Globe Trade Centre S.A. plans to double the leasable area of its commercial real estate by the end of 2007. The move will enable it to take up the position of leading developer in Central & Eastern Europe.
Central & Eastern Europe’s attractive markets
Globe Trade Centre S.A. (GTC) initially focused its operations on Poland. Its most important investments in the country include: Galeria Mokotów, Galeria Kazimierz and Mokotów Business Park. By the end of 2004 the company had developed commercial and residential projects representing 300,000 sq. m. of space.
Currently, Galeria Kazimierz in Kraków has just been completed; two new office buildings in Warsaw, Allianz and Topaz, are under construction, as is the next phase of Osiedle Konstacja (a residential development). New projects that are due to be started very soon include Platinum Business Park in the Warsaw district of Mokotów and Globis Wrocław.
In accordance with the strategy that GTC’s management adopted, expansion beyond Poland, and establishing a strong position in the lucrative Central & Eastern European market, were consistent steps towards further expansion as well as diversification of income. According to Dr. Andreas Ridder, the regional managing director of CB Richard Ellis, in 2004 investment volumes in 6 countries of our region (Poland, Hungary, the Czech Republic, Romania, Slovakia and Russia) reached 3.9 billion Euro, i.e. an increase of more than 50 % compared with the previous year. “There are some very active international real estate funds in these countries. For the moment, yields in the region are superior to those in Western Europe,” says Dr Ridder
Goal – regional expansion
“Since its stock exchange debut last year, GTC has transformed itself from a company solely operating in Poland, into one of the most important players on the Central & Eastern European real estate market. Our goal is further expansion in Poland, Hungary, the Czech Republic, Romania, Serbia and Croatia, as well as in other new markets of the region,” says Eli Alroy, the Chairman of GTC’s Supervisory Board. In order to reach that goal the company is planning both further organic development and possible joint-ventures with local partners, or indeed acquisitions of real estate portfolios. Each of GTC’s projects is being developed by hand-picked teams of specialists that operate in all countries in which the company is present. Eli Alroy says of GTC’s operations, “Our structural capabilities enable us to meet our goals, whilst achieving cost reductions through economies of scale.”
GTC is able to finance its international expansion thanks to, amongst others, resources obtained through its stock market flotation in 2004, which brought the company $ 86 million. Additionally, a very profitable 2004 has provided a further boost to the company’s financial resources. GTC’s net income came to $ 40.6 million, an increase of more than 60 % on the previous year. The company’s total assets rose in value from $ 520 million at the end of 2003 to $ 846 million by the end of 2004. “Our results in 2004 show that the company has the financial capabilities needed to carry out its expansion strategy throughout Central & Eastern Europe,” declared Erez Boniel, GTC’s Chief Financial Officer.
The most important projects under development in Central & Eastern Europe
Galeria Kazimierz (Kraków) – A shopping & entertainment centre with a total area of 57,000 sq. m. (a net rentable area of 36,200 sq. m.). The opening ceremony is due to take place on 16th March 2005. At present more than 90 % of its area has been leased. The key lessees include: Cinema City, Alma Market, Euro AGD RTV, Zara, Cubus, H&M, Reserved and C&A.
Osiedle Konstancja (Warsaw) – The second phase of this residential estate is due to be completed in the third quarter of 2005. At present more than 40% of the houses have been sold.
Allianz (Warsaw) – An office building with a net rentable area of 11,800 sq. m. It is due to be completed in the fourth quarter of 2005. The building has been 100% leased by the Allianz Group for 10 years.
Topaz (Warsaw) – Construction of this office building, with a total net rentable area of 29,700 sq. m, (in two phases – 11,700 sq. m. and 18,000 sq. m.) is to begin at the end of 2005 and be completed in the fourth quarter of 2007. 40% of building A has already been leased by Roche.
Okęcie Business Park (Warsaw) – An office complex located in the vicinity of Okęcie International Airport, which comprises of 6 buildings with a total net rentable area of more than 51,000 sq. m. The first building is due to be completed in 2006.
Platinum Business Park (Warsaw) – An office complex in the vicinity of Mokotów Business Park, with a total net rentable area of 27,000 sq. m. It is to be completed in 2008.
Wega (Warsaw) – The 10th building within the largest office complex in Poland – Mokotów Business Park. Its net rentable area amounts to 18,500 sq. m. It is due to be completed in 2008.
Globis (Wrocław) – An A-class office building with a total net rentable area of 12,000 sq. m. Globis will be completed in 2006.
Center Point 2 – The Second phase of this modern office complex. The net rentable area comes to 23,000 sq. m. (7,000 sq. m. rented by Exxon Mobil). Completion is expected for the first quarter of 2006.
Riverloft – 180 high-standard apartments, of which 60 were sold after only one month on sale. Completion – 2006.
11th District – 10 ha of land (105,000 sq. m.) have been acquired, and are destined to become a new residential district. The project is due to be developed in phases – the first being completed in 2007.
America House – An office building in the city core with a total net rentable area of 27,000 sq. m. Construction has just started, and completion is planned for the first quarter of 2006.
Lake Side Mall – A shopping & entertainment centre of comparable size to Galeria Mokotów, i.e. 54,000 sq. m. of net rentable area. The opening ceremony is due to take place in the fourth quarter of 2007.
GTC House – An A-class office building with a net rentable area of 13,500 sq. m., of which 80% has been pre-leased (the anchor tenant is Raiffeisen Bank with 6,000 sq. m.). Completion is expected for the first quarter of 2005.
Block 19a – An office/residential complex (16,700 sq. m. of office area and 13,000 sq. m. of housing). The project is to start in the third quarter of 2005. Completion scheduled for 2006/2007.
The Czech Republic (Prague)
Holesovice – An office/residential complex with a total net rentable area of 215,000 sq. m. It is to be developed in several phases, with the first (100 apartments) beginning this year.
Jarov – A residential complex consisting of 1,100 apartments. The first phase (more than 15,500 sq. m.) is to be completed in 2006.
New Zagreb Shopping Centre – 26,000 sq. m. of net leasable area plus 6,000 sq. m. of offices. The project is due to be completed in 2007.