AFI Development PLC (GDR) : Purchase of remaining 50% stake in Ozerkovskaya

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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")

AFI development agrees to purchase THE REMAINING 50% stake

in ozerkovskaya from joint venture partner
(Class 2 transaction notification)

London, 4 January 2013 -AFI Development today announces that it has entered into an agreement to purchase the remaining 50% interest and to settle all outstanding liabilities of AFI Development to its partner in Krown Investments LLC (the holding company with the rights to the Ozerkovskaya project) from its joint venture partner, Super Passion Limited, for a total cash consideration of US$ 230 million. As a consequence of the acquisition, the Company will become the sole owner of the Ozerkovskaya project.

The consideration will be paid in instalments, with the main instalment of US$100 million payable within 3 business days from execution of the agreement and the last instalment of US$10 million payable by the end of 2013. The transfer of the 50% interest takes place when the consideration is paid in full, and AFI Development has the option to pay the consideration ahead of the agreed schedule.

Krown Investments LLC is a Russian subsidiary of AFI Development that has developed and currently holds the rights to the Ozerkovskaya project in central Moscow ("the Property"). The Property comprises the completed Ozerkovskaya Phase II residential complex ("Ozerkovskaya II") and recently completed Ozerkovskaya Phase III class A office complex ("Ozerkovskaya III"). Ozerkovskaya III comprises four separate buildings of approximately 51,100 sq.m. of combined lettable space with common underground parking for 557 cars. The development of Ozerkovskaya III was completed in 2012, and it is currently vacant.

Ozerkovskaya III was valued by Jones Lang LaSalle, in accordance with the RICS valuation standards, at US$387.3 million (as of 30.06.2012). The gross asset value of the 50% interest in both Ozerkovskaya II and Ozerkovskaya III, which is the subject of the transaction, is approximately US$ 200 million.

Commenting on today's announcement, Mr Mark Groysman, Executive Director of AFI Development said: "We are pleased to announce that we have reached an agreement to buy out the remaining 50% stake of our partner in Ozerkovskaya; this transaction will allow us greater flexibility in negotiations with potential buyers of this property in whole or in part. "

- ENDS -

For further information, please contact:

AFI Development, [phone]

Ilya Kutnov

Ekaterina Shubina

Citigate Dewe Rogerson, London[phone]

David Westover 

Reena Mavjee

Sandra Novakov

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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