AFRB.L Regulatory News (AFRB)

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IN OR INTO THE RUSSIAN FEDERATION, THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN

AFI DEVELOPMENT PLC

("AFI DEVELOPMENT" OR THE "COMPANY")

AFI DEVELOPMENT AGREES TO SELLTHE REMAINING BUILDING AT AQUAMARINE III

(CLASS 2 TRANSACTION NOTIFICATION)

London, 23 April 2019 - AFI Development Plc announces that it has agreed to sell Building 3 at the completed Aquamarine III Business Centre in Moscow to a leading Russian bank (the "Buyer") for a total cash consideration of RUR4.45 billion (circa US$69.5 million), net of the applicable Russian VAT.

The transaction comprises the sale of office premises, underground parking and a share of commonly owned service areas at the Aquamarine (Ozerkovskaya) III Business Centre at 22-24, Ozerkovskaya embankment, Moscow, Russia. The transaction consists of two Russian law governed agreements: a sales-purchase agreement related to 18,758.6 sq.m of gross buildable area (including 199 underground parking units) and a sale-purchase agreement related to a circa 27% share in the title to the premises of 3,728.6 sq.m of gross buildable area ("the Transaction agreements").

The Aquamarine (Ozerkovskaya) III Business Centre is an office complex forming part of the "Aquamarine" mixed-use development, located on the Ozerkovskaya embankment in the historical Zamoskvorechie district of Moscow. The development includes four Class A buildings with shared underground parking. In 2013, AFI Development disposed of Building 1, while in 2017 it disposed of Buildings 2 and 4. Following the disposal of the three buildings, the Business Centre has 18,758.6 sq.m of gross buildable area and 199 parking units.

The transaction consideration shall be satisfied in two tranches: 50% of the consideration is to be paid upon execution of the Transaction agreements, with the remaining 50% due once the Buyer has been registered as owner, in accordance with Russian law.

The value of the gross assets subject to the transaction is US$57.4 million, as recorded in the consolidated IFRS accounts of the Company.

The disposed property is leased to a number of office tenants. Based on the 2018 preliminary annual financial results, the property contributed US$2.4 million to the gross profit and negative US$10.6 million to the net profit in the consolidated financial statements of AFI Development.

The transaction will be subject to Russian profit tax estimated at RUR347 million (circa US$2.3 million on the consolidated level net of deferred tax liability). As a result of the transaction on the consolidated IFRS accounts, the Company expects to incur a net profit of about US$8.1 million. After the disposal, the Company will no longer pay property tax on the property, which amounted to RUR48 million (circa US$750 thousand) in 2018.

The Company intends to use net proceeds of the sale to partially repay external loans (to Bank VTB PJSC) and to finance construction of its development projects.

- ENDS -

For further information, please contact:

AFI Development, +7 495 796 9988

Ilya Kutnov, Corporate Affairs/Investments Director (Responsible for arranging the release of this announcement)

Citigate Dewe Rogerson, London +44 20 7638 9571

Sandra NovakovLucy Eyles

This announcement contains inside information.

About AFI Development

Established in 2003, AFI Development is one of the leading real estate development companies operating in Russia.

AFI Development is listed on the Main Market of the London Stock Exchange and aims to deliver shareholder value through a commitment to innovation and continuous project development, coupled with the highest standards of design, construction and quality of customer service.

AFI Development focuses on developing and redeveloping high quality commercial and residential real estate assets across Russia, with Moscow being its main market. The Company's existing portfolio comprises commercial projects focused on offices, shopping centers, hotels and mixed-use properties, and residential projects. AFI Development's strategy is to sell the residential properties it develops and to either lease the commercial properties or sell them for a favorable return.

AFI Development is a leading force in urban regeneration, breathing new life into city squares and neighborhoods and transforming congested and underdeveloped areas into thriving new communities. The Company's long-term, large-scale regeneration and city infrastructure projects establish the necessary groundwork for the successful launch of commercial and residential properties, providing a strong base for future.