Globe Trade Centre hurt by declining property portfolio
Globe Trade Centre SA (GTC) said today it expects to report a net loss for the three months to end December due to the expected drop in valuation of the properties.
The real estate development company came to that conclusion after holding preliminary discussions with the valuation experts that it commissioned to value the real estate portfolio of the group.
The group said due to the uncertainty regarding future operating performance as a consequence of Covid-19 and the dampened economic and operating environment in Central and Eastern Europe (CEE), it is expected that the appraised value of its investment properties as at the end of December will decrease when compared to the end of September.
“Based on the preliminary assessment by the valuation expert commissioned to value GTC group’s real property portfolio, the decrease in the value of our investment properties is expected to amount to approximately Є74 million (R1.32 billion) in the three months period to end December, a decline of 3.4 percent when compared to the appraised value of Є2.16bn at the end of September,” the group said.
The group added that the 54 percent of the decline, approximately Є40m, is attributed to the retail activity of the company and in particular to Galeria Pólnocna, which is located in Poland, Ada Mall in Serbia and Galeria Jurajska in Poland, due to the impact of Covid-19 related lockdowns and multi-pronged measures to support tenants.
“The remaining amount of the decline in value of approximately Є34m is attributed to the office sector where we see mild softening in yields and rent conditions,” the group said.
Despite the challenges necessitated by the Covid-19 outbreak, the group maintains a strong cash position which enables it to be compliant with the debt-service payments obligations.
It said it will continue to monitor and protect its financial and liquidity positions, both of which remain healthy as of the date of this report, and undertake mitigating steps to reduce the impact of the adverse market situation.