Q1 2013 Investor Presentation by AFI Development

Q1 2013 Investor Presentation FINANCIAL & BUSINESS RESULTS May 2013

Disclaimer

This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of AFI Development Plc (the "Company") or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the document. This communication is only being distributed to and is only directed at (1) qualified institutional buyers (within the meaning of Rule 144A of the United States Securities Act of 1933, as amended (the "Securities Act") or (2) accredited investors (as defined in Rule 501(a) of Regulation D adopted pursuant to the Securities Act). Any person who is not a "qualified institutional buyer" or "accredited investor" should not act or rely on this document or any of its contents. This document contains "forward-looking statements", which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. Neither the Company, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document. The information contained in this document is provided as at the date of this document and is subject to change without notice. 2

AFI Development at Glance Market Cap, as of May 20, 2013 Price per share as of May, 20 2013 NAV (Equity), as of March 31, 2013 NAV per share, as of March 31, 2013 Portfolio Value*

•Full cycle real estate developer

US$ 0.70 bn US$ 0.68 US$ 1.66 bn

BUSINESS

US$ 1.59

•Focus on unique large scale commercial and residential projects

•Strong liquidity position: US$ 200,8 mn as at March, 2013 FINANCIAL STABILITY

•Primary market: Moscow, Russia

US$ 2.5 bn

•Secured financing for on-going projects • 31% Debt to Total Assets**

Portfolio Value* •12 years on the market

Land Bank 1% Next for development 27%

HISTORY

•Admitted to LSE in 2007 •Premium listing from 2010

•12 completed projects with total c. 600,000 sqm of space TRACK RECORD

•Market reputation for high quality and professional property management

•Free float – 35,12%

•Strong global brand

Delivered 26%

AFIMALL 46%

* Gross Asset Value of Portfolio based on C&W Valuation as for 31 Dec. 2012 and BV of Land Bank projects, Trading Properties and Hotels

BRAND

•Affiliate of Africa Israel Group (64,88% owner) , a major conglomerate with global focus on real estate, construction and infrastructure

•Impeccable credit history

•Substantial income generating portfolio. Major project AFIMALL PORTFOLIO

•5 projects are next for development •Pipeline and land bank

** Bank loans only

Key Projects in Moscow Current Portfolio Yielding Assets (retail, offices and hotels) Value (C&W): GLA(excl. hotels),sqm: AFIMALL City

Ownership:50%

Aquamarine II

US$ 1.8 bn 204K sqm

Berezkovskaya

NOI stab*.

US$ 223 mn

(AFID share, excl. hotels):

Four Winds*** Botanic Garden H2O

Plaza SPA Zhel*

Plaza SPA Kisl *

Aquamarine Hotel

Ozerkovskaya III

Pochtovaya, Phase I Paveletskaya, 1

Tverskaya Plazas Four Winds

AFIMALL City

*Outside of Moscow

Aquamarine Complex

Berejkovskaya H2O Office

Otradnoe

Paveletskaya, Phase # II Paveletskaya, 1

Tverskaya Ib, II

Kosinskaya

Development Projects Value** (C&W): GLA,sqm: Tverskaya

Otradnoe

Pochtovaya

GSA, sqm: NOI stab:

Kosinskaya

US$ 666 mn 252K

574,3K US$ 142,3 mn

Paveletskaya II

Land Bank and Pipeline

**Paveletskaya II, Otradnoe presented as a BV

Value (BV):

US$ 23 mn

Other 4 Note: the NOI projections are â&#x20AC;&#x153;forward looking statementsâ&#x20AC;? based on C&W valuation assumptions and Company estimations and they can be realized or not realized due to factors beyond the Company's control including, among others, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions

SECTION 1 Project Update Yielding Projects

AFIMALL City Project Highlights CURRENT STATUS:  Occupancy level has increased from 77% in December 2012 to 81% in March 2013 due to additional lease of new area

