AFI Development's NAV drops by 60% since June

Russian property builder AFI Development has seen its Net Asset Value per share fall by 60% over the past six months to $4.82, from $12.11 at end-June 2008. On Tuesday, the company reported a loss of $107.86 mln in 2008 compared with a profit of $215.6 mln at end-2007. The company's investment portfolio, appraised by Jones Lang LaSalle, is currently valued at $2.47 bn, down by 58% since 30 June 2008 and 53% since 31 December 2007.

Lev Leviev, Chairman of AFI Development, commented: 'The extremely difficult conditions in the global and Russian real estate markets have resulted in AFI Development reporting a loss in 2008. We have nevertheless retained our strong cash position and are continuing the development of our core projects.'

He added: 'The Moscow market has yet to stabilise and we see few signs of an early recovery in 2009.'

During 2008 the group completed the Four Winds residential project, the Ozerkovskaya Phase II hotel building and the Ozerkovskaya Phase II residential development. Construction of Mall of Russia remains on schedule, AFI said. 'We already have in place sufficient funding to cover our development work in 2009, with significant further progress expected at Mall of Russia this year,' said CEO Alexander Khaldey.

While the company was able to broker the sale of the Aquamarine II office building in May for $207 mln, housing sales have come to a halt since June with only a small number of deals concluded in the second half of 2008, the company added.