Strong earning result despite COVID-19 impact

2020 FINANCIAL HIGHLIGHTS

  • Gross margin from rental activity at €119m (€128m in 2019), despite €15m impact of Covid-19
  • Operating profit: profit before tax and fair value adjustments at €66m (€73m in 2019)
  • FFO strong at €66m (€70m in 2019), FFO per share at €0.14
  • EPRA NAV at €1,112m as of 31 December 2020, EPRA NAV per share at €2.29 (PLN 10.57)
  • Solid financial metrics
    • LTV at 45% (44% as of 31 December 2019)
    • WAIR at historical low of 2.3% (2.6% as of 31 December 2019)
  • Strong liquidity position with cash and cash equivalents at €272m as of 31 December 2020
  • Investment grade rating of BBB- from Scope Rating
  • Green bonds issued in the amount of €110m in December 2020 (33% oversubscription) followed by bonds issue of €54m in March 2021 (25% oversubscription)

2020 PORTFOLIO HIGHLIGHTS

  • OFFICE: SLOWER ACTIVITY DUE TO COVID-19
    • Pandemic slows leasing activity, but it still reached 70,000 sq m in 2020:
      • Extension and prolongation of Barry Callebaut lease in UBP B, Łódź (6,000 sq m)
      • Extension and prolongation of Takeda lease in Sterlinga, Łodź (5,600 sq m)
      • Prolongation of EoN lease in City Gate, Bucharest (4,150 sq m)
      • CommerzBank chose Advance Business Centre, Sofia (3,500 sq m)
      • Generali signed a pre-lease in Matrix B, Zagreb (2,500 sq m)
    • Occupancy remained strong at 90% as of 31 December 2020 (95% in December 2019) despite new completions with lower than average occupancy
    • Completion of 3 office buildings:
      • Green Heart N3 in Belgrade (5,400 sq m);
      • Matrix B in Zagreb (10,700 sq m);
      • ABC 2 in Sofia (17,800 sq m);
    • Acquisition of a landplot in Budapest for future growth
    • Start of construction of Sofia Tower (8,300 sq m)
    • Strat of redevelopment of Center Point 1&2
  • RETAIL: PROMPT AND EFFECTIVE MEASURES TO MINIMIZE NEGATIVE EFFECTS
    • Renegotiation of contracts with retailers
    • Gross margin impacted by €15m in 2020 due  to Covid-19 lockdowns and related tenant’s support measures
    • Temporary discounts in return for material extensions allowed to keep the WALT at 3.6 years as of 31 December (4.0 years at 31 December 2019)
    • Occupancy remained strong at 95%
    • Strong rent collection: 97% of invoiced retail rent paid for 2020
    • Debt covenants relaxed or waived

During the last few years, including 2020, we have grown our property portfolio through development and smart acquisitions, tightened our financial policy and strengthened our liquidity. Our asset management teams delivered excellent service to our tenants and maintained high levels of occupancy. The Group heightened its attention to ESG matters, issued green bonds and strengthened its contribution to the well-being of the communities it creates. We are proud that these accomplishments prepared us for the unforeseen challenges posed by the outbreak of COVID-19 during 2020 – commented Yovav Carmi, GTC’s President of the Management Board.

“At the end of 2020, our property portfolio reached €2.1 billion. Total revenues were at €160 million. The Group’s EPRA net asset value now stands at €1.1 billion, reflecting the high quality of our portfolio and low leverage: net loan-to-value was 45% at year-end. GTC has a record low cost of debt averaging 2.3% and a strong net interest coverage ratio of 3.7x. Occupancy across the whole portfolio was steady at 91%. And all of that despite a very challenging environment” added Yovav Carmi, GTC’s President of the Management Board.

“GTC remained active on the capital markets in 2020, raising about €110 million of senior unsecured bonds, providing additional flexibility that will be used for a combination of debt repayment, new developments and acquisitions. We issued green bonds, further demonstrating our commitment to sustainability and financial innovation. The Group’s strong market position was also confirmed by investment grade rating BBB- by Scope Ratings. Total available liquidity of the Group was €272 million at the end of 2020. As a result, GTC’s finances are prepared for any opportunities or uncertainties which may lie ahead” – commented Ariel Ferstman, GTC’s CFO and Member of the Management Board.

GTC acquires Vaci Greens D and strengthens its portfolio in Budapest

  • GTC acquired the Váci Greens D office building in Budapest.
  • It is an A-class office building located in the Váci Office Corridor, the Northern part of the city.
  • This acquisition enriches the GTC’s Hungarian office portfolio of modern, green buildings.

