Half Yearly Report

28 August 2012

Raven Russia Limited ("Raven Russia" or the "Company")

Results for the six months ended 30 June 2012

The Board of Raven Russia releases the results for the six months ended 30 June 2012.

Highlights

·; Annualised NOI now $166.7 million;

·; Portfolio 94% let;

·; Underlying earnings in 6 months to 30 June 2012 of $14 million;

·; Operating cash inflow of $49.6 million;

·; Adjusted fully diluted NAV per share up 5 cents to 124 cents;

·; Fully let portfolio yield of 11.7%;

·; Acquisition of 258,000 sqm of fully let space in year to date;

·; Acquisition of 38 ha of permitted land in Moscow;

·; Cash balance currently $150 million;

·; Tender offer buy back of 1 in 46 shares at 70p proposed, equivalent to a 1.5 pence dividend.

Glyn Hirsch, CEO, said "Our annualised Net Operating Income has increased by 45% in the year to date following a successful acquisition and letting programme, we have a strategic land bank in the Moscow region which will allow us to grow organically and our improving operating cashflow is allowing us to increase distributions to shareholders."

Chairman's Statement

I am pleased to announce the Group's results for the six months ended 30 June 2012.

At today's date, our annualised, consolidated net operating income ("NOI") is $166.7 million, increasing to $168.6 million including pre-let agreements ("PLAs") and letters of intent ("LOIs ") and before the cost of vacant space. This includes 100,000 square metres ("sqm") of new leases signed in the first 6 months. The significant increase over our previously reported numbers also reflects the substantial acquisitions we have made this year.

Reported NOI for the period to 30 June was $53.4 million (30 June 2011: $37.4 million). Profit before tax was $29.6 million (30 June 2011: $86.4 million), underlying earnings before tax were $14.3 million (30 June 2011: loss of $5.9 million). Underlying, diluted earnings per share were 2.35 cents (30 June 2011: loss per share of 0.54 cents), basic NAV per share was 120 cents (31 December 2011: 118 cents) and adjusted, fully diluted NAV per share was 124 cents (31 December 2011: 119 cents).

The external valuation carried out by Jones Lang Lasalle ("JLL") as at 30 June is reflected in the gross value of our completed assets of $1,417 million, an increase of $42.9 million on previous values (see note 4 to the Interim Statement). This includes the asset acquired at Pushkino on 27 June 2012. The fully let portfolio NOI is estimated at $167 million at 30 June 2012 (31 December 2011: $137 million), increasing to $177 million at today's date, including the acquisition of the property at Sholokhovo and the re-gear of leases at Krekshino in July.

Our period end cash balance was $187 million (31 December 2011: $182 million) with net debt of $497 million (31 December 2011: $380 million). At today's date, following completion of acquisitions, our cash balance is $150 million and net debt is $563 million.

Following the issue of new preference shares in the period, to part finance the acquisition of the Pushkino asset, we now have 194 million preference shares in issue (31 December 2011: 145 million), carried on our balance sheet at $313 million (31 December 2011: $218 million).

Operating cashflows increased again, $49.6 million for the first six months (30 June 2011: $28.9 million) as new lettings commenced and the costs of vacant space reduced.

We will continue our policy of progressive distributions to shareholders and instead of a dividend, intend to seek shareholder approval for a tender offer buy back, with terms set out below.

The market in which we operate continues to improve and we look forward to the future with confidence.

Results

In the six months to 30 June 2012 the company made a pre-tax profit of $29.6 million (30 June 2011: $86.4 million) including revaluation gains of $40.4 million (30 June 2011: $103.5 million). Underlying earnings before tax for the period were $14.3 million (30 June 2011: loss of $5.9 million).

This equates to basic earnings per share of 3.5 cents (30 June 2011: 14 cents) and diluted underlying earnings per share of 2.35 cents (30 June 2011: loss of 0.5 cents).

NOI for the period of $53.4 million (30 June 2011: $37.4 million) is after absorbing operating costs on vacant space of $4.5 million (30 June 2011: $8 million) and stock write downs on our UK residential holdings of $10.5 million (30 June 2011: $2 million). The level of vacancy on our investment portfolio has continued to reduce and today stands at 6% (31 December 2011: 17%).

Net finance costs, before Market to Market valuation of financial instruments and amortisation of costs for the period were $34.2 million (30 June 2011: 30.2 million) including the preference share charge of $14.5 million (30 June 2011: $14.6 million).

