GTC sells its stake in Galeria Mokotów

Globe Trade Centre S.A. (GTC) signed an agreement for the sale of a 50% stake in its landmark development – Galeria Mokotów, based on an asset value of EUR 475m. The purchaser is an affiliate of Unibail Rodamco S.E. – the current co-owner and manager of the shopping center. The transaction will strengthen GTC’s financial position even more and facilitate future developments.

“The value of the transaction demonstrates the high quality of GTC’s assets and its ability to generate profits upon their disposal as outlined in its strategy.” said Eli Alroy, Chairman of the GTC Supervisory Board. “The transaction is in line with the GTC’s strategy of rebalancing its property portfolio, including the sale of mature assets and reinvesting in further expansion. As the real estate investment market continues to improve, we proceed with recycling of capital and plan new investments in the commercial sector in Poland”.

The final execution of the transaction is subject to standard closing conditions.

Galeria Mokotow is a prime retail and entertainment center located in Warsaw. The property was completed in 2000 and remains a landmark development in the retail sector in Poland. The mall comprises 62,000 sqm of net rentable retail space, a number of renowned shops and service points, as well as a multiplex cinema.

Occupancy permit for Platinum IV granted

Globe Trade Centre S.A. (GTC) – the owner and manager of Platinium Business Park, Warsaw – was granted the occupancy permit for the fourth office building in the complex. The investment was completed within record 13 months after obtaining the construction permit.

The construction of the fourth building of Platinium Business Park (located at the intersection of Domaniewska and Wołoska streets) began in May 2010. The 12-storey building, with a lease area of 13,000 sq m had been entirely leased by Aviva Group. The company will move into the building in summer this year.

“The complete realization, in such a short time, of a modern office building for needs of an international corporation is a big success of the GTC team and our partners, including architects from Grupa 5 and general contractor – Warbud. I am delighted that once again we have kept our commitments to a future tenant. Taking into consideration the scale and technical advancement of the project, that is an impressive achievement”- said Piotr Kroenke, General Director of GTC.

Additionally, the construction of the Platinium Business Park V, with a lease area of 11,000 sq m began in April of this year. Platinium Business Park V will be constructed from materials that increase energy efficiency and enable maximum efficiency of heating and air conditioning systems. The building will be equipped with tilt windows, raised floors and suspended ceilings with an integrated lighting system, air conditioning with individual temperature controls, full cabling and a state-of-the-art building management system. Tenants will also have 180 parking spaces at their disposal.
GTC targets to obtain LEED Gold certification for Platinium Business Park V in the new-build category. LEED certification is awarded only to projects meeting the highest standards set by the US Green Building Council.

Special promotion for Osiedle Konstancja buyers has begun

In June of this year Globe Trade Centre S.A. (GTC) will deliver 37 detached and semi-detached houses for occupancy at Osiedle Konstancja. Some of them are still available. From 10 May a special promotion for customers is also underway: every buyer of a home at Osiedle Konstancja may also purchase a popular Mini Cooper at a very special price.

Osiedle Konstancja is one of the most prestigious residential developments in Poland, located at the entrance to the Warsaw suburb of Konstancin-Jeziorna, about 16 km from the centre of the city. The design skilfully combines the character of Konstancin and surroundings with the latest architectural trends and subtle elegance. Successive stages of Osiedle Konstancja were projected by renowned architectural studios, including JEMS Architekci, dip Biuro Projektów and APA Kuryłowicz & Associates.

A special promotion began on 10 May for buyers of homes in Phase 5 of the project, now under construction. Together with a new home, they will be able to become the owners of a Mini Cooper, in a limited edition prepared especially for Osiedle Konstancja, at a price of PLN 19,900. Current Konstancja residents also qualify for a discount on the Mini Cooper.

The promotion will last until this autumn. Details will be available at the next open house at Osiedle Konstancja, on Saturday, 21 May, from 10 am to 6 pm. The program will include an opportunity to tour a show house at al. Stanisława Lema 6/1 and take a test drive of a Mini Cooper, and many attractions for youngsters. The show house at Osiedle Konstancja is fully furnished, with professional interior decorating. Finished with the finest materials, fixtures and sleek, state-of-the-art ergonomic appliances, the home delights and inspires the imagination.

In the four phases of Osiedle Konstancja so far, GTC has completed 242 residences, semi-detached houses and single-family houses. All of them have already found owners. Currently, along al. Stanisława Lema and Danuty Rinn and Marka Grechuty streets, three are 37 two-level semi-detached and detached houses under construction, with floor areas ranging from 215 sq m to 310 sq m, on plots of 510–1,640 sq m.

The architectural design of Phase 5 of Osiedle Konstancja was prepared by dip Biuro Projektów, who also worked on Phase 2 and Phase 3. The architects planned for use of numerous solutions reflecting the latest trends in arrangement of residential space, including use of hand-formed bricks and sandstone finishing of the façades. The elegant and perfectly lighted interiors were designed with the greatest stress on the living comfort of the future residents. The construction of the buildings enables adaption to the individual needs of users, and the houses themselves blend in with the green surroundings. The unique character of Osiedle Konstancja is also reflected in the spacious lanes and recreational areas: gardens, as well as a park with a playground and playing fields located in the central section of the development. The proximity of retail points, such as the Stara Papiernia shopping centre, as well as the American School of Warsaw, are additional strengths of Osiedle Konstancja. The safety of residents is backed by 24-hour security and heat-sensitive video monitors.

