Conference presentation draft v 4.11

September 2011

INVESTOR PRESENTATION

Disclaimer

2

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.

Macroeconomic update

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104.0%

80%

85%

90%

95%

100%

105%

110%

70

80

90

100

110

120

130

140

150

2003 2004 2005 2006 2007 2008 2009 2010

Real GDP (Year 2003 = 100) - left axis

YoY growth, % - right axis

108.8%

106%

108%

110%

112%

114%

2003 2004 2005 2006 2007 2008 2009 2010

Russian CPI, %

Real GDP growth 3.7% in Q2 2011, TY 2011 estimation – 4%

Sovereign debt to GDP ratio is the lowest among its peers

Oil price (Brent) is volatile but still over U$100 per barrel

Unemployment is 6.4% in May. Labor market is steadily improving

Inflation is estimated at 7.5-8.5% for TY 2011

Ruble exchange rate is fluctuating around 30 RUB for 1 US$

0%

50%

100%

150%

200%

Russia

Port

ugal

Irela

nd

Gre

ece

Spain

Italy

Germ

any

UK

US

Sovereign Debt (% of GDP)

Source: EIU, Federal statistics service, JLL

Market update

4

Key indicators Units

Prime rates* 4,000 psqm pa

Base rents 1,350 psqm pa

Prime yield 9.0% – 9.5%

Vacancy <1% (prime) 7% (Moscow aver.)

Retail

Office

Key indicators Units

CBD prime rates

US$1,100 -US$1,200 psqm pa

Class A US$700 - US$800 psqm pa

Yields 9%

Vacancy prime 2% - 4%

*Prime rates: 100 sqm shops on 1st floors in quality shopping centers

Retail supply and vacancy Retail rental rates, US$ psqm pa

0%

1%

2%

3%

4%

5%

6%

0

1

2

3

4

2005 2006 2007 2008 2009 2010 H12011

total area vacancysource: JLL, C&W

Million s

qm

3,000

3,500

4,500 4,800

3,700 4,000 4,000 4,000

1,300 1,500

1,700 2,000

1,200 1,350 1,350 1,350

2005 2006 2007 2008 2009 2010 Q12011

Q22011

Prime rents Base rentssource: JLL, C&W

Class A office supply and vacancy Class A rental rates, US$ psqm pa

0%

5%

10%

15%

20%

25%

0

1

2

3

2005 2006 2007 2008 2009 2010 H12011

Million s

qm

total supply vacancy Class A

vacancy Class A CBD source: JLL, C&W

600 750

1,000

1,400

620 650 750

800

1,000

1,500

2,000

800 850

1,150

2005 2006 2007 2008 2009 2010 H1 2011

Average Class A

Class A CBD Prime source: JLL, C&W

Source: JLL, C&W

AFI Development at glance

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Market Cap - Sep 09, 2011 US$ 0.65 bn

NAV - Jun 30, 2011 US$ 1.8 bn

Average share price - Sep 09, 2011 US$ 0.63

NAV per share - Jun 30, 2011 US$ 1.74

Total equity – Jun 30, 2011 US$ 1.83 bn

Cash & Cash equiv. – Jun 30, 2011 US$ 96 mn

Project level bank loans – Jun 30, 2011 US$ 489 mn

• Full cycle real estate developer

• Focus on unique large scale commercial and residential projects

• Primary market: Moscow, Russia

• Portfolio market value – US$ 2.4 bn (JLL valuation as of June 30, 2011)

Moscow

94%

Kislovodsk 3%

Other 3%

Portfolio market value by project type Portfolio MV by geography

AFIMall City

35%

Completed and unsold

projects 14%

Projects under

development 10%

Pipeline 14%

Land bank 27%

Key projects

6

AFIMALL City

Shopping mall

1

2

3

1

2 Four Winds

“A”-class office

Aquamarine hotel

4* hotel

3

5 Berezhkovskaya

“B”-class office

5

H2O


Paveletskaya I


6

7

6

7

Ozerkovskaya III

Mixed-use

8

8

11

11 Otradnoye

Residentail

10 Paveletskaya II

Residential

10

12

12 Pochtovaya

Mixed-use

13 Serebryakova

Residential

13

Tverskaya Zastava

Mixed-use

14

14

Kosinskaya


9

9

Existing projects

Projects under development

Pipeline projects

CITY OF MOSCOW

4 Ozerkovskaya II

Residentaial 4

Key Yielding Assets

AFIMALL City

8

Презентация матрешек

Close

Key advantages

• Central location

• Largest mall in the city center

• High quality construction and fit-out

Highlights

GLA/# of shops 107K /c.400

Occupancy 81%

2013 NOI (100%) US$120-130 mn (JLL)

Revenue 2011 US$60 mn

JLL appraisal value* US$1,093 mn *(100% project as at Jun 30, 2011)

