 200
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42
White Square
Valuation $ MM 1001.9
GBA sq m 96,704
NRA sq m 76,542
Parking # 802
WAULT Years 6.2
Occupancy % 99,4%
ERV $/sq m 1000
Indexation %/year 2.4%
Land plot sq m 3,500
Land lease agreement Year 2050
Lo
cati
on
Northern Administrative District between the
Garden Ring and Third Transport Ring
Belongs to Belorusskaya area which is one of
the most prestigious business districts in
Moscow (prime office sub-market)
Right next to the Belorusskaya Metro Station (1
minute walk) and Belorusskaya Railway Station
(express trains to Sheremetyevo airport)
Descri
pti
on
Class A+ office centre
Modern, high-class building
completed in 2009
Winner of the Commercial Real
Estate Moscow Awards 2010 for best
Class A Business Center
LG Electronics
White square
Ten
an
ts
MKAD
Ring Road
Lease Expiration Profile
Top-5 tenants occupy 85% of total NRA
Note:
1. Cushman & Wakefield valuation report as of 31.12. 2012
0% 3% 0% 6% 5%
13%
5% 1%
66%
1% 0%
0%
10%
20%
30%
40%
50%
60%
70%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
0 130 200
14
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202
255
105
21
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154
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128
128
204
204
255
0
102
204
217
217
217
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206 43
Ten
an
ts
Krugozor
South West administrative district
Krugozor is close to Kaluzhskaya
Metro Station (5 minutes walk)
Valuation $ MM 358.9
GBA sq m 62,072
NRA sq m 50,951
Parking # 703
WAULT Years 3.6
Occupancy % 100%
ERV $/sq m 655
Indexation %/year 3.74%
Land plot sq m 27,078
Land lease agreement Year 2045
Descri
pti
on
Class A office centre
Consists of 2 buildings of different
heights connected together
Reconstructed buildings of former
toy factory
Krugozor
MKAD
Ring Road
Lo
cati
on
Lease Expiration Profile
Top-5 tenants occupy 55% of total NRA
Note:
1. Cushman & Wakefield valuation report as of 31.12. 2012
(1)
15%
3%
29%
3%
20% 20%
9%
0% 0% 0%
0%
10%
20%
30%
40%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
0 130 200
14
86
155
133
168
202
255
105
21
235
192
154
128
128
128
204
204
255
0
102
204
217
217
217
0
130
206 44
Lesnaya Plaza
Valuation $ MM 280.3
GBA sq m 49,520
NRA sq m 39,710
Parking # 318
WAULT Years 4.5
Occupancy % 91%
ERV $/sq m 600
Indexation %/year 3.7%
Land plot sq m 3,500
Land lease agreement Year 2050
Lo
cati
on
Northern Administrative District between the
Garden Ring and Third Transport Ring
Belongs to Belorusskaya area which is one of
the most prestigious business districts in
Moscow (prime office sub-market)
Right next to the Belorusskaya Metro Station (1
minute walk) and Belorusskaya Railway Station
(express trains to Sheremetyevo airport)
Descri
pti
on
Class A office centre
Modern, high-class building
completed in 2005
LG Electronics
Lesnaya Plaza
Ten
an
ts
MKAD
Ring Road
Lease Expiration Profile
Top-5 tenants occupy 78% of total NRA
(1)
Note:
1. Cushman & Wakefield valuation report as of 31.12. 2012
1% 0%
12%
20%
24%
19%
2%
12%
1% 0%
0%
5%
10%
15%
20%
25%
30%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
0 130 200
14
86
155
133
168
202
255
105
21
235
192
154
128
128
128
204
204
255
0
102
204
217
217
217
0
130
206 45
Le Fort
Valuation $ MM 261.4
GBA sq m 59,781
NRA sq m 56,169
Parking # 714
WAULT Years 3.5
Occupancy % 99.7%
ERV $/sq m 450
Indexation %/year 3%
Land plot sq m 43,424
Land lease agreement Year 2052
Lo
cati
on
East Administrative District
Well developed industrial area with
more than 300 of the largest industrial
companies located there
Close to Preobrazhenskaya Ploschad
Metro Station (7 minutes walk)
Class B office centre
Consists of 10 rentable buildings
of different heights
Reconstructed buildings of former
silk factory (early 20th Century
buildings)
Le Fort
MKAD
Ring Road
Ten
an
ts
Descri
pti
on
Lease Expiration Profile
Top-5 tenants occupy 58% of total NRA
(1)
Note:
1. Cushman & Wakefield valuation report as of 31.12. 2012
2%
18%
24% 21%
25%
1% 3%
0% 0% 0%
0%
10%
20%
30%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
0 130 200
14
86
155
133
168
202
255
105
21
235
192
154
128
128
128
204
204
255
0
102
204
217
217
217
0
130
206 46
Stanislavsky Factory
Valuation $ MM 255.5
GBA sq m 43,251
NRA sq m 34,345
Parking # 335
WAULT Years 2.9
Occupancy % 100.0%
ERV $/sq m 650
Indexation %/year 3.16%
Land plot sq m 19,632
Land lease
agreement Year 2051
Lo
cati
on
Central Administrative district (some
of the most prestigious offices are
located within district)
Close to Taganskaya and
Marksistskaya metro station (7 and 9
minutes walk respectively)
Class A- office centre
Consists of 6 buildings
