LAND LEASE AGREEMENT SIGNED AT PAVELETSKAYA II

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")

Land lease agreement signed at paveletskaya ii

London, 14 November 2013 - AFI Development today announces that the Company subsidiary MKPK JSC and the Moscow city authorities have signed an addendum to the land lease agreement for the Paveletskaya Phase II project, amending the permitted use of land from industrial to the construction of residential and commercial premises. The addendum is in line with previous decisions of the Moscow authorities on development rights of the Company in this project. However, the addendum provides the level of certainty required to change the fair value of the project to market value on the Company balance sheet: the market value of the project, confirmed by Cushman & Wakefield, the Company independent valuers, is US$92.6 million as opposed to the current book value of US$11.6 million. The resulting US$81.0 million gross valuation gain (US$64.8 million net of taxation) will be included in AFI Development Q3 2013 results.

As previously announced, in Paveletskaya Phase II the Company will be allowed to construct 151,373 sq.m. of gross buildable area.

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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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