In recent years Osiedle Konstancja has been highly praised by specialists from the real estate development and construction industry. The project has received such recognition as a prestigious CEE Real Estate Quality Award for best residential project. Osiedle Konstancja is also a winner of the Crystal Apartments award from Apartamenty i Mieszkania magazine, in the category of the most luxurious residential developments in the province of Mazovia.

GTC reports solid operating results, profit for the period and an increase in assets value

First quarter 2011 highlights

  • Completed commercial space increased to 544,000 sq m
  • Rental revenues up to EUR 24m (+2% y-o-y)
  • Profit from property portfolio revaluation, net of EUR 14m
  • Net income almost doubled to EUR 8m up from EUR 4m in the corresponding period of 2010
  • Investments of EUR 60m compared to EUR 63m in the corresponding period of 2010
  • Completion of Avenue Mall Osijek
  • Start of construction of Platinium Business Park V with 50% pre-let

“We started 2011 at GTC dynamically. We opened Avenue Mall Osijek with approx. 90% of the space let. We also commenced construction of Platinum Business Park V with more than. 50% pre-let. We signed a number of lease agreements for a total of close to 15,000 sq m. I believe it is a good start of the year, but we want to do more – especially on the Polish market.” – says Eli Alroy, the Chairman of Supervisory Board.

Financial overview

Rental revenues increased by 2% to €24m over the corresponding period of 2010 which comes from assets that were completed after 31 March 2010 and from an increase in rental rates in the shopping centers in Poland. Some of the buildings are still under occupied as at 31 March 2011 thus not the full rental revenue is generated by those assets.

Revenues from sale of residential properties decreased by 40% to €4m in the first quarter 2011 from €6m in the corresponding period of 2010 resulting from a slowdown of sale of residential properties coupled with an increase in discounts for the apartments.

Service revenues decreased by 4% to €7m over the corresponding period of 2010 resulting from sale of Topaz and Nefryt office buildings in November 2010.

The gross margin (profit) from operations decreased by 9% to €23m from €25 m in the corresponding period of 2010, mainly due to sell of Topaz and  Nefryt office buildings in Q4-2010.

“Despite the reduction in revenues resulting from sale of Topaz and Nefryt, we managed to keep the same level of rental income thanks to increase in the asset base – said Erez Boniel, CFO and Member of the Management Board of GTC. “We continue to enhance the platform with new assets while  expecting to benefit from a yield compression with the renewal of the growth cycle”.

Positive revaluation of investment property, net of EUR 14m brought the value of the group’s investment properties to EUR 2.45 bn. Positive impact comes mainly from revaluation of well performing retail sector in Poland.

Profit from operations improved significantly to EUR 29m from EUR 18m in the corresponding period of 2010, due to an increase in assets value.

GTC maintains favourable structure of debt maturity, with about 50% of debt expiring in 2017 or later. The average cost of debt financing remains  attractive at 5.5% (6.1% in the corresponding period of 2010. This provides the company further comfort in realising its development plan.

Net income almost doubled to EUR 8m from EUR 4m in the corresponding period of 2010.

Investment was at the level of EUR 60m as compared to EUR 63m in corresponding period of 2010. GTC will continue to develop its pipeline according to its previous plan to deliver additional 67,000 sq m this year, which will bring the total completions for the year of 88,000 sq m, to be followed by another 130,000 sq m next year.

Recent developments

New lease agreements

In the last few months the group signed a number of lease agreements for its office and retail space, including:
Ruch in Francuska Office Centre for 2,434 sq m of office space
Bankruptcy Management Solutions, Tax Care and Pharmena in University Business Park in Łódź for 850 sq m of office space
Egis Pharmaceuticals in Okęcie Business Park 3 for 1,700 sq m of office space
– H&M in Avenue Mall Zagreb for 1,840 sq m of retail space
– Pure Health and Fitness in Galeria Stara Zagora for 1,100 sq m of retail space
– Bank Millennium in Francuska Office Center in Katowice for 800 sq m of mixed office and retail space
– 6,129 sq m of retail space let in Avenue Mall Osijek in the first quarter of 2011 to various retail tenants, including Muller, Jysk, Deichman and many more.

Completions

On 7th of April, GTC and the European Bank for Development and Reconstruction (EBRD) opened the Avenue Mall in Osijek, the entertainment and  shopping centre of the eastern part of Croatia. The catchment area for Avenue Mall Osijek is estimated at 500,000 inhabitants.

Avenue Mall Osijek offers nearly 27,000 sq m NRA and 80 retail units. The mall is 90% leased, while the rest of space is subject of advanced negotiations. Development of Avenue Mall Osijek is co-financed by the EBRD and Raiffeisen. The EBRD is also a 20% shareholder in the investment.

Avenue Mall Osijek is the 10th shopping centre in the GTC’s portfolio.

Commencement of new projects

On 31 March 2011 GTC obtained a valid building permit for the 5th building at Platinium Business Park in Warsaw. GTC plans to complete construction of Platinium Business Park V in the second quarter of 2012. The new development is already over 50% let.

Construction of the 11-storey Platinium Business Park V, with a lease area of 11,000 sq m began in April of this year.

Among the tenants for Platinium Business Park V who have already signed agreements with GTC is K2 Internet and Starcom.

GTC targets to obtain LEED Gold certification for Platinium Business Park V in the new build category. LEED certification is awarded only to projects  meeting the highest standards set by the US Green Building Council.