May 2004

1. Russian Real Estate Market OverviewPresented by Real Estate Opportunity in Russia & CIS May 2004

2. I. Market Opportunity

3. Market Opportunity Industry poised for institutionalization CRITICAL MASS One of the largest, quickly growing and most sustainable industries in Russia ATTRACTIVE MARKET OPPORTUNITY VALUE & EXIT Coming institutional capital will boost asset values within several years CAPITAL GAP Large capital gap between supply and demand in real estate market LEVERAGE Sophisticated financing solutions became available over recent years

4. Strong Market Fundamentals Large, quickly growing and sustainable industry Moscow Office Market: Stock & New Construction Shopping Center Stock vs. Other European Cities Source: Noble Gibbons Source: Colliers International Moscow Office Market: Vacancy Rates Moscow Office Market: Rental Rates Source: Colliers International Source: Colliers International

5. Positive Macro Outlook Strong economic fundamentals and political stability form basis for further growth • Sustained Economic Growth: • GDP growing over 5 consecutive years; • Stable budget; • Reducing inflation and stable currency rate; • Growing per capita income and consumer spending. • Political Stability: • New consensus leadership; • Vital reforms initiated (tax, pension, judicial, protection of shareholder rights, etc.); • Commitment to further reforms and free market. Nominal GDP Inflation Rate Source: State Statistics Committee

6. Market Momentum The right time to gain exposure to Russian real estate • Industry overlooked by domestic and international investor groups: • Few professional institutional investors in the asset class. • Investment supply/demand gap in Russian real estate market. • opportunity to gain a leading market position. • Investment grade projects and existing properties command substantial yields. • More assets becoming available from various players. • Not yet fully transparent market: • Access to attractive opportunities depends on local experience and track record. • Suitable real estate debt financing now available to institutional players. • Further decline in Russian market risk estimates and institutionalization of the industry will boost values within foreseeable future. • Improving legal systems.

7. Multiple Exit Options Liquidity grows as a result of more sophisticated exit options • Dividends: Substantial and sustainable cash flow proceeds generated by real estate assets start recouping investors’ capital immediately after an investment and/or necessary operating improvements are made. • Recapitalization: The newly available debt financing options enable a sophisticated real estate investor to return most of investors’ capital via refinancing. More appropriate capital structures also improve current yields and facilitate the return of capital. • Domestic Institutional Buyers: The emerging class of domestic institutional investors, such as pension funds, insurance companies and private groups, lacks investment options and will move into the asset class. • International Buyers: Real estate is one of the primary options for leading international investors seeking exposure in Russia. Decreasing country risk will facilitate this trend. • Sophisticated Structures: High quality portfolios managed by professional, Western-style sponsors can be packaged and listed in REIT-type vehicles domestically or internationally.

8. II. Investment Market

9. Asset Class Return Characteristics Attractive risk/reward parameters across various investment strategies • Acquisitions – Incoming yields of 10-14% for investment grade properties: • Class A, premier location. • High quality tenant list. • Professional management systems. • Enhanced Strategies – Incoming yields of 15-20% that can be enhanced through: • Refurbishment and incremental development. • Repositioning and operating improvement. • Sophisticated use of leverage. • Development – Still provides speculative returns: • Commercial developments deliver returns up to and beyond 30%. • Residential market is booming and provides essentially unlimited upside. Institutional Investors’ Dilemma: Shortage of existing investment grade assets forces institutional capital into more speculative investment areas.

10. Fundamental Issue of the Industry Though profitable and growing, industry suffers from shortage of “smart” money • Property developers and construction companies lack access to sufficient financing to absorb their substantial project flow. Newly developed commercial and residential space is pre-sold prior to completion. • Most owners of significant property portfolios has historically focused on sourcing assets and also lack capital to improve them. • Commercial banks have substantial financial resources, but do not have expertise to develop real estate finance business. • Financing is required in the form of both equity and debt. Solutions Opportunity Funds REIT-like Structures

11. Opportunity Funds Attractive market fundamentals brought new types of foreign investors • Provide foreign investors with exposure to high quality real estate assets. • Normally, structured as closed-end vehicles. • Do not rely upon sponsors’ existing property portfolios (“blind pool” funds). • Upon allocation of investment capital, have ability to access public markets.

