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. Last Updated: 07/27/2016

Africa Israel's Russian Assets Worth $3.8Bln

JERUSALEM - Africa Israel Investments, an Israeli property developer, said Sunday that its Russian unit held about $3.8 billion of real estate, according to a valuation conducted before a planned share sale in London. Shares closed up 8.6 percent on the day.

Most of the property controlled by Africa Israel's 88 percent-owned unit is located in Moscow and includes about 2.6 million square meters of offices, commercial space and housing, Africa Israel said in a statement to the Tel Aviv Stock Exchange on Sunday.

The valuation, conducted by Jones Lang LaSalle, is not final, although it accounts for almost all the value of the subsidiary, said the Yehud, an Israel-based company. It includes 21 projects in 12 sites, the company said.

UBS, in a weekly note released Friday, estimated the holding at about $2.2 billion, or about 43 percent of Africa's total net asset value. Africa Israel, controlled by the Israeli billionaire Lev Leviev, operates the joint venture with an unidentified Russian partner.

Shares of Africa Israel finished up 31.40 shekels ($7.48) at 395.20 shekels in Tel Aviv on Sunday and were the most heavily traded of the day, with 179 million shekels ($42.7 million) changing hands. The shares have risen 112 percent in the past year, outperforming the stock exchange's benchmark TA-25 by almost tenfold.

Fourth quarter profit almost tripled, boosted by the sale of real estate, the company said Monday in a report to the Tel Aviv Stock Exchange. Net income rose to 412 million shekels ($98 million) from 130 million shekels one year earlier.

Profit from the sale of land and buildings jumped to 527 million shekels from 166 million shekels.

Tel Aviv-based Clal Finance Batucha Investment Management raised its rating for Africa to "buy" from "market weight," citing the Russian real estate valuation. Clal said the shares might reach 450 shekels in 12 months.

"This is a valuation given by a very well-known firm, and one that has a very good reputation in its field around the world, and especially with regard to Russia," said Clal analyst Yuval Ben-Ze'ev in an e-mailed note to investors.

Africa Israel announced its first entry into the South American market Sunday, signing an agreement with an unidentified local investor to buy 50 percent of an unspecified historical building in Buenos Aires.

The project will be worth between $1 million and $4.5 million, and the building, once renovated, will contain 54 units of luxury housing, the company said in an e-mailed statement.

Africa Israel Investments also said Monday that it had hired Deutsche Bank and Morgan Stanley to manage the IPO of its Russian unit on the London Stock Exchange.

Deutsche Bank and Morgan Stanley will act as joint global coordinators for the sale of the unit, the company said in a statement.

"We are a company focused on developing a high-quality portfolio of large-scale projects in Russia," AFI development chairman Erez Meltzer said. "Our track record in Russia and local knowledge and expertise provide us with a strong platform."