Independent Consultant DTZ Revalues the Real Estate Property Portfolio of LSR Group

The independent consultant DTZ has revalued the real estate property portfolio owned by LSR Group. As of December 31, 2007 (the effective valuation date) the Group’s development portfolio included 8.24 million sq.m of land compared to 7.8 million sq.m held by LSR on June 30, 2007. The value of LSR’s development projects grew by USD 774 million to total USD 5.672 billion (compared to USD 4.900 billion in June 2007).

Commenting on this revaluation Evgeny Yatsyshin, Managing Director for Real Estate Development and Construction of LSR Group, said:

“The increase in the value of LSR’s real estate property portfolio was the result of a number of factors, including the acquisition of new land assets, mostly in Yekaterinburg, and investments in construction projects, as well as the growth of real estate prices in the 2nd half of 2007.”

At the end of 2007, as part of LSR Group’s strategy of geographical diversification, it acquired 100% of the share capital of Investproekt LLC, a Yekaterinburg company that owns land plots in that city with a total area of 50 hectares. The transaction amounted to EUR 50 million and was financed with borrowings as well as proceeds from the IPO of the Group in the autumn of 2007. The company intends to use the plots for neighbourhood development projects to create economy class housing.

According to the reports of DTZ, as of late 2007 the cost per sq.m of economy and business class residential property in Yekaterinburg was USD 2,150-2,500 while average wages were 16,000 roubles per month (by this indicator Yekaterinburg is the third highest in Russia). In 2007, Standard & Poors assigned a BB rating to Yekaterinburg, with a stable outlook.

For reference:

OJSC LSR Group is a diversified construction company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate development. The Group includes enterprises for extraction and processing of aggregates, production and transportation of building materials, and housing construction — from mass market large-panel housing to elite property built after designs made by leading domestic and foreign architects.

LSR Group has operations and offices in a number of cities in the Leningrad Oblast, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia, Ukraine and Germany.

LSR Group employs over 15,000 people. In 2005 and 2006 the revenues of LSR Group (according to IFRS statements) were RUB 13,085.5 million and RUB 21,110.8 million respectively. For the six months of 2007 the Group’s revenues amounted to RUB 16,062.0 million compared to RUB 9,336.4 million for the same period last year.

In July 2007, Moody’s Investors Service assigned a B1 rating to LSR Group; outlook — stable. In November 2007, OJSC LSR Group implemented an IPO. In December 2007, LSR Group was bestowed a National Award in the field of business as ‘The Company of the Year’ in the ‘Construction’ category.

For more details please contact:

Press Service, LSR Group
+7 (812) 314-1044
press@lsrgroup.ru
www.lsrgroup.ru