GTC improves operational metrics while disposing non-core assets and restructuring related loans

Globe Trade Centre S.A. (“GTC”) released its Q1 2015 financial results today. The results have been prepared in accordance with the International Financial Reporting Standards (IFRS) and are presented in euro.

Q1 2015 Financial Highlights

  • Net profit up to €8m (net loss of €2m in Q1 2014)
  • Underlying profit before tax  up to €9m (€6m in Q1 2014) due to improvement in operations combined with cost savings
  • Rental and service revenues maintained at €27m (€27m in Q1 2014)
  • Rental margin improved to 74% (72% in Q1 2014)
  • Interest cover at 2.7x (3.1x in Q1 2014)
  • Loan to value (LTV) at 53% at 31 March 2015 (54% as of 31 December 2014)
  • Cash flow from operations increased to €13m (€11m in Q1 2014)

Thomas Kurzmann, GTC Chief Executive Officer, comments: “GTC steadily continues to improve all key operational metrics, fuelled by stable rental and service revenues, in parallel the sale of non-core assets is on track. After disapproval of the shares issue plan GTC will consider alternative sources of funding to continue the growth and renewal of its portfolio in its core markets.”

Financial overview

Rental and service revenues was kept unchanged at €27m in Q1 2015. Margin on rental activities was improved to 74% in Q1 2015 from 72% in Q1 2014.

Gross profit from operations was kept unchanged at €20m in Q1 2015.

Administrative expenses, excluding provision for stock based program, decreased to €2.3m in Q1 2015 compared to €3m in Q1 2014.

Underlying profit before tax  up to €9m in Q1 2015 compared to €6m in Q1 2014 due to cost savings.

Financial expenses net were at the level of €8m in Q1 2015 compared to €11m in Q1 2014 due to deleveraging activity.

Net profit of €8m in Q1 2015 is mainly due to a decline in cost items and lower financial expenses.

Value of the properties remained unchanged as of 31 March 2015 compared to 31 December 2014.

Total bank debt and financial liability down to €783m as of 31 March 2015 from €811m as of 31 December 2014. The weighted average debt maturity was 3.9 years and the average cost of debt was 4.2% p.a.

Loan to value ratio was at the level of 53% as at 31 March 2015 compared to 54% as at 31 December 2014.

Interest coverage was at 2.7x as at 31 March 2015 compared to 3.1x as at 31 March 2014.

NAV (before minority) per share stood at €1.4 as at 31 March 2015 compared to €1.4 as at 31 December 2014.

Cash flow from operations went up to €13m in Q1 2015 (€11m in Q1 2014) mostly due cost cuts.

Key achievements

Disposal of non-core assets and restructuring of related loans

During the first and second quarter of 2015, GTC sold two of its non-core assets: Galleria Buzau (Romania) and Felicity residential project (Romania), which was sold in the process of restructuring a loan related to the this project.

Sale of Kazimierz Office Centre

In April 2015, GTC signed a preliminary agreement to dispose Kazimierz Office Centre. Closing of the transaction is expected in May.

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Kiabi to further diversify Galeria Północna’s trade offer

Globe Trade Centre S.A. (GTC) signed a letter of intent with another tenant for Galeria Północna, the company’s flagship project in Warsaw. Kiabi, a clothing company, will lease 1,500 sq m of retail space, which will further diversify the project’s trade offer.

GTC signed another letter of intent in regard to lease of retail space in Galeria Północna shopping mall planned in Warsaw. Kiabi, the latest tenant of this new-generation retail object, decided to lease ca. 1,500 sq m.

Kiabi is a French clothing company specialized in apparel for the whole family. The company has 450 shops around the world, in which it sells about three million clothing and accessory items every week.

“Kiabi is the first among popular, international companies with a relatively limited presence in Poland, that we intend to introduce to Galeria Północna. We wish for clients visiting our object to have the opportunity to explore and enjoy retailers that are not known from other malls. We strongly believe that tenant mix resulting from a combination of popular companies already entrenched in Polish consumers’ minds and brands that are only entering Poland will provide a fresh and interesting formula, which will prove engaging to our clients” – said Jacek Wachowicz, GTC Board member.

GTC’s Galeria Północna will be our second spot in Poland. For over 30 years our ambition has been to propose trendy fashion accessible for all and we intend to introduce this concept in Galeria Północna. The project already has a rich group of apparel suppliers, however we are certain that our offer will fill an existing trade gap, and at the same time result in creating a diversified portfolio which will attract visitors” – added Michał Popławski, Expansion Manager in Schiver Polska, Kiabi franchisee in Poland.

Kiabi is yet another company to join Galeria Północna project. Recently GTC announced signing two important, key tenants for the mall. One is Cinema City, which will open a state of the art theater there, while second is H&M, a global retail-clothing leader.

Galeria Północna is currently in the last phase of operations performed before commencing construction works. The process of obtaining building permit has reached its final stage. After this is done, the company will immediately start construction, which will last for ca. 20-22 months.

Designed by the renowned APA Wojciechowski and Tzur Architects studios, Galeria Północna will feature many green, leisure and entertainment solutions, including a publicly accessible rooftop with a garden, walking paths and a playground. The project will offer its tenants approx. 60,000 sq m, while its customers will be provided with ca. 2,000 parking spaces. GTC is planning to obtain LEED Gold certification for Galeria Północna.

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GTC Group is at the forefront of the commercial real estate sector in Central, Eastern and Southern Europe. Its shares are listed on the Warsaw Stock Exchange and featured in the WIG30 index as well as many other international indices.
The Group was founded in 1994. Ever since we have been active on the real estate markets in Poland, Romania, Serbia, Croatia, Bulgaria, Hungary and Slovakia and we have developed 60 commercial buildings, offering over 1,000,000 sq m of lease area and nine residential projects offering over 400,000 sq m of floor space. Today GTC owns and manage 34 commercial buildings, office buildings and shopping centers, the combined space area of which is more than 662,000 sq m.

