UBS Bank has initiated research coverage of Globe Trade Centre S.A. with a BUY recommendation and a price target of EUR 17 (PLN 65).

In the report dated October 18, UBS Bank recommended buying GTC shares with a price target of EUR 17 (PLN 65). UBS Bank has initiated coverage of five Central & Eastern European real estate companies.

GTC is UBS’s top pick among Warsaw-listed real estate companies, and reflects the analyst’s preference for development activity backed by an extensive project pipeline, a clear strategy and excellent track record, exposure to SEE/CIS markets, and low leverage.

“We believe that these are the key factors required to deliver attractive growth in the current market conditions,” said Andrzej Kasperek, author of the report.

According to the UBS Bank report, GTC offers good exposure to the retail, office and residential markets in the Central & Eastern Europe (CEE) and Southeastern Europe (SEE) regions. UBS believes that GTC is well positioned to benefit from the high and sustainable growth in the CEE and SEE property markets. The bank’s analyst expects the company to achieve 27% (CAGR 2007-10E) growth in adjusted net asset value, with a EUR 1.7 billion development pipeline and a EUR 1.4 billion residential sales program being the main internal drivers of this strong growth.

In UBS Bank’s opinion, GTC management’s excellent track record gives the analyst confidence that the investment program will be carried out. “We see like-for-like rental growth and further yield compression as additional value drivers,” Kasperek wrote.

He is also optimistic about the prospects of the real estate markets where GTC has a good position. The key drivers of the region’s attractive growth outlook are the strong macro environment, the favorable supply/demand momentum, and the continuing flow of funds. “While we are positive about CEE, we think that the SEE and Commonwealth of Independent States (CIS) regions have the best growth potential,” the analyst said.

UBS Bank thinks that real estate sector valuations have become attractive following significant underperformance since the beginning of the year. In their opinion, the fundamentals remain solid, particularly in the CEE region, creating an attractive entry point for investors.

Globe Trade Centre S.A.

KOR 45A, 02-146 Warsaw NIP: 527-00-25-113 T: +48 22 16 60 700 www.gtc.com.pl

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