First tenants moved into Fortyone III

  • FortyOne III – the third building of the modern FortyOne complex in Belgrade – was completed on time
  • The FortyOne complex comprises three A-class  office buildings
  • Total leasable area of the project is 27,000 sq. m

GTC Group has officially opened the third building of the FortyOne complex in Belgrade, marking the completion of the entire investment. The first tenants moved into the building at the beginning of April. The prominent list of tenants that have already chosen FortyOne III as their new premises include Endava and DHL.

FortyOne III offers a total leasable area of over 10,700 sq. m and was built in accordance with the highest international standards of ‘green’ development. The first tenant has already moved in. Endava, an IT services company, with over 16 years of experience of working with some of the world’s leading Finance, Insurance, Telecommunications, Media, Technology, and Retail entrepreneurs, leased 6,500 sq. m, over a half of the building’s lettable area.

Additionally, FortyOne III will feature Muscle Beach Gym – a modern fitness centre encompassing over 370 sq. m.

“Since the very beginning, the FortyOne complex brought us many reasons to be proud of. Therefore we are very happy to announce the successful completion of the whole project, especially as the complex is highly valued among tenants and was awarded the LEED Gold certified as the first building in Belgrade” – said Thomas Kurzmann, GTC’s CEO.

Also DHL, a division of the global market leader in the logistics and transportation industry, will be moving into the building shortly and will occupy 280 sq. m.

FortyOne is a world-class complex with three office buildings conveniently located in the New Belgrade municipality (on the corner of Bulevar Milutina Milankovica and Bulevar Umetnosti). The business park is close to Belgrade’s main highway, which makes it easily accessible by both car and public transport.

FortyOne III

GTC signed a refinancing loan agreement for Corius office building

  • GTC signed a refinancing loan agreement for Corius – the third building of the modern Aeropark Business Centre office complex
  • New investment loan in the amount of EUR 11.4 million from Berlin Hyp Bank

GTC S.A., one of the leading commercial real estate companies in Central, Eastern, and Southern Europe, has signed an EUR 11.4 million investment loan with Berlin Hyp Bank for the refinancing of the previous loan agreement for the Corius office building. The A-class office building offers a total leasable area of over 9,700 sq. m and is GOLD LEED certificated.

The Corius office building is a part of Aeropark Business Center complex located at 17 Stycznia Street, in the direct proximity of Warsaw’s Chopin Airport. The entire Aeropark project offers a total of 29,000 sq. m of high-quality commercial space, giving the tenants room for growth within one office park.

“The refinancing granted by Berlin Hyp Bank confirms the unceasing potential of this pro-ecological development. We appreciate the continued relationship of the company with its lender” – said Erez Boniel, GTC’s CFO.

The whole complex combines both the good quality modern office space with easy access to public transport, thus meeting the needs of even the most demanding tenants. Its architectural design, reflecting the natural advantages of the surroundings (including a pond and green areas) and the proximity to the airport, was created by the renowned APA Kuryłowicz & Associates studio. Aeropark Business Center offers 180 parking spaces that are available for tenants in an underground garage and additional parking spaces for guests, taxis, and couriers on the ground level.

Currently, the entire Aeropark Business Center complex (consisting of Nothus, Zephirus, and Corius) boasts tenants such as are Novo Nordisk, Mitsubishi, Eaton, Avon, Pandora, and Funai. Corius received a prestigious LEED (Leadership in Energy and Environmental Design) certificate, granted by American Green Building Council, that promotes environmentally friendly real estate development.

