GTC pushes ahead

Over 1.7 mln sqm of commercial space and more than 500,000 sqm of residential space could be built by Warsaw-listed developer Globe Trade Centre on its current land bank. "What is important is the fact that over 90 pct of our land bank is free of any mortgages or loans. This year we will finish the construction of 89,000 sqm of commercial space and another 132,000 sqm is to be completed in 2012," explains Mariusz Kozłowski, a board member of the company, which is present not only in Poland but also in Russia, Ukraine, Serbia, Croatia, Bulgaria, Romania, Hungary, the Czech  Republic and Slovakia.

Time to flex some muscle
The years 2008-2009 were a time of belt-tightening, when the developer chose not to invest in increasing its land bank. However, last year saw a number of significant transactions: the sale of Warsaw's Topaz and Nefryt office buildings and the purchase of a 50 pct stake in the Galeria Wilanów project. "We want to finish the administrative process by the end of this year, the last stage of which will be the issuing of a building permit for the shopping centre," reveals Mariusz Kozłowski. This is probably one of the most anticipated retail projects in Warsaw, having generated extreme or at least strong emotions for a good ten years. The centre is to provide 60,000 sqm of shopping  for residents of the Wilanów district and its neighbouring areas. The cost of the enterprise, which is being carried out in cooperation with another listed company, Polnord, is estimated at EUR 170 mln. Work on the Miasteczko Wilanów site is to start at the end of this year or early 2012 at the earliest. However, this year diggers will be moving onto the building site of another of the developer's projects - the fifth office building in the Platinium Business Park complex. A building permit has just been issued for the construction of this twelve-storey office facility, which will have a useable area of 20,400 sqm. It has been designed by architects from the Grupa 5 Architekci studio, who reveal that they have already started design work on another facility in this complex. Shovels will also be going into action on plots in Wrocław and Poznań. "In Wrocław we are planning to launch the first stage of the Centrum Biurowe Karkonoska office centre, which is to be built on al. Karkonoska and ul. Przyjaźni. A total of 11,000 sqm of class 'A' office space will be available in the building. Two more office buildings are planned to be built in the complex in the next few years, with a combined leasable area of 23,300 sqm. Meanwhile, our Poznań project, Wilson Office Park, will provide 12,500 sqm of office space. But we are still waiting for a building permit for this," admits Mr Kozłowski.

Foreign building sites
The developer will also be turning the earth outside Poland. The company is currently developing the Galeria Arad project in Romania (the opening of which is planned for the last quarter of this year), the Avenue Mall Osijek shopping centre in Croatia (opening soon) and Galleria Burgas in Bulgaria. After the completion of the projects in progress, by the end of 2011 GTC Group's portfolio of projects will include a total of 11 shopping centres and 28 office buildings with a total area of 621,000 sqm. A year later this figure is to grow to 753,000 sqm, according to representatives of the company. In addition to this, GTC is planning to start work on the Avenue Park office building in Zagreb this year, which is to have a leasable area of 13,000 sqm, as well as the possible launch of another office project in Bucharest. The management is putting great store in the potential of the Romanian property market. "It is always worth taking a look at the opportunities on offer that can be found in Bucharest. Now there will be less competition in Romania than just three years ago because a lot of developers have disappeared from the scene in the country due to the difficulties in raising the finance for their projects," argued Eli Alroy, president of the management board of GTC, at a meeting to announce the company's results for last year.

On the up
In 2010, Globe Trade Centre generated total operating revenue of EUR 169 mln (a growth of 8 pct compared to 2009), of which revenue from leasing accounted for  EUR 97 mln (a growth of 30 pct) and the operating margin on leasing amounted to 76 pct. The developer's gross profit was also up from a loss of EUR 139 mln in 2009 to  a EUR 29 mln net profit. Thanks to a revaluation of its portfolio (adding EUR 43 mln), its value jumped to  EUR 2.37 bln. Its gross operating profit grew by 14 pct y-o-y reaching the level of EUR 97 mln. This year the company does not intend to pay dividends, but is not ruling this out in the future. "So far there has been the risk that Kardan, as a significant shareholder, would push for a substantial payment of dividends. This possibility has now been closed off, which guarantees the greater stability of GTC's investment plans," claimed a company representative. When questioned on the January flotation of 16 pct of the developer's shares, which has unsettled its share price, GTC executives insisted that they remain happy with what they feel will prove over the long-term to have been a good move.