Update on Potential Acquisition

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

AFI DEVELOPMENT PLC("AFI DEVELOPMENT" OR "THE COMPANY") UPDATE ON POTENTIAL ACQUISITION

London, 5 July 2012 - Further to the release of 10 April 2012, AFI Development today announces that the negotiations with the private company controlled by Mr Lev Leviev, in connection with the proposed acquisition of a shareholding of between 80% to 90% in a Russian company developing a residential project in the Moscow Region, were suspended by the parties.

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For further information, please contact:

AFI Development, +7 495 796 9988

Ilya Kutnov

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 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.