Globe Trade Centre S.A. sells Kazimierz Office Center for 42 million euro

Globe Trade Centre S.A. (GTC), a leading commercial real estate company has announced the signing of a preliminary sale agreement for the sale of Kazimierz Office Center in Krakow, Poland.

GTC signed the agreement with a subsidiary of a fund managed by GLL Real Estate Partners, for the sale of Kazimierz Office Center in Kraków for approximately 42 million euro.

GTC’s decision to sell Kazimierz Office Center is another step in realization of strategy that the company has announced several months ago. In its usual course of business, GTC disposes assets that have reached their performance maturity. The sale will generate approximately 13 million euro of free cash for the Company, which will supplement the execution of GTC’s growth strategy.

We have decided to sell this asset as, in our opinion, it has only limited potential for further value appreciation. The new owner has a different investment strategy and will benefit from the stable cash flow produced by the assets going forward. We consider this transaction as a proof of GTC’s office development capabilities” – said Thomas Kurzmann, GTC’s Chief Executive Officer.

Kazimierz Office Center offers 15,000 sq m of modern office space on five floors. The building is placed in a dynamically developing part of Kraków, in the direct vicinity of city center. An additional advantage of the location is closeness to Galeria Kazimierz shopping mall, numerous hotels and easy access to public transportation. The building was completed in 2009. It offers both underground and ground-level parking.

Completion of the transaction is subject to fulfillment certain standard closing conditions.

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GTC Group is at the forefront of the commercial real estate sector in Central, Eastern and Southern Europe. Its shares are listed on the Warsaw Stock Exchange and featured in the WIG30 index as well as many other international indices.

The Group was founded in 1994. Ever since we have been active on the real estate markets in Poland, Romania, Serbia, Croatia, Bulgaria, Hungary and Slovakia and we have developed 60 commercial buildings, offering over 1,000,000 sq m of lease area and nine residential projects offering over 400,000 sq m of floor space. Today GTC owns and manages 35 commercial buildings, office buildings and shopping centers, the combined space area of which is 665,000 sq m.

Planned capital increase will stimulate GTC’s further growth

Globe Trade Center S.A. (“GTC” or the “Company”), a leading commercial real estate company focused on CEE and SEE, proposes to its shareholders to increase its share capital and issue up to 140 million of new shares. The Company intends to invest the additional equity capital for the acquisition of value added, cash-generating assets, as well as for the construction of selected existing development projects.

Following a change in the shareholder structure at the end of 2013, GTC revised its mid-term strategy to take advantage of the new opportunities in the current market environment; the focus will be on creating value through opportunistic acquisitions and active portfolio and asset management of its growing portfolio in CEE and SEE, supplemented by carefully selected development activities of its existing landbank.

To effectively execute on this strategy, GTC’s Management Board recommends to its shareholders to approve and participate in the announced rights issue of up to 140 million of new shares. The newly raised capital will fuel the company’s further growth and profitability.

We have carefully selected potential acquisition and development targets that meet our stringent investment criteria. We will acquire value added, cash-generating assets and selectively develop projects from our existing landbank which offer the highest risk adjusted returns to GTC. We will focus our new investments to major cities in Poland and capital cities in CEE and SEE, namely Warsaw, Bucharest, Budapest and Belgrade. We strongly believe that the commercial real estate market in combination with the current fiscal policy of the European Union resulting in an extraordinarily low interest rate environment creates unique acquisition opportunities allowing for accretive growth. Our main shareholder, Lone Star, fully supports the management’s revised strategy which is the main objective for this capital increase. We are committed to convince our other shareholders of the merits of this strategy and to vote for the capital increase” – Thomas Kurzmann, GTC’s Chief Executive Officer commented.

Lone Star Fund, GTC’s main shareholder, confirmed its full support of the strategy and the management’s initiative to issue additional capital.

This capital increase is important to further strengthen GTC’s balance sheet and for the execution of its growth strategy” – added Alexander Hesse, Chairman of the Supervisory Board of GTC.

The shareholders’ meeting, at which shareholder will vote on the proposed right issue, is scheduled for 23 April 2015.

***

GTC Group is at the forefront of the commercial real estate sector in Central, Eastern and Southern Europe. Its shares are listed on the Warsaw Stock Exchange and featured in the WIG30 index as well as many other international indices.

The Group was founded in 1994. Ever since we have been active on the real estate markets in Poland, Romania, Serbia, Croatia, Bulgaria, Hungary and Slovakia and we have developed 60 commercial buildings, offering over 1,000,000 sq m of lease area and nine residential projects offering over 400,000 sq m of floor space. Today GTC owns and manage 35 commercial buildings, office buildings and shopping centers, the combined space area of which is 665,000 sq m.

