Global brand on the Polish market – Forever 21 in Galeria Północna

  • Forever 21 will open its shop in Galeria Północna.
  • Letter of intent was signed during MAPIC trade show in Cannes.
  • The opening of Galeria Północna is scheduled for H1 2017.

American clothing giant, Forever 21, will open its shop in Galeria Północna, which is scheduled for opening in H1 2017. Letter of intent was signed during MAPIC – largest retail property trade show in Europe.

Forever 21 is one of the most popular American fashion brands, which is recognized all over the world. The brand shall emerge in the Polish market in 2017. Forever 21 is present in several dozens of countries, among others in: Belgium, Australia, Canada, China, Germany, Ireland, the Netherlands, Thailand and Great Britain.

Forever 21 is yet another key tenant adding more diversity and style to Galeria Północna. The recognized fashion retailer hereby joins a great list of tenants that includes the names like Empik, Smyk, H&M, Wólczanka, Vistula, W.KRUK, Reserved, Cropp, Cinema City and least but not last Carrefour.

We are very pleased that during the most prestigious event in our industry – MAPIC trade show in Cannes – as the first in Poland we signed a contract with a global brand – Forever 21. The fact that shop of the American clothing giant in Poland will be opened in Galeria Północna, is a strong evidence that this project is attractive not only for well-known and respected tenants but also for the operators looking for a strong entry into our market. We wish that the customers of Galeria Północna could benefit from the offer which is not available in other shopping centers, so we constantly work on it. I hope that soon we will be able to inform about further successes on this field says Szymon Mińczuk, Director of Lease at GTC.

The construction of Galeria Północna started in July this year and its opening is scheduled for the first half of 2017. Galeria Północna will be a modern shopping and entertainment center, which due to its unique design features will have a significant impact on the Polish retail sales market.

Galeria Północna is going to shift the dynamics of Warsaw retail sales. The new modern shopping and entertainment centre, located in the north-east part of Warsaw, will aim to attract not only customers from Białołęka but also from other districts of Warsaw and its surrounding. Cooperation with renowned architects from APA Wojciechowski and TzurArchitects will set out new standards in design and construction of shopping centres. One of the unique features of Galeria Północna will be an open rooftop garden with a lawn, walking paths and a playground. A partially glass roof will be yet another innovative solution, which combined with the extensive interior of the gallery will provide access to natural daylight. The unique structural design features have made Galeria Północna one of the most eco-friendly buildings in its category in Poland, earning it a LEED GOLD precertification.

The gallery offers its tenants around 64,000 m2 of space and 2,300 parking places for its customers. It is one of the two, alongside Galeria Wilanów, most important GTC investments in Warsaw. The construction of the gallery started in July 2015 and its opening is planned for H1 2017. The commercialization of Galeria Północna is executed by Cushman & Wakefield and JLL, all marketing and advertising activities are provided by Communication Unlimited agency.

 

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GTC acquires Duna Tower in Budapest

  • Twin-tower, Class A office building
  • Total GLA of 31,500 sq. m
  • Tangible near-term value-add potential via improved occupancy and lease extensions

GTC, one of the leading commercial real estate companies in CEE has acquired Duna Tower, an iconic office building that dominates the skyline of Budapest’s Váci Corridor.

Inaugurated in 2006, the 60-meter-high office tower stands on the Pest side of Árpád Bridge. It has 16 floors and offers a total of 31,500 sq. m of gross leasable area plus a 3-floor underground garage with nearly 400 parking spaces. The building, located close to the Danube bank, boasts a fantastic view to the historic City and the Margaret Island. Downtown Budapest is a five-minute car journey only.

We are delighted to announce the acquisition of Duna Tower in Budapest. Following the successful completion of our capital increase, we are now ready to put our expertise and financial resources to work to pursue our growth strategy. The acquisition of Duna Tower marks the next significant milestone, after launching construction works on GTC’s own development projects of over 90,000 sq. m GLA in Poland and Serbia this year.said GTC CEO Thomas Kurzmann.

