Africa Israel Investments has received regulatory permission to build a giant shopping and commercial center in Bucharest, it announced to the Tel Aviv Stock Exchange yesterday.

The company, which is controlled by Russian businessman Lev Leviev, says the cost of building the facility - which is supposed be one of the biggest in the Romanian capital city - should run at NIS 820 million.

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Africa Israel will be carrying out the project via a granddaughter company that has been operating in Romania since 2005. Its partner in the mall project will be the U.S. investment company New Century Holdings Capital.

The companies expect the center to be ready in the second half of 2008.

The facility is to include a mall, no less than five office towers with 280,000 square meters of built-up space (including 75,000 square meters of office space), and parking facilities.

The companies already have pledges from the likes of Marks & Spencer, Leonardo, Fox, Levis, Holmes Place, and IMAX Cinema City.

"Given our great success in Prague with the Flora Palac, I have no doubt this will be a project with a great success coefficient," said Lev Leviev, Africa Israel's chairman and controlling shareholder.

He noted the amount and quality of lease pledges even before a single cornerstone has been laid down, and that international and local banks are lining up to provide financing.

"We became aware of the potential in Romania, which is about to join the European Union, and which has relatively little commercial space in comparison to other European capitals. Also, Bucharest is a giant city with 2 million residents characterized by a penchant for shopping and entertainment," Leviev added.

Certainly, Eastern Europe has done well by the Israeli company. A year after building the Flora Palac in Prague, in 2003, Africa Israel sold half of it at an NIS 100 million profit to an Irish investment firm.