Moscow, Russia - 26 May 2008 - Sistema-Hals OJSC (LSE, MICEX, RTS: HALS), one of the leading diversified real estate companies in Russia and the CIS, announced today that it has entered into an agreement with Italian architectural firm, Giugiaro Architettura, to help develop interiors for serviced apartments on Milyutinsky Lane, Moscow.

Giugiaro Architettura belongs to the Italdesign group of companies, established by famous automobile designer Giorgio Giugiaro.

The property, situated at 5 Milyutinsky Lane, forms part of the Moscow City Telephone Network (MGTS) redevelopment programme. Built in 1903, and a total area of 11,241 sq. m, the building is an early 20th century architectural landmark. As part of the new development, the building will house 47 serviced apartments. Renovation work is scheduled to begin in 2008.

The Italian architect will be designing 15 types of interiors for the apartments and communal areas, based on three stylistic trends - classic modern, art-deco and Giugiaro style. Creating a concept for the interior design will involve selecting the finishings, light fixtures and various kinds of illumination, flooring, ceilings, furniture and textiles, as well as a variety of graphic symbols. The actual implementation of the design projects will be overseen by Giugiaro Architettura. Sistema-Hals plans to sell apartments with finishing.

"As we increase our presence in premium segments of the market, we are hiring high-class design studios with international experience in elite projects, which keenly appreciate the needs of potential buyers and which follow the latest trends in fashion and taste preferences," says Ivan Batalov, Vice President of Sistema-Hals.