Letter to shareholders – Update about the projects

Dear Shareholder,

With this short relation we want to give you an update about the projects.

The hotel in St.Petersburg (Russia) is running well and the year 2017 appears positive. During the last period it has been able to maintain a high reputation and occupancy. It alos appears that tourism is picking up in St. Petersburg.

The good news is related with interest from the market for the purchase of the Hotel in St Petersburg.

Of course we are aware about the last independent evaluation, which is published on our web site and gave an evaluation of our properties which is not in line with our expectation, but at the same time we are confident the real market value of the hotel is higher than the one estimated in the NAV and we will remain strong in our negotiations if these are realized to achieve the best possible price.

Under the operational point of view we are proud of our hotel and we invite you to look at the web site www.booking.com searching for Domina Prestige St Petersburg: we are sure you will appreciate either the photos of the hotel and the rating we are getting from the clients. Since we opened it, we are getting very good positive comments from the guests and this goodwill is fundamental for the evaluation of the hotel.

As for the hotel in Novosibirsk, it was finished and opened to the public at the beginning of the year 2016: it is really still a new hotel for the market.

Novosibirsk it is not a city like St Petersburg, and despite there is no international tourism, the city, capital of the huge Siberia, still needs new infrastructures like our hotel which iwill increase in value slowly.

Novosibirsk is still suffering from the international crisis, as it still depends on business activities. It is easy to look at the www.booking.com and checking the hotels prices: all the hotels are still suffering and our one is not different.

As our hotel is a new one, built we international standards, well managed, and ready to take all the opportunities as soon as the market will get back to a normal situation.

In the city, almost of 2 million people, there are only 4 international hotels: Hilton, Marriot, Park inn and our hotel, and so we are competing against them in terms of occupany and rates

Finally a brief mention also to the land of Kryvoy Rog in Ukraine for which it is still not possible to make any judgement yet as to the commencement of the project although things appears to be changing slowly but in the right direction.

After this overview about the investments, it is our pleasure to remind you, Brickstone is an open-ended fund, which dosen’t have any time limit and for this reason, even in a tough international period like this one, it is able to maximize its strategy.

We strongly continue to believe in our commitment and for this reason even during the year 2017, we will calculate the NAV only once: at the time being there is no reason to spend Fund money to calculate an NAV more than once annually.

It is our humble opinion that things are slowly changing for the better in Russia and our outlook for our Fund remains positive.

We are all aware Brickstone Fund is investing in a medium-long period and it has no sense to push to sell any of the properties unless the correct price is achieved for the sake of our shareholders.

Luigi Pesce
BricKstone Funds