GTC RO refutes rumors

So, we noticed an article on a Romanian site that claimed GTC was considering closing down some of its mall in Romania. That’s hardly unprecedented, when you think that Immofinanz is currently doing just that in Arad with one of the disasters it inherited from Immoeast when that company imploded (more on that in the Sept. issue of CIJ). But that’s not only a difficult process, time -consuming and sensitive, and it’s not really something one speculates idly about in an earnings report.

The news seemed to be related GTC’s release of financial data for the second quarter, in which it’s pretty up front about the fact that it’s rough in Romania at the moment (its portfolio there took a €14m valuation hit, apparently the victim of Romania’s it’d-be-funny-if-it-weren’t-so-serious political squabbles (hopefully over, now?) But closing malls seemed a bit extreme, and there wasn’t much hint of such a move when we last spoke with GTC.

So when we got through to them  headquarters in Bucharest, they weren’t any too thrilled by what they called rumors, nor could they figure out where they were coming from (outside of the usual suspects). In any case, while admitting that times are indeed difficult in regional Romania, CEO Shimon Galon derided the reports, calling them nonsense and saying there are no plans to close anything.

Galleria Arad numbers

Galleria Arad, which opened last week in Romania, has already had over 100,000 visit it. In its first day alone, it saw 31,000 people come through the doors to browse through its 35,000 sqm of retail space. Anchor tenants include Cora, Inditex brands Zarsa, Bershka, Stradivarius and PULL&Bear, along with Peeraj Group’s Mango, Oviesse and others. The mall has an underground garage for 1,000 cars and some departments from the Municipality of Arad also have offices in the building. It’s the 11^th mall the developer GTC has opened in CEE.

Gallerie Arad signs with Inditex

The developer GTC has landed Inditex Group at Gallerie Arad, its 33,600 sqm mall in western Romania. Inditex signature brings the mall to 85% occupancy, and GTC claims there’s a few more to come in the coming days. The mall is scheduled to open this fall. Inditex’s brands Zara, Bershka, Stradivarius and Pull&Bear will occupy approx. 3,700 sqm in Gallerie Arad.

GTC signs up Cora for Galleria Galati

Romanian media is reporting that French retailer Cora will open a hypermarket in Galleria Galati after agreeing terms with its developer, GTC. The 28,000 sqm shopping center could be opened by next year, with Cora taking 9,000 sqm as a key anchor tenant. To date, it’s opened six hypermarkets in Romania. GTC is working on a series of Galleria shopping centers in the country, and has made its mark on the local office and residential markets as well.

GTC sells its stake in Galeria Mokotów

Globe Trade Centre signed a preliminary agreement for the sale of its 50 percent stake in its Galeria Mokotów project based on an asset value of €475m. The purchaser is an affiliate of Unibail-Rodamco, which already owned the other half of the mall.

“The transaction is in line with the GTC’s strategy of rebalancing its property portfolio, including the sale of mature assets and reinvesting in further expansion. As the real estate investment market continues to improve, we proceed with the recycling of capital and we’re planning new investments in the commercial sector in Poland,” said Eli Alroy, Chairman of the GTC Supervisory Board.

Located in Warsaw, Galeria Mokotow was completed in 2000. The mall comprises 62,000 sqm of net rentable retail space.

Q1 profitable for GTC and JWC

GTC begins 2011 in the black
The first quarter results for Global Trade Center are out for 2011. GTCdoubled its profits from PLN 24.84m in the first quarter of 2010 to PLN 41.21m in 2011. Its rental revenues rose to PLN 6m over the same period. The company made a profit of PLN 114.5m over the course of 2010 (following a PLN 571.2m loss in 2009) and it expects another good year, with rising rental rates and limited new supply due to hit the market.