Net Asset Value

Adjusted, fully diluted NAV per share was 124 cents at 30 June 2012 (31 December 2011: 119 cents). Fully diluted NAV per share at today's sterling exchange rate is 78 pence (31 December 2011: 75 pence).

The increase in NAV, from $669 million at the year end to $685 million at 30 June 2012, follows the formal bi-annual valuation of our completed portfolio by JLL. Based on this valuation, our investment properties are carried at a gross value of $1,417 million which represents a fully let portfolio yield of 11.7 per cent (31 December 2011: 11.9%).

Financing

Total bank debt outstanding at 30 June 2012 was $693 million (31 December 2011: $570 million) at a weighted average cost to the Group of 7.2% (31 December 2011: 7.1%) and a weighted average term to maturity of 4.4 years (31 December 2011: 4.5 years). This includes the $129 million, 5 year investment facility secured on Pushkino and a further draw of $20 million in the period on the facility secured on our Shushari project. The Group's gearing ratio was 42% (31 December 2011: 38%).

Despite the continuing deterioration in the global banking environment, we have advanced negotiations on refinancing or rolling over near term maturities of facilities secured on our Krekshino and Constanta assets and expect these to be finalised prior to their maturity dates on favourable terms.

We have also received initial credit approval on a facility of $47.5 million secured on our Klimovsk phase 2 project and hope to finalise this in the final quarter of the year. Opportunities for construction finance are also available and we are considering these for our sites at Noginsk, Klimovsk phase 3 and Padikovo.

Hedging

The majority of the Group's senior debt portfolio is hedged against US Libor rate rises, with a mix of swap and cap instruments. $199 million (30 June 2011: $151 million) has been capped for an average of 3.8 years (30 June 2011: 4.5 years) with an average strike rate of 2.5% (30 June 2011: 3.1%). $458 million (30 June 2011: $255 million) has been swapped for an average of 3.3 years (30 June 2011: 3 years) at an average fixed rate of 2.0% (30 June 2011: 2.7%).

Since 30 June 2012, we have also hedged against the effect on our preference share coupon of Sterling strengthening against the Dollar, capping the US Dollar/Sterling exchange rate at 1.60 for 3 years to December 2015.

Tender Offer

Since the share price remains at a significant discount to our adjusted, fully diluted NAV per share we will return cash to shareholders by way of a tender offer. Accordingly we intend to implement a tender offer buy-back of 1 in 46 ordinary shares at 70 pence, a premium of 10 per cent to the existing price, and representing the equivalent of a dividend of 1.5 pence per share. The tender offer will be subject to shareholder approval and a circular setting out full details will be posted shortly. It is expected that the tender offer will complete in October.

Our business is maturing (we joined the FTSE 250 recently) we are profitable, cashflow positive and making sensible distributions to shareholders.

Richard Jewson

Chairman

27 August 2012

Chief Executive's Statement

The market in which we operate continues to improve. The Russian economy is growing and our tenants are doing well. There is a structural undersupply of logistics warehousing and combined with fragmented competition and limited development finance, this means that the supply/demand dynamics are in the landlord's favour.

We have seen continued lettings across the portfolio and rising rents.

As I set out at the year end, the core income producing portfolio is performing well, we have virtually no vacant space in Moscow or Rostov and St Petersburg and Novosibirsk are steadily filling up.

Since the beginning of the year, we have leased a further 100,000 sqm of space. Valuations have improved slightly, mainly as a result of higher rents. We still await some yield compression.

Solid cash-flow progression is underpinning our increasing distributions to shareholders. Since flotation we have distributed $250 million to stakeholders: $156 million to ordinary shareholders by way of dividends and tender offers; $89 million of dividends to preference shareholders; and $5 million to warrant holders following a warrant offer.

At the year end I said that the key to our next phase of growth is investment and the use of our cash. During the year to date we have made great progress with this next phase.

In the first instance we have purchased Pushkino and Sholokhovo. These are Grade A warehouses in Moscow, are fully let to strong tenants and income producing. They yield 11.5% and 11.75% respectively. After deducting bank interest and preference dividends, issued to finance Pushkino, they contribute $11 million to profits on an annualised basis. This is earnings and cashflow enhancing and is exactly what we want to do. Deals like these are difficult to source but we will continue to seek similar earnings enhancing opportunities.

Following these acquisitions the Group's annualised NOI is $166.7 million, this will rise to $177 million when vacant space is let.

Due to the timing of completion we will show this newly acquired income for the first time in the second half of the current year with a full contribution in 2013.

Secondly we have purchased zoned land in the Moscow region.

