Globe Trade Centre S.A. (GTC) earned a record profit in Q3 2007 of nearly EUR 113m, while the profit attributable to equity holders was EUR 106m.

Revenues grew to about EUR 30m – an increase of 64% from a year ago. The total portfolio of pipeline projects under development exceeds 1.7m sqm of net building rights.

The total year-do-date profit was EUR 202m, with the year-to-date profit attributable to equity holders reaching nearly EUR 174m.

The profit from revaluation of commercial property contributed largely to the record profits. The increased value of GTC’s completed assets resulted from a combination of both continuing yield compression and rental growth across the region.

In September 2007 the America House building in Bucharest was sold for EUR 120m, at a record-low yield of 5.55%. The transaction contributed an additional EUR 30m to the Q3 2007 profit.

The sale of the Lighthouse building in Prague was concluded at an asset valuation of EUR 76.5m, reflecting an investment yield of 5.65%.

In August 2007 GTC Croatia opened the Avenue Mall in Zagreb. The development includes a 27,000 sqm NRA modern shopping center and a 7,000 sqm NRA office tower. The mall became a landmark shopping destination immediately after opening, attracting 270,000 clients in the first four days of business. The property has been valued at EUR 190m, based on an investment yield of 6.25% for the retail part and 7% for the office element.

These transactions are market-endorsed evidence that the property developed by GTC meets the highest investment-grade standards and is able to deliver impressive returns to GTC’s shareholders.

The investment yields achieved in these transactions indicate a strong yield compression in Southeastern Europe. GTC sees SEE markets as targets for its accelerated expansion.

Serbia appears to be one of the markets where positive convergence trends can be expected. GTC has completed one office building there, GTC House (13,500 sqm), and by the end of Q1 2008 is expected to deliver two more projects: 19 Avenija (17,400 sqm) and GTC Square (23,000 sqm).

Office markets across the region indicate steady demand from tenants, with the Polish market standing out with its strong take-up and growing rental rates. GTC’s office buildings Platinium Business Park 1 (9,000 sqm) and Nefryt (15,000 sqm) in Warsaw, Globis Wrocław (14,000 sqm), and Edison (10,000sqm) in Cracow are being successfully leased and are expected to be fully let before their completion, which is scheduled in the next two quarters.

GTC is poised to benefit from the increased demand from retailers for high-standard retail space. The company holds interests in three completed top-quality shopping centers: Galeria Mokotów in Warsaw, Galeria Kazimierz in Cracow, and Avenue Mall in Zagreb. Pipeline projects under development include malls in Poland, the Czech Republic, Romania, Bulgaria and Serbia. Upon completion of the projects that have been already secured, GTC‘s retail portfolio is expected to reach 360,000 sqm NRA (counting only GTC’s equity portion) in 15 shopping centers. Nonetheless, the company is actively seeking more acquisitions to increase GTC’s retail portfolio further.

The company continued to successfully develop and sell residential property in the upper-middle and upper segments of the market.

In Q3 2007 the majority of the third phase of Warsaw’s Osiedle Konstancja development was completed. As a result the company recognized revenues of EUR 15m and gross profit of EUR 6.4m, achieving an impressive gross margin on sales of 43%.

GTC’s accounting policy provides for recognition of revenues and profits from the sale of residential property only upon full completion and hand-over. Therefore the financial results of several projects that are already close to completion or sold in significant part will be recognized in 2008 and 2009.

In Belgrade’s Park Apartments, 95% of units have been sold and the project is to be completed in the coming months. Other projects that are scheduled for completion in 2008 include the first phases of Sasad Resort in Budapest, Rose Garden and Felicity in Bucharest, Prague Marina in the Czech Republic, and Vinohradis in Bratislava. The total value of apartments that have been sold or reserved in those projects is EUR 182m, which has not been recognized yet in GTC’s income statement.

In 2007 the company secured projects in Hungary, Romania, Serbia and Bulgaria with total net building rights of 580,000 sqm. New acquisitions are expected to maintain this rapid pace, and GTC’s management has set a long-term target to acquire a minimum average of 600,000 sqm of net building rights every year.

Globe Trade Centre S.A.

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