GTC, a leading developer and asset manager in Central and Eastern Europe, has decided to extend its Hungarian portfolio with the new development, the Váci Greens D office building in Budapest. The transaction is partially financed from the green bonds issued in 2020 and is in line with the Group strategy to invest in sustainable portfolio of commercial buildings located in the CEE capitals.

Just a few weeks before the publication of the 2020 financial results, GTC demonstrates the Group’s strength as well as a unique ability to seize new opportunities during the challenging times of the COVID-19 pandemic. New acquisition, Váci Greens building D offers 16,027 sq. m of modern space that meets tenants’ highest convenience standards during daily work with all necessary amenities present including an attractive terrace area, various retail units such as restaurants or fashion brands as well as 246 parking spaces. Some funds for the purchase came from the issuance of green bonds.

The building fits into GTC’s sustainable portfolio of green developments that ensure tenants’ health and well-being. The Váci Greens D office building complies with the BREEAM requirements, achieving the “Excellent” certification in its design. The acquisition will be partially financed from green bonds issued at the end of 2020.

“Last year we have sold one of our long-lasting assets, Spiral office building. Seeking new opportunities on the market, we decided to acquire Váci Greens D located in Budapest, that fits our portfolio and meets our requirements in terms of modern and sustainable A-class projects. We consequently continue our strategy, offering our tenants the highest standards that now in the pandemic are needed more than ever before” – commented Yovav Carmi, President of the Management Board of GTC.   

The property is a part of the larger office complex located in the “office corridor” of Budapest. It distinguishes with excellent communication links by metro and the major artery of Váci út. The Váci Corridor reminds the most prestigious office localization in Budapest attracting leading Hungarian and international companies. The office building is almost fully occupied with reputable prime tenants including Unilever, AVON, and Ford.

Together with the purchase of the Váci Greens D property, GTC Hungary manages the portfolio of state-of-the-art developments offering 88,400 sq. m of office space, including Center Point, Duna Tower, and GTC Metro. Additionally, GTC is developing Pillar, an extraordinary project that will offer 29,000 sq. m office space and has been fully rented before commissioning planned for Q1 2022.

Playing together for a good cause: GTC partners with Virtuosa Foundation

  • GTC will support Virtuosa Foundation, founded by Colliers International.
  • The goal of the foundation – to modernize the space in children’s hospitals, ensuring their well-being – reflects GTC values and mission.
  • Grzegorz Strutyński, Country Manager at GTC in Poland, will join the Virtuosa Foundation Board.

GTC, a leading developer and asset manager in Central and Eastern Europe, joins a partnership with Virtuosa Foundation. Established by Colliers International, the organization focuses on modernizing spaces in children’s hospitals for their well-being. Also, Grzegorz Strutyński, Country Manager at GTC Poland, will join the Foundation’s Board. Such cooperation is a significant step for GTC towards strengthening the relationship with local communities and trusted partners in Poland.

Acting responsibly and making a positive impact on the communities, where the company operates, has always been on GTC’s agenda. The company has been actively searching for a trusted partner to amplify this impact and direct it to where it is needed the most. Virtuosa, a recently launched foundation aimed at modernizing the space in children’s hospitals, could not be a better choice. Established by worldwide famous violinist-soloist and philanthropist Patrycja Piekutowska, Ph.D., and Monika Rajska-Wolińska, Managing Partner and EMEA Board Member at Colliers International, Virtuosa calls for businesses and experts like GTC to make a real impact on improving the environment in which children function.

This is particularly true, since Grzegorz Strutyński, Country Manager at GTC Poland, took a place on the Foundation Board among eminent figures from the world of medicine and business, such as Bohdan Maruszewski, MD, Ph.D., a prominent Pediatric Cardiac Surgeon, Pawel Wierzbicki, CEO of Schindler Poland, and Monika Rajska-Wolińska, Managing Partner at Colliers International.

“Focusing on the well-being of all members of the society runs deep in GTC values. Therefore, we are thrilled to join Virtuosa Foundation and work together on improving the treatment conditions of young patients. Knowing that the goals of the foundation are in line with our core business – construction, and mission – creating user-friendly spaces for everyone, I am sure our cooperation will bring very effective results. I am happy to be a part of this journey as a board member and I will do my best to contribute” – commented Grzegorz Strutyński, Country Manager at GTC in Poland and Board Member at Virtuosa Foundation.

The partnership with Virtuosa is mutually beneficial: the foundation plans to carry out projects combining the virtuosity of architects, designers, music professionals and businesses, providing many opportunities where GTC can help with their expertise as a leading commercial developer. At the same time, joining efforts together with such prominent experts as Patrycja Piekutowska, Ph.D., would allow the company to bring a high impact change to the well-being of local communities in Poland.