GTC_Aeropark Business Center

Strong operating performance allows to propose dividend of PLN 0.27 per share

2016 HIGHLIGHTS

  • Total investment of €255m (including €162m of acquisitions)
  • Revaluation gain of €85m (€26m in 2015) driven by projects under construction includes also modest 3% revaluation gain on income generating properties on improved performance
  • EPRA NAV increased to €897m (€779m as of 31 December 2015)
  • EPRA NAV / share increased 20% to PLN 8.62 from PLN 7.21 as of 31 December 2015
  • Gross margin from rental activity increased by 10% to €86m (€79m in 2015)
  • 13% FFO I improvement to €43m (€38m in 2015)
  • FFO I / share at PLN 0.39 (PLN 0.38[1] in 2015) and FFO I yield of 5%
  • Profit after tax at €160m (€44m in 2015)
  • Earnings per share up by 183% to €0.34 (€0.12 in 2015)

[1] Based on GTC’s 59% share in FFO I of City Gate to present GTC’s fair economical interest in generated funds from operations

PORTFOLIO UPDATE

  • Acquisition of income generating assets of €140m and land for development of €22m (total acquisitions in 2015 of €53m)
  • Investment in assets under construction of €93m (€34m in 2015)
  • 23% growth in total property value to €1,624m (€1,324m as of 31 December 2015)
  • 20% growth in income generating portfolio to €1,261m (€1,052m as of 31 December 2015)
  • 139,000 sq. m NLA under construction in five projects with over 83,000 sq. m to be completed in 2017
  • 181,000 sq. m NLA in planning stage
  • 144,000 sq. m of new lettings and lease renewals for office and retail space in 2016
  • Occupancy rate at 94%

GTC delivered solid results in 2016, several value accretive acquisitions and completions of office projects contributed significant to NAV and NOI growth. We will deliver a strong performance over the next years to come as our income-generating portfolio will expand and boost rent income through further accretive acquisitions and completion of development projects. Over 139,000 sq. m GLA of retail and office space under construction and an additional 181,000 sq. m at planning stages supported by a strong cash position are the ingredients of a substantial NAV growth to come.”– Thomas Kurzmann, GTC’s CEO said.

“Thanks to the growth achieved in 2016, the board recommended dividend distribution from 2016 profits of PLN 0.27 per share. Recognizing profit distribution to shareholders as one of management’s goals, we are committed to execute appropriate, performance-based dividend payments, whilst continuing to pursue our NAV and FFO I growth strategy. The dividend policy is therefore guided by our cash resources, planned investment and expected FFO I growth.”commented Erez Boniel, GTC’s CFO.

We are confident that we will generate a double-digit dividend and NAV growth in years to come as we deliver on our total return investment strategy.”– added Thomas Kurzmann.

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GTC lays cornerstone for Ada Mall

  • The cornerstone ceremony took place on 6 March
  • Ada Mall will have 34,000 sq m of modern, well designed retail space
  • Project is scheduled for completion in Q3 2018

The ceremonial laying of the cornerstone for Ada Mall, GTC’s latest retail investment in Belgrade, was held on 6 March 2017. It was attended by representatives of the investor, its partners and city authorities.

GTC received the final building permit for Ada Mall in mid-February 2017. The plot for the retail project stretches along Radnička Street, opposite the popular Ada Ciganlija recreational zone.

At GTC, we strongly believe that with its great location, the state-of-the-art design concept and it’s very attractive leisure offer Ada Mall will become the preferred shopping destination in Belgrade” commented Thomas Kurzmann, GTC’s CEO.

Last year, GTC celebrated 15th anniversary of successful operations in Serbia and it doesn’t slow down the pace.

“We are more than satisfied with the performance of our existing office portfolio in Belgrade, however it is always a pleasure to launch another project. Additionally, as Ada Mall is our first retail investment in Serbia, it marks an important milestone of our operations in the country” commented Peđja Petronijević, GTC General Manager in Serbia.

Ada Mall will have approximately 34,000 sq m of gross lettable area (GLA) with 1,000 designated parking places and will be designed and built according to the highest international standards. The development is located in Cukarica, directly opposite Ada Ciganlija. The opening of the mall is scheduled for autumn 2018.

