Israeli real estate developer Africa Israel Investments, controlled by Billionaire Lev Leviev, posted a loss of $214 million in Q4, resulting from the revaluation of real estate projects run by its Russian unit, AFI Development, Reuters reported.
Chief Executive Avraham Novogrocki said blamed the loss on “the challenging situation in Russia … negatively impacted the value of real estate assets of subsidiary AFI Development. The geopolitical situation is the main reason for this year’s loss.”
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The AFI loss came to $220.
In 2013 Q4 Africa Israel posted a $3 million profit.
Africa Israel revenue in Q4 dropped to $350 million from 1$410 million the year before.
According to Reuters, one of AFI Development’s main assets is Moscow’s Afimall City shopping center. Last year, Africa Israel warned in a statement to the Tel Aviv Stock Exchange that the sharp depreciation in the ruble would likely have a negative impact on business there:
“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.”
AFI Development’s rental income is denominated in rubles and indexed to the dollar. But now, because of the sharp depreciation of the ruble, many of the company’s commercial tenants have been demanding the severing of their rents in rubles from the dollar.
