AFI Development plc (LSE:AFID) today confirmed yesterday's report in "Globes" which quoted an industry analyst saying that Africa-Israel Investments Ltd.'s (TASE:AFIL) AFIMall City in Moscow is far from being completed and is not ready to open. The report resulted in the share price of the company's Russian development arm, which owns the mall, to fall 5.7% in heavy trading.
Before yesterday, the latest target opening date given by Africa Israel was January. Today, AFI Development confirmed that there will be a soft opening in early March and a grand opening in May.
On January 24, AFI Development announced that it had received a certificate of completion for the AFIMall City from the Moscow Municipality. Today, however, the company announced, "Further to the announcement of January 24, 2011 and in accordance with the planned development schedule, the final works requested by the municipal authorities regarding safety and fire hazards are being carried out in order to receive authorization to proceed with a 'soft opening' of the mall to the general public." The company now expects the mall to open in early March.
AFI Development added, "During this process, fit-out works for the retail units are proceeding on schedule so that 160 stores will be open during the course of March." 74% of the sales area has been leased, and it expects to lease 80% within three months of the soft opening.
In response to reports about a bitter dispute between Africa-Israel chairman Lev Leviev and Moscow municipal officials over the municipality's plan to sell its stake in the AFIMall at a value of $500 million, AFI Development said, "In accordance with the decree issued by the Moscow City Government in 2010, the company is in the final stages of negotiation with the municipal authorities to purchase the city's 25% share in the development together with the partially completed parking area for 2,700 cars." The company said that it was renting parking spaces from adjacent buildings.
AFI Development's share price opened at $1.33 in London today, giving a market cap of ₤725 million. Africa-Israel's share price fell a further 4.8% in early trading today to NIS 27.80, giving a market cap of NIS 3 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on February 15, 2011
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