Reconstructed buildings of former
factory
Stanislavsky Factory
MKAD
Ring Road
Ten
an
ts
Descri
pti
on
Lease Expiration Profile
Top-5 tenants occupy 50% of total NRA
(1)
Note:
1. Cushman & Wakefield valuation report as of 31.12. 2012
10%
19% 21% 19%
30%
0%
0%
10%
20%
30%
40%
2013 2014 2015 2016 2017 2018
0 130 200
14
86
155
133
168
202
255
105
21
235
192
154
128
128
128
204
204
255
0
102
204
217
217
217
0
130
206 47
Avion
Valuation $ MM 106.7
GBA sq m 19,147
NRA sq m 18,429
Parking # 63
WAULT Years 0.9
Occupancy % 99.5%
ERV $/sq m 550
Indexation %/year 4.7%
Land plot sq m 9,428
Land lease agreement Year 2054
Lo
cati
on
North Administrative District
Close to Aeroport metro station
The property resides along Leningradsky
Prospekt, a principal route from the
Moscow city centre to the Sheremetyevo
airport
Right next to Aeroport Metro Station
Class B+ office centre
Consists of 2 buildings connected
together
Reconstructed in 2005
Avion
MKAD
Ring Road
Ten
an
ts
Descri
pti
on
Lease Expiration Profile
(1)
Top-5 tenants occupy 68% of total NRA
Note:
1. Cushman & Wakefield valuation report as of 31.12. 2012
77%
8% 9% 0%
5% 0%
0%
20%
40%
60%
80%
100%
2013 2014 2015 2016 2017 2018
0 130 200
14
86
155
133
168
202
255
105
21
235
192
154
128
128
128
204
204
255
0
102
204
217
217
217
0
130
206 48
Lo
cati
on
Central Administrative district (some of the
most prestigious offices are located within
district)
Close to Paveletskaya metro station (2
minutes walk)
One of the most well developed business
districts in Moscow
Class A office complex
Consists of 3 buildings, 11 stories
each
New development completed in
late 2011
Ten
an
ts
Vivaldi Plaza
Descri
pti
on
MKAD
Ring Road
Vivaldi Plaza Lease Expiration Profile
Valuation $ MM 422.5
GBA sq m 71,809
NRA sq m 48,051
Parking # 754
WAULT Years 6.9
Occupancy % 100%
ERV $/sq m 700
Indexation %/year 4.3%
Land plot sq m 16,322
Land lease agreement Year 2060
Top-5 tenants occupy 75% of total NRA
(1)
Note:
1. Cushman & Wakefield valuation report as of 31.12. 2012
0% 0% 0% 0%
9%
0%
25%
56%
9%
1%
0%
10%
20%
30%
40%
50%
60%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
0 130 200
14
86
155
133
168
202
255
105
21
235
192
154
128
128
128
204
204
255
0
102
204
217
217
217
0
130
206 49
Lighthouse
Valuation $ MM 237.1
GBA sq m 44,581
NRA sq m 27,405
Parking # 332
WAULT Years 7.1
Occupancy % 93%
ERV $/sq m 700
Indexation %/year 3.5%
Land plot sq m 6,200
Land lease agreement Year NA L
ocati
on
Garden Ring
Central Administrative district (some
of the most prestigious offices are
located within district)
Close to Dobrininskaya and
Paveletskaya metro station (3 and 5
minutes walk, respectively)
Class A office centre
14 floors building
New development completed in
early 2012
McDonalds
Fitch Ratings
Knight Frank
Fitness
Lighthouse
MKAD
Ring Road
Ten
an
ts
Descri
pti
on
Lease Expiration Profile
(1)
(1)
Top-5 tenants occupy 64% of total NRA
Note:
1. Cushman & Wakefield valuation report as of 31.12. 2012
0% 0% 0% 0%
12%
16%
29%
6%
0%
27%
0%
5%
10%
15%
20%
25%
30%
35%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
0 130 200
14
86
155
133
168
202
255
105
21
235
192
154
128
128
128
204
204
255
0
102
204
217
217
217
0
130
206 50
Silver City
Valuation $ MM 360.8
GBA sq m 56,033
NRA sq m 41,766
Parking # 446
WAULT Years 3.0
Occupancy % 100%
ERV $/sq m 700
Indexation %/year 2.2%
Land plot sq m 3,500
Land lease agreement Year 2050
Lo
cati
on
Central Administrative District within the Garden
Ring
Between Taganskaya and Paveletskaya metro
stations.
Descri
pti
on
Class A office centre
Modern, high-class building
completed in 2007
Silver City
Ten
an
ts
MKAD
Ring Road
Top-5 tenants occupy 58% of total NRA
(1)
(1)
Lease Expiration Profile
Note:
1. Cushman & Wakefield valuation report as of 31.12. 2012
31%
4%
16% 10%
17% 13%
6% 0% 0% 0%
0%
50%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
0 130 200
14
86
155
133
168
202
255
105
21
235
192
154
128
128
128
204
204
255
0
102
204
217
217
217
0
130
206 51
Ducat Place III
Valuation $ MM 380.1
GBA sq m 46,085
NRA sq m 33,079
Parking # 494
WAULT Years 2.8
Occupancy % 98%
ERV $/sq m 1,100-1,300
Indexation %/year 3.0%
Land plot sq m N/A
Land lease agreement Year N/A
Lo
cati
on
Central Administrative District, in the most
prestigious business area in moscow
Between Mayakovskaya and Belorusskaya
metro stations.
Descri
pti
on
Class A prime office centre
Modern, high-class building
completed in 2008
Ducat III
Ten
an
ts
MKAD
Ring Road
Top-5 tenants occupy 51% of total NRA
(1)
(1)
Lease Expiration Profile
Note:
1. Cushman & Wakefield valuation report as of 31.12. 2012
1%
40%
7%
15% 12% 15%
3% 1% 2% 0%
0%
10%
20%
30%
40%
50%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
52
Thank you