Russian golf industry overview 2011

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Russian golf industry overview 2011
Russian golf
industry overview
              2011
Russian golf industry overview 2011
Contents
Introduction.................................................................. 1

Russia’s golf industry: Key trend..................................... 2

     Supply..................................................................... 2

          Current supply.................................................... 2

          Building the concept........................................... 4

          Demand............................................................. 5

          Golf club returns................................................. 6

          Findings............................................................. 7

Statistical information (2010)........................................ 8

     Supply of golf services.............................................. 8

     Returns................................................................... 9

Overview of existing and projected golf clubs................10

Golf club location maps................................................15

Services of Ernst & Young in the golf industry...............17

Contacts.....................................................................17
Russian golf industry overview 2011
Introduction
This is an overview of the findings of our first survey to explore key trends
in Russia’s golf industry and its prospects for growth.
Our analysis identified that new golf courses are built in Russia each year.
The operating performance of Russian golf clubs is moving back towards levels
existing prior to the recent economic crisis .
We thank the management of the golf clubs Tseleevo, Don, Dunes, Moscow Golf
Club in Krylatskoye and Stary Oskol for their cooperation in providing information
for this overview.
We hope that this summary will be of interest and use to you. Should you wish
to participate in a future survey, or have suggestions for improvement or other
information you would like to see included, we invite you to contact Anastasia
Stepanenko or Olga Fazullina at +7 (495) 755.9700 by telephone or
E-mail: Anastasia.Stepanenko@ru.ey.com; Olga.Fazullina@ru.ey.com.

Olga Arkhangelskaya                          Anastasia Stepanenko
Partner, Head of the Real                    Manager, Hospitality and
Estate Group in the CIS                      Leisure Advisory Services

Russian golf industry overview 2011                                                  1
Russian golf industry overview 2011
Russia’s golf industry:
Key trends
Golf has not yet become a common leisure and sporting                    In recent years, the domestic golf industry has seen
activity in Russia and the domestic golf industry is still at its        a positive trend, receiving a stronger backing from the
early stages. Due to hefty membership fees and additional                Russian Ministry of Sports, Tourism and Youth Policy, which
spending on golf equipment and gear, golf remains an                     has worked closely with the Russian Ministry of Education
expensive, elite sport. Consequently, most golf clubs are                and Science to promote children’s and youth golf in Russia.
located in the vicinity of Moscow where the most solvent
                                                                         Golf business is greatly dependent on the overall economic
demand exists, represented by individuals and companies
                                                                         growth of the host region and country. The global liquidity
with sufficient disposable time and income to enjoy this
                                                                         crunch caused a slowdown in business activity resulting in
leisure sport.
                                                                         a decrease in corporate events held on the premises of golf
The availability of quality golf services remains                        resorts. At the same time, the golf industry is less
underdeveloped in Russia, the demand exceeding the supply.               susceptible to market fluctuations regarding capital intensity
As a result, a significant portion of Russian golfers prefer             and ultimate returns.
major international golf resorts in Spain, Portugal, Finland,
Poland, China and Korea.

    A world-class golf industry means eight to ten courses available within reach.

Supply
Current supply                                                           Where a golf club is part of a major residential development
                                                                         (estate), it is often perceived as an image component
                                                                         contributing to the overall prestige of the estate and the
Based on the most recent information, a total of 18 golf
                                                                         value of residential properties within it, while not being the
clubs totaling 216 holes operate in eight of Russia’s 83
                                                                         highest-return component.
regions.
                                                                         As opposed to private clubs, in semi-private clubs one-off
According to public sources and interviews with developers,
                                                                         guests are allowed to play for a ‘green fee’1. Members are
another 30 clubs (483 holes) are currently on the agenda for
                                                                         entitled to play an unlimited number of games on the course
development. Most of them are elite clubs with champion
                                                                         and have priority over non-member guests. Any new
golf courses of 18 holes. Major projects are described in the
                                                                         member wishing to join a private club must be proposed by
table beginning on page 12.
                                                                         existing members.
Generally, golf clubs are segmented according to the degree
                                                                         The fundamental difference between public clubs and
of access (open/ limited ) and available infrastructure (see
                                                                         private/semi-private elite clubs is their public accessibility as
graphical outline on page 3).
                                                                         public facilities use no membership schemes.

