Landmark transaction in Serbia: GTC sells office portfolio to Indotek Group

Mihai Cristea 25/05/2021 | 15:20

Globe Trade Centre has decided to sell its Belgrade office portfolio to the Hungarian investor Indotek Group. The proposed acquisition price is 267.6 mln euro, exceeding the book value of GTC’s Serbia portfolio as of 31 December 2020. The agreement will cover the sale of 11 buildings within 5 business parks of a total 122,175 sq m GLA with high occupancy rates, located in the New Belgrade district. Once completed in Q3 2021, the sale will become one of the largest real estate transactions in the last 5 years on the CEE market.

 

Intending to optimize its operations in Serbia, GTC has signed a sale and purchase agreement for the sale of 11 premium quality office buildings within 5 business parks – Green Heart, FortyOne, Belgrade Business Center, 19 Avenue and GTC House – occupying over 122 ths. sq m in the business heart of Belgrade. The transaction price of 267.6 mln euro is slightly above the book value as of 31 December 2020 of 265.6 mln euro which proves the prudent valuation of GTC’s portfolio.

“The sale of 11 premium class office buildings in Belgrade is a bold move which will allow us to complete our development cycle in Serbia and start a fundamentally different chapter on this market. The sale of the Serbian portfolio couldn’t be timelier as we are currently in process of redefining market strategy and advancing our operations to be more sustainable and futureproof. This is benchmark transaction in Belgrade demonstrating liquidity post covid. Selling some of our assets and relocating the free cash flow for the development of brand-new, ambitious projects in Serbia and other markets of CEE is truly an “exit on a strong note”, which will drive us forward.” – said Yovav Carmi, President of the Management Board of GTC.

The agreement is expected to be completed in Q3 2021. Once closed, the deal with the Hungarian investor will represent one of the largest real estate transactions on the CEE market in the last 5 years. With that, GTC will become one of the first companies to complete the development circle in Serbia – from land acquisition and construction, through years of enjoying the high rent levels and free cash flow, to the exit on respectable terms. This opportunity will help re-balance the company’s portfolio towards higher rated countries including Poland and Hungary while the buyer a Hungarian investor, the Indotek Group, is happy to enter the Serbian market with such a strong portfolio.

“Indotek Group has been present in its domestic market for almost 25 years. In the last decade the company also started to expand outside of Hungary, resulting in Indotek Group being active in 10 countries today. We have been looking for the opportunity to enter the Serbian market for a long time, and with the current transaction we are able to significantly strengthen our position in the region. I am particularly proud that our first transaction in Serbia makes us one of the most dominant participants in the Belgrade office market.”said Dániel Jellinek, Founder and CEO of Indotek Group.

GTC as Sellers were represented by Dentons and ZSP Legal while Indotek Group as Buyer worked with lawfirms Lakatos Köves and Partners as well as BDK Advokati.

The decision to sell a portfolio of office buildings in Belgrade was motivated by the GTC’s strategic plans to re-establish its Serbian market position and invest in other CEE markets where the developer is active. The company plans to allocate a free cash flow generated from the transaction to the development of cutting-edge projects on both Serbian market as well as in higher rated economies.

Recently, GTC has invested 160 mln euro in the acquisition of two office properties in Budapest: the Ericsson Headquarters and the Siemens Evosoft Headquarters. Apart from that, the developer plans a few ambitious projects, including those in Serbia – GTC X and Project Blaze, designed to stand out with modern building systems and the latest architecture trends to meet the most exquisite tenant requirements. Both developments will create a fundamentally new critical mass of the office buildings, bringing GTC back to the pedestal of the Serbian office market.

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