This purchase takes GTC Hungary’s total office portfolio up to 118,000 sq. m gross leasable area and reinforces the company’s profile as leading investor and developer in the Region. GTC’s portfolio in Budapest includes major class A office buildings like Center Point, GTC Metro and Spirál.

The purchase price reflects ca. 7% yield on current rent income with actual 80% occupancy. We will invest in upgrading the buildings specification and amenities to improve service and comfort level to new and existing tenants. Increased occupancy combined with increased lease terms will contribute to value appreciation.said Mr. Kurzmann. “We believe that our strong local expertise and presence in Budapest supported by an improving office market environment will enable us to reach these goals quickly”, he added.

The Hungarian economy has been showing a strong momentum over the past year, with GDP growing year-on-year at 3.3% in Q1 2015 and an unemployment rate dropping from ca. 10% to below 7% in just two years. Currently, the vacancy rate in Budapest’s Class A office sector stands at 12.8% but is expected to drop further to ca. 10% over the next two to three years, mainly due to an increase in demand and lack of new Class A developments in the foreseeable future.

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Martes Sport to further expand the offer of Galeria Północna

  • Galeria Północna signed a lease agreement with Martes Sport.

Martes Sport becomes next tenant in Galeria Północna. Sports retail chain, offering its clients sports apparel and accessories of renowned brands, will lease over 840 m2  in the first modern shopping and entertainment centre of the north-east part of Warsaw, which is scheduled for opening in H1 2017.

Martes Sport is a large format sports store chain offering its clients sports apparel and accessories of renewed brands including Hi-Tec, Arena, Iguana, Magnum, Colmar, Martes, Elbrus, Ice PeakNike, Adidas, Reebok, Puma, Salomon, Merrel, Kross, Merida, The North Face, Brugi, Head, Atomic, Rossignol, Uvex, Viking, Spokey, Roxy and Quicksilver.

The offer of Martes Sport includes selected, highest quality products of many well established brands providing its customer with a wide range of sports apparel and accessories. Becoming a tenant of Galeria Północna is an important step of our expansion strategy in Poland. GTC’s investment already boasts a diversified offer and innovative design solutions. We are glad to shape the landscape of the retail market together with Galeria Północna” – comments Tomasz Barchański, Head of Development and Management at Martes Sport.

The construction of Galeria Północna started in July this year and its opening is scheduled for the first half of 2017. Galeria Północna will be a modern shopping and entertainment center, which due to its unique design features will have a significant impact on the Polish retail sales market.

“The concept of organizing store sections according to themes, adopted by Marters Sport, allows customers to make the right purchase with ease. The transparent product exposition is customer friendly and conveys a sports related atmosphere. Our goal is to provide our future customers with a rich, diversified offer and to create a comfortable ambience ultimately making the time spent in Galeria Północna an exceptional experience. Signing a lease agreement with Martes Sport, a manufacturer and distributor of renowned sports brands, confirms the potential and attractiveness of Galeria Północna.” – comments Szymon Mińczuk, Director of Lease at GTC

Martes Sport is joining tenants’ list of Galeria Północna, next to names like Cinema City, Carrefour, Empik, Smyk, H&M, LPP Group (owner of clothing brands like Reserved and Cropp), Wólczanka, Vistula, W.KRUK, CCC and many more.

Galeria Północna is going to shift the dynamics of Warsaw retail sales. The new modern shopping and entertainment centre, located in the north-east part of Warsaw, will aim to attract not only customers from Białołęka but also from other districts of Warsaw and its surrounding. Cooperation with renowned architects from APA Wojciechowski and TzurArchitects will set out new standards in design and construction of shopping centres. One of the unique features of Galeria Północna will be an open rooftop garden with a lawn, walking paths and a playground. A partially glass roof will be yet another innovative solution, which combined with the extensive interior of the gallery will provide access to natural daylight. The unique structural design features have made Galeria Północna one of the most eco-friendly buildings in its category in Poland, earning it a LEED GOLD precertification.

