Changes in the Board of Directors

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION

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

22 August 2012

AFI DEVELOPMENT PLC

("AFI DEVELOPMENT" OR "THE COMPANY")

Changes in the Board of Directors

London, 22 August 2012 - AFI Development announces that on 21 August 2012 its Board of Directors appointed Mr Avraham Novogrocki, the new CEO of Africa Israel Investments Ltd, the Company's majority shareholder, as non-executive director. The appointment of Mr Novogrocki follows the resignation of Mr Izzy Cohen from the Board of AFI Development (as announced by the Company on 17 July 2012).

Mr Novogrocki was appointed CEO of Africa Israel Investments Ltd. after serving as CEO of its subsidiaries: Africa Israel Industries Ltd. (from 2008 to 2012) and Packer Steel Industries Ltd. (from 2007 to 2012). Prior to this, Mr. Novogrocki served as Deputy CEO and CFO of Africa Israel Industries Ltd. In total, Mr. Novogrocki has been working in the Africa Israel Group for 15 years.

Mr. Novogrocki is a director in Africa Israel Industries Ltd., Danya Cebus Ltd., Africa Israel Properties Ltd. and Africa-Israel Residential Ltd., publicly quoted companies on the Tel-Aviv Stock Exchange, Israel. He has no unspent convictions in relation to indictable offences. Mr. Novogrocki has not (i) whilst a director, or within 12 months preceding such events, been associated with any receiverships, compulsory liquidations, creditors voluntary liquidations, administrations, company voluntary arrangements or any composition or arrangement with its creditors generally or any class of its creditors of any company whilst acting as an executive director; (ii) whilst a partner, or within 12 months preceding such events, been associated with any compulsory liquidations, administrations or partnership voluntary arrangements of any partnerships whilst acting as a partner; (iii) whilst a director, or within 12 months preceding such events, held assets which have been the subject of a receivership; (iv) whilst a partner, or within 12 months preceding such events, been partner of any partnership preceding any receivership of the assets of such partnership; (iv) been declared bankrupt or entered into any individual voluntary arrangements; (v) been subject to any public incrimination and/or sanction by statutory or regulatory authorities (including designated professional bodies); or (vi) been disqualified by a court from acting as a member of the administrative, management or supervisory body of any company or from acting in the management or conduct of the affairs of any company.

Commenting on today's announcement, Mr Lev Leviev, Chairman of AFI Development, said: "On behalf of the Board of Directors I would like to welcome Mr Novogrocki to the Board and wish him successful service."

- ENDS -

For further information, please contact:

AFI Development, +7 495 796 9988

Ilya Kutnov

Citigate Dewe Rogerson, London+44 20 7638 9571

David Westover

Reena MavjeeSandra Novakov

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.