AFI DEVELOPMENT RECOVERS BOTANIC GARDEN PROJECT

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")

 AFI Development recovers botanic garden project

London, 18 December 2014 - AFI Development announces that it has today restored the Botanic Garden project on its financial statements, following liquidation of former primary investor, Novoe Koltso Moskvy OJSC ("NKM").

As previously announced on 16 October 2014, a Moscow court had decided to liquidate NKM, resuming its bankruptcy proceedings. A liquidation record has now been entered into the State Registry of Legal Entities.

As risks related to the bankruptcy of NKM have now been removed, AFI Development has restored the project on its balance sheet. However, according to the current position of the Company external appraisers, due to extreme volatility of the exchange rate of the Russian rouble to US dollar, the recent decision of the Central Bank of the Russian Federation to increase the key lending rate from 10.5% to 17% and non-systemic market fluctuations, the market value of the development rights of AFI Development in the project as of today cannot be established in a comprehensive way. It should be noted that the valuation of the project as of 31 December 2014 will be established in due course.

- ENDS -

For further information, please contact:

AFI Development, Moscow +7 495 796 9988

Ilya Kutnov

Ekaterina Shubina

Citigate Dewe Rogerson, London+44 20 7638 9571

David Westover

Sandra NovakovShelly Chadda

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 favourable 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.

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