(LONDON, 4 August 2008) - PIK Group (LSE: PIK), one of Russia’s leading residential real estate developers, and Strabag, an Austrian construction company with a solid presence in Russia, today announce the launch of a joint venture, named «ILBAU».

ILBAU will serve as a general contractor and will provide significant execution capacity for PIK’s business class and high-end individual concrete residential development projects in Moscow prime locations. Such projects include:

• The redevelopment project of the Kuntsevo district in the western part of Moscow next to Rublevskoe highway (PIK share: approx. 170,000 square meters of net sellable space scheduled for completion by 2014)

• Business class residential project on «Marshal Zakharova» street (PIK share: approx 30,000 square meters of net sellable space scheduled for completion by 2012)

• Business class residential project on «Marina Roscha» street (PIK share: approx 32,000 square meters of net sellable space scheduled for completion by 2011)

On a selective basis, ILBAU will also be a general constructor for a number of individual

pour concrete buildings in the Moscow region. Such buildings are:

• The «Coliseum» individual poured concrete building (approx. 59,000 square meters of net sellable space) in the «Dolgoprudny Centralny» neighborhood development located in Moscow region;

• Number of individual poured concrete buildings in the «Novo-Kurkino» neighborhood development located in Moscow region.

PIK and Strabag has already been cooperating on a number of projects, such as for instance, the «English Town» business class residential project located within the third ring road in the central part of Moscow (PIK share: approx. 70,000 square meters of net sellable space scheduled for completion by the end of 2011) and also «Rublevskie Ogni» business class residential project (PIK share: approx. 32,000 square meters of net sellable space scheduled for completion by Q4 2011).

PIK Group and Strabag have equal equity stakes in ILBAU. The two companies plan to potentially extend the relationship to cover additional residential projects in the foreseeable future.