The gallery offers its tenants around 64,000 m2 of space and 2,300 parking places for its customers. It is one of the two, alongside Galeria Wilanów, most important GTC investments in Warsaw. The construction of the gallery started in July 2015 and its opening is planned for H1 2017. The commercialization of Galeria Północna is executed by Cushman & Wakefield and JLL, all marketing and advertising activities are provided by Communication Unlimited agency.

 

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Galeria Północna to shine in Cannes

  • Galeria Północna is to participate in the MAPIC trade show, the most prestigious event in the retail property industry.     

MAPIC is the largest annual retail property trade show in Europe, in the French city of Cannes. This year’s edition of the prestigious event is to feature Galeria Północna, a modern shopping and entertainment center, which will bring new quality to the Polish retail trade market. The opening of Galeria Północna is scheduled for H1 2017.  

This year’s edition of the show will bring together approx. 8,400 participants including retailers, investors, developers, local authorities and other persons with interests in the property market and commercial leasing of retail space. Investors and developers from around the world will showcase their flagship retail projects. Among them is Galeria Północna, currently, alongside Galeria Wilanów, one of the two most important GTC investments in Warsaw.

Galeria Północna is developed in cooperation with the best architects. A continuously expanded offer and applied state of the art design will attract customers from entire Warsaw and its surrounding. I am convinced that the unique design and the construction solutions of the project will set new standards in the development of similar projects. We are delighted to have the chance to present our investment at the largest showcasing event in the retail property industry. Trade shows are a great opportunity to meet tenants, other developers and industry leaders.” – says Jacek Wachowicz, head of investments at GTC.

Galeria Północna has been designed with the principles of sustainable construction in mind. The approach will provide more comfort to both future customers and tenants. The project has already received the LEED GOLD precertification, further confirming the minimal environmental impact of the innovative solutions applied in the building. To ensure world class comfort to the visitors of Galeria Północna the architects of renowned APA Wojciechowski and Tzur Architects have designed a unique, open, green roof with walking alleys and a playground. A partially glass roof in combination with the vast interior of the gallery will provide unparalleled amounts of daylight, a solution not found in other shopping centers in Poland.

This shopping and entertainment centre is to offers to its tenants approx. 64,000 m2 of retail space and 2,300 parking places for its customers. The construction of Galeria Północna started in July 2015 and its opening is scheduled for H1 2017. The commercialization of Galeria Północna is being supported by JLL and Cushman & Wakefield, all marketing and advertising activities are provided by Communication Unlimited agency.

During the trade show GTC will also present its Galeria Wilanów project, which is to be the first new generation shopping centre located in the south part of Warsaw. The renowned APA Wojciechowski and Moshe Tzur Architects have put openness of this shopping and entertainment centre to its customers at the core of its design. The eco-friendly project is to include an entertainment section and playgrounds. Galeria Wilanów will offer its tenants over 61,000 m2 in approx. 250 stores and service points. Furthermore, 2,200 parking places on the roof and underground will be made available to customers. Galeria Wilanów has already attracted many recognizable tenants like: Cinema City, Carrefour, H&M, LPP Group and many others.

 

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GTC now on the growth path

Q3/9M 2015 HIGHLIGHTS

  • After successful restructuring GTC focuses on growth
  • Capital increase completed with 34% oversubscription
  • NOI at €59m in 9M 2015 (€61m in 9M 2014); NOI margin at 75% in 9M 2015 (74% in 9M 2014)
  • Stabilized value of commercial assets
  • Significant decrease in financial expenses, net to €22m in 9M 2015 (€31m in 9M 2014)
  • Profit before tax at €22m in 9M 2015 (loss of €59m in 9M 2014)
  • FFO up to €28m in 9M 2015 (€22m in 9M 2014)
  • Net debt down to €613m (€698m as of 31 Dec. 2014)
  • Net LTV down to 50% (54% as of 31 Dec. 2014)
  • Interest cover at 2.9x (2.1x as of 31 Dec. 2014)

