GTC’s rental and service revenues decreased by €3.8 million to €37 million in Q1 2021 from €41 million in Q1 2020. Profit before tax and fair value adjustments for Q1 2021 reached €15 million, up from €13 million in Q1 2020. The company published its financial results for Q1 2021.
“The first quarter was extremely busy. As all the businesses around the world, we were focused on mitigating the COVID-19 impact but we already saw a more positive sentiment compared to 2020. Our office leasing activity improved significantly from 70,000 sqm in the whole of 2020 to almost 40,000 in the first quarter of 2021 itself. Also retail saw some significant lease agreements and openings. Additionally, we proceeded with our acquisition plans and invested €212 million in prime offices in Budapest, acquiring Váci Greens D, Ericsson HQ and Siemens Evosoft HQ, which are fully leased to blue-chip tenants and will contribute significantly to our annual NOI. Those acquisitions further complement and boost our green office portfolio in CEE and are a part of our strategy of refocusing more on Poland and Budapest. We financed the acquisitions with our own funds combined with bank financing and green bonds issued in late 2020 and early 2021,” commented Yovav Carmi, GTC’s President of the Management Board.
“On top of the acquisitions, we were also preparing GTC to change our financing structure and move from individual bank loans for particular projects to unsecured bond funding. We would like to tap the liquid bonds market for more flexible and hassle-free instruments, similarly to our regional peers who successfully approached the bond markets recently. We aim to issue the Eurobonds still prior to the summer,” commented Ariel Ferstman, GTC’s CFO and Member of the Management Board.
Q1 2021 financial highlights
Q1 2021 office portfolio highlights
Q1 2021 retail portfolio highlights
Financial results in detail
Rental and service revenues decreased by €3.8 million to €37 million from €41 million in Q1 2020. The decrease mainly resulted from a decrease in rental revenues (€3.4 million) due to rent relief imposed by governments during the lockdown of shopping malls and rent concessions and discounts provided by the Group to the retail tenants across the portfolio due to the COVID-19 outbreak combined with a decrease in rental revenues following the sale of Spiral in the fourth quarter of 2020 (€1.2 million). The decrease was partially offset by an increase in the rental revenues due to the completion of Green Heart, Advance Business Center and Matrix (€0.9 million).
Gross margin from operations decreased by €2.4 million to €27 million from €30 million in Q1 2020, mostly resulting from a loss in rent and service revenues in shopping malls across the portfolio due to the COVID-19.
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