GTC_Cornerstone at Ada Mall_Siniša Mali, Mayor of Belgrade and Thomas Kurzmann, GTC CEO

GTC supports Children’s Hospitals in Warsaw

  • GTC donated PLN 40 thousand to The Friends of Children’s Hospitals of Warsaw Foundation at the CEE Retail Real Estate Awards Gala
  • The donations will be used to acquire special medical equipment for Medical University of Warsaw

GTC, one of the leading commercial real estate companies in Central, Eastern and Southern Europe, received an official title of “A friend of the Children’s Hospitals of Warsaw” by donating PLN 40 thousand  at this year’s CEE Retail Real Estate Awards gala.

At the ninth annual Europa Property CEE Retail Real Estate Awards Gala, the developer and asset manager donated PLN 40 thousand to the Friends of the Children’s Hospitals in Warsaw Foundation, which will be dedicated to acquire special medical equipment. The Foundation’s current project is to purchase an endoscope and a videostroboscope for laryngeal treatment for the Medical University of Warsaw.

At GTC, we pay a lot of attention to being a caring member of the society and we feel a great responsibility to share and to make good deeds towards the needy, especially when the cause concerns children. We endeavor to take every opportunity we can to support such admirable organizations as the Friends of the Children’s Hospitals in Warsaw Foundation and we plan on doing so in the future” commented Jacek Wachowicz, GTC’s CIO.

Founded in 1993 with the support of USAID, the Friends of the Children’s Hospitals in Warsaw Foundation was one of the first non-governmental organizations in Poland. Its mission is to make the best care available for children by investing in Warsaw hospitals for children through donations of state-of-the-art medical equipment and funds for facility renovations.

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KMG Rompetrol to stay at City Gate in Bucharest

  • KMG Rompetrol has signed a five-year City Gate lease prolongation with GTC
  • KMG Rompetrol will retain 9,400 sq m of modern office space
  • The total leasable area of the complex is 48,000 sq m

GTC has signed another lease agreement with KMG Rompetrol, a petroleum industry giant and one of the key players in the fuel sector in Southeast Europe, extending the contract for another 5 years. KMG Rompetrol is to retain 9,400 sq m of its headquarters in City Gate in Bucharest, Romania.

KMG Rompetrol, an international oil company operating in Romania, Moldova, Bulgaria, Georgia and France, decided to continue its lease of 9,400 sq m of modern office space in the northern tower of the City Gate complex until July 2023. The property is located in a prestigious business district of Bucharest and consists of two independent towers, with a total leasable area of nearly 48,000 sq m.

“The trust of our business partners strengthens GTC’s position as a leading real estate player on the Romanian office market. We are glad a company as renowned as KMG Rompetrol once again relied in us and showed proof of their satisfaction by extending their lease” commented Bogdan Jigman, Managing Director of GTC Romania.

City Gate is considered to be one of the best performing office projects in the Romanian capital. Last year, GTC successfully streamlined the ownership structure of the whole complex by buying out its minority partner, Bluehouse Capital and now owns 100% of the equity.

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Well known fashion brand in Galeria Północna – New Yorker joins the tenants group

New Yorker, the German fashion chain belongs to the leaders of the European clothing industry. It’s well known amongst the young fashion segment and it just confirmed it’s retail space in Galeria Północna. The store will occupy an area of 1220 sqm., and will be the thirteenth shop in the center of over 1000sqm. Finilized in the last of the lease agreement significantly contributed to the increase in the level of commercialization of the Galeria Polnocna, which at the moment is 80%.

New Yorker has more than 1,000 stores in more than 40 countries worldwide. Since many years, this brand follows the latest trends in fashion. A wide and diverse range of New Yorker is divided into number of known brands, such as FISHBONE, FISHBONE SISTER (sportswear and streetwear), AMISU and SMOG (classic and elegant style clothing), as well as CENSORED (underwear and swimwear). ACCESSOIRES which is a line that is full of distinctive accessories.

Under the motto “Dress for the moment” even the most demanding customer will find the dream outfit for every occasion in New Yorker

Moreover, several times a week we are communicating the new agreements that we sign with the new tenants. There are many ongoing conversations with the potential tenants, some of them will be finalized in the near future. What pleases us the most, is that in addition to well-known and highly anticipated brands such as New Yorker, we can offer our customers not available to date stores, such as Poland’s first Hamleys, one of the first stores Forever 21 or the first in Warsaw multibrand living 4faces – highlights Agnieszka Nowak, director of the Galeria Polnocna.