PORTFOLIO UPDATE

  • Total property at €1,232m; 82% income generating
  • Average occupancy rate at 90%
  • First phase of FortyOne office building in Belgrade completed (10,300 sqm)
  • Almost 92,000 sq m of office and retail space under construction
    • Galeria Północna in Warsaw
      (retail; 64,000 sq m)
    • University Business Park in Łódź
      (office; 19,600 sq m)
    • Second phase of FortyOne project in Belgrade (office; 8,000 sq m)

The successful execution of the capital increase with proceeds of EUR 140 million now enables GTC to use its expertise in its core markets to realise growth through new developments and selective acquisitions. – Thomas Kurzmann, GTC’s CEO said. Over the past months we have successfully continued with the implementation of turnaround measures. In addition to the loan restructuring executed earlier this year, we continue to make significant progress in the disposal of non-core assets, but more importantly we focus on growth. The completion of the FortyOne office building in Belgrade represents the first milestone in the execution of our development pipeline – and there are more projects to come. With the commencement of Galeria Północna construction in Warsaw, one of GTC’s prime shopping mall projects, University Business Park in Łódź or the second phase of the FortyOne project in Belgrade, we move full steam ahead with delivery of our development projects. Additionally, we remain focused on growth through acquisition of value add income producing properties and attractive land plots for future development projects across the CEE and SEE regions. – Mr Kurzmann added.

FINANCIAL HIGHLIGHTS

Total revenues were at the level of €28m in Q3 2015 compared to €31m in Q3 2014 and at €88m in 9M 2015 compared to €95m in 9M 2014, mostly due to disposal of Kazimierz Office Center and non-core assets, as well as slow down of residential sales due to significant decrease in the available inventory.

NOI was at the level of €19m in Q3 2015 compared to €20m in Q3 2014 and €59m in 9M 2015 compared to €61m in 9M 2014, mostly due to sale of Kazimierz Office Center and non-core assets. NOI margin remained stable at 75% in 9M 2015 compared to 74% in 9M 2014.

Gross profit from operations was at €19m in Q3 2015 compared to €21m in Q3 2014 and €60m in 9M 2015 compared to €61m in 9M 2014.

Administrative expenses, excluding provision for stock based program, remained unchanged at 2m in Q3 2015 compared to €2m in Q3 2014 and declined to €7m in 9M 2015 compared to €9m in 9M 2014, due to cost management.

Net Financial expenses decreased sharply to €6m in Q3 2015 compared to €9m in Q3 2014 and to €22m in 9M 2015 compared to €31m in 9M 2014 due to deleveraging activity and restructuring of loans

Profit before tax was at €11m in Q3 2015 compared to €9m in Q2 2014 and at €22m in 9M 2015 compared to a loss of €59m in 9M 2014.

There was no tax provision Q3 2015 compared to €4m of tax in Q3 2014, as a result the tax provision went down to €5m in 9M 2015 from €8m in 9M 2014.

Net profit of €11m in Q3 2015 compared to €5m in Q3 2014 and net profit of €17m in 9M 2015 compared to a net loss of €67m in 9M 2014, due to improved operating results combined with no movement in the valuation of investment property and impairment of residential projects.

FFO up to €28m in 9M 2015 compared to €22m in 2014 mostly due to a significant decrease in interest and hedging expenses.

Value of the properties at €1,232m as of 30 September 2015 compared to €1,293m as of 31 December 2014 due to the disposal of Kazimierz Office Centre. 82% of total assets are income generating.

Total bank debt and financial liabilities down to €714m as of 30 September 2015 from €811m as of 31 December 2014. The weighted average debt maturity was 3.7 years and the average cost of debt is down to 3.6% p.a.

