AFI Development plc (LSE:AFID), the Russian development arm of Africa-Israel Investments Ltd. (TASE:AFIL), controlled by chairman Lev Leviev, has reached a non-binding understanding over the purchase of City of Moscow's 25% share in AFIMall and an adjacent 2,700 parking lot for $310 million.
At the same time, AFI Development is to transfer its development rights in the Tverskaya Zastava shopping centre to the City of Moscow. AFI Development will be compensated fully for all the development costs incurred so far. In compensation the City of Moscow may grant additional the company building rights for other projects.
The City of Moscow plans converting the retail space into an underground parking facility at its own expense.
AFI Development will remain the owner of the projects surrounding Tverskaya, equating to nearly 350,000sq metres of commercial and residential space.
Leviev said: "We fully support the city-planning policy of the Moscow's Mayor Sergey Sobyanin to enhance road transportation systems aimed at improving the quality of life of the capital's residents.
He added, "We are satisfied with the city's decision to allow us to continue development of the Tverskaya surroundings in volumes and functionalities agreed in the past, while receiving compensation for work completed on the Tverskaya Zastava shopping centre project.
Leviev said, "We are also pleased to have reached an understanding with respect to the purchase of the City of Moscow's 25% share in AFI MALL City"
Published by Globes, Israel business news - www.globes-online.com - on March 27, 2011
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