We can observe the commercialization of the Galeria Polnocna. Recently, new tenants joined Galeria Polnocna, brands such as  Hamleys, 4faces, Starbucks, Ethno Cafe, Bierhalle, McDonald’s, Makarun, Culinary Workshop. CCC brand decided to significantly enlarge it’s retail space before the offical opening of Galeria Polnocna.

The lease transaction GTC – investor of Gallery North – advised by experts JLL.

New Yorker is another big fashion tenant that decided to launch it’s store in the Galeria Polnocna. Centre keep expanding its portfolio of brands with a very popular clothing chain, aimed at younger audiences. This is another element that will help us create the specific offer aimed on all families. – comments Agnieszka Olszewska, Senior Consultant in the Department Hiring Retail, JLL

Strong growth momentum

9M 2016 HIGHLIGHTS

  • NOI increased by 10% to €65m (€59m in 9M 2015)
  • Revaluation gain of €39m (loss of €2m in 9M 2015) mainly driven by ongoing projects under construction
  • Profit after tax of €107m (€17m in 9M 2015), positively impacted by successful merger of GTC SA with its Dutch entities
  • 14% FFO improvement to €33m (€29m in 9M 2015)
  • €175m of new project financing raised
  • EPRA NAV increased by 8% to €837m (€779m as of 31 December 2015), corresponding to an EPRA NAV per share of € 1.82 [PLN 7.85] (€1.69 [PLN 7.29] as of 31 December 2015)

PORTFOLIO UPDATE

  • Total property value of €1,544m as of 30 September 2016 (1,324m as of 31 December 2015)
  • 16% growth in income generating portfolio to €1,222m (€1,052m as of 31 December 2015)
  • Total investment volume of €221m (thereof €152m of acquisitions)
  • Disposal of non-core standing assets successfully executed; ongoing land bank disposal; total sales of €29m in 9M 2016
  • 106,000 sq. m NLA under construction in four projects with over 82,000 sq. m to be completed in 2017
  • 160,000 sq. m in planning stage and another 39,000 sq. m in pre-planning stage
  • 94,000 sq. m of new lettings and lease renewals for office and retail space
  • Stable occupancy rate at 91%

“We are very pleased to report solid results for Q3 2016. Several new acquisitions of value accretive office buildings over the last 9 months have contributed to our NOI and will further boost results in the quarters to come. GTC has over 106,000 sq. m of office and retail GLA under construction. These projects will contribute significantly to the NAV growth in 2017. Additional 200,000 sq. m of retail and office developments at the planning stage, guarantee further growth over the next 3 years to come. With our strong cash position, we are ready for more acquisitions within our target markets.” – Thomas Kurzmann, GTC’s CEO said.

“We completed the disposal of non-core assets with negative cash flow stabilizing our asset base. A major simplification in the structure of our non-Polish holding structure combined with refinancing activities further decreasing interest cost increase significant the efficiency and profitability of our operations.” – commented Erez Boniel, GTC’s CFO.

KEY OPERATING ACHIEVEMENTS IN 9M 2016

 

Growth of the income generating portfolio through accelerated acquisitions and completions  In 9M 2016 GTC increased its income generating portfolio by expanding the company’s asset base by 16% to €1,222m through the investment of €152 million in value accretive office properties

GTC’s latest acquisitions successfully strengthened its position in the CEE and SEE regions

o   Pixel, an iconic and unique office building located in Poznań (Poland),o   Premium Plaza and Premium Point; two A-class office buildings in Bucharest (Romania)

o   Neptun Office Center, a high-rise office building in Gdańsk (Poland)

o   Sterlinga Business Center in Łódź (Poland) with 13,900 sq. m of leasable office

