Update on Botanic Garden project

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AFI DEVELOPMENT PLC

("AFI Development" or "the Company")

UPDATE ON BOTANIC GARDEN PROJECT

London, 22 February 2013 - AFI Development today announces a further update on the Botanic Garden project.

In its previous announcement on the subject (5 February 2013), the Company reported that it needed to assess the legal consequences of execution of the addendum to the investment contract dated 4 February 2012 for the Botanic Garden project, in light of on-going bankruptcy proceedings of the 'main investor' under the original investment contract, OAO "Novoe Koltso Moskvy" ("NKM"). According to this addendum, NKM shall not have any claims to the investments made by AFI Development in the Botanic Garden project and its subsidiary, OOO "Nordservice", will become the only investor under the investment contract.

After thorough assessment of risks to the Company's development rights in respect of the project, AFI Development has agreed to make payments to the city of Moscow under the addendum to the investment contract in return for additional development rights. The total aggregate amount of the payments for additional development rights is approximately US$18.5 million, which will be paid in several installments. The decision was based on the opinion of external legal advisers of the Company that, in the event that the addendum is declared void or is cancelled (following a claim by the creditors of NKM), the amounts paid to the city of Moscow would be repayable back to the Company. It should be noted that the provision to write-off the Botanic Garden (made in August 2012) will not be cancelled at this stage.

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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 Novakov

Reena Mavjee

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 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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