12. REIT-like Structures Provide financing and securitization alternatives for real estate industry • Legal Format: “Closed Real Estate Mutual Fund” in accordance with 2002 Investment Fund Act # 156. • Portfolio Requirements: 40% to 90% of the fund’s assets need to be comprised of real estate assets or equity in construction companies. • Regulation: Focus on protecting investors’ rights. • Mandatory licensing of the fund’s management company by the newly created Federal Financial Markets Agency (FFMA). • All transactions involving the fund’s assets need to be approved by a Specialized Depository (licensed by FFMA). Ownership rights for the investment units are registered by a Specialized Register (licensed by FFMA). • The funds portfolio need to be appraised by a licensed appraiser on annual basis. • Liquidity: Legal format provides an option to list the fund on a domestic stock exchange. Investment units can also be used as a quality collateral in the construction industry financing schemes. • Existing Players: • Concordia Asset Management: $10mm fund listed on MSE. • Management Consulting: $32mm fund.

13. III. RCF’s Real Estate Activities

14. RCF Highlights • Specialized Russia-focused investment banking firm. • Created in 1994, RCF established itself as one of the foremost financial advisors to Russian companies entering international capital markets. • Facilitated over $1 billion of debt financing in the form of syndicated loans, bonds, and commercial paper. • Professional staff includes 28 employees located in offices in New York, Moscow, and Geneva. • Moscow office provides a range of integrated investment banking solutions, including organization of debt, equity, and project financing. • New York office carries out private and public placement of securities: • Registered Broker-Dealer with the NASD, • Registered with the SEC, • Member of the Securities Investor Protection Corporation (SIPC). • In-depth industry expertise in Telecommunications, Financial Services and Real Estate and Construction • Over the last 2 years, executed over 10 investment banking transactions with total transaction value in excess of $120 million.

15. RCF’s Construction Financing Vehicle Financing and securitization mechanism for real estate and construction industry Real Estate Assets Construction Process Construction company Investments “Closed Real Estate Mutual Fund” Unit Purchase Individuals Private Investors Institutional Investors Insurance Companies Banks Pension Funds

16. RCF Real Estate Fund • RCF Real Estate Fund is an institutional investment vehicle focused solely on real estate investment opportunities in Russia & CIS. • Sponsored by RCF Group, one of Russia’s leading specialized investment banking firms. • Benefits from the sponsor’s unique local resources, such as established network of relationships and proprietary transaction flow. • RCF’s dedicated real estate team has unique combination of Russian and Western experience: • Managed institutional Russia-focused real estate funds since 1996. • Invested in excess of $50 million in more than 10 real estate and private equity transactions in Russia & CIS. • Fundraising Status: • Target Size: $100 million • Completing the pre-marketing campaign. • Group of strategic anchor investors identified. • First closing planned for 2nd Quarter 2004.

17. Investment Themes Based on market opportunity, sponsor’s capabilities and team experience • Development & Refurbishment Projects • Highly profitable, sustainable opportunities. • Returns realized through efficient deal sourcing, project development and management. • Speculative Opportunities with Shorter Investment Horizon • Limited project term, but exceptional return characteristics. • Acquisition of Quality, but Undervalued Assets • Many existing assets suffer from temporary deficiencies. • Flaws can be corrected under institutional ownership through professional asset management. • Joint Ventures with Strategic Partners • Partnering with groups that can add specific value to portfolio investments. • Sponsor maintains relationships with a number proven and potential partner groups. • Sophisticated Use of Leverage • Debt financing became common in the real estate market. • Only available to professional institutional players.

18. Transaction Sourcing In opaque Russian market, access to the best opportunities is essential • Access depends on the relationships and track record of collaboration with the local authorities. • Deal flow is proprietary and often exclusive. • Partnering with established industry players to ensure proper incentives: • Pre-agreed contracts at market terms. • Partner co-investing with the Fund. • RCF’s Existing Relationships: • Leading Russian development and construction companies; • Governmental agencies (State Committee for Housing Construction and Maintenance); • Proven local partners in major regional centers; • Established independent real estate agencies; • Institutional and private investor groups with existing exposure to Russian real estate; • Conglomerates with significant real estate portfolios; • Leading banking institutions involved in real estate finance business. • Active log of transactions readily available for execution.

19. Hands-on Portfolio Management • STRATEGY • Focused portfolio development strategy • Disciplined investment process • Strict investment criteria • Promotion of corporate profile HANDS-ON PORTFOLIO MANAGEMENT FINANCE • Efficient financial control • Optimal cash flows • Capital structure • Western financial reporting • LEGAL • Competent structuring • Effective legal control • Constant deal monitoring • Fund structure maintenance TRANSACTION MANAGEMENT • Pro-active portfolio management • Efficient deal partner incentives • Focused asset management • Clear organization structure

20. Contact Information RCF Group Mr. Vadim Komissarov Managing Partner Paveletskaya Pl. 2-1, 12th Floor Moscow, 115054, Russia Phone: +7-(095)-933-5454 Fax: +7-(095)-933-5453 Email: VKomissarov@rcfcap.com Internet: www.rcfcap.com