Loan to value ratio was at the level of 50% as at 30 September 2015 compared to 54% as at 31 December 2014.

NAV (IFRS, before minority) per share stood at €1.3 as at 30 September 2015 compared to €1.4 as at 31 December 2014.

Interest coverage was at 2.9x as at 30 September 2015 compared to 2.1x as at 31 December 2014.

KEY ACHIEVEMENTS

Focus on growth

After successful completion of the restructuring process, it is now visible that GTC’s portfolio is stabilized and provides a firm foundation for further growth. Its financing structure is solid with room to extend debt maturity and further improve financing cost. Optimized and efficient management structure is in place to manage and implement the new strategy. These features combined with the successful capital increase allow GTC to pursue its growth strategy and proceed with the acquisition and development activities according to its plan.

Successful completion of capital increase to fund acquisition and development program

Following the shareholders’ consent, GTC issued 108,906,190 series K shares with pre-emptive rights at PLN 5.47 per share. The share offering was more than 34% oversubscribed. The proceeds from the share issue will fund the development of GTC’s promising projects, including Galeria Wilanów in Warsaw, University Business Park in Łódź and the second phase of the FortyOne project in Belgrade. Acquisitions and development projects will enable GTC to further increase its real estate portfolio value and financial results. Additionally, GTC has carefully selected a number of potential acquisition targets that meet its investment criteria. The company plans to invest in properties with value-added potential that can be realized through its regional platform and asset management skills. The acquisition targets are located in Poland and capital cities in the CEE and SEE region. GTC plans to acquire assets in the office and retail sectors.

Completion of FortyOne office building (Belgrade, Serbia)

In October GTC officially opened the first building in its new office complex in Belgrade – FortyOne. The building of over 10,000 sq m has already reached 88% of occupancy.

Almost 92,000 sq m of office and retail space under construction (Poland and Serbia)

GTC returned to development path and has almost 92,000 sq m under construction in one prime retail project and two modern office projects. Following receipt of a building permit, GTC commenced construction of Galeria Północna,
a 64,000 sq m modern shopping centre. The centre is located in the north-east part of Warsaw, and will attract customers from Białołęka and surrounding districts. As of today Galeria Pólnocna is 36% pre-leased, has financing in place and its construction work progresses as planned.

Furthermore, GTC commenced the construction of University Business Park building II following pre-leasing of 9,000 sq m. The building is a modern, class A office complex of 19,600 sq m, situated in the centre of Łódź. The complex offers tenants flexibility and growth opportunities within one office park. The University Business Park features a restaurant, café and other amenities. The tenants will move in April 2016.

In Serbia, very good leasing results of FortyOne office project and an increasing interest from the tenants encouraged GTC to commence the development of the second phase of this project. The LEED Gold certified building, of over 8,000 sq m will be completed in the third quarter of 2016.The FortyOne project is one of the most modern office parks, comprising three buildings, in New Belgrade.

 

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CCC joins Galeria Północna

  • CCC, a leading Polish footwear retailer, will open its store in Galeria Północna.

CCC, the largest manufacturer and a leading footwear retailer in Poland, signed a lease contract with Galeria Północna, which is to commence operations in H1 2017.Galeria Północna is to be the first modern shopping and entertainment centre located in the north-east part of Warsaw.

CCC stores are some of the most recognizable shoe shops in Poland. The largest manufacturer and a leading footwear retailer in Poland adheres to the “house of brands” principle, namely sales of multiple brands under one roof. The approach has enabled CCC to affirm a market leading position in its category. CCC will open a store of around 800 m2 in Galeria Północna.

CCC is yet another key tenant adding more diversity and style to Galeria Północna. The recognized footwear retailer hereby joins our other valued tenants like: Cinema City, Carrefour, Empik, Smyk, H&M, LPP Group (owner of brands like Reserved and Cropp), Wólczanka, Vistula and W.KRUK.