Disclaimer:
Not for release, publication or distribution, directly or indirectly, in or into the United States of America, Australia, Canada or Japan.
This document has been prepared by Globe Trade Centre S.A. (the “Company”), is for informational purposes only and under no circumstances shall constitute an offer or invitation to make an offer, or form the basis for a decision, to invest in the securities of the Company. This document does not constitute marketing or advertising material within the meaning of Article 53 of the Act on Public Offerings, the Conditions for Introducing Financial Instruments to an Organised Trading System, and Public Companies.
A decision as to whether to increase the share capital of the Company has not been made yet. The extraordinary general meeting of the shareholders of the Company, the agenda of which includes a resolution on the share capital increase, has been convened to be held on 23 April 2015 (the “EGM”). The announcement regarding the convocation of the EGM was published on 27 March 2015 by means of current report No. 8/2015. On the same date, the draft resolution of the EGM regarding the share capital increase was published on the Company’s website (www.gtc.com.pl). In case of the adoption by the EGM of the resolution on the share capital increase by way of the issuance of new shares (the “Shares”) in the Company subject to pre-emptive rights, the Company intends to file with the Polish Financial Supervision Authority (the “PFSA”) an application for the approval of a prospectus (the “Prospectus”) which will be the sole legally binding document containing information about the Company and the offering of its Shares in Poland (the “Offering”). The Company will be authorised to carry out the Offering only after the EGM has adopted the above-mentioned resolution and the Prospectus has been approved by the PFSA. The Company will make the Prospectus available pursuant to applicable law.
This document does not constitute a recommendation within the meaning of the Regulation of the Polish Minister of Finance Regarding Information Constituting Recommendations Concerning Financial Instruments or Issuers Thereof dated 19 October 2005.
This document (and the information contained herein) does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in the United States, Australia, Canada or Japan, or any other jurisdiction. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States of America, unless registered under the Securities Act or unless an exemption from the registration requirements set forth in the Securities Act applies to them. No public offering of the securities will be made in the United States of America.
To the maximum extent permitted under the applicable provisions of law, no representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. The information, opinions and forward-looking statements contained in this document are subject to change without notice. The forward-looking statements included in this document involve a number of known and unknown risks, uncertainties and other factors that could cause the Company’s or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. The Company does not undertake publicly to update or revise any forward-looking statement that may be made herein, whether as a result of new information, future events or otherwise. Any business outlook information contained in this document shall be read as the internal targets of the Company and shall not be construed as financial projections or forecasts. These targets may or may not prove to be accurate. Neither the Company nor any of its subsidiaries or any other related entities shall be held accountable for any damage resulting from the use of this document, a part hereof, or its contents or in any other manner in connection with this document.

Continues improvement of key financial and operational metrics

Globe Trade Centre S.A. (“GTC”) released its 2014 financial results today. The results have been prepared in accordance with the International Financial Reporting Standards (IFRS) and are presented in euro.

2014 Financial Highlights

  • Rental and service revenues maintained at €110m in 2014 (€110m in 2013)
  • Rental margin improved to 74% (71% 2013)
  • Underlying profit before tax  up to €29m in 2014 (€19m in 2013) due to improvement in operations combined with cost savings
  • Interest cover up to 2.1x (1.7x in 2013)
  • Loan to Value (LTV) at 54% (53% as of 31 December 2013)
  • Average interest cost down to 4.2% (4.3% in 2013)
  • Cash flow from operations increased to €40m (€26m in 2013) mostly due to decline in the interest expenses coupled with improvement in cash from rental activity
  • Cash and deposits of €113m at year end
  • Revaluation loss of €194 in 2014 (€185 in 2013)
  • Preliminary agreement for settling the Felicity loan with an asset at the recent valuation is agreed with the lenders

Throughout 2014, the company’s management has been focusing its efforts on further streamlining the company and cost reductions. This has resulted in steady and continuous improvement of key operational ratios.

Thomas Kurzmann, GTC Chief Executive Officer, comments: “I believe that GTC’s operations have significantly improved, with strong and stable rental and service revenues. Following reassessment of performance of our portfolio in secondary cities and B-class locations in Romania, Croatia, Bulgaria and Hungary we decided to stop supporting some of the non-performing assets and to intensify our efforts to sell them. As a result, we recognised significant decline in valuations of some of the properties and land bank in those locations. However, we managed to find potential buyers for some of those properties. Moreover, we with our lenders, which will allow us to sell those assets and shift the loans to GTC’s level. We consider this as a great step forward, as it will allow the team to focus purely on the future development and acquisition program.”

“We have passed significant milestones in leasing and administrative proceedings on our developments Galeria Północna and Galeria Wilanów in Warsaw. We expect that building permit for Galeria Północna will be issued by mid-2015, this will be followed by immediate commencement of construction.”

“GTC’s team in Serbia managed to expedite construction of FortyOne office project in Belgrade. The building is scheduled for completion in the third quarter of 2015. We also continue analysing potential acquisition of income producing assets with upside potential. We are prepared to realize that part of our strategy as soon as funds from the capital rise is available”– concluded Thomas Kurzmann.

Financial overview

Rental and service revenues kept unchanged at €110m in 2014 compared to €110m in 2013. Margin on rental activities was improved to 74% in 2014 (71% in 2013).

Revenues from sale of residential properties increased to €15m in 2014, mostly due to improved sale of residential units in Romania and Poland. Margin on sale of residential properties was 1%.

Gross profit from operations increased to €81m in 2014 compared to €78m in 2013, mostly due to cuts in the operating expenses of non-performing properties.

Selling expenses remained virtually unchanged at the level of €3m in 2014 compared to €3m in 2013.

Administrative expenses, excluding provision for stock based program, remained unchanged at €11m in 2014 compared to €11m in 2013.

Underlying profit before tax  up to €29m in 2014 compared to €19m in 2013 due to improvement in gross margin from operations coupled with cost savings.

Net loss on revaluations of investment property and residential projects was €194m in 2014. The decline is attributed mainly to a decline in fair value of assets located in secondary cities in Romania, Croatia and Bulgaria, as well as land bank in Budapest. In previous years GTC supported the operations of certain projects with an intent to improve their operating performance. However, those efforts have not brought expected improvement. Following the reassessment of performance of Group`s portfolio in secondary cities and B-class locations in Romania, Croatia, Bulgaria and Hungary during fourth quarter of 2014, we decided to no longer support certain of these assets and to sell the Company`s non-performing assets. As a result, the valuations were based on less favourable assumptions with respect to future performance of certain shopping malls, which resulted in changes of estimated rental value of the projects, their required additional investments and their risk-adjusted yields.