                                                                              he amount of money a club charges a one-off visitor
                                                                             T
                                                                         1

                                                                             to play the golf course.

2                                              Russian golf industry overview 2011
Russian golf industry overview 2011
Growth of the golf industry is driven by:                            Constraints to growth:
• High returns on diversified assets                                 • A land plot of an adequate size is difficult to find
• Growing popularity of golf as a sport                              • Comprehensive golf facilities require considerable
                                                                       investment
• Growing demand for golf clubs as a venue
  for corporate events                                               • There are regulatory limitations on construction
                                                                       and use of water resources

Key parameters of golf clubs

                                                           Golf clubs

                          Access                                                          Infrastructure

                                                                                                                    Golf resort and
                                                                                  Golf         Golf club within
     Private            Semi-private      Public               Golf club                                              residencial
                                                                                 resort       residential estate         estate

Source: Ernst & Young

    All private clubs have complex selection                         • Priority registration for club tournaments
    procedures. Sometimes, the application has                       • Access to a variety of events held for members by
    to be reviewed by the general council and                          the club and its partners
    approved by the chairman before one can                          • Priority use of the club’s premises and infrastructure
    become a member. Member benefits may                               for private (corporate) events or tournaments free
                                                                       of rent
    vary from club to club.
                                                                     • The ability to store golf equipment on the club’s
    Key benefits may include                                           premises
    the following:                                                   • Free parking on the club’s premises
    • Free use of the golf course                                    • Access to the club’s premises and services for the
                                                                       member’s guests (no advance registration is required
    • Free use of the practice course and an unlimited
                                                                       for three or fewer guests)
      number of balls
                                                                     • Special prices for the member’s guests.
    • The ability to pre-book game start times

                                           Russian golf industry overview 2011                                                        3
Russian golf industry overview 2011
Building the concept
The following factors contribute to a successful golf club:             A golf resort would normally offer quality conference facilities
                                                                        to clients who desire to hold their corporate events and
• Sufficient area (at least 30 hectares)
                                                                        business negotiations in a relaxed atmosphere.
• Diverse landscape
                                                                        Spa centers of various sizes can also be a good addition to
• A course of 18 holes suitable for international                       a golf club. Importantly, experts believe that spa centers are
  championships                                                         more attractive to investors when they operate within a hotel,
                                                                        and their rate of return can be 15% higher compared with
• Convenient transport access:
                                                                        a stand-alone scenario. A spa facility may contribute 10-12%
    —— location in proximity to a big city will secure corporate        or more to overall income.
       demand;
                                                                        Based on domestic and international practices, combining the
    —— close to main thoroughfares;                                     golf club with a hospitality component is also a good idea. In
    —— convenient access to airports and railway stations;              such a scenario, a significant portion of demand will be for
    —— relatively close to other golf courses (within one-hour          hotel rooms and suites with kitchenettes. Long-stay hotels,
       drive or less);                                                  aparthotels and serviced apartments can also be feasible
                                                                        within a golf resort. Most golf clubs (77%) are independently
• Additional services (conference rooms, restaurants/bars,
                                                                        managed by their owners and form a separate operating unit,
  equestrian facility, spa, hotel, etc).
                                                                        while the remaining components of the resort are managed
                                                                        by international hotel operators.

