Moscow, Russia - October 10, 2007 - Sistema-Hals (LSE, MICEX: HALS), one of the largest diversified real-estate companies in Russia and the CIS, has today announced the total acquisition of two companies: Khamovniki Experimental Factory of Drinks and Prestige.

As a result of the transaction Sistema-Hals has acquired control of land with a total area of over 2.2 hectares at 23/7 and 23/5 Lev Tolstoy Street, Moscow, formerly the site of the Khamovniki Experimental Factory of Drinks. The plot is currently occupied by about 20 administration buildings now in disrepair.

Sistema-Hals is planning to build an office-residential complex with a total area of approximately 70,000 square metres on the site, including elite residences (180 apartments), three detached mansions, office accommodation, underground and ground-level car parking and infrastructure.

"This transaction is being carried out as part of our long-term strategy to diversify our business and reinforce our presence in highly profitable segments of the market," said Sistema-Hals Vice President Yevgeny Kolodkin.

"Elite residential property is one of the fastest growing and most promising sectors in the real estate market. The site on Lev Tolstoy Street is ideal for building elite residential property - it is located in a prestigious district next to Zubovski Boulevard and the ‘golden triangle,' but at the same time it is set well back from the road."