June 1, 2007 – Dragon Ukrainian Properties & Development Plc (“DUPD” or the “Company”), today announces the placing of its ordinary shares by way of an Initial Public Offering (‘IPO’).  DUPD is a real estate investment company incorporated in the Isle of Man whose strategy is to invest in the development of new commercial properties as well as in the redevelopment of existing properties in Ukraine.

Highlights of the IPO are:

• 104,000,000 million ordinary shares have been placed with certain institutional investors at a price of $2.00  (the ‘Offer Price’) per ordinary share raising gross proceeds of $208 million (the ‘Placing’).

• Admission to trading on AIM is expected to become effective and unconditional dealings on AIM under the ticker symbol DUPD are expected to begin at 8:00 am on 1 June 2007

• The Company's strategy is to invest in the development of new commercial properties as well as in the redevelopment of existing properties in Ukraine, and expects to invest the net proceeds of the Placing within 24 to 30 months after Admission.

• Once the proceeds of the Placing have been fully invested, the Directors intend to work towards a target dividend yield of 7 to 10% per annum at the Placing Price and also currently intend that in due course the dividends paid by the Company will represent not less than 85% of annual net profits.

• Zimmerman Adams International has been appointed as the Company’s Nominated Adviser and Broker.

Commenting on the Placing and Admission

Aloysius van der Heijden, Chairman of DUPD said “We are delighted with the response from investors to DUPD, a fund focussing on investing in property in Ukraine. Through our management agreement with Dragon Capital Partners Ltd, the private equity division of Dragon Capital, we will receive advice from a manager with expertise across a wide spectrum of industry sectors in the Ukrainian investment market.“

Mr. Tomas Fiala, a Non Executive Director of DUPD and Director of the Investment Manager, Dragon Capital Partners Limited, said  “Our track record in the sector and ability to deliver a solid pipeline of projects allowed us to complete the placing within a very short timeframe, while securing several of the world’s largest investment banks and asset managers among our shareholders.   From now on, Dragon Capital is committed to pursue all of its real estate investments in Ukraine through DUPD.  It has also subscribed for $10 million worth of shares of the Company at admission.”

--- ends ---

For further information, please contact:

Dragon Ukrainian Properties & Development Plc
Tomas Fiala
+380 44 490 7120

Zimmerman Adams International
Ray Zimmerman/Jonathan Evans
+44 20 7060 1760

M:Communications
Edward Orlebar/Maria Souvorov
+4420 71531523/1527

About Dragon Ukrainian Properties & Development Plc

Dragon Ukrainian Properties & Development plc has been formed to invest in the development of new commercial properties and redevelopment of existing properties in Ukraine which offer the prospect of attractive returns to its Shareholders.

The Company will utilise the property investment and development expertise of Dragon Capital Partners Limited (“DCP”).  The Company expects to implement its strategy in partnership with one or more property development experts.  It may acquire properties from such partners and may make investments in or form joint ventures with them.

DCP has been appointed to provide advisory, investment management and monitoring services to the Company. DCP is an affiliate of Dragon Capital, a leading Ukrainian financial institution specialising in the provision of investment banking, securities trading, asset management and private equity services.

The senior management of DCP possess expertise in the Ukrainian investment and real estate markets. In addition, DCP has access to the additional resources of Dragon Development Limited, a Ukrainian company specialising in the provision of real estate development services with particular expertise in the retail sector.

The Company has entered into a Management Agreement with DCP for an initial five year term.

Once the proceeds of the Placing have been fully invested, the Directors intend to work towards a target dividend yield of 7 to 10% per annum at the Placing Price and also currently intend that in due course dividends paid by the Company will represent not less than 85% of annual net profits.

The Investment Manager

Dragon Capital Partners Ltd, an affiliate of Dragon Capital, has been appointed to provide advisory, investment management and monitoring services to the Company. DCP is an affiliate of Dragon Capital, a leading Ukrainian financial institution specialising in the provision of investment banking, securities trading, asset management and private equity services.

Investment Strategy of DUPD

The company aims to:

• invest in the Ukrainian commercial property market and, in particular, the development of new and re-development of existing properties in the retail, office and warehousing sectors, as the Directors believe this presents a solid investment opportunity mainly due to the following:

o in the short and medium term, demand for high-quality retail, office and warehouse space should continue to exceed supply as the country’s economy develops, which, coupled with limited availability of high quality property stock, is expected to exert strong upward pressure on rent levels; and
o over the foreseeable future, the Ukrainian real estate market is expected to experience growth in capital values as confirmed by expectations of further yield compression, mirroring the trend in other central and eastern European countries.

The Board of DUPD

Aloysius Wilhelmus Johannes van der Heijden – aged 58, Non Executive Chairman

Mr. van der Heijden has worked in the real estate industry for 29 years, a large part of which he spent as a General Director of Beheer Brouwershoff Amsterdam B.V., a private investment company of Drs. C. van Zadelhoff with a core business in capital investment, predominantly in real estate and also commercial real estate brokerage and advisory services. Currently, he is a director of Corvan Properties Limited, a non-executive partner of DTZ Zadelhoff (The Netherlands) and a Supervisory Board member of DTZ Zadelhoff Tie Leung Central & Eastern Europe and N.V. “Het Havengebouw”.