Key components of a golf resort

                              Apartments/                     Golf course
                                                                                               Specialty
     Casino                    detached                                                                                   Trout farm
                                                                                                 store
                                houses

                                                               Golf resort
     Tennis                       Hotel                      infrastructure                   Restaurant                   Helipad
     courts

    Miniature                                                                                   Fitness
                               Aparthotel                      SPA center                                                    Stalls
      golf                                                                                      center

Source: Ernst & Young

4                                             Russian golf industry overview 2011
Russian golf industry overview 2011
Demand
Golf is becoming more popular each year. However, entrance                            Key criteria for golfers choosing a golf club are t he quality
and membership fees are high and many golfers would                                   of the course and services, additional offerings and
rather pay a one-off green fee instead of joining the club.                           infrastructure, convenient location and transport access.
According to the Russian Golf Association, there are roughly
                                                                                      Local demand for golf services is of a variable, seasonal
2,000 registered golfers in Russia. Another 5,000 guests
                                                                                      nature. With the climatic diversity of Russia’s regions, the
play golf three times a year or more on a green-fee basis.
                                                                                      average playing season is 180-190 days (180 days in
The business elite accounts for the major part of the clients                         Moscow and the Moscow Region).
of international golf clubs. A similar trend is seen in Russia.

       The following are the major annual golf                                        • Ronald McDonald House
       tournaments in Russia:                                                         • Deloviye Ludy Cup
                                                                                      • Women’s Golf Championship
       • Russia’s Open Professional Championship (part of the
         Professional Golf Association Tournament)                                    • Golf Style Cup
       • President’s Cup                                                              • Golf Digest Cup

Structure of demand for golf resort services2

                                                                          Clients

                                                                                                                                        Demand
         Business demand                             Golf demand                           Leisure demand                              for events

                                                    Roughly 35%
            Roughly 10%                             (15% actually                            Roughly 30%                             Roughly 25%
                                                      play golf)

Source: Ernst & Young

    Business demand is generated by visitors seeking a certain business environment in order to discuss business issues. Golf demand means demand for golf
2

    as a sport. Leisure demand primarily relates to demand for recreation and leisure on the club’s premises. Demand for events is represented by corporate
    or private clients holding conferences, meetings, trainings and functions on the club’s premises.

                                                          Russian golf industry overview 2011                                                                 5
Russian golf industry overview 2011
Golf club returns
In Russia, golf is associated with the prestige and high social         Additional services, such as stores selling golf equipment
standing of players, reflected in the size and structure of             and supplies, restaurants, bars, hotels, and detached
entrance and membership fees. Such fees are significantly               houses, can help increase the profit margin.
higher in Moscow and adjacent areas compared with other
                                                                        Comparing costs and expenses of stand-alone golf clubs and
regions.
                                                                        comprehensive resorts, the latter are much better positioned
Green fees paid for single rounds, tournament fees, annual              owing to the synergy of all components and amenities.
membership fees and fees for the use of practice areas form
                                                                        Before the 2008 financial crisis, golf resort projects were
the basis of a golf club’s revenue sources.
                                                                        funded by selling houses and apartments at the earliest
Longer payback periods are typical of the golf industry                 stage of construction. In the time of crisis and in the
compared with other types of commercial real estate,                    following years, it has become feasible, in the first place, to
resulting in lower rates of return on investment. The reasons           invest in the construction of the core component, normally
are the significant cost of the creation, maintenance, design           the golf club and relevant infrastructure. Moving forward
and architecture of golf courses and specialized and auxiliary          with an aggressive schedule to construct the main image
staff (up to 70 staff members; 40 staff members on                      component can enhance the sale of the residential
average).                                                               component. The image factor has contributed to the value
                                                                        of residential properties in the vicinity of a golf course both
                                                                        before and after the crisis.