We want our gallery to meet the highest expectations of our future customers. The fact that CCC – a market leader in its field and one of the most successful Polish companies – opted to be present in Galeria Północna is highly appreciated. I am convinced that CCC will contribute to creating an attractive fashion offer to our customers.”- says Szymon Mińczuk, Director of Lease at GTC.

Galeria Północna project is going to shift the dynamics of Warsaw retail sales. The new modern shopping and entertainment centre, located in the north-east part of Warsaw, will aim to attract not only customers from Białołęka but also from other districts of Warsaw and its surrounding. Cooperation with renowned architects from APA Wojciechowski and TzurArchitects will set out new standards in design and construction of shopping centres. One of the unique features of Galeria Północna will be an open rooftop garden with a lawn, walking paths and a playground. A partially glass roof will be yet another innovative solution, which combined with the extensive interior of the gallery will provide access to natural daylight. The unique structural design features have made Galeria Północna one of the most eco-friendly buildings in its category in Poland, earning it a LEED GOLD precertification.

The Gallery offers its tenants around 64k m2 of space and 2,300 parking places for its customers. It is currently one of the two, alongside Galeria Wilanów, most important GTC investments in Warsaw. The construction of the Gallery started in July 2015 and its opening is planned for H1 2017. The commercialization of Galeria Północna is executed by Cushman & Wakefield and JLL, all marketing and advertising activities are provided by Communication Unlimited agency.

 

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More brands at Galeria Północna

  • Wólczanka, Vistula and W.KRUK to open a new showrooms in Galeria Północna.

Galeria Północna signed leases with Wólczanka, Vistula and W.KRUK. The brands are to open their showrooms in Galeria Północna, which is to commence operations H1 2017.

Wólczanka, Vistula and W.KRUK belong to Vistula Group S.A. which specializes in designing, production and distribution of jewelry and fashion wear for both men and women. The Group has been dynamically developing its own sales network for years and now decides to join the success of Galeria Północna.

“Joining forces with Galeria Północna was a natural step in the dynamic development of our brands. In response to the needs of our customers, we wish to be present in all the best shopping galleries. Therefore the decision to open our showrooms in Galeria Pólnocna came quite easily” – says Marcin Rydz, Investment Director at the Vistula Group.

The construction of Galeria Północna started in July this year and its opening is scheduled for the first half of 2017. Galeria Północna will be a modern shopping and entertainment centre, which due to its unique features will attract not only customers from Białołęka but also from other districts of Warsaw and its surrounding.

“We are thrilled to welcome new prestigious brands to our tenants portfolio, which are synonymous to elegance and high quality to our customers. Galeria Północna will be the first modern shopping and entertainment centre located in the north-east part of Warsaw. We thrive to give our customers the best shopping experience and a varied range of products on offer. We deliver this goal by adding new tenants such as Vistula Group’s: Wólczanka, Vistula and W.KRUK”. – says Szymon Mińczuk, Director of Lease at GTC.

Wólczanka, Vistula and W.KRUK are joining the list of tenants of Galeria Północna, alongside Cinema City, Carrefour, Empik, Smyk, H&M, LPP Group (owner of brands like Reserved and Cropp) and many more.

Galeria Północna is to be the first modern shopping and entertainment centre located in the north-east part of Warsaw and one of the two most important GTC’s investments alongside Galeria Wilanów. One of its unique features is a green area with a lawn, walking alleys and a playground on a part of the roof structures. Another unique solution, designed by the renowned architects – APA Wojciechowski and Tzu Architects – is a glass roof, which in combination with the spacious interior of the Gallery will ensure significant amounts of natural daylight, a feature not found in other existing galleries. The Gallery offers its tenants around 64k m2 of space and 2,300 parking places for its customers. The commercialization of Galeria Północna is executed by Cushman & Wakefield and JLL, all marketing and advertising activities are provided by Communication Unlimited agency.

 

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