LSR Group (“LSR” or the “Group”), one of the leading real estate developers and building materials producers in St Petersburg and the Leningrad region (LSE: LSRG, MICEX, RTS: LSRG), today announces that its subsidiary ZAO Mosstroirekonstruktsiya has entered into a contract to acquire two companies — OOO Triada Agency and OOO Centaur Management owning plots of land totalling 1.8 hectares at Leningradskoye Shosse in Moscow. According to the terms of the deal, the value of the transaction is not disclosed. The deal was approved by LSR’s Board of Directors.

Mosstroirekonstruktsiya propose to use the site acquired for building a multi-purpose business centre with a total area of 115,000 sq. m including 50,000 sq. m of offices and apartments and 14,000 sq. m of retail outlets. A parking lot for 1,200 slots is also to be constructed. The total estimated amount of investments is over US$ 280 million. The construction is planned to start in 2010.

The future business centre is conveniently located only 500 m from the Water Stadium metro station, 12 km from central Moscow and 15 km from Sheremetievo International Airport. The flyover currently under construction at Pulkovskaya Street will provide uninterrupted access to Leningradskoye Shosse (Leningrad Highway) in any direction. In addition, the Khimki Water Reservoir is situated in front of the proposed business complex providing the apartments in the upper portion of the complex with a picturesque view of the reservoir.

Commenting on the acquisitions Ivan Romanov, CEO of ZAO Mosstroirekonstruktsiya, said:

“Commercial property in the northern part of Moscow has high potential. Rapid development of retail and office space towards Leningradskoye Shosse ranks third after Moscow downtown and areas within 3rd Transportation Ring. A highly developed infrastructure and increasing transport accessibility make the area extremely promising for developing business complexes.”

As of April 1, 2008 the market value of these plots in Moscow is US$ 105 million, according to DTZ independent appraisers. On that basis, the real estate development portfolio of LSR Group (including the acquisition of a plot of land in Yekaterinburg) has grown by at least 260,000 sq. m, increasing its value by US$ 127.1 million. DTZ previously valued the developments portfolio of 8.24 million sq. m at US$5.7 billion on 31st December 2007.

The feasibility of the business complex project is also confirmed by the results of expert research. According to research by Jones Lang LaSalle and S.A. Ricci/King Sturge into the demand for office and retail space near the Water Stadium metro station, the level of rental fees in the area at the end of 2007 were US$ 600-700 per sq.m/year for offices and US$ 1,000-1,200 per sq.m/year for retail space (EX VAT and maintenance fees).

Notes to Editors:

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 US$ 463 million and US$ 777 million respectively. In 2007, the revenues amounted to US$ 1,403 million.

In November 2007, OJSC LSR Group implemented an IPO, and now its GDRs are listed on the London Stock Exchange, and the shares — on MICEX and RTS.

LSR Group has a B1 rating; outlook — stable assigned by Moody’s Investors Service.

In 2007, LSR Group was bestowed a National Award in the field of business as ‘The Company of the Year’ in the ‘Construction’ category.

ZAO Mosstroirekonstruktsiya is an investment and construction company founded in 2001. Today Mosstroirekonstruktsiya is a leading Moscow market player in the business and premium class segments of real estate. In 2007, the company completed its first project, the Dom na Davydkovskoy business class residential development. Currently the company is implementing a unique project, the Grunvald elite residential project, to be completed at the end of this year. In addition, the New Balchug multi-purpose business complex is underway at Sadovnicheskaya Street just 500 m from the Kremlin.