TEL AVIV Dec 18 (Reuters) – Israeli real estate group
Africa Israel Investment said on Thursday the crisis
in Russia and the sharp depreciation in the rouble would likely
hurt its business in Russia.
“Because of the great number of factors affecting Russian
economic conditions and their consequences, and noting the
extreme currency fluctuations, the company cannot quantify their
impact,” Africa Israel said in a statement to the Tel Aviv Stock
Africa Israel, controlled by billionaire diamond dealer Lev
Leviev, is the parent company of Russian real estate developer
AFI Development. One of AFI Development’s key assets
is the Afimall City shopping centre in Moscow.
Africa Israel noted that when it published its quarterly
results last month it said a continuation of the Russian
economic situation or a deterioration could significantly harm
AFI Development due to weakening consumer purchasing power, a
decline in the value of its assets and a rise in financing
“In light of the deterioration in the Russian economy, the
company estimates that the likelihood that these consequences
will occur has increased,” Africa Israel said.
Most of AFI Development’s rental income is denominated in
roubles and linked to the dollar and there has been a
substantial rise in the number of commercial tenants who have
sought to limit this linkage due to the rouble’s sharp
AFI Development is studying each of these requests
individually and any limits agreed upon will be for no more than
a few months in most cases, Africa Israel said. It added that
about 40 percent of AFI Development’s loans are in roubles.
In the residential sector, AFI has one substantial project
with 700 housing units in development and there has not been a
decline in the pace of sales so far, Africa Israel said.
“Nevertheless, the rouble’s sharp depreciation could hurt
the project’s profitability,” it said.
(Reporting by Tova Cohen; Editing by Vincent Baby)