 Average rental rate is US$ 1,257 per sqm pa before discounts vs US$ 1,243 in December 2012, and US$ 1,278 in Q1 2012  During the Q1 2013 the Mall has continued to see increases in footfall. The average daily footfall in March has reached c. 42K visitors per day compared to 30K in March 2012 (40% growth)  Total revenue for the Q1 2013 reached US$ 23,2 mn vs. US$ 21,7 mn in Q1 2012 PROJECT HIGHLIGHTS

100%

(as of March 2013)

Total GLA(shops, offices, storage), sqm Total GLA shops only, sqm % of GLA shops only

 In line with revenue growth, the collection exceeded quarter-to-quarter

107.2K 96,8K 81%

Stabilized NOI (C&W est.)

US$151.2 mn

MV (C&W est.)

US$ 1.160 bn

Loan balance as for March, 2013

US$ 615 mn

Daily Average ('000 visitors) 42K

50.0 40.0 30.0 20.0 10.0 -

Workdays average

Weekends average

Daily average

AFIMALL and Moscow-City Development MOSCOW CITY DEVELOPMENT  By the end of 2012 circa 500K sqm of office building have been completed  According JLL report as of November 2012 in 2013 additional 308K of leasable area will be build up in CityPoint, Mercury City Tower, Federation Tower (Vostok), Eurasia Towers

AFIMALL

 Employees of office tenants of Moscow City represent significant percentage of the Mall’s footfall and therefore additions to completed and let office space in Moscow City shall bring additional customers to AFIMALL City (Employees will increase more than double)

FUTURE DEVELOPMENT OF TRANSPORTATION STRUCTURE(SUBWAY) NOVOTEL

 2013 – section between Delovoy Center and Park Pobedi  2015 – metro line from Tretiyakovskaya till Ramenki

AFIMALL EXISTING OFFICE COMPLEX

PLANNED/UNDER CONSTRUCTION

0 – Tower 2000

2, 3 – Evolution Tower

4 – Imperia Tower

8 – CityPoint

9 – Capital City

11 – Transport Terminal

10 – Naberezhnaya Tower

12 – Eurasia Tower

13a – Federation Tower (Zapad)

13b – Federation Tower (Vostok)

19 – Northern Tower

14 – Mercury City Tower

OTHERS 1 – Expocenter 6, 7 – Central Core (AFIMALL City)

15 – Moscow City Government Building 16a – OKO 16b – Parking 17, 18 – Russia Tower 20 – Exposition and Business Center 7

Yielding Properties

Building

AFIMALL

Ownership

100% Moscow Moscow City 304,205 107,208 2,075 81%

Location GBA, sqm GLA, sqm Parking lots (total), # Ocupancy rate, % Average rent as of 31.12.2012, $/sq m

74% Moscow

Paveletskaya, bld. 1 99.1% Moscow

11,612 10,250 150 98%

16,246 14,085 126 96%

Berezkovskaya

H2O 100% Moscow 10,698 8,990 81 94%

Tvesrkaya Plaza Tverskaya Plaza Ozerkovskaya Ib II III 100% 100% 100% Moscow Moscow Moscow CBD CBD CBD 2,104 6,008 73,346 1,909 6,008 55,423 551 94% 90% -

Kavkaz region 25,000 274 keys 58% ADR 367

TOTAL

Kavkaz region 9,526 134 keys 15 51%

470K 204K

600

362

377

677

493

Class

Retail

Office B

Street retail & Office

Office A & Street Retail

Hotel

NOI stab (C&W est.), US mn

156.9

5.8

4.6

2.9

1.4

4.3

46.7

5.0

4.6

3.5

223

77.7

5.0

3.5

2.4

1.1

33.3

10.4

2.7

3.7

3.2

143

MV(AFID share),US$ mn**

1,160

389

1,754

CAP Rate

10%

12%

13%

14%

12%

10%

n/a

ADR 187

Plaza Spa* Plaza SPA * Kislovodsk Zheleznovodsk 50% 100%

1,257

NOI Year 2013 (C&W est.), US mn

750-500

Aquamarine Hotel* 100% Moscow CBD 11,130 159 keys 15 58%

ADR 171

ADR, NOI â&#x20AC;&#x201C; company data for hotels as for 31.12.2012

** Average rent presented as of 31.12.2012 except AFIMALL, where all data refers to March 2013 *** Cap Rate based on C&W valuation as for 31.12.2012 **** MV based on C&W valuation as for 31.12.2012 except hotels

