AFI Development Plc could become the biggest Russian property company on the London Stock Exchange after it priced an initial public offering of shares at more than $1 billion, amid growing interest in the sector, Reuters reported.

The company, a subsidiary of Africa Israel Investments, said on Tuesday that it will be offering up to 100 million global depositary receipts (GDRs) priced at $10 to $13 each, with one GDR representing an interest in one new share.

AFI said the IPO valued the company at between $4.2 billion and $5.5 billion before the offering, or about double the market capitalisation of fellow pure Russian property company Sistema-Hals, which listed in London last November and was five-times oversubscribed.

A source familiar with the deal said he also expected investors to warm to AFI, which focuses on developing commercial and residential real estate assets in the Moscow region and in other large Russian cities such as St. Petersburg and Volgograd.

In a statement, AFI said the offering of new shares will result in a free float of 19 percent -- not including the potential exercise by the underwriters of an over-allocation option worth up to another 10 percent of the offering.

AFI said in a statement it expected final pricing to be on or around May 3, with the roadshow beginning on Tuesday.

Deutsche Bank and Morgan Stanley are joint global coordinators for the offering. Citigroup is co-lead manager.

AFI's IPO comes amid a revival of equity investor interest in the Russian real estate market, and is seen being followed by others.

AFI is 88 percent owned by Africa Israel and 12 percent owned by the Nirro Group SA, a company controlled by AFI Director Alexander Khaldey, who also serves as chief executive at Stroyinkom-K, the company's Russian operating subsidiary.

The company said it would use the IPO proceeds to fund its current development portfolio and to acquire new pipeline projects in Moscow.

AFI has an existing portfolio of 21 development projects that cover an area of about 3.2 million square meters in 12 locations in Russia, and an additional 12 pipeline projects at various stages of negotiation totalling 1.5 million square meters.

The company said its portfolio of projects was valued by an independent evaluator at $3.69 billion in late March.