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SOFIA (Bulgaria), November 14 (SeeNews) - Polish real estate developer GTC Group said on Thursday it has increased its rental and service revenues to 125 million euro ($137.4 million) in the first nine months of 2019 from 111 million euro in the same period of 2018, partly backed by the acquisition of Mall of Sofia in Bulgaria.
GTC's gross margin from operations also increased, to 93.8 million euro in the review period from 81.2 million euro a year earlier, supported mainly by newly completed and acquired properties, the group said in an interim financial report.
Mall of Sofia is maintaining a very strong and stable occupancy rate at 100% as well as increased rents since the acquisition, GTC noted.
Last year, GTC Group purchased Bulgarian company Dorado 1, the owner of shopping centre Mall of Sofia in the Bulgarian capital, from Luxembourg-registered EEE 5 for 90 million euro.
"The acquisition of Mall of Sofia was an excellent opportunity to buy a stable cash-flow generating building, at the heart of Sofia," Thomas Kurzmann, CEO of GTC, said at the time."This acquisition will appreciate value by taking advantage of fast-growing customer spending power and is another step in reaching our mid to longer-term NAV growth targets."
A consortium of Hungarian lender OTP and its Bulgarian unit DSK Bank financed the bulk of the acquisition price.
"Our offer in completed and constantly upgraded buildings, as well as our developments under construction, meet strong and continues demand for office and retail space in all our countries of operation," Kurzmann commented in GTC's financial report.
GTC's strategy of bringing early enough the right modern and energy-efficient buildings to CEE capitals has been proven successful in terms of rental rates growth and yield compression. The group believes more value creation in the CEE and SEE capitals is still ahead of it, Kurzmann added.
Mall of Sofia is located in the central business district of Sofia and provides 23,700 sq. m. gross leasable area of retail space, 10,300 sq. m of office space and more that 600 underground parking places. It is occupied by anchor tenants such as H&M, Terranova, Calliope, CCC, Benetton, Sisley, Nike, Adidas and Cinema City.
GTC Group, focused on real estate investment and development in Poland and the capital cities in CEE, now actively manages a commercial real estate portfolio of 47 commercial buildings providing 762,000 sq. m of lettable office and retail space in Poland, Budapest, Bucharest, Belgrade, Zagreb and Sofia. It currently has a development pipeline of 336,000 sq. m retail and office properties in capital cities in CEE and nearly 63,000 sq. m under construction.
In 2017, GTC sold two shopping malls in Bulgaria, located in the cities of Burgas and Stara Zagora respectively, for a total of 62 million euro.