Income and expense structure
                           Income                                         Expenses                                Profit margin

Golf club                  66% — golf                                     27% — golf                              30%
                           34% — other income                             73% — other expenses

Golf resort                77% — infrastructure utilization               78% — infrastructure utilization        75%
                           23% — golf                                     22% — golf

    A golf club can help increase the value
    of residential properties by an average of                            15-20%
Potential implementation
scheme of a golf resort                                   Before the crisis                                  After the crisis
project

                                                     Sale of off-plan residential                Construction of golf club and hotel
                                                             properties                                (min. infrastructure*)

                                                        Construction financed
                                                     from the sale of residential                    Sale of residential properties
                                                             properties

                                             * minimum sufficient infrastructure

                                             Source: Ernst & Young

6                                            Russian golf industry overview 2011
Findings
Driven by the growing popularity of golf as a sport, the potential steady return from a golf club helps promote
Russia’s golf industry. With potential buyers of country properties becoming more interested in this sport and
active rest, developers increasingly build golf courses in luxury housing communities.
In the meantime, there are also constraints to the growth of the golf industry in Russia such as difficulties
in finding a land plot of adequate size, the high capital intensity of golf projects, regulatory limitations on
construction and use of water resources, lack of experienced and qualified staff and red tape. Although these
issues are factors for golf facilities in all markets, in Russia they are particularly acute because of the early
stage of development of golf as a leisure sport. It can be a time and money consuming process to obtain all
resources and documents required for the construction of a golf resort.

                                            Russian golf industry overview 2011                                     7
Statistical information
(2010)
Supply of golf services in Russia
Breakdown of golf courses                                                      Breakdown of golf courses
by membership type                                                             by number of holes

                                                                                                                  18 holes
                                                                                                                  50%
                                                          Private
      Public                                              56%
       22%

                                                                                  9 holes                            3 holes
                                                                                       38%                           6%
     Semi-private
                                                                                                                6 holes
               22%                                                                                              6%

Golf courses in the Russian federal districts (FD)

               Central FD                                                13%                                              17%
      North-Western FD      1%                            8%
                Volga FD        2%          3%
        Far-Eastern FD               3%
           Southern FD      1%              4%
                Urals FD    1%
            Siberian FD
     North Caucasus FD
                            0                5                      10                 15    20            25                  30

                                 Existing                 Projected

8                                                Russian golf industry overview 2011
The number of golf courses in Russia
 Club number                                                                                                             Hole number
   35                                                                                                                             800

   30                                                                                                                             700

                                                                                                                                  600
   25
                                                                                                                                  500
   20
                                                                                                                                  400
   15
                                                                                                                                  300
   10
                                                                                                                                  200
      5                                                                                                                           100

      0                                                                                                                           0
          1987       1990                                        2000                                       2010           2015

            Clubs at the beginning of the year         New clubs               Total hole number on the market

Returns
Average green fee                                Average entrance fee                             Average membership
US$                                              US$                                              fee per annum
                                                                                                  US$

160                                              120,000                                          12,000     11,254
             134                                               104 936
140
                                                 100,000                                          10,000
120
                                                  80,000                                           8,000
100
 80                           64                  60,000                                           6,000
 60                                                                              38 034
                                                  40,000                                           4,000                 3,279
 40
                                                  20,000                                           2,000
 20
  0                                                     0                                               0
           Moscow        Other regions                         Moscow          Other regions                 Moscow   Other regions

                                                 Russian golf industry overview 2011                                                    9
Overview of existing
and projected golf clubs
Major golf clubs in Russia
Name               No. on    Nearest   Address               Number     Total area   Area of       Infrastructure               Since
                   the map   city                            of holes   (hectares)   golf course
                                                                                     (hectares)

Le Meridien                  Moscow    Moscow Region,      18           120          N/A           Hotel, detached houses,      1993
Moscow                 1               Krasnogorsk                                                 club house, restaurants,
Country Club                           District, Nakhabino                                         bars, conference room,
                                                                                                   business center,
                                                                                                   swimming pool, sauna,
                                                                                                   spa, equestrian facility,
                                                                                                   beach

Pestovo golf                 Moscow    Moscow Region,       18          200          76,53         Restaurant, club house,      2006
and yacht club         2               Mytishchy District,                                         yacht club, swimming
                                       Rumyantsevo,                                                pool, shopping area,
                                       Nikolskaya street,                                          fitness center, equestrian
                                       estate 1, building 1                                        facility