SECTION 2 Project Update Projects next for Development

Pipeline Projects CF budget 2013 Odintsovo

CURRENT STATUS:

PARAMETERS:

Type: Residential GBA(Phase I), sqm: 200,8K GLA(Phase I total), sqm: 149,4K # of Apartments(Phase I): 2,620

• •

Type: Mix GBA, sqm: GLA, sqm: MV(C&W),mn:

Plaza IV and Plaza IIa

Bolshaya Pochtovaya

The Company has finalized almost 80% of all design works Reinforced existing buildings; working documentation for electricity and heating are in place)

111,7K 90,3K S$ 102,7 CURRENT STATUS:

PARAMETERS: Type: Office GBA, sqm: GLA, sqm: MV(C&W):

• •

The Company has signed an agreement with the General Contractor The land plot is ready for construction, the construction of the 1st stage in Phase # 1 has been lunched (54,5K sqm from 200,8K sqm of GBA) The Company plans to start sales in Q3 2013 The project team is working on marketing campaign

CURRENT STATUS:

Kosinskaya PARAMETERS:

Tverskaya Plaza IC

• •

51,2K 32,5K US$ 106,6 mn

PARAMETERS

•

The Company has received the final approval documentation – GPZU (GZK and land lease agreement are in place)

• • •

Design works are in process. Project design stage – stage P The company works on choosing a General Contractor Start of construction - Q4 2013

CURRENT STATUS: Plaza I and Plaza IIa:

Plaza IIa:

Plaza IV:

Type:

Retail

Office

GBA,sqm : 10,5K GLA, sqm: 7,6K MV(C&W),mn: 32

GBA,sqm : 108K GLA, sqm: 61,4K MV(C&W),mn: 159,6

•

Securing approval documentation

CURRENT STATUS:

PARAMETERS: Type: Residential GBA, sqm: GSA, sqm: MV(C&W),mn:

Paveletskaya

170,4K 107,0K

Design works are in process Securing approval documentation

US$ 141,3

CURRENT STATUS:

PARAMETERS: Type: Residential GBA, sqm: GSA, sqm: MV(C&W), mn:

• •

151,4K 76,4K US$ 117,4

• •

Design works are in process Securing approval documentation

Pipeline and Land Bank

Project

Type

Land (ha)

GBA upon completion (sqm)

BV as of 31.12.2012, US$ ‘000

Park Plaza Kislovodsk

Hotel resort

5.3

40,000

8,000

Versailles, Kislovodsk

Hotel resort

0.6

12,350

9,000

Ruza

Mixed use

387

n/a

4,000

St. Petersburg

Mixed use

3.07

n/a

2,000

TOTAL

23,000

Extensive land bank 

Land bank – projects of the Company is currently put on hold

Land bank strategy 

Activate projects upon securing required financing and evaluation of demand level from prospective tenants/buyer



Full flexibility regarding future development in various cycles of the economy – the major competitive advantage for the Company

Note: MV upon completion and GBA upon completion are “forward looking statements” based on JLL valuation assumptions and they can be realized or not realized due to factors beyond the Company's control including, among others, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions

SECTION 3 Financial Update

Income Statement #

Q1 2013 Q1 2012 Actual Actual

ITEM ('000)

(1)

Construction consulting/management services

0.0

1.5

(2)

Rental income

33.1

29.3

(3)

Sale of residential

0.2

1.6

33.4

32.3

3.2

0.1

(4) TOTAL REVENUE (5)

