Etalon Group - Expanding Portfolio for Robust Growth slide image

Etalon Group - Expanding Portfolio for Robust Growth

B 1Grou Focus on Key Markets - Moscow and St. Petersburg Metropolitan Areas MMA and SPMA are the most attractive residential markets in Russia MMA & SPMA - most populated Russian regions... Total: 142mn (4) 22mn with growing demand for residential real estate Population growth/ (decline) in 2007-2010 (4) 85% 12% 1.3% 0.6% (0.4%) ■MMA ■ SPMA Other MMA SPMA Other Potential demand estimation (ths. households) Total # of households in target markets US$3-6 ths. per HH per month Households with income within target price-range (1 (1) 1,852 (7) 60% MMA SPMA 6,300 1,700 8,000 Residential real estate commissioning in Russia Households planning to improve living 1,111 Satisfied households conditions By value in US$ (2010) (5), (6) By volume in ths.sqm (2010) (5) (8) 56% 35% 53% 13% Total: US$48bn 72% 20% 8% Total: 33mn sqm ■MMA ■ SPMA ■Rest of Russia Source: Rosstat Lower income Higher income Households with preference for primary 622 market Secondary preference Indicative potential market (3) Regional demand 622+ Investment demand The above set of simple assumptions further supports the existence of significant unsatisfied demand for value-added housing in MMA and SPMA (1) Company estimates based on Rosstat's methodology and data; includes additional demand from mortgage users - share of sales with mortgage in total sales is 12%, according to MER (assuming no overlap between mortgage and instalments customers); (2) 1H2010 new supply volume of Middle Class residential properties on the primary market, according to MIAN and SPb Realty, converted from sqm into housing units, assuming that 1 flat = 85.3 sqm (average flat size in Russia in 2009, Rosstat)); (3) The demand structure shown on the pie chart is for indicative purposes; (4) Rosstat data as of January 2010; (5) Residential real estate commissioning, excluding individual construction; (6) Calculated as residential real estate commissioning volume in 2009 (excluding individual construction) multiplied by average real estate RUR prices on the primary market in 2009 and divided by end of period official CBR RUR/US$ exchange rate in 2010 (RUR/US$ 30.5); (7) 60% of households plan to improve living conditions (source - Rosstat; Comcon, 2010); (8) 56% of consumers prefer primary vs. secondary residential real estate market (Source -Metrinfo survey in Moscow, 1H 2010) → Etalon Group 7
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