AFI Development acquires parking at AFIMALL City

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AFI Development acquires parking at AFIMALL City

London, 16 December 2011 - Following its announcement on 24 November, AFI Development Plc ("AFI Development" or "the Company") announces that its subsidiary Bellgate Constructions Limited ("Bellgate") has signed a binding contract with the Moscow municipal organization GUP "Tsentr-City" ("Tsentr-City") relating to the acquisition of the parking area under AFIMALL City. The Company will pay a total consideration of RUR 4 billion, including VAT (circa US$126 million, including VAT) for the parking complex, the construction of which is approximately 65% completed. The consideration will be paid in four tranches:

RUR 700 million (including VAT) payable on 12th January 2012;

RUR 633.333 million (including VAT) payable on 29th February 2012;

RUR 1.333 billion (including VAT) payable on 28th February 2013;

RUR 1.333 billion (including VAT) payable on 28th February 2014.

The Company is now proceeding with completion of the transaction, which includes the transfer of the parking complex to Bellgate and registration of its title to the premises. It is planned that Bellgate receives the asset and registers the title by the timing of the first tranche.

The transaction requires Bellgate to transfer certain areas in the parking complex back to "Tsentr-City" upon completion of the construction phase. The areas to be transferred back to "Tsentr-City" will be used largely to house common engineering facilities of MIBC "Moscow City". "Tsentr City" will pay an agreed price of approximately RUR12.4 million including VAT (circa US$ 390 thousand, including VAT) for these areas.

Commenting on the transaction, Mark Groysman, CEO of AFI RUS LLC said: "We are very happy to be able to announce that, after long negotiations, we finally signed the binding contract with the City of Moscow on the parking for AFIMALL City. We believe that very soon we will be able to open the first phase of the parking to AFIMALL customers. Needless to say, the parking will have a major positive impact on the operations of AFIMALL City and it is expected to significantly increase the footfall of the mall".

AFI Development is in continuous negotiations with VTB Bank on the provision of debt financing for the acquisition and construction of the parking area, as well as on a potential acquisition by the Bank of about 600 parking lots.

- ENDS -

For further information, please contact:

AFI Development, +7 495 796 9988

Alexander Adadurov

Ilya Kutnov

Citigate Dewe Rogerson, London+44 20 7638 9571

David Westover

Sean Bride

About AFI Development

AFI Development is one of the leading real estate development companies operating in Russia. Established in 2001, AFI Development is a publicly traded subsidiary of Africa Israel Investments Ltd.

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.