Etalon Group Real Estate Portfolio Market Value Up 20%

05 March 2012

 

Etalon Group Limited (LSE: ETLN) (the "Company" or the “Group”), one of Russia's largest and oldest residential real estate developers, today released the updated valuation of its portfolio as of 31 December 2011, conducted by Jones Lang LaSalle. The updated valuation shows a 20% increase in the market value of the Group’s portfolio, reaching a total of USD 1,714 million. Details of the updated valuation is available on the Company’s website: www.etalongroup.com.

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Etalon Group President Vyacheslav Zarenkov said: “During the past two years consumer activity has risen significantly, despite continued turbulence in the capital markets. The high level of pre-sales we saw again in the second half of 2011 underscores the structural gap between supply and demand in Russia that will take several generations to reach equilibrium.

“Today’s announcement also showed that the Group’s share of total NSA in the Moscow Metropolitan Area (MMA) has reached 44%, which demonstrates our commitment to expansion in this market. We delivered approximately 100 thousand sqm in the MMA in 2011.

“The market value of Etalon Group’s portfolio reached USD 1,714 million based on the report we published today, and our net cash position of USD 167 million at the end of the year underscores that the Company is well positioned for continued growth. While we are pleased with this growth in market value of Etalon Group’s portfolio, our business model remains focused on residential development in the 5th, 6th or 7th €˜belts’ of residential neighbourhood zones outside of the centres of major cities, where land is generally available and is a commodity product.

“Last year we contracted 270 thousand sqm, and acquired a further 535 thousand sqm of new NSA (447 thousands sqm attributable to Etalon), which yields a landbank maintenance ratio of 1.65x. The Group’s landbank as of today provides for six years of operations, and is due to increase further with the USD 490 million of expansion capital on Etalon’s balance sheet[1] that we are actively employing in high-quality projects.

“Before the crisis, in the first half of 2008, we contracted 218 thousand sqm (up to 440 thousand sqm on an annualized basis) in St. Petersburg alone. While we are still significantly behind the pre-crisis level of operations, the trend is positive and we are optimistic on 2012, given our successful expansion in the MMA, continued strengthening of consumer activity since the beginning of the year and the quality landbank opportunities we see on the market today.”

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Etalon Group IR Team

T: +44 (0) 20 8123 1328

E: info@etalongroup.com

M: Communications

Sam VanDerlip

T: +7 495 663 8005

E: vanderlip@mcomgroup.com

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About Etalon Group

Founded in 1987, Etalon Group is one of Russia's largest residential real estate developers. The Company operates in both the St. Petersburg and Moscow Metropolitan Areas.

Etalon Group has a strong portfolio focused on large-scale residential complexes, with a dominant position in the "comfort class" (lower middle class and upper economy class) price segment, providing high quality living at affordable prices. The Company's portfolio comprised 31 projects, as of 31st December 2011, with a total of 3.25 million sqm of unsold net sellable area ("NSA") in the St. Petersburg and Moscow Metropolitan Areas. For the year ended 31st December 2010, the Company recorded revenues of RUB 20.3 billion (USD 669 million) and EBITDA of RUB 6.9 billion (USD 227 million), with an EBITDA margin of 34%.

Since 20th April 2011, Etalon Group Limited has had its GDRs traded on the Main Market of the London Stock Exchange.

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6 March 2012