Fredrik Svinhufvud – aged 52, Non Executive Director

Fredrik Svinhufvud is currently managing director of Malka Oil AB, a Swedish oil company concentrating on oil and gas production in western Siberia in Russia. Previously he was managing director of Tetra Pak Ukraine for six years until February 2007. Fredrik started in Ukraine as Tetra Pak factory manager in 1995 and was then appointed managing director in 2001. Additionally, he has held several international positions within the oil field services industry, initially with Schlumberger Ltd in South America, Atlas Copco in North America and the Geco Well Services in the North Sea. Later he held positions within sales and marketing in the agriculture supply industry (Trelleborg AB). In March 2006 Fredrik was elected President of the European Business Association in Ukraine.

Tomas Fiala – aged 33, Non Executive Director

Mr. Fiala has been the principal shareholder and managing director of Dragon Capital Group, a Kyiv-based investment bank, since April 2000. Mr. Fiala established Dragon Capital as a brokerage and has since grown it into a leading Ukrainian investment house specialising in brokerage, investment banking, securities trading, asset management and private equity investments. Prior to establishing Dragon Capital, Mr. Fiala served as senior executive for five years at Wood & Company, a leading investment bank in the Central Eastern Europe region. Mr. Fiala is currently serving as chairman of the supervisory board of Karlivka Machine-building Plant, Ukraine’s leading agricultural equipment producer. He is also a member of the Supervisory Board of Nova Liniya, the largest DIY supermarket chain in Ukraine, Cantik Enterprises Limited, a Ukrainian retail real estate development company, Retail Group, one of the largest food retailers in Ukraine, Ukrinbank as well as KP Media, a leading Ukrainian media holding.

Ukrainian market opportunity

The Directors believe that the Ukrainian commercial property market and, in particular, the
development of new and re-development of existing properties in the retail, office and warehousing sectors, presents a solid investment opportunity mainly due to the following:

– high rental yields are available in the Ukrainian property market relative to other     European markets;

– in the short and medium term, demand for high-quality retail, office and warehouse space should continue to exceed supply as the country’s economy develops, which, coupled with  limited availability of high quality property stock, is expected to exert strong upward pressure on rent levels; and

– over the foreseeable future, the Ukrainian real estate market is likely to experience further yield compression, mirroring the trend in other central and eastern European countries.

Ukraine is the second-largest country in Europe with total land area of 603,700 km2. It has a strategic position in Eastern Europe, bordering the Black Sea in the south, Poland, Slovakia and Hungary in the west, Belarus in the north, Moldova and Romania in the south-west and Russia in the east.

Ukraine ranks among the thirty largest economies worldwide. In the Soviet era, Ukraine was the second most important republic in terms of its economic contribution, producing approximately 4 times the output of the next-ranking republic. Following the collapse of Soviet Union, the country progressed towards a market economy, albeit at a gradual pace. The country was also slow in the implementation of structural reforms.

From the early 2000’s the economy started to show strong export based growth of 5% to 10%, with industrial production growing more than 10% per year.

Investment – Foreign Direct Investment
FDI has grown strongly during the two years ending 31 December 2006, more than doubling from 2004. During 2006, net FDI reached $4.5 billion. The main driver of FDI growth is the continuing trend of increased government transparency and relaxation of entry barriers in various sectors as Ukraine is currently modifying its legislation to meet WTO requirements. Ukraine is seeking entry to the WTO and this is anticipated in 2007. Traditionally, the main interest of foreign investors has been directed to the banking sector following the purchases of several large banks that constituted one third of the whole FDI inflow in 2006. Moreover, a substantial increase in FDI was recorded in both the manufacturing and commercial services sectors of the economy. The Kyiv region attracts the largest proportion of foreign capital with 25%, or $1.125 billion of the aggregate FDI.

Overview of the Ukrainian Property market

Ukraine offers significant investment opportunities for foreign property investors mainly due to its large geographic scale, strategic location within Europe and scope for economic development from its current position. This, coupled with higher rental yields available in the Ukrainian real estate market, in comparison to most central and western European markets, has attracted a strong inflow of foreign investment into the sector.

Phase of Market Development

During the last five years, the Kyiv property market has gone through a number of positive changes such as expansion of the market size and the general improvement of product quality. However, despite the progress made within the last few years, Kyiv remains a relatively immature market characterised by strong demand across all the property classes and sluggish delivery of quality supply by developers.

Sources estimate that the office market will continue to grow with the volume of annual new supply increasing gradually in 2007-2008. However, given the presently large deficit and solid foundations for growth in demand, all the new stock is expected to be immediately absorbed by the market with market power resting fully with the landlords for at least a couple of years.

In the short-to-medium term, the prices in the commercial property market are expected to remain high due to strong demand and slow delivery of new properties to the market. Therefore, it is anticipated that the market will continue to provide current landlords and/or sellers with a strong opportunity to dictate prices. The development of additional quality western standard commercial property is expected no sooner than 2008-2009.

If the current pipeline of transactions announced during 2006 to 2007 were to materialise across all property classes Kyiv would still continue to lag behind its neighbouring capitals which, given the fact that the population of Kyiv (2.6 million) is significantly higher than Warsaw (1.7 million), Budapest (1.7 million) and Prague (1.2 million), clearly indicates the sectors’ significant growth prospects.

The availability of high rental yields in Ukraine, in comparison to other European countries where yields have been compressed due to the mature status of their property markets, is likely to continue attracting investors into the real estate sector. Currently, there is significant interest from foreign investors in purchasing income-generating property assets.

Following the example of central European countries, yields are expected to compress further and eventually, over the long term, approach the current yield levels of neighbouring countries in central and eastern Europe. The Directors believe that this will result in a gradual increase in property values, which, coupled with significant under-supply of quality real estate assets is providing a serious incentive to proactive real estate developers.