GTC eyes up joint ventures

One of the leading real-estate companies in the CEE region, Globe Trade Center SA, recorded a net profit of $140 (zł.446) million in 2005. The company's operational revenues reached $95.6 (zł.304) million, which is a 70-percent growth on 2004. These results are mainly due to high lease rates in almost all of the firm's buildings, as well as the leasing of constructions completed last year, including Galeria Kazimierz in Kraków.

"Last year was exceptional in GTC's 11-year history. Diversifying investment in the CEE region and building up a high-quality portfolio turned out to be an effective strategy," said the head of GTC's supervisory board, Eli Alroy.

In 2005, GTC invested $180 (zł.573) million in new projects. As part of its asset-diversification strategy, the company also sold a selection of its assets. "We do not normally do that, unless for a good price," admitted Alroy. After 10 years of being a tenant, Allianz Group bought the Allianz building from GTC. The company also recorded a profit from the sale of a five-percent share package in Orbis SA. By selling 50 percent of its shares in the Galeria Kazimierz shopping center, GTC also won a new partner, Quinlan Private.

"By 2008 we will invest at least $600 (zł.1,910) million. I stress that this is a minimum and any new investment can increase this sum. Our aim for 2006 is also to enter three new markets in the region: Slovakia, Bulgaria, and Ukraine," said Alroy.

The company is also open to the possibility of joint ventures, with a share of 50 percent and above. Alroy also said that the relationship between its operations in Poland and the countries of the region will change. "So far 85 percent of GTC activities was in Poland. This value will drop," said Alroy.

In order to accelerate its expansion in CEE, GTC is considering raising its asset value. The company's shareholders will soon decide whether to agree to the management board increasing the firm's initial capital, excluding the right to acquire. If shareholders go along with the plan, the company will be able to issue up to 1.8 million shares.

Agnieszka Barteczko