Maximum yield

Warsaw-based Globe Trade Centre (GTC) recorded E89 (zł.341) million in profit and E28 (zł.107) million in revenue for the first half of 2007. In Q2 alone, the company earned a net profit of E77.9 (zł.295) million for Q2 2007, double the figure from the same period last year. According to the company, revaluation of properties in its portfolio contributed significantly to the quarterly results.

Such properties include the Avenue Mall and its affliliated office tower in Zagreb, which provides GTC with annual revenues of E10 (zł.38) million. "The market value of Avenue Mall upon completion amounts to E163 [zł.625] million, which is more than double the total investment cost," says Erez Boniel, GTC's financial director. The market value of the property, independently appraised by CB Richard Ellis, was attributed a 6.25-percent exit yield, indicating the potential of subsequent yield compression on other properties throughout the Southeastern European region.

GTC executives cite high demand on the residential market as a significant source of the company's income. Home sales in Warsaw's Osiedle Konstancja alone amounted to E20 (zł.77) million in 2007. The acquisition of 12 new projects across the CEE region will add close to half a million square meters to GTC's pipeline portfolio. "Each of these projects, upon completion, will bring in a significant profit for GTC," declares Boniel.

By the end of this year, GTC will complete two projects in Warsaw, three in Romania and two in Belgrade. By the end of 2008, GTC plans to invest close to zł.3 billion in new development projects throughout Central and Eastern Europe.