AFI Europe has picked up €13.4m in financing from UniCredit Bank Austria, which it needed to get construction going on AFI Business Park Cotroceni in Bucharest. AFI Business 1 is the first of five class A office buildings the developer hopes to build that would add 70,000 sqm to Bucharest’s office stock. “We are impressed with the bank´s responsiveness and their ability to deliver the financing under the current tough market conditions,” said AFI’s CEO David Hay.
The sale of Palac Flora has finally gone through, with Atrium European Real Estate agreeing to pay €191m for the property, which sits on top of the Flora metro station in Prague. The 37,600 sqm property (20,000 sqm of which is retail, the rest offices) was sold by AFI Europe and Avestus. It’s interesting to note how the geography of debt is becoming an issue in these days of currency nervousness:
As a result of the acquisition the value of Atrium’s income producing portfolio increases to ca. €2.0 billion, of which 75% by value is situated in ‘A-‘ or above rated countries. Further, the Czech Republic, the highest rated country in Atrium’s markets, at A+ /Positive, now accounts for around 23% of the Company’s total portfolio by value; meaning it becomes Atrium’s second largest market after Poland at 46% (A- Stable). In addition, Atrium’s exposure to the Czech Republic’s largest two cities, Prague and Brno, has increased to 68% of the Czech portfolio.
AFI Palace Cotroceni rental income falls
AFI Europe saw its rental income fall 8 percent in the first quarter of 2011, compared with the same period last year. It collected just €5.8m in the first three months of the year compared with €6.2m last year. The company is gearing up to develop another shopping center on land it bought from Laromet in 2007. AFI Europe agreed to pay €78m in all for 156,000 sqm plot (€500 per sqm), but it apparently took threats of execution by the vendor before final payment was made.
UMB Spedition will build Radauti ring road for €82m
UMB Spedition is to build a 16 km ring road around the northern Romanian village of Radauti within 36 months. The builder, which is controlled by Dorinel Umbrarescu, signed the €82m contract for this key infrastructure project in Suceava with the Regional Direction president. The company will also be modernizing the road from Suceava to Botosani.
Having concluded painful debt settlement arrangements with bondholders and banks, and with around €200m in short-term bonds to pay by May 2011, AFI Europe hopes to raise €130m to float a mixture of new and old shares. Haaretz gives the details:
AFI Europe’s ownership equity totaled 198 million euro (NIS 966 million) at the end of June. Along with owners’ loans extended by Africa-Israel Properties totaling 265 million euro (NIS 1.3 billion), the company’s total economic equity was 463 million euro (NIS 2.26 billion).
The intention is to raise 130 million euro (NIS 635 million), with the expectation that this will yield 100 million euro (NIS 490 million) for new capital, with the 30 million euro (NIS 146.5 million) balance being an offer of existing shares from the parent company, to go toward paying down its bond debt and completing projects in Israel.
AFI Development has reached an agreement with VTB Bank on an extension of a RUB 8.448m loan for the construction of the developer’s Mall of Russia project. Originally siged in late August 2008, the repayment schedule has been extended by two years, with the interest rate falling from 16% to 13.25%. A total of RUB 6.378m had been drawn down as of June 30. The mall is due to open in December.
AFI Development is getting back in the development game in Russia, following a revision to its business plan for 2010. Specifically, the company says it’s reached an agreement on its Mall of Russia project, under which it will complete necessary infrastructure around the project. In return, the city is to give up a commensurate share in the project.
Also, AFI will resume work on its Tverskaya, Ozerkovskaya, Paveletskaya and Kalinina projects. According to Alexander Khaldey, Chief Executive Officer at AFI Development:
“We observed signs of strengthening in the market in the last few months of 2009 and we believe this is the right moment selectively to move forward with a number of our important projects. Having reached an agreement with the City of Moscow we see a clear path to completion for the Mall of Russia this year and we intend to resume work at three projects, including Ozerkovskaya where we have a successful track record from our first two phases of development. We are also expanding our hotel portfolio in southern Russia and intend to complete works at the Paveletskaya Business Park in Moscow.”