JW Construction with PLN 19.29m profit
The Polish developer JW Construction has turned in a net profit of PLN 19.29m for Q1 of  2011, up from the PLN 17.6m it produced during the same quarter in 2010. One of Poland’s residential development leaders, JW Construction has been listed on the Warsaw stock exchange since 2007. It made an operating profit of PLN 31.57m during Q1 this year (up from PLN 28.8m in Q1 2010) and its revenues rose from PLN 118.25 to PLN 125.61

Media watch: Romania

C&A opens three stores in  Iulian Dascalu malls
The retailer C&A will open three stores totalling 4,300 sqm in three shopping centers owned by the businessman Iulian Dascalu. Dascalu has landed the Austrian retailer for Iulius Mall Timisoara (1,700 sqm), on the ground floor of Iulius Mall Suceava (1,225 sqm) and 1,380 sqm in Palas Mall in downtown Iasi. These are C&A’s first stores in all three cities. Wall-Street

Alcatel-Lucent takes  2,000 sqm at City Gate
Alcatel-Lucent Romania has leased nearly 2,000 sqm in GTC’s office project City Gate located in the Piata Presei district of Bucharest. It ranks among the largest office deals concluded in the first quarter of 2011, along with leases to Intel (3,500 sqm in BOC Tower), Volksbank (8,000 sqm in Nusco Tower) and Pfizer (2,000 sqm in Platinum Business and Convention Center).  Wall-Street

Asmita Gardens crisis deepens

The €120m Asmita Gardens residential complex in Bucharest is in crisis because of a dispute between the general contractor, Strabag, and its developer, Asmita and the ECDC investment fund.

Mariusz Kozłowski withdraws resignation from GTC board

Mariusz Kozłowski, GTC board member for investor relations, isn’t resigning after all. Having  handed in his resignation earlier this year in order to pursue “personal investment plans”, he’s apparently changed his mind and withdrawn the resignation. He will remain a board member, though he will no longer take care of investor relations.

RREEF buys Nefryt and Topaz from GTC

RREEF Investment has acquired two office buildings in Warsaw, Nefryt and Topaz, from GTC for its investment vehicle called grundbesitz europa. The price tag was €80m.
Topaz and Nefryt are both seven-storey buildings, totaling about 27,000 sqm of rental space and are fully-let to 16 companies. They’re located in the Mokotów district, a  popular Warsaw office hub.
Grundbesitz europa currently holds 36 properties with a total value of €2.8 bn.

GTC sells Nefryt and Topaz to RREEF at 7.2%

Warsaw listed Globe Trade Centre has sold two of its office buildings in Warsaw: Nefryt and Topaz. The assets were purchased by a fund managed by RREEF Investment. The transaction value was €79 and the yield at 7.2 percent.

“This transaction is the first asset disposal for GTC since September 2007,” said Eli Alroy, Chairman of the GTC Supervisory Board, as quoted in the company’s press release. “We believe that the real estate investment market will continue to improve, which may encourage us to proceed with recycling of capital, as in the past GTC used to sell one or two assets per year.”

Nefryt and Topaz are located in the heart of Mokotów, the largest business district in Poland, next to the Galeria Mokotów shopping mall. The Topaz and Nefryt buildings has  a total combined area of approx  27,000 sqm. The tenant list includes such renowned firms as Roche, Allianz, Cisco Systems, Motorola, Honeywell and Noble Bank.

GTC and Polnord to build mall in Warsaw

Globe Trade Centre and Polnord signed a set of agreements on co-ownership of a SPV that will own 7.5 ha of land in Wilanów district of Warsaw. The two companies GTC and Polnord will develop a 60,000 sqm shopping and entertainment center on the plot, currently owned by Polnord. Construction is expected to start within next 12 months, after obtaining a building permit. The total cost of investment, including land, is estimated at  €170m.

GTC will have a leading role in the development and management of the project with a full support of Polnord. The value of  the mall upon completion is estimated at €250m.

GTC signs LOI to sell Nefryt and Topaz

Globe Trade Centre has signed a letter of intent with an as yet undisclosed international investor for sale of its two office buildings in Warsaw: Nefryt and Topaz. Nefryt and Topaz are office assets located in Mokotów, Warsaw’s prime office hub, next to Galeria Mokotów shopping center (also developed by GTC).

Current tenants include Roche, Allianz, Noble Bank, Cisco Systems, Motorola and Honeywell along with others. The total rentable space of the building is approx 27,000 sqm. According to GTC, “the final execution of the transaction is subject to due diligence and approvals of statutory organs of both the buyer and the seller and is scheduled for the end of June 2010”.

The agreed value of the transaction reflects the price of approx €3,000 per net sqm and the yields of 7.0-7.2% on a current income.