Growth of the property portfolio through accelerated development; Currently 106,000 sq. m under construction with over 82,000 to be completed in 2017, 160,000 sq. m in the planning stage and another 39,000 sq. m in the pre-planning stage   Completion of University Business Park B, a modern A-class office building in Łódź

Completion of FortyOne II, a modern A-class office building in BelgradeConstruction of Galeria Północna progressing as planned with the opening scheduled for summer 2017 (commercialization at 75%)

Construction of FortyOne III progressing as planned with the opening scheduled for Q1 2017 (pre-leased at 70%)

Construction of Artico, a modern A-class office building in Warsaw, according to the initial plan. Opening is scheduled for Q3 2017 (pre-leased at 100%)

White House, a modern A-class office building, is expected to be launched in early at the beginning of Q1 2017 after the completion of the pre-construction works

Ada Mall, a modern shopping center in Belgrade, is in the permitting stage with building permit expected by the end of the year; commercialization has already started

Budapest City Tower, a modern A-class office building in Budapest, concept design and all related  works in order to obtain a building permit  currently ongoing

Green Heart, a modern A-class office building in Belgrade, concept design and zoning process have commenced

Galeria Wilanów is in the building permit procedure

“X”, a modern A-class office building in Belgrade, concept design is being prepared

Avenue Park, a modern A-class office building in Zagreb is undergoing a design refreshment, building permit in place

 

Ongoing letting activity  Further improvement of overall occupancy currently exceeding 91%

During 9M 2016 newly leased or renewed 94,000 sq. m of office and retail space, including prolongation of 13,000 sq. m of Romtelecom lease in City Gate and 12,200 sq. m of IBM lease in Korona Office Complex

KEY FINANCIAL HIGHLIGHTS

 

Revenues Rental and service revenues increased by €6m to €85m in 9M 2016 due to the acquisitions of Duna Tower, Pixel, Premium Plaza, Premium Point, Sterlinga Business Center and Neptun Office Center
Net profit from revaluation and impairment €39m in 9M 2016 as compared to a loss of €2m in 9M 2015

Reflects progress in construction of Galeria Północna, University Business Park B and Fortyone II as well as profit from the revaluation of Galeria Jurajska and Galleria Burgas following an improvement in the respective operating results

Net financial expenses Decrease to €20m in 9M 2016 from €22m in 9M 2015 mainly due to refinancing activity, and the repayment of more expensive loans

Reduction also supported by change in hedging strategy that allowed to benefit from a low EURIBOR environment and therefore resulted in a decrease in the average borrowing cost to 3.2% in 9M 2016 from 3.4% 9M 2015

Taxation  Non-cash reversal of tax provision recognized at €36m in 9M 2016, resulting mainly form a merger of GTC S.A. with GTC Real Estate Investments Ukraine B.V. and GTC RH B.V. which reversed the temporary tax differences related to Euro denominated loans granted by GTC S.A. to GTC RH B.V.
Net profit  €107m in 9M 2016 compared to €17m in 9M 2015
Funds From Operations (FFO)  Increased to €33m in 9M 2016 from €29m in 9M 2015 as a consequence of the NOI improvement and a decrease in interest and hedging expenses
Total property value  At €1,544m as of 30 September 2016 (€1,324m as of 31 December 2015) due to acquisitions, investment into assets under construction and revaluation gain
EPRA NAV Up by 8% to €837m in 9M 2016 from €779m in 2015

Corresponding to an EPRA NAV per share of €1.82 [PLN 7.85] compared to €1.69 [PLN 7.29]

Financial liabilities At €827m as of 30 September 2016 compared to €717m as of 31 December 2015

Weighted average debt maturity of 3.9 years and average cost of debt of 3.2% p.a.

