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

GTC’s rental income suffered a €2 million decrease due to rent and service charge relief imposed by governments during the lockdown of shopping malls. Still, total rental and service charge revenues increased to €41 million in Q1 2020 from €39 million in Q1 2019. GTC presented its financial results at the end of Q1 2020.

“Our operations were significantly tested during the last few months when COVID-19 outbreak started in Europe. We closed all our shopping malls for part of March, April and part of May. In order to ensure the continuation of operations in our shopping centres, we support our tenants after the re-opening of the shops. That will have a negative impact on both our operations and value of properties which, as we announced earlier, felt by 2.7% recently, which resulted in the lack of compliance with certain financial covenants included in the retail assets loan agreements as of 30 June 2020. We managed to waive the covenants until June 2021 in case of Galeria Jurajska and Ada Mall loans and we entered into the negotiations with the lender of Galeria Północna. However, when we look at the statistics of the shopping malls after the re-opening, they seem to be encouraging,” commented Yovav Carmi, GTC’s Management Board Member. “We recommend to the AGM to retain profit from 2019 in the company to fight the consequences of COVID-19 outbreak but also to be prepared for further development or acquisition activity which will be dependent on the market conditions.”

Offices: Completions and lease-up add to in-place rent

  • Leasing activity amounted to 17,900 sqm in Q1 2020, compared to 32,700 sqm in Q1 2019.
  • Occupancy stood at 95%, unchanged from 31 December 2019.
  • 5,400 sqm of office space was completed in Q1 2020 with the handover of Green Heart (N3) in Belgrade.
  • There is currently 57,500 sqm of office space under construction with completion scheduled for 2020 and 2021. All projects enjoy a high pre-release rate and are on time and on budget.
  • COVID-19 resulted in a drop in requests from potential tenants and freezing the requirements for future growth, in addition to a rejection of opportunistic requests for rent reductions.

Retail: Impacted by COVID-19 measures

During the closure the majority of tenants received rent-free. Almost all tenants received a discount for a short period (up to 6 months), rent payment in instalments, waivers of late payment interest and service charges in exchange for an extension of their lease term for not less than the period during which they received a concession.

After reopening (but prior to the reopening of cinemas), footfall has gradually recovered and is standing above 80% of 2019 footfall in Poland, over 80% of 2019 footfall in Zagreb and at 56% of 2019 footfall in Sofia. In Belgrade, 79% of pre-lockdown 2019 footfall was reached in May and 88% in June but footfall tumbled to 60% of pre-pandemic levels in July due to a severe spike in new COVID-19 cases in Belgrade,

June turnover increased gradually to 82% of 2019 turnover in Galeria Północna and 81% in Galeria Jurajska in Poland, to 90% in Belgrade, to 87%, in Zagreb and to 57% in Sofia. (All comparisons made in June.)


Rental and service charge revenues increased to €41 million from €39 million in Q1 2019. During this period, the Group has improved the rental revenue through completion and leasing of Green Heart complex as well as the opening of Ada Mall, Advance Business Center I and Matrix A. The increases were partially offset by sale of GTC White House in the third quarter of 2019, Neptun Office Center in the fourth quarter of 2019 of €1.5 million and a decrease in income of €2 million due to rent and service charge relief imposed by governments during the lockdown of shopping malls starting on the second half of March 2020 following the introduction of COVID-19 outbreak prevention measures.

Profit before tax and fair value adjustments was €13 million. The net profit amounted to €3 million. This mostly resulted from a decrease in rental and service charge revenue combined with loss from revaluation/impairment of assets, higher foreign exchange differences loss and higher tax expenses resulted in from foreign exchange devaluations of foreign currencies and its impact on fixed assets values in local currencies.