Interest expenses net were at the level of €37m in 2014 compared to €43m in 2013.

Net loss of €207m in 2014 is attributable mainly to loss on revaluation of investment properties and residential projects.

Total debt of €811m as of 31 December 2014 (down from €888m as of 31 December 2013). The average debt maturity was 5.1 years and the average cost of debt was 4.2% p.a. (down from 4.3% in 2013).

Loan to value ratio was at the level of 54% as at 31 December 2014 compared to 53% as at 31 December 2013.

Interest coverage improved to 2.1x as at 31 December 2014 from 1.7x as at 31 December 2013.

NAV per share stood at €1.4 as at 31 December 2014 compared to €1.9 as at 31 December 2013.

Cash flow from operations went up to €40m in 2014 (€26m in 2013) mostly due to improvements in occupancy and rental income in the Group’s projects in Kraków, Łódź and Katowice, as well as cost cuts combined with decline in interest paid.

Key achievements

Share issue

In January 2014, GTC has executed a successful issue of 32 million series J ordinary bearer shares. The issue was 250% oversubscribed, proving strong interest in the company from both Polish and international investors.

Bonds refinancing

In March 2014, GTC has successfully issued 20,000 new bonds in total nominal value of PLN 200 million maturing in 2018/2019. The bonds were issued to Polish financial institutions and are listed on Catalyst Alternative Trading Systems.

Early in 2014, GTC has repaid €102m of bonds maturing in April 2014, as well as hedges related to bonds, consequently decreasing balance of liabilities from the proceeds from the bonds issue and partially from the share issue.

Commencement of FortyOne office project in Belgrade

In October 2014, GTC conducted an official ground breaking ceremony for its newest project in Serbia, the class-A FortyOne office complex. FortyOne will offer 10,300 sq m of leasable space, which today is 60% pre-leased. Phase one of the project is scheduled for completion and opening in Q3 2015, as construction works progress ahead of plan.

Completion and opening of Pascal in Kraków

Following the re-launch of construction of Pascal, the last phase of valued and esteemed Korona Office Complex in Kraków, Poland, in the first half of 2014. GTC has finalized construction works in regard to this 5,600 sq m office building. Currently, Pascal is fully operational and leased.

Progress in two key shopping mall projects in Warsaw

As of 31 December 2014, both projects reached a respectable number of pre-lease agreements. With regard to Galeria Północna, 10 agreements for total 19,921 sq m of space were signed, which brought the project’s pre-lease level to 31%. There is a significant number of pre-lease agreements that is under advanced negotiations.

Galeria Wilanów saw 11 pre-lease agreements for a total of 15.627 sq m of space signed by the end of 2014. This amounts to a pre-lease level of 25%, with additional pre-lease contracts in the pipeline.

Applications for building permits for both projects are currently being processed. In regard to Galeria Północna, the process has reached its final stage and as for Galeria Wilanów, the application process is progressing.

New leases and lease renewals

Despite continuous market pressure on rental rates, GTC benefits from outstanding reputation among renowned tenants, who value company’s experience and quality. Year 2014 was marked by numerous significant new leases and renewals, as well as pre-lease agreements for GTC’s new projects, totalling 147,500 sq m in Central and Eastern as well as South East Europe.

Significant renewals and extensions:

  • Hungarian Gov., Budapest, Hungary – 28,787 sq m
  • ExxonMobil in Center Point, Budapest, Hungary – 19,000 sq m
  • IBM in Korona Office Complex, Kraków, Poland – 7,154 sq m
  • Microsoft in City Gate complex, Bucharest, Romania – 6,845 sq m
  • Roche in City Gate complex, Bucharest, Romania – 2,881 sq m

Significant pre-lease agreements:

  • Carrefour in Galeria Północna and Galeria Wilanów, Warsaw, Poland – 16,100 sq m (combined)
  • LPP Group in Galeria Północna and Galeria Wilanów, Warsaw, Poland – 9,350 sq m (combined)
  • Cinema City in Galeria Północna and Galeria Wilanów, Warsaw, Poland – 7,300 sq m (combined)
  • H&M in Galeria Północna, Warsaw, Poland – 2,100 sq m

1 Profit before taxes, movement in valuation of investment assets, depreciation and change in fair value of hedges

2 Profit before taxes, movement in valuation of investment assets, depreciation and change in fair value of hedges

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GTC Group is at the forefront of the commercial real estate sector in Central, Eastern and Southern Europe. Its shares are listed on the Warsaw Stock Exchange and featured in the WIG30 index as well as many other international indices.
The Group was founded in 1994. Ever since we have been active on the real estate markets in Poland, Romania, Serbia, Croatia, Bulgaria, Hungary and Slovakia and we have developed 60 commercial buildings, offering over 1,000,000 sq m of lease area and nine residential projects offering over 400,000 sq m of floor space. Today GTC owns and manage 35 commercial buildings, office buildings and shopping centers, which combined space accounts for 665,000 sq m.

State of the art Cinema City theatres to open in Globe Trade Centre’s new Warsaw malls

Globe Trade Centre S.A. (GTC) has signed a binding lease agreement with Cinema City for over 3,300 sq m of cinema space in Galeria Północna, the company’s flagship project in Warsaw, Poland.

Cinema City International is the largest cinema operator in Central-Eastern Europe and Israel, being today part of Cineworld Group plc, the second biggest cinema operator in Europe. The company has decided to lease more than 3,300 sq m in Galeria Północna where it will open a state of the art multi-screen cinema. It will enable residents of Białołęka district to enjoy the newest movie productions in one of the 11 cutting-edge movie auditoriums.

