Africa-Israel Investments (TASE: AFIL), controlled by chairman Lev Leviev, will build one of Moscow's largest malls. The company reported today that a subsidiary, in which it owns an 80% stake, had won a Moscow municipality tender to build a 150,000-sq.m. mall in the city center for $300 million. The mall will be located in a new entertainment center initiated by the municipality, to be called Moscow City, which will have one million sq.m. of office, commercial and hotel space. The Moscow municipality's offices are expected to move to the new complex, which will be linked to a network of roads, bridges and railways to the city center and international airports.
The tender won by Africa-Israel was for the municipality's share in the mall - Africa-Israel offered a 25% stake. The entire construction cost will fall on the contractor, however. Participating companies had to make a $3 million deposit. If Africa-Israel and the Moscow municipality fail to reach a detailed contract, the deposit will be foreclosed.
In the event that a binding contract for building the mall is signed, it will be the second mall the company is building in Moscow. It has already obtained all the permits for building a mall on one of Moscow's main streets, at a cost of $160-170 million.
In a separate deal, Africa-Israel announced on Friday that a subsidiary, in which it owns an 65% stake, had signed an agreement in principle to buy a 37-storey 100,000-sq.m. building in New York's financial district for $210 million. In contrast to similar deals, this is an income-producing property. Africa-Israel will convert only 15% of the space into residences, while leasing the rest as office space.
Published by Globes [online], Israel business news - www.globes.co.il - on April 17, 2005