LTV at 45% on 30 September 2016 (39% on 31 December 2015) due to increase in loans of €175m related to acquired properties, construction and refinancing

Interest coverage at 3.6x on 30 September 2016 (3.0x on 31 December 2015)

Cash and cash equivalents  Decreased to €107m as of 30 September 2016 from €169m as of 31 December 2015, due to investment activities partially offset by an increase in loans€28.9m of euro-denominated bonds issued on the Polish market in November 2016

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QUIOSQUE – Another feminine brand in the Galeria Północna

To the group of tenants in Galeria Północna joined QUIOSQUE – polish brand with over 20 years of experience in the market. The offer of QUIOSQUE is addressed to women who want to feel elegant and comfortable, regardless of the occasion. The brand puts special emphasis on good quality materials and comfort, and their collection is a combination of classic design with modern trends. This is another tenant of the fashion sector, which has recently joined the centre’s portfolio in the past few weeks.

 

 Currently, we are finalizing the process of commercialization. Each week we sign agreements with new tenants who appreciate the commercial potential of North Warsaw. Recently, those were mainly fashion brands, which are lacking in this part of town- summarises Agnieszka Nowak, director of Galeria Północna.  The offer of Quiosque, combines elegance and comfort which will definitely meet the interest of our customers- she adds.

The first store of QUIOSQUE was opened in Bydgoszcz in 1992. Today, the brand has over 130 stores around Poland and it’s constantly expanding. Under the slogan ‘’We are different, we are beautiful” the brand offers clothes in sizes from 34 to 48. QUIOSQUE proves that any woman can look beautiful with any size and body type, and appropriately selected styles and colours of clothing can only emphasize the beauty. In each of QUIOSQUE’s salons, clients can count on professional advice on styling.

Our clients appreciate the versatility of our products. We design them so that small change of accessories would allow woman to wear the same dress to the office, a family celebration or an evening meetings. We also put a lot of attention to comfort. Our clothes must be perfectly tailored and we use only the best quality materials. Only then, they retain their immaculate appearance all day and gives modern women exactly what they expect. We are a polish brand and the majority off our collection is sewn in the country. Knowledge of the needs and expectations of polish women, allows us to compete with foreign companies – emphasizes Monika Kujas, PR Manager Quiosque.

During the lease transaction, firm GTC – to the developer of Galeria Północna –  gained advice from the property experts JLL.

We are pleased that a popular clothing brand Quiosque joined the group of fashion tenants in Galeria Północna, which is the most anticipated commercial facility in the capital of Poland – adds Ada Budynek, Junior Consultant in the Department of Retail Lettings, JLL.

 

World of beauty and fregrances in Galeria Północna

Galeria Północna will be the first large shopping mall in North Warsaw. In addition to the wide range of fashion offerings, the investor of the centre – GTC SA, wants to provide it’s customers with access to world of beauty. The perfumery Sephora, has just been confirmed as one of the new tenants having confirmed a 270 square meter store.

Sephora, owned by the group Moët Hennessy Louis Vuitton (LVMH), is the largest chain of perfumeries in the world. It has more than 1,900 stores in nearly 30 countries around the world. 93 of them are located in the biggest cities in Poland and the next joining them will be in the Galeria Północna in 2017.

With great pleasure, we are proud to announce the opening of another Sephora in Warsaw, this time in Galera Północna. Next year already, we will invite all the residents of  Białołęka and from further afield to visit this new location, which will surely surprise our customers with an innovative offer and unforgettable atmosphere. We hope that the inhabitants of Warsaw will appreciate not only the proximity and easy access of our products, but also the ability to use free make-up services as well as the presence in our perfumeries of new, long-awaited beauty brands- emphasizes Kamila Jaroszyńska, Head of growth and investments, Sephora Polska.

 Agnieszka Nowak, director of Galeria Północna also appreciates the new tenant: Access to the best brands and products in this part of town is highly convinient and time saving for the residents of the neighbourhood and surrounding areas. Sephora is a leader in the sale of selective cosmetics among the perfumery chains, as well as the most innovative and inspiring perfumeries in Poland. Residents of Białołęka will surely appreciate its availability in the neighbourhood.

Furthermore, Galeria Północna stores will also include the brands of Douglas, Ziaja, Yves Roche as well as drugstores Superpharm and Rossmann.