GTC sells EUR 79m of Polish assets to RREEF fund

CEE listed real estate developer Globe Trade Centre (GTC) has completed the sale of two prime office buildings in the Polish capital for a total of EUR 79 mln to a fund managed by German investment manager RREEF Investment.

The transaction is the first asset disposal clinched by GTC since September 2007. 'We believe that the real estate investment market will continue to improve, which may encourage us to proceed with recycling of capital, as in the past GTC used to sell one or two assets per year,' commented Eli Alroy, chairman of the GTC supervisory board.

The Nefryt and Topaz properties are located in the heart of the Mokotów business district of Warsaw, adjacent to the Galeria Mokotów shopping mall. They provide 27,000 m² of total office space leased to a number of tenants including Roche, Allianz, Cisco Systems, Motorola, Honeywell and Noble Bank.

Upon sale of the two buildings, GTC's net cash position will increase by about EUR 21 mln, the company said. The deal reflects an average yield of 7.2%. 'The pricing of the transaction reflects the yield compression trend that started early this year,' said GTC's Chief Financial Officer Erez Boniel. 'Lower investment yields should have a positive impact on the valuation of GTC's office portfolio in Warsaw.'

The cash proceeds from the transaction will be used to further strengthen GTC's financial capability to 'capture new opportunities on the market'.

The company expects to commence construction shortly of Corius, the third building at its Okecie business park, located adjacent to the Warsaw Chopin Airport.