AFI in EUR 580m Moscow project

A wholly-owned subsidiary of AFI Development's has entered into a short-term land-lease agreement with the municipality of Odintsovo in the suburbs of Moscow for the construction of a major project. Through the agreement, AFI has taken possession of a plot of land of almost 32 hectares that is zoned for residential use. The Otradnoye project will comprise about 450,000 m² of residential space; 22,000 m² of retail space; 17,960 m² of office space; 106,400 m² of parking along with two schools, two kindergartens, a medical centre and a library. AFI said that the grant of a short-term lease for the duration of a project's construction is standard practice in Russia, with longer-term leases granted upon completion.

'This progress with the Otradnoye project will enable us to proceed into the construction phase of the project on schedule, which would in turn allow us to start marketing and sales of the residential units, thereby generating cashflow for the company,' chief executive officer Alexander Khaldey said in a statement. AFI said that expected development costs for the Otradnoye project are US$787 mln (EUR 580 mln) while Jones Lang La Salle has valued the company's beneficial ownership of the Otradnoye residential development in its current state of development at $370 mln (EUR 272 mln) as of 31 March 2007.

AFI Development was listed on the London stock exchange earlier this year. It is a subsidiary of the holding and investment company Africa-Israel Investments, which is quoted on the Tel Aviv exchange.