Additionally, GTC is concluding a lease agreement with Cinema City for a movie theatre in Galeria Wilanów, GTC’s another shopping centre, planned in Warsaw’s southern district of Wilanów.

Cinema City International is one of those key tenants that largely determine the attractiveness of a mall’s entertainment offer. We are proud to have with us a cinema operator this experienced. Cinema City will perfectly complement Galeria Północna’s and Galeria Wilanów’s tenant mixes, so that clients visiting our schemes will be provided with interesting and engaging options, satisfying their commercial, entertainment and culinary needs. We are committed to providing our customers with the best leisure and entertainment offers in these two malls and a cinema plays an important role in this mix.” – said Jacek Wachowicz, GTC Management Board member.

Both projects, Galeria Północna and Galeria Wilanów, are at the final stages of activities performed prior to commencing construction works. Applications for building permits for both schemes have already been submitted.

We are delighted to be included amongst the tenants of GTC’s Galeria Północna and Galeria Wilanów. We are especially proud to announce that our theatres in both shopping centres will be our most technologically advanced facilities. The appearance of Cinema City in Białołęka and Wilanów creates an exciting opportunity to reach new audiences and clients with our offer. I am certain that Cinema City will perfectly complement other tenants and strong leisure and entertainment offerings envisaged there, with which we will create a commercial and entertainment base that will serve range of Białołęka’s and Wilanów’s residents’ needs.” – said Mooky Gredinger, CEO, Cineworld Group plc.

Galeria Północna, designed by the renowned APA Wojciechowski and Tzur Architects studios, will feature many green, leisure and entertainment solutions, including a publicly accessible rooftop with a garden, walking paths and a playground. The project will offer its tenants approx. 60,000 sq m, while its customers will be provided with ca. 2,000 parking spaces. GTC is planning to obtain LEED Gold certification for Galeria Północna.

Galeria Wilanów will be the first next generation shopping centre in Poland. The project is also being designed by APA Wojciechowski and Tzur Architects studios. The design encompasses the roof offering ample green areas providing the customers with a relaxing atmosphere and an opportunity to relax and enjoy the extensive leisure and entertainment offer. Galeria Wilanów will be surrounded by recreation areas, playgrounds and greenery. The investment will be environmentally friendly, as confirmed by the ecological LEED precertification. The project will provide tenants with over 61,000 sq m of GLA in about 250 retail and service outlets. Customers of Galeria Wilanów will be serviced by approximately 2,200 parking spaces.

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The GTC Group, established in 1994, is one of the leading commercial real estate companies in Central, Eastern and Southern Europe. The Group operates in Poland, Romania, Hungary, Croatia, Serbia, Bulgaria, Slovakia and Czech Republic.
GTC develops and actively manages real estate portfolio in two sectors of the market: office buildings and retail centres. Since its establishment, the Group has developed 43 office buildings and 12 shopping malls with a total net space amounting to more than 1 million sq m. GTC currently manages 28 commercial real estate projects with a total commercial space of over 589,000 sq m.
GTC S.A. is listed on Warsaw Stock Exchange on WIG30 index. The company’s shares are also included in the international indexes: Dow Jones STOXX Eastern Europe 300 index, GPR 250, which comprises the 250 largest and most liquid real estate companies of the world and the FTSE EPRA/NAREIT Emerging Index.

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Cinema City International is part of Cineworld Group plc. Cineworld Group plc is the second largest Cinema circuit in Europe, operating in 9 different countries with over 200 cinemas and over 1850 screens. Cineworld Group plc is a leading player in each of its markets and, in addition, is the biggest IMAX operator in Europe. Cineworld Group plc emphasises its strategy to offer state of the art cinemas including the best projection and sound technologies, stadium seating, great lobby areas, all this creating for its customers the best place to watch a movie. Cineworld Group plc has served in 2014 more than 90 million customers.

GTC signs construction loan for Fortyone office building in Belgrade, Serbia

GTC Serbia, a wholly owned subsidiary of GTC S.A., has signed a construction loan agreement with Raiffeisen Bank. The EUR 9,5 million loan will finance the development of the first phase of GTC’s Fortyone office project in Belgrade, Serbia.

Construction of the Fortyone office complex began in October 2014. As at the end of 2014 it has already reached 60% pre-lease with prominent tenants such as Bosch, PS Tech, Tetrapak and Regus.

“We are satisfied by being slightly ahead of schedule with construction and having high demand for the office space that is yet to be leased. We are one of the first developers commencing construction of an A Class office building in Belgrade after many years of almost no supply. We are very pleased that we could attract finance from Raiffeisen for the first phase of the Fortyone office project. This continues a long term successful partnership with the bank.” – stated Thomas Kurzmann, CEO, GTC.

Development of Fortyone is part of GTC’s strategy to grow through development of selected office and retail projects that meet tenant’ demand, and acquisition of value added cash-generating assets in capital cities in the region.

“We are happy to support GTC in its effort to develop the most modern office building in Belgrade. GTC has a proven track record for developing office buildings in CEE and SEE, its brand name is well recognized in Belgrade by big international tenants. Thanks to the experience of GTC’s team and the companies involved in the design and construction process we are certain that Fortyone will set new standards in user comfort, office space flexibility and energy efficiency, and we are pleased to be a part of it.” – said Michael Weitersberger, Head of Real Estate Finance International, Raiffeisen Bank.

Fortyone office complex will add in total over 27,000 sq m of Class A office space to the market and it will be built in three phases. The first building will offer its tenants approx. 10,000 sq m and is scheduled to be completed in the third quarter of 2015.

Fortyone is located in the prominent corner of New Belgrade, at the intersection of Milutina Milankovica Boulevard and Umetnosti Boulevard, a place close to the centre of the city and the airport as well as conveniently connected with the main highway. The building will offer approximately 500 ground and underground parking places. Each of the buildings will include retail facilities to provide a convenient and attractive working environment of its tenants’ employees.

