Bloomberg News

Sistema-Hals' Property Valuation Increases 35 Percent

March 22, 2007

Sistema-Hals (HALS), the property unit of Russian billionaire Vladimir Yevtushenkov, said the value of its real estate assets rose 35 percent in the second half of 2006 because of growing demand for office space in Moscow.

Sistema-Hals' stakes in 88 real estate projects were worth $2.04 billion as of Jan. 1, 2007, compared with $1.51 billion six months earlier, the Moscow-based company said in an e-mailed statement today. The valuation was conducted by Cushman & Wakefield Stiles & Riabokobylko.

The company's new valuation includes three new projects in Moscow totaling 82,000 square meters, according to a report today by Deutsche Bank AG's Russian unit, which organized Sistema-Hals' initial public offering. Deutsche Bank raised its price estimate on the shares to $13.16 from $12.89 after the new valuation. The bank recommends investors ``hold'' the stock.

Real estate prices in Moscow, home to about 11 million people, more than doubled in the last two years because of growing demand for modern offices and apartments. Europe's most populous city is also its most expensive for prime real estate, after surpassing London this year, property broker Jones Lang LaSalle said in September.

Sistema-Hals raised more than $400 million at its share sale in November. The company's global depositary receipts in London added 4.4 percent to $11.80. The global depositary receipts have fallen 11 percent this year.

To contact the reporter on this story: Todd Prince in Moscow at Tprince2@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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