UPDATE ON MANAGEMENT CHANGE

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION

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

14 July 2011

UPDATE ON MANAGEMENT CHANGE

AFI Development plc ("AFI Development" or the "Company") today announces that Mr. Alexander Khaldey, executive director of the Company and Chairman of AFI Rus and Stroyinkom-K, the Company's subsidiaries, will cease performing his executive positions with the Company and will be stepping down from his positions as Chairman of AFI Rus and Stroyinkom-K, effective as from the 1 August 2011. Mr. Mark Groysman, CEO of AFI RUS since May 2011, will assume Mr. Khaldey's executive functions.

At this stage Mr. Khaldey is expected to continue to serve as a non-executive director of the Company until 31 December 2011. This transitional period will assist in a smooth hand over between Mr. Khaldey and Mr. Groysman.

Over the past ten years, the Company has experienced significant growth, has completed the development of a number of milestone projects and was successfully admitted to the premium listing segment of the Official List of the Financial Services Authority and to the London Stock Exchange.

Mr. Khaldey has decided to pursue businesses and interests outside AFI Development.

Commenting on the announcement, Mr. Lev Leviev, Chairman of AFI Development said:

"On behalf of the board and management of AFI Development, I would like to thank Alexander Khaldey for his outstanding contribution to the Company over the past decade and would like to wish him success in all his future endeavours."

Reflecting on his time at AFI Development, Mr. Alexander Khaldey said:

"I am proud of the progression of AFI Development during my time here and have enjoyed being an integral part of its maturity in recent years. I am now happy to hand over to the capable hands of Mr. Groysman"

Commenting on his new position, Mr. Mark Groysman, incoming CEO of AFI Rus said:

"I am delighted to be taking on this new role assuming responsibility for the day-to-day running of the Company's business. I look forward to building on the strong foundations laid by Alexander Khaldey and taking the Company forward at this exciting time"

- ENDS -

For further information, please contact:

AFI Development

Alexander Adadurov +7 495 796 9988

Natalia Ivanova

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 in Moscow, the Moscow Region, and other major cities in Russia and the CIS. The Company's existing portfolio of 30 development projects 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.