Strong performance proves value creation for shareholders

Q1 2017 HIGHLIGHTS

  • Development profit of €24m driven by projects under construction and assets for sale
  • Profit after tax at €32m (€16m in Q1 2016)
  • Earnings per share up by 96% to €0.07 (€0.04 in Q1 2016)
  • EPRA NAV increased to €933m (€897m as of 31 December 2016)
  • EPRA NAV / share increased 4% to €2.03 as of 31 March 2017 from €1.95 as of 31 December 2016
  • Gross margin from rental activity increased by 6% to €22m in Q1 2017 (€21m in Q1 2016)
  • 18% FFO I improvement to €12m (€10m in Q1 2016)
  • FFO I / share at €0.026 (€0.022 in Q1 2016)

PORTFOLIO UPDATE

  • Completion of FortyOne phase III (Belgrade) with 10,700 sq. m and GAV of €23m
  • GAV of income generating portfolio at €1,290m (2% increase)
  • 154,000 sq. m GLA under construction in 5 projects with over 72,000 sq. m to be completed in 2017
  • 156,000 sq. m GLA in planning stage
  • 34,000 sq. m of office and retail space newly leased and renewed
  • Occupancy at 93% (94% as at 31 December 2016) impacted by completion of FortyOne III and preparation of space for extension by some tenants
  • Strong pipeline of accretive acquisition opportunities of approx. €200m of income generating assets and development land in various stages of negotiations

GTC delivered strong per share performance which already proves solid value creation for our shareholders. Our high quality assets with sustainable high occupancy rates generate recurring income, which combined with our development pipeline and accretive acquisition opportunities provide a solid total return. Our development pipeline includes over 154,000 sq. m GLA under construction in such great projects as Galeria Północna, White House or Ada Mall as well as over 156,000 sq. m GLA at the planning stage, which will further unlock significant embedded value”– said Thomas Kurzmann, GTC’s CEO.

The results of the first quarter reflect the momentum of the current development and investment activity. It reconfirms our Total Return proposition as well as our target to generate a double-digit dividend and NAV growth in years to come”– commented Erez Boniel, GTC’s CFO.

“With the disposal of Galleria Burgas and Galleria Stara Zagora, we fully focus our portfolio on Poland and the capital cities in CEE and SEE region. We plan to reinvest the proceeds from this disposal into the growing Sofia’s office market” – commented Thomas Kurzmann.

2017_Q1_Financial Results_Press release

BlackRock to move into GTC White House

  • BlackRock will initially lease 3,500 sq. m with GTC White House with an option to extend the lease to 7,700 sq. m
  • GTC White House, a modern class A office building, is currently being developed by GTC in Budapest, Hungary
  • Total leasable area of the building is 21,500 sq. m

BlackRock, the world’s largest asset manager, have signed a lease for 3,500 sq. m at GTC White House, an office building presently being developed by GTC Hungary and due for completion in Q1 2018. The agreement was concluded with an option to extend the office area up to 7,700 sq. m, starting in April 2018.

BlackRock has opened an innovation and technology center in Budapest and the company found itself in an immediate need for high-quality office space. GTC Hungary has come to the aid offering a flexible solution and providing an interim office space at Duna Tower in four phases reaching 3,500 sq. m by Q3 2017. GTC Hungary acquired Duna Tower in November 2015 and carried out a complete refurbishment, including all common areas and the technical equipment.

We were extremely thorough while selecting our Budapest office as we wanted it to reflect the innovative culture of the company. GTC White House ticked all the key boxes for us including location, building infrastructure and amenities, as well as capacity to accommodate future growth. We were not only looking for an office building but also wanted to establish a long-term partnership with GTC Hungary as the developer and landlord”, commented Melanie Seymour, Managing Director and Head of BlackRock Budapest.

GTC White House is a modern A-class office building offering 21,500 sq. m GLA. The state-of-the-art project features exhilarating, uplifting green architecture, including an entirely refurbished turn-of-the-century stand-alone loft of 2,000 sq. m.  GTC White House is scheduled for delivery in Q1 2018.

