DEFERRAL DECISION GRANTED BY VTB BANK

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")

DEFERRAL DECISION GRANTED BY VTB BANK

London, 12 July 2016 - Further to the Company's announcement on 1st July 2016, on its decision to postpone the quarterly principal payments due to VTB Bank PJSC ("the Bank"), the Company provides the following update.

On 11th July 2016 the Company received a letter from the Bank notifying the Company that the competent executive bodies of the Bank had decided to agree to postpone the due date for payment of the quarter principal payments of US$1.815 million and US$6.5 million due on 30th June 2016, under the loan facilities provided to each of Krown Investments LLC and Bellgate Constructions Limited (together the "Loan Facilities"), to 1st August 2016, as requested by the Company.

The Bank has been and continues to be able to exercise its rights under the Loan Facilities at any time and in the event that it does, prior to the Guarantee or Disposal (as defined in the previous announcements by the Company) being completed, it remains highly probable that there would be a material adverse effect on the Group's operations and on the value of the Company's shares. As announced on 16th June 2016, the parties are aiming to agree either the Guarantee or Disposal by 1st August 2016.

- ENDS -

For further information, please contact:

AFI Development, +7 495 796 9988

Ilya Kutnov

Citigate Dewe Rogerson, London +44 20 7638 9571

David Westover

Sandra Novakov

Marina Zakharova de Calero

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 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.