GTC posts H1 results, plans purchases

Investment & finance
CEE REGION In Q2 2015, GTC’s net losses amounted to EUR 2 mln. At the same time the company generated a net profit of EUR 6 mln in the first half of the year. The company now aims to spend EUR 40 mln on acquisitions by the end of 2015 and issue PLN 0.5 bln of new shares.

Business as usual

At the end of June 2015, the value of the GTC properties amounted to EUR 1,231 mln, a small decrease compared to the EUR 1,293 mln reported at the end of December 2014. This was mainly a result of the sale of Centrum Biurowe Kazimierz in Kraków, says the company. In H1 2015, the developer’s debt decreased to EUR 726 mln – compared to EUR 811 mln at the end of 2014. “Over the last few months we managed to achive many of our goals: we restructured our debt and significantly speeded up the sales of assets unrelated to our core operations. We have started the construction of Galeria Północna – one of our key projects – and put into operation the first building of the FortyOne office complex in Belgrade. We are currently analysing a few potential investment projects in the CEE and SEE markets, while continuing to implement our strategy, which involves both investing in new assets with a growth potential and carrying out selected development projects,” explained Thomas Kurzmann, the president of GTC. The company, which currently eyes eight potential purchases, earmarked EUR 40 mln for the 2015 acquisitions, which will mostly be completed office buildings. Meanwhile the launch of the construction of another GTC Warsaw shopping centre, Galeria Wilanów, has been postponed. The Warsaw-listed developer is working on the formal and legal issues related to the project, which also includes obtaining the building permit. According to Thomas Kurzmann, the construction of the Wilanów mall should begin within 12 months. In July GTC disposed of two malls: a shopping centre in the Croatian town of Osijek was sold for PLN 5.5 mln (EUR 1.3 mln) while Galeria Varna in Bulgaria was sold for PLN 23.1 mln (EUR 5.5 mln). The CEE developer is also selling a parcel of land located nearby the Konstancja residential estate in Konstancin on the outskirts of Warsaw. The company has already signed a preliminary sales agreement for the sale of a plot on ul. Warszawska. A small shopping centre is likely to be built on the site.

The apple oftheir eye

At the same time Globe Trade Centre has obtained financing from Bank Pekao for the construction of the Galeria Północna shopping centre in Warsaw’s Białołęka district. This includes a construction loan of up to EUR 116 mln and an investment loan of EUR 175 mln. “We are delighted to have concluded the loan agreements for the Galeria Północna development, where construction work is already underway at full speed. This will be the first major modern shopping and entertainment centre located in the north-eastern part of Warsaw. We are very pleased to have secured financing from Bank Pekao for this investment – it continues the successful, long-term partnership of GTC with the bank,” said Erez Boniel, CFO of GTC. The construction work on Galeria Północna started in July, immediately after GTC obtained the building permit. The property is now over 32 pct leased by such tenants as Carrefour, Cinema City, H&M and the LPP Group. Designed by the APA Wojciechowski and Tzur Architects studios, Galeria Północna is to comprise app. 64,000 sqm of leasable space. It will feature a publicly accessible rooftop garden, walking paths and a playground.

Looking for equity

In addition, GTC plans to issue over 108 mln series K shares potentially worth app. PLN 590 mln in total. The company’s prospectus has been already approved by the Securities Commission and publicised. “Funds from the capital increase will strengthen our balance sheet and will be used to finance the company’s growth through the acquisition of value-add assets, the development of selected projects in our core markets and seizing opportunities that will enhance the company’s value,” said Thomas Kurzmann, GTC’s CEO. “Lone Star, our majority shareholder, has informed us that they support our strategy and will participate in the share issue pro-rata to its holding, which gives us a great deal of confidence in the success of this issue,” he added. GTC’s office and retail acquisition targets are located in Poland and in CEE and SEE capital cities, the company says. The proceeds from the share issue are also to be invested in such existing GTC developments as Galeria Wilanów in Warsaw, University Business Park in Łódź and the second FortyOne office building in Belgrade.