“‘I am delighted that BlackRock have chosen Hungary and GTC White House as a permanent home for their Innovation and Technology Centre in Budapest. This is a major step forward for GTC in Hungary and compliments our development strategy in the region. GTC Hungary are offering BlackRock the utmost flexibility in their office occupation in a truly wonderful property and we are proud to be a part of their success”, added Robert Snow, Managing Director GTC Hungary.

“Cushman & Wakefield is very proud to have represented BlackRock in this significant office transaction and we look forward to our continued cooperation”, added Gergely Pados, Managing Partner Cushman & Wakefield Hungary.

ABOUT BLACKROCK

BlackRock is a global leader in investment management, risk management and advisory services for institutional and retail clients.  At March 31, 2017, BlackRock’s AUM was $5.4 trillion. BlackRock helps clients around the world meet their goals and overcome challenges with a range of products that include separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles.  BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®.  As of March 31, 2017, the firm had approximately 13,000 employees in more than 30 countries and a major presence in global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company’s website at www.blackrock.com

ABOUT GTC WHITE HOUSE

GTC White House in Budapest is a class A office building with a total leasable area of 21 500 sq. m and 299 underground parking places. The modern project features exhilarating, uplifting green architecture including an entirely refurbished turn-of-the-century stand-alone loft of 2,000 sq. m and a green roof. GTC White House is being built to a LEED Gold standard and will be delivered in Q1 2018.

ABOUT GTC AND GTC HUNGARY

The GTC Group is a leading real estate investor and developer focusing on Poland and three capital cities in Eastern Europe. Since 1994 GTC has developed 65 high standard, modern office and retail properties with a total area of over 1.1 million sq. m through Eastern Europe.

GTC now actively manages a commercial real estate portfolio of 35 commercial buildings providing nearly 550,000 sq. m of lettable office and retail space in Poland, Budapest, Bucharest, Belgrade and Zagreb. In addition, GTC has a development pipeline of more than 300,000 sq. m retail and office properties in capital cities of Eastern Europe, thereof 128,000 sq. m under construction.

GTC has implemented a dividend policy with a pay-out ratio of 65% of its FFO.

GTC S.A. is listed on the Warsaw Stock Exchange and included in the WIG30 index and inward listed on the Johannesburg Stock Exchange. The company’s shares are also included in the Dow Jones STOXX Eastern Europe 300 Index.

GTC Hungary is a subsidiary of GTC responsible for all its operations in Hungary. It was established in 2000 and since then has developed 85,900 sq. m of A-class office space in Budapest. Today, GTC Hungary manages the office space totaling 117,200 sq. m in four projects: Centerpoint, Spiral, GTC Metro and Duna Tower, and is developing two state-of-the art office projects: GTC White House and City Tower, which will enlarge its high quality office portfolio by another 64,000 sq. m.

Vaci47_northwest

Statement about mild fire on the roof of the Galeria Północna

Dear Sirs,

In collaboration with the relevant departments, our work to explain the causes of roof fire in the Galeria Północna and to estimate the losses caused by this incident has been completed. The fire appeared during the roof insulation work when a small portion of the plume lit up. The fire was extinguished quickly and smoothly, posing no threat to the lives and health of people on site and in the surrounding of the Galeria Północna.

The losses resulting from the incident are marginal and will not affect the opening of the Galeria Północna in any way. The opening is planned for the third quarter of 2017. Cleaning works at the roof are currently ongoing.

At the same time, on behalf of the general contractor of the investment, Unibep SA, we would like to inform you that at the time of the accident about 100 people were present at the scene – mostly Unibep SA supervisors, security and employees of subcontractors working on the roof and in other parts of shopping mall. This is only a small part of the employees working on the investment area. On weekdays, over 1000 people work on the construction of the Galeria Północna. Employees were quickly and efficiently evacuated from the scene of the incident, their life or health was not compromised. The presence of employees on the site of the investment was directly attributable to the subcontractor’s decision and was dictated by the favorable weather conditions necessary to carry out the work within the roof.

 

If case of any further questions, please contact Emilia Szkudlarek, mobile: 506 008 168, e-mail: eszkudlarek@gtc.com.pl.

 

Best regards

Director of the Galeria Północna