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The GTC Group, established in 1994, is one of the leading commercial real estate companies in Central, Eastern and Southern Europe. The Group operates in Poland, Romania, Hungary, Croatia, Serbia, Bulgaria, Slovakia and Czech Republic.
GTC develops and actively manages real estate portfolio in two sectors of the market: office buildings and retail centres. Since its establishment, the Group has developed 43 office buildings and 12 shopping malls with a total net space amounting to more than 1 million sq m. GTC currently manages 28 commercial real estate projects with a total commercial space of over 589,000 sq m.
GTC S.A. is listed on Warsaw Stock Exchange on WIG30 index. The company’s shares are also included in the international indexes: Dow Jones STOXX Eastern Europe 300 index, GPR 250, which comprises the 250 largest and most liquid real estate companies of the world and the FTSE EPRA/NAREIT Emerging Index.

H&M to open in Galeria Północna

Globe Trade Centre S.A. (GTC), one of the leading commercial real estate companies in Central, Eastern and Southern Europe, signed a lease contract with H&M, a global clothing retail leader. This notable tenant will lease over 2,100 sq m of retail space in Galeria Północna in Warsaw.

After signing an agreement in Galeria Wilanów, GTC’s another flagship project in Warsaw, the Swedish clothing chain also decided to open one of its shops in Galeria Północna, which will be located in Warsaw’s Białołęka district.

“The fact that such a significant player decided to mark its presence in both our malls in Warsaw makes us extremely pleased. I am certain that, just as with Galeria Wilanów, also in Galeria Północna H&M will contribute to creating an exciting tenant mix for the clients. Let me welcome yet another tenant to our gallery.” – saidJacek Wachowicz, member of GTC Management Board.

Over the last few weeks, the developer has announced signing lease contracts for Galeria Północna with two other key retailers: LPP Group, one of the fastest developing clothing chains in Europe, and with an operator of a hypermarket chain – Carrefour.

“H&M is a perfect complement to Galeria Północna’s offer. Inhabitants of right-bank Warsaw, especially of Białołęka district and its surroundings, deserve their own retail centre, which would satisfy their shopping and entertainment needs. Galeria Północna will be such a place. Market leaders see that fact and want to join.” – saidAnna Wysocka, JLL, the company involved in leasing Galeria Północna.

“Considering the lease agreements we have already concluded, the offer of Galeria Północna is becoming clearer and sharper. H&M, but also other tenants of the mall, confirms that customers can count on a large, well-known brands and high quality service.”- said Renata Kusznierska, DTZ company, also involved in the rental of the Gallery premises.

Galeria Północna is currently at the final stages of formal and legal actions preceding commencement of construction works. Construction works will initiate as soon as the building permit is issued, and will last for approx. 20-22 months.

Galeria Północna, is designed by the renowned architectural studios APA Wojciechowski and MTZ Architects. The project will boast a green roof with lawns and walking paths. Part of the roof will be glazed allowing daylight to come inside the mall. Galeria Północna will offer its clients approximately 64,000 sq m of retail space. Just as in the case of Galeria Wilanów, GTC expects to obtain LEED gold certification for Galeria Północna. The project is co-leased by JLL and DTZ.

***

The GTC Group, established in 1994, is one of the leading commercial real estate companies in Central, Eastern and Southern Europe. The Group operates in Poland, Romania, Hungary, Croatia, Serbia, Bulgaria, Slovakia and Czech Republic.
GTC develops and actively manages real estate portfolio in two sectors of the market: office buildings and retail centres. Since its establishment, the Group has developed 47 office buildings and 12 shopping malls with a total net space amounting to more than 1 million sq m. GTC currently manages 28 commercial real estate projects with a total commercial space of over 589,000 sq m.
GTC S.A. is listed on Warsaw Stock Exchange on WIG30 index. The company’s shares are also included in the international indexes: Dow Jones STOXX Eastern Europe 300 index, GPR 250, which comprises the 250 largest and most liquid real estate companies of the world and the FTSE EPRA/NAREIT Emerging Index.

***

H&M Hennes & Mauritz AB was founded in Sweden in 1947 and is traded on NASDAQ OMX Stockholm. The company’s business concept is to offer fashion and quality at the best price. In addition to H&M, the Group includes the brands COS, Monki, Weekday, Cheap Monday, & Other Stories as well as H&M Home. The H&M Group has more than 3,300 stores in 54 markets. In 2013, sales including VAT were approximately SEK 150 billion. The number of employees amounts to more than 116,000. For further information, visit hm.com.

***

JLL is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $4.0 billion, JLL operates in 75 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of over 280 million square metres worldwide and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $48 billion of real estate assets under management. For further information, please visit www.jll.pl.

***

DTZ a global leader in real estate services. Company provides business, corporate / occupier and investor clients with comprehensive services including retail, office and industrial lease agency, integrated end-to-end service covering property and facility management, capital markets / investment consultancy, valuation, project and building consultancy. Additionally, through the best quality market research and consultancy services, DTZ provides clients with global and local market knowledge. By forecasting markets trend developments, DTZ provides best-in-class solutions and support to complex client needs. DTZ has 24,200 employees, operating across 209 offices in 52 countries. DTZ in Poland has approx. 250 employees. More information on www.dtz.com.

Operational results continue the upward trend

Globe Trade Centre S.A. (“GTC”) released its third quarter and nine months 2014 results today. The results have been prepared in accordance with the International Financial Reporting Standards (IFRS) and are presented in euro.