Other income

(6)

Operating expenses

(21.4)

(14.8)

(7)

Administrative expenses

(4.0)

(3.0)

(8)

Cost of sales of residential

(0.2)

(1.4)

(9)

Other expenses

(1.8)

(0.2)

(24.2)

(19.4)

(0.6)

(8.4)

8.6

4.5

16.5

6.9

25.1

11.4

(10) TOTAL EXPENSES (11)

Share of profit of equity-accounted investees

(12) GROSS PROFIT (13)

Valuation gains on investment property

(14) RESULTS FROM OPERATING ACTIVITIES (15)

Profit on sale/disposal of properties/investment

32.1

2.0

(16)

Finance income

15.7

4.4

(17)

Finance expense

(16.8)

(15.5)

(18)

FX Gain/( Loss)

(9.2)

15.2

(19)

Translation reserve reclassification due to disposal of subsidiary

(30.3)

0.4

(40.5) 16.7

4.5 17.9

(20) Net finance income/(costs) (21) PROFIT BEFORE INCOME TAX (22)

Current income tax

(23)

Deffered income tax

(24) PROFIT FROM CONTINUING OPERATION

(1.1)

15.6

(10.0)

 (2) Rental income up 13% Y-o-Y to 33.1 mn was mainly driven by AFIMALL contribution at US$ 23.2 mn

 (15) W4W  (19) Translation reserve transferred from BS to PL due to W4W sale

 (24) Net profit almost doubled compared to Q1 2012 to 15.6 mn

7.9 13

Statement of Financial Position # (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16)

NARRATIVE Investment property Investment property under development Investment in Joint Ventures Property, plant and equipment Long-term loans receivable VAT recoverable Goodwill

Non-current assets

31.03.2013 31.12.2012 Changing US$ mn US$ mn US$ mn % 1,680.8 568.3 6.0 74.0 21.7 0.6 0.0

1,292.3 567.7 82.4 76.6 113.5 0.5 0.2

388.5 0.5

30% 0%

(2.5) (91.8) 0.1 (0.2)

-3%

218.3

10%

2,351.5

2,133.1

Trading properties Trading properties under construction Inventory Short-term loans receivable Trade and other receivables Current tax assets Cash and cash equivalents

39.8 114.4 0.7 0.1 71.0 3.0 200.8

3.6 141.8 0.6 0.1 78.3 0.1 174.8

Current assets

429.8

399.3

30.5

71.3

(71.3)

2,603.8

177.5

(17) Assets held for sale (18) (19) (20) (21) (22) (23) (24) (25) (26) (27) (28) (29) (30) (31) (32) (33) (34) (35)

36.2 1006% (27.4) (19%) 0.1 9% (0.0) (1%) (7.3) (9%) 2.9 26.0 15%

 (1)Acquisition 50% of partners share in Ozerkovskaya projects

 (09) (10) Completion of the parking construction

 (17) W4W deal was completed in Q1 2013

TOTAL ASSETS Equity

2,781.3

Share capital Share premium Translation reserve Retained earnings Equity attributable to owner of the Company Minority interest TOTAL EQUITY Trade and other payables Long-term loans and borrowings Deferred tax liabilities Deferred income

1.0 1763.4 (124.8) 26.2 1,665.9

1.0 1763.4 (144.6) 9.7 1,629.5

(0.0) 0.0 19.9 16.5 36.3

(0%) 0% (14%) 171% 2%

(2.8) 1,663.0

(3.0) 1,626.5

0.1 36.5

0.0 846.6 103.2 21.0

38.3 554.6 81.9 20.2

(38.3) (100%) 292.0 53% 21.3 26% 0.8 4%

Non-current liabilities

970.8

695.0

275.8

40%

Short-term loans and borrowings Trade and other payables Income tax payable

9.6 137.9 0.0

17.3 267.1 0.0

(7.7) (129.3) 0.0

(45%) (48%)

Current liabilities

147.5

284.5

(137.0)

