AFI Development plc (LSE:AFID), the Russian development arm of Africa-Israel Investments Ltd. (TASE:AFIL), controlled by Lev Leviev, today confirmed that it will open the Mall of Russia in Moscow in the first week of December 2010.
AFI Development said that it expects to lease up to 75% of the Mall of Russia by the opening. It added that the 179,930-square meter mall will be one of the largest malls in Europe. It will have 305 stores, a cinema, and a 2,400-square meter supermarket. The company predicts that the mall will generate "significant rental income".
AFI Development has already leased space to top international brands, including Marks and Spencer, H&M, Zara, Next, and Bodyshop, as well as X5, Russia's largest retailer.
Leviev said "We are delighted to announce the opening of the Mall of Russia in December this year, which represents a key landmark for the group. This is a high profile and unique retail centre in Moscow which illustrates the company's development and leasing expertise. We believe that the prestigious tenants and opening for the holiday season will ensure its success."
Danya Cebus Rus, a subsidiary of Africa-Israel's contracting arm, Danya Cebus Ltd. (TASE: DNYA), is carrying out the finishing work on the Mall of Russia.
IBI Investment House Shay Lipman says that the current dynamics at the Mall of Russia should expedite the signing of more leases now under negotiations, mainly with smaller tenants that want to present at the opening. He adds that rent is usually higher in these cases.
Lipman adds that the announcement is especially important for AFI Development, first of all because the Mall of Russia will begin generating tens of millions of dollars in revenue in 2011, and that the property will probably be revalued upon completion, and the new value will be booked in the financial report for 2010.
AFI Development's share price rose 9.5% on London on the announcement to $0.87, giving a market cap of ₤584 million, and Africa-Israel's share price rose 8% by midday to NIS 20, giving a market cap of NIS 2 billion. AFI Development's share price has fallen 60% over the past six months, and Africa-Israel share price is down over 50%.
Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2010
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