Warsaw-listed GTC, the owner of the City Gate office towers and Galleria malls, said its Romanian portfolio represents 15% of the overall portfolio held by the company in Europe, estimated at EUR1.5 billion at the end of June.
Besides the office and retail developments, the developer also owns on the local market residential compounds FeliCity and Rose Garden and several other plots.
The four malls held in Romania were evaluated at EUR72 million end-June, from EUR84 million at the end of 2011. The mall covers 69,000 square meters and has a 89% occupancy rate, GTC said in a report Thursday.
The average rent applied for the malls is EUR8 per sqm.
The City Gate office towers have a net rentable area of 47,700 sqm, while occupancy reached 93% in these units end-June, from 96% end-2011. Their market value reached EUR169 million end-June, from EUR173.6 million at the end of 2011. Average rent in the offices reaches EUR22 per sqm per month.
The company’s representatives said in a report it could not be ensured an optimization of the retail projects both in Bulgaria and Romania, due to the low occupancy level and of the rent.
Thus, the group is incapable to attract new tenants or increase the rent due to the market conditions, the report also read. The group has no guarantee it could sell or restructure such a project to reduce losses, and it equally envisages a temporary suspension or annulment of projects that are not commercially sustainable. According to the report, there is no guarantee the group could reduce losses by taking any of the above measures.
Part of its strategy to reduce costs, the company plans to sell a land in the eastern town of Galati for EUR4.2 million.
In January to June, the developer posted revenue worth a total EUR13 million in Romania and Bulgaria, compared to EUR12.6 million during the same period a year before. Expenditure in the two countries cumulated EUR7.6 million, compared to EUR9.7 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.