AFI Development plc (LSE:AFID), the Russian development unit of Africa-Israel Investments Ltd. (TASE:AFIL), controlled by chairman Lev Leviev, is upbeat on the Russian real estate market, and is about to inaugurate its flagship project, the Mall of Russia, in Moscow in December.
AFI Development's revenue rose 15% to $32.8 million in January-September 2010 from $28.1 million in the corresponding period of 2009. The company attributed the growth to higher rental income and residential sales.
The company posted a net loss of $53.9 million in January-September compared with a net profit of $217.1 million in the corresponding period. The net profit last year was due to an upward revaluation of properties under development.
Leviev said, "Our belief in the positive outlook for the Russian real estate market remains firm and we are encouraged by the signs of sustained market recovery as demand from our tenants continues to improve. We are also pleased with our decision to focus on our key projects under development during the economic crisis, which has served to further strengthen our position in the market and ensure that we are well placed for market recovery."
AFI Development said that its strategy was to pursue projects as stabilization in market conditions continues. In the short term, the company will complete fully funded projects under construction in Moscow: the Mall of Russia, Tverskaya Zastava Shopping Center, Phase III of the Ozerkovskaya Embankment, and Paveletskaya Business Park.
In the long term, the company will review the land bank outside of Moscow once market conditions have improved. Future developments will be based on the availability of financing and strength of demand for each project.
AFI Development's share price opened ₤1.14 in London today, giving a market cap of ₤630 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 18, 2010
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