“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 Globe Trade Centre S.A.
The transaction will improve both, the cash flow and profit and loss statement by €3 to €4 m on an annual basis since the properties were loss making. As a result of this transaction, GTC will recognize a revaluation loss of €19 m 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.
The buyer is an international private investor. The transaction is subject to buyer due diligence and customary approvals. The sale purchase agreement is expected to be finalized by Q1 2013.
The centers are located in Buzau, Piatra Neamt and Suceava which are second-tier and third tier cities in Romania and opened in 2008.
