PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION

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

29 March 2011

AFI DEVELOPMENT PLC

PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010

AFI Development PLC ("AFI Development" or the "Company"), a leading real estate company focused on developing property in Russia and the CIS, has today announced its preliminary audited financial results for the year ended 31 December 2010.

Financial Highlights:

• Adjusted Net Asset Value per share now stands at US$1.65, up by 7.1% from US$1.54 as at 30 June 2010 and 1.4% from US$1.62 as at 31 December 2009.
• Net Asset Value, based on the valuation of our projects portfolio independently verified by Jones Lang LaSalle LLC and project costs, is US$1.73 billion, up 1.4% from US$1.70 billion as at 31 December 2009.
• The Company's investment portfolio as at 31 December 2010 is valued at US$2.31 billion, up by 20% since last valuation carried on 31 December 2009 and 31 May 2010 of US$1.92 billion.
• Profit for the year is US$25.88 million in comparison to a loss of US$2.66 million in 2009.
• Net Revaluation of our investment portfolio by JLL. In 2010, recognised a US$93.92 million gain from revaluation of our completed projects as opposed to a loss of US$38.92 million in 2009. The major drivers of the revaluations were the revaluation of AFIMALL City, up by US$96.23 million, Ozerkovskaya phase III up by US$66.65 million and W4W up by US$20.01. On the other hand, the Company decided to write-off of the Kuntsevo project, in the amount of US$79.89 million, due to project uncertainties. Strong cash position retained at US$129.84 million and the Company continues to access debt financing for its development projects.

Operational Highlights:

• Completion of AFIMALL City (formerly Mall of Russia) with approximately 75% of the retail shops in the Mall let to a wide mix of tenants.
• The first company focused on Russian real estate to obtain a Premium Listing on the London Stock Exchange with its ‘B' shares commencing trading on 5 July 2010 under the ticker AFRB. Greater commitment to corporate governance reiterated through the appointment of a further two independent non-executive directors, Michael Sarris and Panayiotis Demetriou, to the Board of Directors.
• Acquamarine Hotel on Ozerkovskaya Embankment, which was opened at the end of 2009, started its operation in the beginning of 2010 and achieved high levels of occupancy by year end.
• Completion of Paveletskaya I office complex with significant progress on preleasing.
• Significant progress on development at the fully-financed Ozerkovskaya Embankment Phase 3 project which remains on track for completion in 2011.
• Commencement of development of the Kalinina Hotel in Zheleznovodsk following completion of tender for and appointment of the project's general contractor and approval of the full development budget of US$20 million. Full financing for the project was secured through a Russian rouble loan from Sberbank.

Key highlights since financial year end:

• Following receipt of the requisite regulatory approvals for the operation of the Mall on 4 March 2011, the Company issued operators of the rented retail units in the Mall a notice requiring them to conclude all fit-out works and prepare for the opening of their shops by March 10, 2011, when AFIMALL City opened to the public.
• On 26 January 2011, AFI Development's major shareholder, Africa Israel Investments, agreed to purchase approximately 9.7% of the aggregate equity and voting rights in AFI Development from a company wholly-owned by Mr. Alexander Khaldey, the Executive Director of AFI Development. Total consideration is approximately US$129 million or approximately US$1.27 per each share or GDR of AFI Development. Part of the consideration was paid by way of set-off against the existing loan provided by the Company in 2007. Alexander Khaldey continues to serve as the Executive Director on the Board of AFI Development and Chairman of OOO AFI Rus and of ZAO Stroyinkom-K.
• On 4 March 2011, the Board of AFI Development accepted the resignation of Evgeny Luneev as Chief Financial Officer, who decided to leave the Company in order to pursue other business opportunities. Mr. Luneev will act as the CFO until 29 March 2011. His successor will be announced in due course.
• On 23 March 2011, AFI Development leased the Paveletskaya office complex to a single tenant ZAO GREENATOM, a subsidiary of the State Atomic Energy Corporation ROSATOM. An 11-month lease agreement was signed with ZAO GREENATOM, which will roll over a 3-year period once the ownership certificate has been obtained, expected before year end. The lease will yield annualized revenue of US$4.7 million, excluding VAT.
• On March 25 2011, the Company confirmed that it had reached a non-binding understanding with the Moscow City administration regarding the purchase from the City of Moscow of its 25% share in AFIMALL City and 2,700 parking lots adjacent to AFIMALL City, for a total consideration of approximately US$ 310 million.

• On March 25, 2011, the Company confirmed that it has reached a non-binding understanding with the Moscow City administration to transfer its development rights in the Tverskaya Zastava shopping centre to the City of Moscow in exchange for being fully compensated for its development costs incurred in the project to date. Such compensation may take the form of the City of Moscow granting additional building rights for the Company's other projects. As part of the non-binding understanding reached with the City of Moscow, it is intended that AFI Development will remain the owner of the projects surrounding Tverskaya, equating to nearly 350,000 of commercial and residential space. It is also intended that such projects will retain their key development criteria and it is the Company's understanding that the current planning documentation will remain in place.

Commenting on today's announcement, Lev Leviev, Chairman of AFI Development, said:

"AFI Development has emerged from the crisis in a leading position among Russian developers, well placed to benefit from improving conditions, by completing projects that meet the demand for the quality space that Moscow continues to lack.

The success of our projects has been reflected in our financial performance. The Company returned to profitability in 2010 and maintained a strong cash position with approximately US$130 million at year-end. Reflecting the recovery in the real estate sector, rental income rose by 22% and residential sales rose by 16% to a combined US$75 million.

We look forward to 2011 as another year of growth in the Moscow property sector. We anticipate a significant level of rental revenue this year coming from our newly opened retail project AFIMALL City.  We will continue the development of our core projects and selectively activate new projects within our pipeline, ready to meet demand at the right time. We believe we are well positioned within the Moscow real estate sector and on this basis we will create value for all our shareholders. In addition, we remain committed to further strengthening our corporate governance policies and enhancing our internal controls and disclosure procedures."

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For further information, please contact:

AFI Development

Stanislav Joukov                                                                                                      +7 495 796 9988

Natalia Ivanova                                                                                                  

Citigate Dewe Rogerson, London                                                                       +44 20 7638 9571

David Westover

Sandra Novakov

Lucie Holloway

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.

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