GTC delivers record profits in Q1 2006

GTC has achieved the highest quarterly net profit in its history – USD 88m
Operating profit more than doubled y-o-y to USD 107m

In Q1 Globe Trade Centre S.A. (GTC) recorded its highest ever profit for the period – USD 88.2m, an increase of nearly 140% year-on-year.

Such an outstanding performance resulted from the continuing improvement of margins on both rental and sales income, and from revaluation gains on newly completed and fully let class A office buildings – Topaz in Warsaw and America House in Bucharest.

Romania confirmed its position as Emerging Europe’s rising star, where the EU convergence process is creating enormous real estate opportunities. A prime location, high standard of office space and an impressive tenant list in America House resulted in the single largest revaluation gain for GTC – more than USD 69m.

Revenues from operations grew by 25% to USD 26.8m. The two completed office buildings – Topaz and America House have not yet contributed to the top line, as most of the tenants start their lease terms in the coming quarters. Residential sales revenues in Poland are going to increase in the coming months as the sale of houses in the third phase of Osiedle Konstancja started in 2Q 2006. Furthermore, sales of residential units in Hungary, which are currently at an early stage of construction, are expected to grow in the coming quarters.

In Q1 2006 GTC continued its expansion in the region, starting activity in Slovakia with a 350-apartment residential project.

In Budapest GTC purchased an office project in District XIII – Spiral, where approx. 53,000 sqm of office space will be constructed in phases on a 1.4 hectare plot.

Another residential project was acquired in Romania, where together with a partner GTC purchased a 10 hectare site in the north of Bucharest and plans to develop100-130,000 sqm of residential space there.

GTC also accelerated its activity in Serbia. The construction of its office and residential projects (19 Avenija and Park Apartments, respectively) started inBelgrade’s Block 19a, while a 2 hectare site in Block 41 was acquired for a new office and retail development with some 24,000 sqm of commercial space.

Investors showed their confidence in GTC’s expansion strategy by heavily oversubscribing a new shares issue which GTC completed at the end of March 2006. The Company successfully sold 1.712 m shares to the leading international and domestic institutional investors, raising USD 150 m for new investments.

In April 2006 Globe Trade Centre started its activity in Bulgaria with the acquisition of an 11,000 sqm office project, to be developed on a 0.4 hectare site in Sofia, close to the American Embassy.
In the coming month GTC plans to start activity in Ukraine, i.e. its ninth country of operations in the region.