 

Q3 & 9M 2014 Financial Highlights

 

  • Rental and service revenues maintained at 27m in Q3 and 82m in 9M (€28m in Q3 2013 and €83m in 9M 2013); rental margin improved to 75% in Q3 and 74% in 9M (74% in Q3 and 72% in 9M 2013)
  • Selling, administrative and finance costs, down to €12m in Q3 and €43m in 9M (€14m in Q3 and €43m in 9M2013)
  • Underlying profit before tax up to €9m in Q3 and €22m in 9M (€6m in Q3 2013 and €14m in 9M 2013)
  • Revaluation loss of €1 in Q3 and €68m in 9M (€16 in Q3 and €86 in 9M 2013)
  • Net profit at €5m in Q3 and net loss of €67 in 9M (loss of €2m in Q3 2013 and €77 in 9M 2014)
  • Loan to value improved to 54% (59% as of 31 December 2013) as a result of debt repayment
  • Cash flow from operations increased to 33m (€19m in 9M 2013)
  • Cash and deposits of €130m after repayment of bonds and related hedges (€88m as of 31 December 2013)

9M 2014 Operating Highlights

  • Commencement of construction of Fortyone office building in Belgrade (10,300 sq m) with 60% pre-lease
  • Significant 24% pre-lease in Galeria Wilanów and 25% pre-lease in Galeria Północna

 

“In the third quarter of 2014, we are showing continuous improvement in our operating results. Occupancy was maintained at high level and efficient operations enabled GTC to achieve 75% gross margin on rental activities. Lower financial costs allowed to generate €33m of cash from operations. We have also started our new office investment Fortyone in Belgrade with 60% pre-leased space already a year before completion.” – said Thomas Kurzmann, GTC Chief Executive Officer. “ Now we have to concentrate on future growth. Our two commercial projects in Warsaw, Galeria Wilanów and Galeria Północna, attracted further sizeable tenants including Carrefour, LPP Group and H&M. But that is not all, we are analysing various investment and development opportunities in CEE and SEE and look forward for shareholders` support to seize these opportunities. We remain optimistic on expanding our commercial real estate portfolio in CEE and SEE regions.” – added Thomas Kurzmann.

Financial overview

Rental and service revenues kept virtually unchanged at €27m in Q3 2014 and €82m in 9M 2014 compared to €28m in Q3 2013 and €83m in 9M 2013. Margin on rental activities was improved to 75% in Q3 2014 and 74% in 9M 2014 (74% in Q3 2013 and 72% in 9M 2013). As of 30 September 2014, GTC`s completed buildings were leased in 91%, therefore further rental revenue growth is probable.

Revenues from sale of residential properties increased to €4m in Q3 2014 and €13m in 9M 2014, mostly due to improved sale of residential units in Romania and Poland.

Gross profit from operations was €21m in Q3 2014 and €61m in 9M 2014 compared to €21m in Q3 2013 and €60m in 9M 2013.

Selling expenses remained at the level of €0,7m in Q3 2014 and €2m in 9M 2014.

Administrative expenses, excluding provision for stock based program, declined to 2m in Q3 2014 and €9m in 9M 2014.

Net loss on revaluations of investment property and residential projects was  €1m in Q3 2014 and €68m in 9M 2014. The nine months result is mostly a result of a devaluation of retail properties in Croatia and Romania following a decrease of expected rental values and expansion of yields and devaluation of long-term pipeline land plots in light of limited liquidity.

Finance expenses net were at the level of €9m in Q3 2014 and €31m in 9M 2014.

Net result was a profit of €5m in Q3 2014 and a loss of €67m in 9M 2014, which is attributable mainly to loss on revaluation of investment properties and residential projects.

Total debt of €941m as of 30 September 2014 includes bonds issued in March 2014 of €48m as well as the loan from Galeria Kazimierz of €62m. The average debt maturity was 4.4 years and the average cost of debt was 4.3% p.a. Loan to value ratio was at the level of 54% as at 30 September 2014. Interest coverage improved do 2.23 as at 30 September 2014 from 1.68 as at 31 December 2013.

NAV per share stood at €1.7 as at 30 September 2014 compared to €1.9 as at 31 December 2013. EPRA NAV per share was also €2.1 while EPRA NNNAV/per share was €1.7.

Cash flow from operations went up to €33m in 9M 2014 (€19m in 9M 2013).

Key non-financial highlights

Commencement of construction of Fortyone office project in Belgrade

On 1st October 2014, GTC conducted an official ground breaking ceremony for its newest project in Serbia – the class-A Fortyone office.

Fortyone office complex will add over 27,000 sq m of class A office space to the market, in three separate phases. The first building will offer its tenants approx. 10,300 sq m. The building, featuring raised floors and offering flexible floor division, will allow its tenants to efficiently plan their office space and to create comfortable work environment for their employees. Phase one of the investment is planned for completion  in the third quarter of 2015.

Fortyone will be located in the prominent corner of New Belgrade, at the intersection of Milutina Milankovica Boulevard and Umetnosti Boulevard, a place both close to center of the city and the airport, as well as one conveniently connected with the main highway. For the convenience of the tenants, the building will offer close to 500 ground and underground parking places. Each of the buildings will include retail facilities to improve the working environment of the its tenants.

Application for building permit for Galeria Północna filed

Administrative proceedings for both shopping mall projects in Warsaw reached their final stages, with application for building permit for Galeria Północna, at Warsaw`s Białołęka, district submitted in August 2014 and accepted for further proceeding by the City of Warsaw authorities.

 

Significant pre-leases in Galeria Północna

During 2014, GTC achieved a significant, 25% pre-lease level of Galeria Północna signing lease contracts with major anchor tenants including:

 

  1. LPP Group, with the whole range of LPP`s clothing brands: House, Mohito, CroppTown and Sinsay, as well as Home&You, a popular interior decoration and home accessory chain. LPP decided to open a flagship Reserved store with more than 2,100 sq m of retail space in each of the malls.
  2. Carrefour hypermarkets will provide a strong, modern and high quality food offering in on its new shop located on 9,300 sq m.
  3. H&M with the whole range of the clothing products.

