Moscow, Russia - 20 December 2007 -Sistema-Hals OJSC (LSE, MICEX, RTS: HALS), one of the largest diversified real estate companies in Russia and the CIS, has today announced the sale of a 50% stake in 13 Kostyansky CJSC to partner company MIRAX GROUP.

"In seeking to establish the most effective possible asset structure, Sistema-Hals continuously carries out complex monitoring and score analysis of its profile. Its current business model shows that it would be more cost effective to invest the funds received from the sale of the 13 Kostyansky project into other projects that the company is currently implementing," Sistema-Hals Vice President Igor Kashcheev says.

Senior Vice President of MIRAX GROUP, Alexander Yedinak says "MIRAX GROUP does not engage in typical projects and is only interested in original and innovative concepts such as 13 Kostyansky. We decided to acquire a stake in this project from our partners, Sistema-Hals, so that the concept could be realised in line with our vision. 

"The unique structure of this luxury residential project is strictly in keeping with the architectural style of Moscow's historic centre. This is an interesting and complex development and we believe that MIRAX GROUP has both the experience and strong brand reputation to successfully complete this project," says Mr Yedinak.

13 Kostyansky CJSC is a company working on the project located at 13 Kostyansky Lane, Moscow. Sistema-Hals and MIRAX GROUP previously held equal ownership interests in the company. The project will comprise the construction of a nine-storey club complex with a total area of around 30,000 sq. m, with 76 flats, office space, underground parking for 281 cars, a restaurant and a fitness club with swimming pool.

Note to editors

JSC Sistema-Hals is a leading diversified company in the Russian and CIS real estate market. The core businesses of Sistema-Hals are development, project management and construction, and facilities and property management.

Sistema-Hals was the first Russian property developer to list its shares on the main market of the London Stock Exchange. The company's shares are also listed on the Moscow Interbank Currency Exchange and the Moscow Stock Exchange. The company group FJSC Sistema holds a 71.1% stake and there is an 18% free float. Sistema-Hals is one of the largest companies by capitalisation operating in Central and Eastern Europe real estate markets.

Since starting its operations in 1994, Sistema-Hals has successfully completed more than 30 projects with a total area of about 300,000 square metres, including the headquarters of DaimlerChrysler, the Hals Tower office building, the headquarters of Trubnaya Metallurgical Company and a hotel for the MaMaison chain (Orco Property Group).

At present Sistema-Hals is constructing the Leningradsky Towers complex, which comprises two buildings, one of which will be the headquarters of Siemens in Moscow. It is also carrying out a complex redevelopment of the property portfolio of Moscow City Telephone Network, rebuilding the Hotel Peking and the flagship Children's World toy store near Lubyanka Square, and pursuing a series of other projects.

Sistema-Hals has assembled a balanced and diversified portfolio of assets in fast-growing sectors of the market. The company strategy is focused on building class A and B office space, mixed-use retail and office complexes, business-class homes, residential estates and land development.

Cushman & Wakefield valued Sistema-Hals' share of the properties and projects in its portfolio at USD 2,882 million as at 1 July 2007.

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