AFI Development resumes construction of Russian projects

AFI Development has unveiled plans to resume construction of its main projects in the country due to improving market conditions. The Russian property developer said this week it has decided to re-start the development of the Paveletskaya project as well as Phase III of the Ozerkovskaya Embankment project in Moscow. The projects are expected to be completed in the first half of 2011.

The developer will also complete construction of the public infrastructure in the immediate vicinity of the Mall of Russia. Construction works will be carried out on behalf of the city of Moscow, following a preliminary agreement signed with the municipality in the past weeks.

The Mall of Russia project, with a total surface area of 180,000 m2, is expected to be completed in September-October 2010, Afi said. The marketing of the centre continues to progress, reflecting improving demand from the Russian retail sector. Around 40% of the centre has been pre-let, with recent leasing agreements being signed with a number of tenants including the Russian supermarket chain X5, which is taking up circa 2,400 m².

Additionally, the company has secured financing for its Kalinina hotel project in Zheleznovodsk, in the Caucasus Mineral Springs area in Southern Russia. Sberbank is providing a $20 mln loan to fund the project, at an effective interest rate of circa 9.25%. Completion of this development is expected in the first half of 2011. Meanwhile, the engineering works on the Tverskaya underground shopping mall project is also progressing, Afi said.

'We observed signs of strengthening in the market in the last few months of 2009 and we believe this is the right moment selectively to move forward with a number of our important projects,' said CEO Alexander Khaldey. 'We are also expanding our hotel portfolio in southern Russia and intend to complete works at the Paveletskaya Business Park in Moscow.'