Interest rates on AFIMALL City loans decreased

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

Interest rates on AFIMALL City loans decreased following mortgage registration

London, 2 March 2012 - AFI Development Plc ("AFI Development" or "the Company") today announces that its subsidiary Bellgate Construction Ltd ("Bellgate") has successfully registered the mortgage, related to the loans provided by VTB Bank, over the premises of AFIMALL City (excluding the parking). Under the existing loan facility agreements with the bank, registration of the mortgage triggers an immediate decrease of about 2% in the interest rates charged on loans taken out on the Mall and its parking.

The decrease in interest rates is expected to result in RUR 280.8 million (circa US$ 9.6 million) annualized saving on interest payments on existing loan facilities related to AFIMALL City and its parking.

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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.