AFI Development PLC announced the sale of the Kosinskaya project located in the Eastern Administrative District of the City of Moscow, comprising a Class B office building of 112,000 m² and 10.4 ha of land. The company has entered into a sale and purchase agreement for the project with a non-related third-party buyer, at a sale price of US $195 million (approx. 137 mln.), payable over the course of one year.
AFI sold the Kosinskaya project for 137 million.
To date the company has received US $40 million of the first installment of US $60 million that is payable by August 20, 2009. Under the agreed terms and conditions, the buyer is entitled to a discount of up to 7.7% if the full payment is made ahead of the payment schedule, with lower discounts applying the later the final payment is effected.
The contracted price reflects a US $44.2 million premium to the book value of the project as of March 31, 2009.
Kosinskaya project is a modern class B+ business center with total area of 111,770 m². The project is located in the heart of the historical area of Veshnyaki, in Moscow's Eastern Administrative District, close to the Moscow Ring Road (MKAD). The site unites the historical neighborhoods of Veshnyakovo, Vladychino and Kuskovo with their sophisticated architecture and Moscow's only French-styled park. A great number of parks and woods make this area an attractive place for both residence and business.
The business center is located close to Moscow's main Eastern District highways: Novoryazanskoye and Gorkovskoye as well as the MKAD. The nearest metro station is a 7-10 minute walk from the Center. In addition, there is a well developed public transport infrastructure including stops for 18 buses and two trolley-buses connecting the business center with various metro lines as well as the Novogireevo, Novokosino, Golyanovo, Izmailovo Moscow districts, Schelkovskoe Highway and Highway of Entuziastov and even the nearest Moscow region towns of Reutov and Lyubertsy.
Commenting, Alexander Khaldey, Chief Executive Officer, said: "We are delighted to finalise this transaction at such a significant premium to the book value and to the previous valuation, which demonstrates the strong underlying interest among investors in the Moscow property market, even in the current economic uncertainty. We believe that continued stabilisation of the market will benefit our significant portfolio of assets and enhance the value of our company to its shareholders, reflecting the long-term growth outlook for Moscow real estate.
"This sale further strengthens our already strong cash position, which is of paramount importance in the current market environment."