Tseleevo golf                Moscow    Moscow Region,        18         400          N/A           Detached houses,             2008
and polo club          3               Dmitrovskoye                                                club house, restaurant,
                                       Highway, 47th km                                            equestrian facility,
                                       of Moscow Ring                                              ski facility, helipad
                                       Road

Moscow Golf Club             Moscow    Moscow,               18         N/A          55            Swimming pool, bath,         2004
in Krylatskoye         4               Krylatskaya str., 2                                         sauna, fitness center,
                                                                                                   billiards, tennis courts,
                                                                                                   club house, massage
                                                                                                   room, tanning bed

Agalarov Golf &              Moscow    Moscow Region,        18         320          70            Hotel, restaurant, bar,      2010
Country Club           5               Istra District,                                             fishing, spa, club house,
                                       Obushkovo                                                   business center,
                                       Country District,                                           swimming pool, hamam,
                                       villages of                                                 sauna, gym, billiards,
                                       Voronino and                                                bowling alley, beach,
                                       Zakharovo,                                                  tennis courts, helipad,
                                       Novorizhskoye                                               mooring for boats,
                                       Highway, 24th km                                            guarded parking area,
                                       of Moscow Ring                                              shopping area
                                       Road

Pirogovo                     Moscow    Moscow Region,        9          100          N/A           Ownership residences,     2007
                       6               Ostashkovskoye                                              restaurant, club house,
                                       Highway,                                                    beach, hockey pitch, mini
                                       Klyazminskoye                                               soccer pitch, tennis
                                       Reservoir                                                   courts, mini farm, yacht
                                                                                                   club, mooring for motor
                                                                                                   boats and yachts, sailing
                                                                                                   school, boat house for
                                                                                                   winter storage with an
                                                                                                   adjacent dock and slipway
                                                                                                   for launching boats

Tiger                        Moscow    Moscow,               5          N/A          2.5           Guarded parking area,        2008
                       7               Proektiruemy lane                                           car wash, office and
                                       5217, 2                                                     warehouse facilities,
                                                                                                   cafés

10                                     Russian golf industry overview 2011
Name          No. on    Nearest       Address              Number      Total area   Area of       Infrastructure                Since
              the map   city                               of holes    (hectares)   golf course
                                                                                    (hectares)

Moscow City             Moscow        Moscow,              9           N/A          22            Restaurant, bar,              1987
Golf Club         8                   Dovzhenko str., 1                                           conference facility,
                                                                                                  fitness center, beauty
                                                                                                  salon, ice stock rink

Golf club               Moscow        Moscow,              9           N/A          27,4          Golf academy, children’s  2010
in Kurkino        9                   Kurkino,                                                    sports school, fitness
(Devyatka)                            Yurovskaya str.,                                            center, shopping area,
                                      41                                                          golf school, club house,
                                                                                                  swimming pool, sauna,
                                                                                                  restaurant, bar,
                                                                                                  conference room, parking
                                                                                                  area. A hotel and
                                                                                                  apartments are projected.

Dunes                   St.           St. Petersburg,      18          N/A          18            Hotel, detached houses,       1997
                 10     Petersburg    Primorskoye                                                 club house, restaurants,
                                      Highway, 38th km                                            bars, health resort,
                                                                                                  equestrian facility, beach,
                                                                                                  rink, tennis courts,
                                                                                                  volleyball court,
                                                                                                  badminton, skateboards,
                                                                                                  bikes, inline skates,
                                                                                                  crossbow and airgun
                                                                                                  shooting, beauty salon,
                                                                                                  gym, swimming pool,
                                                                                                  sauna, bath

Don                     Rostov-       Rostov-on-Don,    18             500          110           Restaurant, club house,       2008
                 11     on-Don        Starocherkasskaya                                           shopping area

