GTC sells Piatra-Neamt, Suceava and Buzau malls

Israeli real estate developer Globe Trade Centre (GTC) will sell three of the shopping malls it owns in Romania to “an international private investor” following the decision to give up the small-retail division, the company has announced.

The three “non-core assets” are located in Buzau, Piatra Neamt and Suceava and were opened in 2008.

GTC has not disclosed the name of the buyer or the value of the transaction. The sale purchase agreement is expected to be finalized by Q1 2013.

“Each of the three properties comprises between 10,000 and 14,000 sq m of net rentable area while all other GTC shopping centers exceed 30,000 sq m and are more focused on international tenants. GTC decided to focus on its large scale shopping centers due to the change in market conditions, relatively high operational costs for smaller assets, and their different tenant mix which results in lack of synergies with the larger retail assets in the Group,” said Alain Ickovics, chairman of the supervisory board of GTC.

The transaction is expected to improve both the cash flow and profit and loss statement by EUR 3 to EUR 4 million on an annual basis since the properties were loss making

“As a result of this transaction, GTC will recognize a revaluation loss of EUR 19 mln in the third quarter of 2012. In this specific case, GTC decided to choose immediate operational improvement over longer term value preservation due to current market conditions,” reads the company’s press release.

GTC’s local portfolio was evaluated at EUR 241 million in the first half of the year.

The real estate developer has been active inRomaniasince 1999 and is one of the few local developers that have delivered commercial centers as well as office and residential projects. The firm is behind the Europe House and America House projects, which have both been sold and City Gate office buildings inBucharest.

Simona Bazavan