News Article CEE financial report GTC office profit report retail
by Property Forum | Report

In H1 2022, GTC’s net profit amounted to €41 million in H1 2022 (compared to €21 million in H1 2021). This mainly resulted from a strong operating performance combined with profit from revaluation/impairment of assets and lower finance cost, partially offset by an increase in foreign exchange differences loss.

“We are a company with almost 30 years of experience in real estate. Our underlying business is strong and generates steady cash flow which allows for strategy expansion and new investments. As part of our strategy expansion, we are primarily considering investment in technology parks, renewable energy facilities and the development of PRS assets. We expect returns from such investments at a similar or higher level than the returns on the core business. We want the new investments to involve sectors with sustainable growth and come from the market segments that should be resilient to turbulent market conditions and will improve GTC’s ESG profile,” commented Zoltán Fekete, GTC’s President of the Management Board.

Zoltán Fekete

Zoltán Fekete

President of Management Board

Previously, he has served the company as the Chairman of The Supervisory Board for two years. He joined GTC in July 2020. Zoltán Fekete graduated from the Law Faculty of Eötvös Lorand University and obtained an MBA in Banking from the University of Exeter, UK. Mr Fekete has over 30 years of experience in international investment banking and private equity. As an investment banker, he worked for HSBC London, Credit Suisse First Boston in Budapest, London, and Israel. During his career, Mr Fekete has dealt with a large number of IPOs, M&A transactions and private equity investments in the field of real estate, technology, and life sciences. Between November 2015 and March 2022, he acted as CEO of Optima Investment Ltd. More »

“The H1 2022 results are very strong. Our retail sector is at its best, with significant improvements on both last quarter but also 2019 operating results, with a strong increase, on both revenue side but what is more important on the performance side. Our balance sheet and cash position are very strong. Net debt stays virtually unchanged, LTV at 42% and cost of debt still at an all-time low of 2.16%. We are very satisfied with our results and looking forward to the new investments and opportunities,” commented Ariel Ferstman, GTC’s CFO and Member of the Management Board.

Ariel Ferstman

Ariel Ferstman

Chief Financial Officer

Ariel Ferstman is a member of GTC’s Management Board and Chief Financial Officer since July 2020. He joined GTC in 2011 and has been leading the finance departments as a chief financial officer for GTC in Hungary, Croatia and Slovakia. Prior to joining GTC, Mr Ferstman spent over three years as the Financial Controller for BSR Europe, formerly listed on the Tel Aviv Stock Exchange, and five years as a senior auditor in Ernst &Young in Israel and Argentina. Ariel Alejandro Ferstman graduated cum laude from The University of Buenos Aires where he obtained a B.A. degree in accounting and finance. He also holds an MBA in Finance and Business Strategy from The Hebrew University of Jerusalem. Moreover, Mr Ferstman is a chartered public accountant in Israel and Argentina. More »

Financial results

  • Rental and service revenues were up to €84 million in H1 2022 as compared to €79 million in H1 2021.
  • Gross margin from operations increased to €62 million in H1 2022 as compared to €59 million in H1 2021.
  • Adjusted EBITDA was at €53 million (€52 million in H1 2021), the net profit amounted to €41 million in H1 2022 (€21 million in H1 2021). This mainly resulted from a strong operating performance combined with profit from revaluation/impairment of assets (€16 million) and lower finance cost (by €5 million), partially offset by an increase in foreign exchange differences loss (by €1 million).
  • Funds From Operations (FFO I) was up to €34 million as compared to €31 million in H1 2021, FFO I per share at €0.06.

Strategy expansion

  • Diversification to new growing real estate-based sectors without deconcentrating on the core business
  • Investment in sectors with higher sustainable growth potential compared to the existing real estate portfolio
  • Expected returns at least the same or higher than the existing real estate portfolio
  • Segments expected to be resilient to turbulent market conditions
  • Establish platforms for fundraising from third-party investors to achieve larger exposure to new growing segments
  • Dedicated management teams with experience in relevant sectors
  • Potential new sectors identified by the company’s management to be considered for investment as part of the new strategy include innovation and technology parks, renewable energy facilities and the development of PRS assets (residential).

Investing in Kildare Innovation Campus

  • Ireland is one of Europe’s largest data centre hubs with 70 facilities operating across the state and more earmarked.
  • Kildare Innovation Campus, located outside of Dublin, extends over 72 ha (of which 34 ha is undeveloped).
  • There are nine buildings that form the campus (around 101,685 sqm): six are lettable buildings with designated uses including industrial, warehouse, manufacturing and office/lab space. In addition, there are three amenity buildings, comprising a gym, a plant area, a campus canteen and an energy centre. The campus currently generates around €6.26 million gross rental income per annum with a significant potential to improve.
  • Under the transaction, GTC will acquire a minority stake of 25% through notes (debt instruments) issued by a Luxembourg securitisation vehicle for €115 million, which constitutes less than 5% of the total property value.

Potential capital increase

  • GTC will finance its strategy expansion with its own funds, however, it may also require new equity.
  • With the current debt level and yield on GTC’s bonds, GTC may seek to deleverage.
  • The potential capital increase will be in the range of €150-250 million.
  • The contemplated capital increase supporting GTC strategy expansion will further improve GTC’s ESG profile.
  • GTC believes that the capital increase will enjoy substantial investors interest, coming from existing but also new investors.