25 November 2020, Road Town, Tortola, BVI 
 
   BUSINESS HIGHLIGHTS 
 
 
   -- In Q3 2020 the Company continued to expand its activity to Europe and 
      diversify its portfolio to ensure long-term capital preservation. 
      Following this strategy, in July 2020, the Company acquired 100% of 
      interest in the entity holding a hotel property in Salzgasse 4 in Dresden, 
      Germany. The property is located in the historic centre of Dresden, very 
      close to the main city attractions and Dresden Airport. It comprises an 
      area of 15,550 sqm. with a total of 180 rooms, 46 underground parking 
      spaces, a spa, restaurant, 261 sqm. of retail space and meeting rooms for 
      up to 230 people. The property and is occupied by 4-star Hotel Innside 
      Dresden of Melia Hotels & Resorts Group. The current lease runs till 
      December 2029. 
 
   -- The Company's rental properties continue generating sufficient cash to 
      cover the Company's operating expenses, service the debt and partially 
      finance its new acquisitions. 
 
   -- The Company successfully continued sales of Arbat premises in Moscow. 
      During 3rd quarter 2020 a few more apartments and parking lots have been 
      sold. 
 
   -- RUB and EUR, the major currencies in which the Group operates, continue 
      to be volatile and have an impact on the Company's operating result and 
      net asset value. RUB weakened against US$ by more than 26% since the 
      beginning of 2020. In average for the 9 months of 2020 RUB weakened by 
      11% as compared to the same period of 2019. EUR appreciated against USD 
      by 4% and 1%, accordingly. 
 
   -- The management of the Company is constantly monitoring the impact of 
      COVID-19 pandemic on the Company's rental income on an asset by asset 
      basis. As of today, the Management of the Company cannot judge on the 
      future potential negative impact of Covid-19 on the global economy and 
      major financial markets as well as on the Company's properties but as per 
      the most recent assessment, impacts on our portfolio are only considered 
      short-term with no material impact expected for the long-term. 
 
 
   FINANCIAL HIGHLIGHTS 
 
   The above key events led to the following main changes in the Company's 
financial results for Q3 2020: 
 
 
   -- Acquisition of new hotel property in Dresden, SALZ 4, added US$ 60.52 
      million (EUR 51.5 million) to the value of the Company's investment 
      properties. 
 
   -- Further, during Q3 2020 the Group's additional investments in LASS 1, an 
      office property under refurbishment in Vienna, amount to approximately 
      EUR 15 million, resulting in its recognized value of US$ 103.70 million 
      as of 30 September 2020. The Group measures LASS 1 property at cost, 
      since its fair value is not reliably measurable in the refurbishment 
      stage, until its fair value becomes reliably measurable or construction 
      is completed (whichever is earlier). 
 
   -- The Group's borrowings increased due to the loan with a total value of 
      US$ 22 million (EUR 19 million) granted by Hypo Vereinsbank (member of 
      Unicredit Group) which was acquired together with the acquisition of SALZ 
      4 property. The loan matures in December 2029 and is payable through 
      monthly amortization payments with a balloon payment of EUR 9.76 
      million. 
 
   -- Apart from the impact of Q3 2020 acquisitions, the values of the Group's 
      properties and debt are influenced by the currency fluctuations between 
      RUR/EUR and US$. 
 
   -- Net rental income declined from US$ 56 million for 9 months of 2019 to 
      US$ 45 for 9 months of 2020. The decrease is mainly attributable to 
      Russian properties and caused especially by the compression of US$ values 
      of RUR-denominated revenues resulting from RUR depreciation, as well as 
      by revision of certain leases. 
 
   -- Properties acquired in the first 9 months 2020, STRAL 3 and SALZ 4, 
      contributed US$ 2 million and US$ 0,7 million, respectively, for the 
      period after acquisition by the Group (STRAL 3: 6 months, SALZ 4: 3 
      months). 
 
   -- For 9 months of 2020 foreign exchange gain recognised in the Company's 
      income statement was partially overlapped by negative change in currency 
      translation adjustment recognized directly in equity; so the overall gain 
      from exchange rate fluctuations in the reporting period is US$ 13 
      million. 
 
 
   Attachment 
 
 
   -- 201125 EPH Q3 2020 Financial update 
      https://ml-eu.globenewswire.com/Resource/Download/b5587056-4a22-4bba-995a-fcd0dc89be10

(END) Dow Jones Newswires

November 25, 2020 13:00 ET (18:00 GMT)