AFRICA ISRAEL TRANSACTION COURT APPROVAL

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")

TRANSACTION BETWEEN AFRICA ISRAEL INVESTMENTS LTD

AND MR LEVIEV APPROVED BY TEL AVIV COURT

London, 29 July 2016 - Further to the Company's announcement of 26 July 2016 regarding the agreement entered into between Africa Israel Investments Ltd ("AI") (the Company's controlling shareholder) and Mr Lev Leviev (the Company's Executive Chairman), AFI Development announces that it has received a notice from AI, stating that the District Court in Tel Aviv approved the Purchase Transaction (as defined in the announcement on 19 July 2016) on 28 July 2016.

The completion of the Purchase Transaction remains subject to receiving a mandatory tender offer exemption from the Cyprus Security and Exchange Commission ("CySEC") under the Cyprus Takeover Code. The deadline to meet this condition is 31 July 2016 or a later date as may be agreed by AI, Mr Leviev and the trustees on behalf of the AI Bondholders (the "Trustees"). Since the decision from CySEC is not expected by 31 July 2016, AI has also notified the Company that AI and Mr Leviev intend to seek the agreement of the Trustees (expected to be on 31 July 2016, which is a business day in Israel) on a new deadline of 10 August 2016.

- 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

Marina Zakharova de Calero

This announcement contains inside information.

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.