-48%

(36) TOTAL LIABILITIES

1,118.2

979.5

138.8

14%

(37) TOTAL EQUITY AND LIABILITIES

2,781.3

2,606.0

175.3

The change in Equity Statement Q1 2012 Total equity at 1 January 2013 Profit for the period Foreign currency translation differences for foreign operations Translation difference reclassified to income statement on disposal of joint venture Share option expense Total other comprehensive income

US$ ’000 1,626.5 15.6 -10.6 30.3 1.2 1,663.0

 (33) Amount paid in December relates to prepayment for W4W transaction

Loans and Cash Position as of March 31, 2013 Gross balance of the loan portfolio (as of March 31, 2013) – US$ 854 mn Total cash balance (as of March-31, 2013) – US$ 200,8 mn

Project

Balance as of Lending bank Mar-31, 2013

Available (US$ mn)

Nominal Interest rate

Currency

(US$ mn)

(dd.mm.yy)

RCB

$306

3-month LIBOR + 6,7%

RCB

$309

$43

AFIMALL (Refinance)

Total AFIMALL

Maturity

USD

01.04.2018

9.5%

RUB

01.04.2018

$615

Ozerkovskaya III (100%)

VTB

$220

3-m Libor+5,7%

USD

26.01.2015

Plaza SPA Zheleznovodsk

Sberbank

$19

13.50%

RUB

20.12.2014

Average Interest Rate

7.8%

***

Debt service expected up to 31.12.2013 Total

RCB

VTB

Sberbank

Interest payments

$50.3

$38.5

$9.9

$1.9

Repayments

$1.1

$0.0

$1.1

AFIMALL Liquidation Value of the property should be higher than sum of the outstanding principal and six months interest Q4 Revenue: not less than US$ 19,8 mn (including VAT) As of March, 2013 the Company is in line with the covenants 15

Portfolio NAV as of March,31 2013 AFI Mall Berezkovskaya (100%)* Paveletskaya I (1) Plaza H20 OZE Phase III Plaza Ib Plaza II

TOTAL INVESTMENT PROPERTY: Plaza Ic Plaza II a Plaza IV (100%) Kosinskaya Bolyshaya Pochtovaya Paveletskaya II Ruza St. Petrsburg

TOTAL INVESTMENT PROPERTY UNDER DEVELOPMENT:

1,160 43 30 19 389 10 31

(615)

1,681

(835)

(220)

107 32 168 103 141 12 4 2

568

545 43 30 19 169 10 31

846

673

1 10

Aquamarine/Ozerkovskaya 26 Plaza Spa Kislovodsk (Tirel) (50%) Plaza Spa Zheleznovodsk Pyatigorskaya (Park Plaza Kislovodsk) Versailles (Kislovodsk)

33 26 24 8 8

(19)

33 26 5 8 8

(19)

TOTAL PROPERTY PLANT AND EQUIPMENT: Odintsovo-Otradnoeye AFIMALL parking sold to VTB

TOTAL TRADING PROPERTY UNDER DEVELOPMENT:

TOTAL PORTFOLIO: CASH AND CASH EQUIVALENT DEFFERED TAX LIABILITY TOTAL OTHER ASSETS AND LIABILITIES

TOTAL EQUITY:

LTE = 51%

107 32 168 103 141 117 4 2

Four Winds II Ozerkovskaya Phase II (26)

TOTAL TRADING PROPERTY:

LTV = 34%

1 10

114 29

80 114 29

143

2,501

(854)

1,753 201 (103) (188)

1,663

Contact Information

Registered office AFI DEVELOPMENT PLC Spryou Araouzou 165, Lordos Waterfront Building 5th Floor, Flat/Office 505, 3035 Limassol, Cyprus Tel. +357 25 310975 Principal office of operating subsidiary AFI RUS 16 A Berezhkovskaya Embankment, building 5, Moscow, 121059, Russian Federation. Tel: +7 495 796 99 88 http://investors.afi-development.ru