Imenie                  Togliatti     Togliatti,           6           N/A          N/A           Club house, conference       2008
                 12                   Komzin str., 6 (v)                                          facility, sauna, restaurant,
                                                                                                  bar, shopping area

Stary Oskol             Stary Oskol   Stary Oskol,         9           N/A          10            Hotel, parking area,          2005
                 13                   Molodiozhny                                                 miniature golf course,
                                      prospect, 6                                                 fitness center, swimming
                                                                                                  pool, club house,
                                                                                                  restaurant

Kazan                   Kazan         Kazan, 30km          9           420          54            Detached houses, club         2006
                 14                                                                               house, restaurant, tennis
                                                                                                  courts, gym, spa, sauna

Pine Creek              Ekaterinburg Sverdlovsk Region, 18             147.2        81.5          Golf academy, practice        2009
Golf Club        15                  Sysert District                                              field, club house, golf
                                                                                                  villas, private residences,
                                                                                                  guest houses

                                      Russian golf industry overview 2011                                                               11
Projected golf clubs
Name             No. on    Nearest   Address              Number      Total area   Area of       Infrastructure              Since
                 the map   city                           of holes    (hectares)   golf course
                                                                                   (hectares)

Links National             Moscow    Moscow Region,    18             500          N/A           Golf academy, practice      2011
(Teleshovo          1                Dmitrov District,                                           field, club house,
Links)                               60th km of                                                  residential community
                                     Moscow Ring Road

Forest Hills               Moscow    Moscow Region,    18             450          N/A           Golf academy, practice      2011
Resort and          2                Dmitrov District,                                           field, hotel, club house,
Golf Club                            45th km of                                                  golf villas, private
                                     Moscow Ring Road                                            residences, swimming
                                                                                                 pool, spa, tennis courts,
                                                                                                 equestrian facility

Sorochany                  Moscow    Sorochany,           9           N/A          N/A           Hotel, swimming pool,      2012
                    3                Dmitrovskoye                                                spa, sauna, gym, tennis
                                     Highway                                                     courts, biking and jogging
                                                                                                 paths, volleyball court,
                                                                                                 swimming pool, sauna

Nick Faldo                 Moscow    Leningradskoye       27          244          244           Tennis courts,              N/A
International       4                Highway, estate                                             restaurants, bars, fitness
                                     170-288                                                     center, indoor golf center,
                                                                                                 volleyball court, fitness
                                                                                                 club, beauty salons,
                                                                                                 swimming pool, sauna

Top Golf                   Moscow    Troparevskaya str.   9           38.85        N/A           Hotel, business center,     N/A
                    5                                                                            cafés, bars, restaurants,
                                                                                                 conference room, Internet
                                                                                                 café, slot machine parlors,
                                                                                                 parking area, fitness
                                                                                                 center, bowling alley,
                                                                                                 billiards, swimming pool,
                                                                                                 tennis courts, jogging and
                                                                                                 strolling paths, skiing
                                                                                                 runs, club house

Putilkovo                  Moscow    Putilkovo District   N/A         300          N/A           N/A                         N/A
                    6

Skolkovo                   Moscow    Skolkovo             N/A         26           N/A           Business school Skolkovo, N/A
                    7                                                                            Innograd

Nizhniye                   Moscow    Nizhniye Mnevniki 18             35           35            Detached houses, club       N/A
Mnevniki            8                str., Teplichny farm                                        house

Golf City                  Moscow    Moscow Region,       27          968          272           Hotel, business center,     2015
                    9                Kievskoye                                                   restaurants, bars,
                                     Highway, 80th km                                            swimming pool, fitness
                                                                                                 center, spa, tennis courts,
                                                                                                 movies, childcare facility,
                                                                                                 school, curling,
                                                                                                 snowmobiles

