Leviev: Moscow real estate market fully recovered

Lev Leviev was in bullish mood as AFI Development reported that net profit rose six-fold in 2011.

Africa-Israel Investments Ltd. (TASE:AFIL) Russian development arm, AFI Development plc (LSE:AFID) reports revenue and profit growth for 2011. Africa-Israel and AFI Development chairman Lev Leviev predicts further growth in 2012, now that the Moscow real estate market has fully recovered.

Net profit rose six-fold to $172 million in 2011 from $26 million in 2010, and net operating income (NOI) rose 78% to $45 million. The company had $84.8 million in cash and cash equivalents at the end of the year.

Revenue, including the sale of properties, was $134 million, 79% more than in 2010. The company's AFIMall City in Moscow, opened last year, contributed $65 million to revenue in 2011. The company's reported a pretax revaluation gain on properties of $269 million in 2011, compared with $76 million in 2010, mainly due to the opening of the AFIMall City, as well as general improvement in Moscow's real estate and investments market.

Asset value, assessed by Jones Lang LaSalle LLC, rose 25% to $2.68 billion at the end of 2011 from $2.15 billion a year earlier, and net asset value (excluding loans, cash, and other assets and liabilities) rose 8% to $1.9 billion from $1.7 billion.

Leviev said, "We look forward to 2012 with confidence. The Moscow real estate and financial markets have fully recovered from the financial crisis of 2008 and 2009 and demonstrate strong growth trends in terms of commercial rents, prices for residential space, investment properties values and available financing. We expect AFIMall City to reach its full footfall and turnover capacity towards the end of the year, while the parking facility is expected to become operational in phases throughout 2012. We also expect to lease or partially sell our Ozerkovskaya III complex during 2012." He added that the company planned to selectively activate new projects, while maintaining a positive cash flow, and to restructure major development loans on favorable terms.

AFI Development's share price rose 3.3% on London’s Alternative Investment Market (AIM) today to $0.66, giving a market cap of ₤210 million. Africa-Israel's share price fell 2% on the TASE to NIS 14.08, giving a market cap of NIS 1.7 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on March 19, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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