Additional matters

• The 25% city share acquisition in Sep 2011

• The Company aims to have the finance in place by the end of Sep 2011

• The Company continues its negotiations with the City in respect of the parking

• Favorable finance terms have been reached in respect of the existing loan

0

5

10

15

20

25

March April May June July August

Average daily footfall

tho

usan

d v

isit

ors p

er d

ay

http://www.afimall.ru/2011/05/%d1%82%d1%80%d1%86-%c2%ab%d0%b0%d1%84%d0%b8%d0%bc%d0%be%d0%bb%d0%bb-%d1%81%d0%b8%d1%82%d0%b8%c2%bb-%d1%82%d0%be%d1%80%d0%b6%d0%b5%d1%81%d1%82%d0%b2%d0%b5%d0%bd%d0%bd%d0%be-%d0%be%d1%82%d0%ba%d1%80/%d0%bf%d1%80%d0%b5%d0%b7%d0%b5%d0%bd%d1%82%d0%b0%d1%86%d0%b8%d1%8f-%d0%bc%d0%b0%d1%82%d1%80%d0%b5%d1%88%d0%b5%d0%ba-3/

Four Winds office

9


Close

Key advantages

• Prime location in CBD

• AAA long-term tenants

• Well-known brand in Moscow

Highlights

Ownership 50%

GBA/GLA 28K /22K

Occupancy 100%

NOI US$29 mn

Rental rate US$1,350 psqm pa

JLL appraisal value* US$271 mn *(100% project as at Jun 30, 2011)


Aquamarine Hotel

10


Close

Key advantages

• Central location

• Part of the residential / office complex with a total area of 160K sqm

• Professional development concept

Highlights

GBA/# of keys 11K /159 keys

Occupancy (H1 2011) 60%

2011 NOP US$2.1 mn (JLL)

Stabilized NOP US$4 mn (JLL)

ADR US$195

JLL appraisal value* US$47 mn *(100% project as at Jun 30, 2011)


Plaza Spa

11


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Key advantages

• Recognized recreational area

• Solid reputation for the top quality service in Kislovodsk town

• Established client base

Highlights

Ownership 50%


Occupancy (H1 2011) 73%

2011 NOP (100%) US$8.1mn (JLL)

JLL appraisal value* US$62mn *(100% project as at Dec 31, 2010)


Active Development

Ozerkovskaya III

13


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Key advantages

• Prime location in CBD

• 3rd phase of the residential / office complex with a total area of 160K sqm

• High quality construction and fit-out

Highlights

Ownership 50%

GBA/GLA 79K /46K

Completion Q4 2011

Stabilized future NOI US$38 million (JLL)

Average rate US$800 (JLL)

Management targets

• Development completion in Q4 2011

• The Company is exploring several disposal possibilities of completed office buildings, in whole or in part


Kalinina Spa

14


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Key advantages

• Recognized recreational area

• Second Spa project in the region after Plaza Spa success

• Attractive price-quality

Highlights


Operation start Q1 2012

Stabilized future NOI US$3 million (JLL)

Management targets

• Start operation in Q1 2012

• Occupancy stabilization by 2012 end


Pipeline next for development

Tverskaya Zastava

16


Close

Key advantages

• Prime business location

• Close proximity to public transport

• Moscow top rental rates /prices in the neighborhood

Highlights (based on JLL)

GBA Over 300K

Delivery 2016-2017

Current status

• The Company is still in negotiations with the Moscow authorities on the matter of Tverskaya Zastava


Otradnoye (Odintsovo)

17


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Key advantages

• Green zone in 7 km from Moscow

• Prestigious direction & top prices in Moscow Region

• All amenities for comfort living in place

Highlights

GBA/# of apartments 665K /c.7.5K

Revenue US$1,370 mn*

Development costs US$860 mn*

Management targets

• Renewal of construction permit and construction start and/or cooperation with co-investor (clarity in 2012)

* The information is based on valuation report conducted by JLL as at Jun 30, 2011 for the purpose of the Company financial statements for the 6 months 2011


Paveletskaya Phase II

18


Close

Key advantages

• Central location – 5 km from the Kremlin

• Embankment of the Moscow River

• Undersupply of quality residential space in Moscow

Highlights

GBA 106K

Revenue US$390 mn*


Management targets

• Design and approval works proceeding to secure construction permit (clarity in 2012)



Pochtovaya

19


Close

Key advantages

• Central administrative district of Moscow

• Embankment of the Yauza River

• Undersupply of quality residential space in Moscow

Highlights

GBA 424K

Revenue US$1,497 mn*


Management targets

• Design and approval works proceeding to secure construction permit (clarity in 2012)



Financial position

Financial position

2,331 235

Real estate properties Current & other assets

• Stable cash position of US$ 96 mn

• Total assets (TA) – US$ 2.57 bn

• Total equity (TE) – 1.83 bn, TE/TA – 0.71

• Net debt (ND) – US$ 393 mn, ND/TA – 0.15

Balance sheet structure (June 30, 2011), US$ mn

21

=

Sources of finance

Total assets

=

US$2,566 mn

1,825 462

28

252

Equity Long-term loans Short-term loans Other

Investor Relations

Conference presentation draft v 4.11