Akatovo                    Moscow    Novorizhskoye        18          9 250        53            Hotel, guest houses,         N/A
(Blagodatnaya      10                Highway, 100th                                              fitness centers with gyms,
Ruza)                                km                                                          swimming pools and spa
                                                                                                 facilities, equestrian
                                                                                                 facility, pistol club, yacht
                                                                                                 club, football ground,
                                                                                                 tennis courts, paintball,
                                                                                                 volleyball and basketball
                                                                                                 facilities, restaurants,
                                                                                                 cafés, supermarkets,
                                                                                                 school, childcare facility,
                                                                                                 farm, parking areas

12                                   Russian golf industry overview 2011
Name             No. on    Nearest       Address              Number      Total area   Area of       Infrastructure                Since
                 the map   city                               of holes    (hectares)   golf course
                                                                                       (hectares)

Bunino                     Moscow        Novorizhskoye        36          27 750       157           Hotel, guest houses,          N/A
(Blagodatnaya      11                    Highway,                                                    fitness center with a gym,
Ruza)                                    100th km                                                    swimming pool and spa,
                                                                                                     equestrian facility, pistol
                                                                                                     club, yacht club with a
                                                                                                     boat house and station,
                                                                                                     tennis courts,
                                                                                                     restaurants, cafés,
                                                                                                     supermarkets, parking
                                                                                                     facilities

Dunes,                     St.           Primorskoye          27          130          200           Detached houses,              2014
extension          12      Petersburg    Highway, 38th km                                            swimming pool

Tsarskoselsky              St.           Pushkin,             18          274          80            Hotel, detached houses,       2014
(Babolovsky        13      Petersburg    Catherine’s Palace                                          club house
Park)

Peterhof Lakes             St.           Peter’s Palace       18          86           76            Hotel, golf academy,          2015
Course             14      Petersburg    District                                                    practice field, club house

Gatchina                   St.           Gatchina             N/A         560          160           N/A                           N/A
                   15      Petersburg

Bolshoye                   Moscow/       Tver Region,        27           1313         50            Radisson Hotel, detached      2012
Zavidovo           16      Tver          Konakovo District,                                          houses, residential
                                         Novozavidovo                                                community, yacht club,
                                         rural area, village                                         beach, equestrian facility,
                                         of Shosha, 117th                                            tennis court
                                         km of Moscow Ring
                                         Road

(Name pending)             Kaliningrad   Gagarin str.         18          569          N/A           Detached houses               2015
                   17

Chkalovsky                 Kaliningrad   Ring road district   N/A         N/A          24            Hotel, restaurant, spa        N/A
                   18

Bagrationovsky             Kaliningrad   Ladushkin            18          160          160           N/A                           N/A
                   19

Amber Valley               Svetlogorsk   Svetlogorsk          18          250          N/A           Hotel, detached houses,       N/A
                   20                                                                                club house, equestrian
                                                                                                     facility

Vinogradnaya               Anapa         Anapa, Vityazevo     18          1600         200           Detached houses, spa,         2014
Dolina             21                                                                                grape valley, sports and
                                                                                                     fitness center,
                                                                                                     restaurants, shopping
                                                                                                     area

Rayevsky                   Anapa         Novorossiysk,        18          N/A          178           Hotel, detached houses,       2010
                   22                    Rayevskaya, Lenin                                           club house, winery,
                                         str., 27                                                    tasting room, shopping
                                                                                                     center

                                         Russian golf industry overview 2011                                                               13
Name             No. on    Nearest       Address              Number      Total area   Area of       Infrastructure                Since
                 the map   city                               of holes    (hectares)   golf course
                                                                                       (hectares)

Black See                  Gelendzhik    Krasnodar Region, 9              148.5        135           Ownership residences,         2011
Mountain           23                    Gelendzhik                                                  yacht parking lot, hotel,
Golf Resort                              District, village of                                        business center,
                                         Mikhailovsky                                                conference room,
                                         Pereval                                                     equestrian facility,
                                                                                                     restaurants, bars,
                                                                                                     swimming pool, bridge
                                                                                                     club, library, spa, fitness
                                                                                                     club, tennis courts, bike
                                                                                                     tracks, billiards, beach