Demand for Moscow warehouses is strong and supply constrained. This land, combined with additional phases at Klimovsk and Noginsk, gives us the potential to build a further 444,000 sqm in the Moscow region, a potential 54% increase to our Moscow portfolio.

This land underpins our organic growth plan for the next few years. Having worked so hard to create a strong income producing portfolio capable of meaningful distributions to shareholders we do not intend to have a large development exposure.

We are primarily a property investment company, not a developer.

We intend to build out our land in modest phases working closely with potential tenants and banks. As we have said before, adding 50,000 to 100,000 sqm per year of income producing property to the portfolio ensures strong growth for shareholders.

Although in Russia we have made good progress with bank refinancing the poor UK mortgage market continues to slow the UK residential market. To reflect our gloomy outlook on the UK market, we have written down our UK stock by $10.5 million. We remain hopeful of converting the carrying value into cash over the medium term.

In terms of shareholder distributions we are committed to tender offer buy-backs whilst this can be achieved at discounts to NAV. In the medium to long-term this will add value to shareholders. From correspondence received, some private shareholders seem to feel disadvantaged by this mechanism but this is not correct. A shareholder tendering shares will receive cash equivalent to the quantum of a dividend and, assuming the tender offer is fully taken up, will retain the same percentage shareholding. Even though the number of shares held reduces, the percentage holding of the shareholder remains the same and NAV per share will rise as shares are cancelled at a discount to NAV. I hope that clears up any confusion with this policy.

So moving forward we aim to actively manage the existing portfolio, keeping in close contact with our tenants, to conservatively develop out our land holdings and to continue to improve financing terms.

We were very pleased to fund part of the Pushkino acquisition cost by way of a further issue of preference shares. It was gratifying to add new, blue chip, institutional shareholders to our register alongside the continued support from existing ones.

Whilst we continue to discuss attractive financing terms with banks we are also exploring funding the business with new long-term instruments attractive to institutional investors.

The plan is more of the same, a conservative business strategy in a very exciting market.

Glyn Hirsch

Chief Executive Officer

27 August 2012

Corporate Governance

Principal risks and uncertainties

Internal controls and an effective risk management regime are integral to the Group's continued operation. The Group considers its principal risks to be:

Strategic risks

Our ability to anticipate, manage and take advantage of changes in the economic environment.

Real estate and development risks

Potential loss of income and increased vacancy due to customer default, falling demand or over supply.

Financial risks

A material fall in the Group's property asset values or rental income could lead to a breach of financial covenants within its credit facilities, which in turn could lead to credit facilities being cancelled.

Deterioration in the Group's credit profile, a decline in debt market conditions or general rise in interest rates could impact the cost and availability of borrowings.

Foreign exchange rate changes could reduce the US Dollar value of assets and earnings.

There have been no significant changes to these risks in the period. The risk management processes adopted by the Group, together with a detailed analysis of these risks are described in the Annual Report of the Group for the year ended 31 December 2011.

Going concern

The financial position of the Group, its cash flows, liquidity and borrowings are described in the Chairman's and Chief Executive's Statements and the accompanying financial statements and related notes. During the period the Group had and continues to hold substantial cash and short term deposits. These were supplemented by the increasing and profitable rental streams and, as a consequence, the Directors believe the Group is well placed to manage its business risks.

After making enquiries and examining major areas that could give rise to significant financial exposure, the Board has a reasonable expectation that the Company and the Group have adequate resources to continue its operations for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in the preparation of the accompanying interim financial statements.

Directors' Responsibility Statement

The Board confirms to the best of its knowledge:

The condensed financial statements have been prepared in accordance with IAS 34 as adopted by the European Union, and that the half year report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.

The names and functions of the Directors of Raven Russia Limited are disclosed in the Annual Report of the Group for the year ended 31 December 2011.

This responsibility statement was approved by the Board of Directors on the 27 August 2012 and is signed on its behalf by

Mark Sinclair Colin Smith

Chief Financial Officer Chief Operating Officer

INDEPENDENT REVIEW REPORT TO RAVEN RUSSIA LIMITED

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 which comprises the Condensed Unaudited Group Income Statement, the Condensed Unaudited Group Statement of Comprehensive Income, the Condensed Unaudited Group Balance Sheet, the Condensed Unaudited Group Statement of Changes in Equity, the Condensed Unaudited Group Cash Flow Statement and the related notes 1 to 16. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Ernst & Young LLP

London

27 August 2012

The accompanying notes are an integral part of this statement.