GALS Development : PRESS RELEASE DD 02/06/2017 (MAJOR TRANSACTION OF THE SUBSIDIARY)

MOSCOW, RUSSIA - June 02, 2017 - HALS-Development (LSE, MICEX: HALS), a major Russian real estate Company announces, that the Company's subsidiary - JSC "Beijing-Invest" (Project owner) has entered into the major transaction on the 02ndJune 2017 with the JSC "FODD Konstrakshn" (General constructor) (Additional agreement #10 to the General contractor contract #10/33/15 dd February 04, 2015).

Making the Additional agreement #10 is aimed to increase the price of the General contractor contract

#10/33/15 dd February 04, 2015 up to 3 556 431 256,61 rubles and to change the time of completion of work under the General contractor contract #10/33/15 dd February 04, 2015.

The contract sum is 44.6% of the book value of the assets of the JSC "Beijing-Invest" on the end date of the reporting period (quarter, year) preceding the settlement of transaction in the amount of 7 977 123 thousands rubles (RAS).

The Company was the first Russian property developer to list its shares on the main market of the London Stock Exchange. The Company's shares are also listed on the Moscow Exchange.

The company is in the top five of the largest developers in Moscow. The total value of development projects of HALS- Development is 1.6-mil sq.m. In 2016 the Company put into operation 4 projects with total area 300 thousand sq.m.: the first phase of construction of the business class residential premises of "Nasledie"; "Wine House"; "Peking Gardens"; "IQ-Quarter" residential block (MMDC "Moscow-City").

The total value of currently developing projects by HALS-Development is about 800 thousands sq.m. Hals-Development is currently developing such projects as development of the second phase construction of the business class residential premises of "Nasledie"; multifunctional complex "Iskra-Park", non-residential towers of "IQ-Quarter" (MMDC "Moscow-City") and the residential complex "Dostoyanie".

The Company's portfolio includes such existing facilities as the business centers SkyLight, "Danilovsky Fort", hotel "Beijing", the shopping and entertainment complex "CDM at Lubyanka", resort complex "Camellia" in Sochi and other objects in Moscow and regions.

Elizaveta Bekreneva Corporate Secretary

Tel. +7 (495) 589-2222 (ext. 1338)

bekreneva@hals-development.ru

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The information in the press release may contain forward-looking statements regarding future events or the future financial performance of Hals-Development. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could", "may" or "might" the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and those actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date thereof or to reflect the occurrence of unanticipated events.