LSR Group finalizes the acquisition of a 100% stake in the Yekaterinburg-based OOO Promrezerv

OJSG LSR Group has finalized the acquisition of a 100% stake in OOO Promrezerv, a Yekaterinburg company holding a long-term lease of a land plot of more than 9.8 hectares in Yekaterinburg. The acquisition costs totalled €7.065 million. The transaction was approved by the Board of LSR Group in February 2008.

LSR Group proposes to use the land for neighbourhood real estate developments to include an economy class residential compound with a garage complex and a Class B office building, as well as service outlets and various local shops. According to the development concept, the total building area is estimated at 147,000 sq.m.

Even today the district features a developed social infrastructure with schools, supermarkets and other facilities in close vicinity to the future development.

The area also boasts easy transportation access. In the long-term, the City Development Plan up to 2025 includes a proposal to build a metro line.
 
Notes to Editors:

OOO Promrezerv is a Yekaterinburg company holding a long-term lease of a land plot of more than 9.8 hectares in the eastern part of Yekaterinburg bordering on the downtown area (the Analytical Centre of the Urals Real Estate Chamber assigns the plot location area to Price Belt 1). According to an independent assessment by DTZ (reported in February 2008), the investment value of the plot was US$ 22.1 million (over € 15 million).

Yekaterinburg is the main city of the RF Urals Federal District. It is a major administrative, industrial, transport, trade, research and cultural centre. Yekaterinburg is the centre of the Sverdlovsk Oblast. The population of Yekaterinburg is around 1.3 million people. By its volume of construction the region ranks fourth after Moscow (including the Moscow region), St. Petersburg and Kazan. The construction market in Yekaterinburg has been rapidly growing over recent years: e.g. a total of 900,000 sq.m of housing were completed in 2007, nearly 170,000 sq.m (23% growth rate) more than in 2006 (732,700 sq.m). In 2006, the growth of housing construction compared to the 2005 volume (approx. 640,000 sq.m) was 14%. According to the reports of DTZ, as at end of 2007 the cost per sq.m of economy and business class residential property in the primary market was US$ 2,150-US$ 2,500 while the average monthly wages were 16,000 roubles (by this indicator Yekaterinburg holds third place in Russia). In 2007, Standard & Poors assigned a BB rating to Yekaterinburg, with a stable outlook.

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
Tel.: +7(812) 314-1044
press@lsrgroup.ru
www.lsrgroup.ru