AFRB.L Regulatory News (AFRB)

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION

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

AFI DEVELOPMENT PLC

("AFI DEVELOPMENT" OR THE "COMPANY")

UPDATE ON THE LOAN FACILITY AGREEMENTS

London, 7 December 2016 - Further to the Company's announcements on 28 September 2016 and on 29 November 2016, on the agreement between the Company and Bank VTB PJSC ("VTB") to amend the terms of the loan facility agreements, the Company confirms that the Company and VTB have now executed all outstanding security agreements to the Krown Investments LLC ("Krown") and Bellgate Constructions Limited ("Bellgate") loan facilities. Accordingly, all agreements relating to the amendment of the terms of the loan facility agreements have now been entered into.

In respect of the Krown loan facility, the Company (and its subsidiaries) and VTB have executed the following agreements:

· Share pledge agreement over 100% of the share capital of each of Titon LLC (which holds the Company's interest in the Kossinskaya project) and Semprex LLC (which holds the Company's interest in the Aquamarine Hotel);

· Mortgage agreement over the Kossinskaya project;

· Suretyship agreements with each of Titon LLC, Doralo Limited (the parent company of Titon LLC), Bellgate, Semprex LLC and AQUAMARE TRE LTD (the parent company of Semprex LLC) for the full amount of the Ozerkovskaya III Loan Facility; and

· Second ranking mortgage agreement over AFIMALL City and the Aquamarine Hotel.

In respect of the Bellgate loan facility, the Company (and its subsidiaries) and VTB have executed the following agreements:

· Second ranking pledge agreement over 100% of the share capital of each of Krown and Titon LLC (which holds the Kossinskaya project);

· Pledge agreement over 100% of the share capital of each of Semprex LLC and AFI FM LLC (the property management company for the AFIMALL City Shopping Centre);

· Suretyship agreements with each of Krown, AFI FM LLC, Inscribe Limited (parent company of AFI FM LLC), Titon LLC, Doralo Limited and AQUAMARE TRE LTD for the full amount of the Bellgate loan facility; and

· Second ranking mortgage agreement over each of the Ozerkovskaya III project and the Kossinskaya project.

- 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

David Westover

Sandra Novakov

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 and 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.