(LONDON, 28 July 2008) - PIK Group (LSE: PIK), one of Russia’s leading residential real estate developers, today announces the launch of its first regional housing production plant in the city of Obninsk (Kaluga Region).

In line with the established strategy PIK plans to implement a new precast technology in Russia’s regions in order to provide sustainable execution capacity. Currently, PIK is in the process of introducing four precast facilities throughout Russia, of which the first is being launched in Obninsk with annual capacity of 80,000 square metres of housing.

A further three plants are expected to be put into operation by summer 2009, in Sergeev Pasad (Moscow region), Nizhny Novgorod and Novocherkassk (Roston-on-don region). Additionally, PIK intends to start the modernisation of another facility in Perm city.

The usage of in-house production facilities will enable the Group to provide sufficient control over the development process and mitigate risks arising from subcontracting to third parties.

The technology allows the Group to apply industrial methods in construction with the following key advantages:

- Economies of scale on construction costs leading to pricing advantages compared to poured concrete technology (cost advantage is estimated at 25%);

- Rapid construction speed enabling the Group to build the superstructure of a 17 storey building within only 3 months;

- Ease of transportation: the standardised manufactured elements of the buildings may be transported within a 500 km radius from the production site;

- Compliance with an appropriate quality standard;

- Flexibility of space planning (variable ceiling heights, and apartment layouts)

- Space and cost efficiencies with the usage of underground facilities (e.g. underground parking lots);

PIK intends to implement and construct the first buildings of the above type in Obninsk city, where the Group owns 74 thousand square metres of net sellable space for completion by Q2 2010).

Total investment on the modernisation of the production facility in Obninsk amounted to approximately US$5.5MM.