 

Significant pre-leases in Galeria Wilanów

During 2014, GTC achieved a significant, 24% pre-lease level of Galeria Wilanów signing lease contracts with major anchor tenants including:

 

  1. LPP Group, with the whole range of LPP`s clothing brands: House, Mohito, CroppTown and Sinsay, as well as Home&You, a popular interior decoration and home accessory chain. LPP decided to open a flagship Reserved store with more than 2,100 sq m of retail space in each of the malls.
  2. Carrefour hypermarkets will provide a strong, modern and high quality food offering.
  3. H&M with the whole range of the clothing products.
  4. Rossmann with it cosmetic and chemical offer.

 

Rossmann chemist’s at GTC’s Galeria Wilanów shopping mall in Warsaw

Globe Trade Centre S.A. (GTC), one of the leading commercial real estate companies in Central, Eastern and Southern Europe, has signed a lease contract with Rossmann. Shop of this brand will open in the planned Galeria Wilanów in Warsaw, Poland.

Rossmann is present in 930 locations in 380 Polish cities. This leader of chemical and cosmetic market has decided to lease 570 sq m of commercial space in the planned shopping mall.

“We are very pleased with Rossmann joining one of our key projects. I am convinced that the Rossmann brand, already familiar to the clients throughout Poland thanks to its complete and competitive product offering, will be an outstanding addition to Galeria Wilanów, which will be one of the most modern shopping malls not only in Warsaw but also in Poland” – said Jacek Wachowicz, GTC Board Member.

“Galeria Wilanów provides a major retail location in Poland, but also meets the demand from our Clients residing in Wilanów. This is a very attractive location for Rossmann” – said Marek Maruszak, Chairman of Rossmann Poland.

“We are extremely satisfied that Rossmann joins the group of Galeria Wilanów’s tenants, where it plans to open a concept reserved for dominating shopping malls in Poland. We are convinced that the synergy between tenants of the centre will create a unique and optimal offer” – said Teresa Pieczonka, Senior Consultant at JLL, agent responsible for commercialization of the project.

Rossmann is yet another renowned retail chain that signed a lease contract for Galeria Wilanów. Earlier, Carrefour hypermarket chain has decided to lease 6,300 sq m of space in the mall and 9,300 sq m in Galeria Północna, GTC’s planned second shopping mall, to be built at Warsaw’s Białołęka district. Another key tenant anchoring Galeria Wilanów mall is LPP SA, one of the world’s fastest growing fashion companies. The GTC mall will feature the entire range of LPP’s clothing brands: Reserved, House, Mohito, CroppTown and Sinsay. LPP’s shops in Galeria Wilanów will occupy a total area of 4,680 sq m. The agent exclusively responsible for leasing scheme is JLL.

Galeria Wilanów, along with its sister Galeria Północna, are in the final stages of formal preparations which precede construction works. The construction of the mall will begin immediately after obtaining the building permit and it will take from 20 to 24 months.

The unique design of Galeria Wilanów, which was prepared by APA Wojciechowski and Moshe Tzur, internationally recognised architectural studios, opens the building to the exterior and blends it with the surrounding green areas, playgrounds and recreational areas. State of the art environment-friendly solutions, already confirmed by the ecological LEED gold certificate awarded to the project, will ensure that the mall will have minimal impact on its surroundings. Among green solutions used there will be i.a. rainwater recycling system and solar batteries.

Galeria Wilanów will offer its tenants over 61,000 sq m in ca. 250 stores and service points.
***
The GTC Group, established in 1994, is one of the leading commercial real estate companies in Central, Eastern and Southern Europe. The Group operates in Poland, Romania, Hungary, Croatia, Serbia, Bulgaria, Slovakia and Czech Republic.

GTC develops and actively manages real estate portfolio in two sectors of the market: office buildings and retail centres. Since its establishment, the Group has developed 43 office buildings and 12 shopping malls with a total net space amounting to more than 1 million sq m. GTC currently manages 28 commercial real estate projects with a total commercial space of over 589,000 sq m.

GTC S.A. is listed on Warsaw Stock Exchange on WIG30 index. The company’s shares are also included in the international indexes: Dow Jones STOXX Eastern Europe 300 index, GPR 250, which comprises the 250 largest and most liquid real estate companies of the world and the FTSE EPRA/NAREIT Emerging Index.
***
The first Rossmann chemist’s in Poland was opened in 1993 at Piotrkowska street in Łódz. After years of its business activity the company has 900 stores in nearly 380 towns and cities. Rossmann is present both in biggest cities’ shopping centres as well as in towns. The chemist’s can be found in such prestigious locations as for example Krupówki in Zakopane, Bohaterów Monte Cassino in Sopot or at ul. Floriańska in Cracow. Its domestic detergents-cosmetic business market share is 22%. Each day 600,000 people shop at Rossmann. Rossmann’s headquarters are in Lodz. The company employs 12,000 workers.

Rossmann Poland is a part of capital-purchasing group composed of Rossmann GmbH and A.S. Watson. It includes 11,000 chemists in 33 countries in Europe and Asia. The group employs in total over 100,000 workers. Rossmann’s logo is a centaur – half-horse, half-man, inscribed in the letter “o”. This trademark is also a visualization of the company’s founder and owner’s surname (Ross – steed, Mann – man).
***
JLL is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $4.0 billion, JLL operates in 75 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of over 280 million square metres worldwide and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $48 billion of real estate assets under management. For further information, please visit www.jll.pl.