Warsaw-listed GTC, the owner of the City Gate office towers and Galleria malls, said its Romanian portfolio represents 20% of the overall portfolio held by the company in Europe, estimated at EUR2.02 billion at the end of 2011.
Besides the office and retail developments, the developer also owns on the local market residential compounds FeliCity and Rose Garden and several other plots.
For Romania, “revaluations of residential projects (further slowdown in sales and decrease in selling prices) and retail projects (reduction of estimated rental value) amounted to EUR41 million in (the fourth quarter of 2011) and EUR120 million in 2011,” the group noted in its annual financial report.
GTC expects housing prices to keep dropping in the short run, because of difficulties on the lending market.
The four malls held in Romania were evaluated at EUR84 million at the end of 2011. GTC completed a mall in Arad, with a net rentable surface of 32,500 square meters. As such, GTC is involved in retail projects cumulating 69,500 sqm (of which 58,400 sqm is GTC’s holding) in Romania, with an occupancy rate of 88%.
The average rent applied for the malls is EUR9 per sqm, and the average yield stood at 9.2%.
On the office segment, GTC developed the City Gate office towers, with a net rentable area of 47,900 sqm (GTC’s part is 28,218 sqm). Occupancy reaches 96% in these units, and their market value was calculated at EUR173.6 million at the end of 2011, compared to EUR173.8 million in 2010. Average rent in the offices reaches EUR22 per sqm per month, and the average yield is 7.1%.
Last year, the developer posted revenue worth a total EUR26.5 million in Romania and Bulgaria, compared to EUR27.6 million in 2010. Expenditure in the two countries cumulated EUR18.3 million, compared to EUR23 million.
The developer is active on the Romanian market through stakes in 26 firms. These firms own or develop, under the GTC Romania umbrella, commercial, residential and office projects. The company is part of Dutch-registered group Kardan.