Chudo-Dolina               Goryachy      Goryachy Klyuch,     18          200          200           Hotel, detached houses,       N/A
                   24      Klyuch        village of                                                  equestrian facility,
                                         Bezymyanny                                                  hunting lodges, sport
                                                                                                     shooting

Samarsky                   Samara        Samara Region,       90          735          445           Hotel, detached houses,       2011
                   25                    village of Syreyka                                          club house, polo, fishing,
                                                                                                     restaurant, tennis courts,
                                                                                                     bank, dental services,
                                                                                                     business center

Saratov                    Saratov       Saratov              18          N/A          N/A           Hotel, restaurant, parking N/A
                   26                                                                                areas for motor boats,
                                                                                                     snowmobiles and PWCs

(Name pending)             Vladivostok   Russky Island        N/A         10,298       N/A           Island Sky winter sport    2013
                   27                                                                                park, beach, diving center

Ples                       Ples          Ples                 18          125          N/A           Hotel, detached houses,       N/A
                   28                                                                                tennis courts, swimming
                                                                                                     pool, health center,
                                                                                                     beauty salon, beach, club
                                                                                                     house, spa, helipad,
                                                                                                     fitness club, playground,
                                                                                                     volleyball courts, yacht
                                                                                                     dock, parking area,
                                                                                                     shopping area

Uglich                     Uglich        On the bank of the   27          143          143           Hotel, detached houses,       N/A
                   29                    Volga, between                                              equestrian facility,
                                         the villages of                                             restaurant, yacht club,
                                         Derevenky and                                               tennis courts
                                         Cherkasovo

Golf Kazan,                Kazan         30 km away from      18          N/A          420           Hotel, detached houses,       N/A
extension          30                    Kazan, Highway                                              club house, restaurants,
                                         М7, village of                                              tennis courts, gym, spa,
                                         Savinovo                                                    swimming pool, sauna,
                                                                                                     mooring for yachts, ski
                                                                                                     facility

Source: media

14                                       Russian golf industry overview 2011
Golf club
location maps
Golf clubs in the vicinity of Moscow

                                                           1
                                                                       3
                                                       2           3

                                                                       2

                                                               4           6
                                                           9
                                                       1       6
                               10 11             5            4
                                                           7 8
                                                                  7
                                                             5 8
                                                                7

                                       9

                  7     Existing golf clubs

                 10     Projected golf clubs

Source: golf clubs and media

                                               Russian golf industry overview 2011   15
Golf clubs in the vicinity of St. Petersburg

                            10
                            12

                            14

                                               13

                                                                        10     Existing golf clubs

                                     15
                                                                        12     Projected golf clubs

Source: golf clubs and media

Golf clubs in other regions of Russia

           19 20
            18 17
                               29
                       16       28
                  13                 14
     21                              30
                 11            12
      22               26
          23                    25             15
            24

                                                                                                      27

     11    Existing golf clubs            16   Projected golf clubs

Source: golf clubs and media

16                                                  Russian golf industry overview 2011
Services of Ernst & Young
in the golf industry
• Planning clubs and recreation facilities: feasibility studies for golf, hospitality, spa and other amenity components
• Investments: forecasting operating performance including residential and commercial development
• Fundraising: valuation and advisory
• Legal and tax advisory

Contacts
            Olga Arkhangelskaya                                                          Anastasia Stepanenko
            Partner, Head of the                                                         Manager
            Real Estate Group in the CIS                                                 Tel: +7 (495) 662 9381
            Tel: +7 (495) 755 9854                                                       Anastasia.Stepanenko@ru.ey.com
            Olga.Arkhangelskaya@ru.ey.com

            Angelika Normann
            Senior manager
            Tel: +7 (495) 648 9667
            Angelika.Normann@ru.ey.com

                                            Russian golf industry overview 2011                                           17
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