Q1-Q3 2021 financial highlights

• Gross margin from rental activity at €93 million in Q1-Q3 2021 (€91 million in Q1-Q3 2020)
• Adjusted EBITDA at €83 million in Q1-Q3 2021 (€82 million in Q1-Q3 2020)
• FFO at €52 million in Q1-Q3 2021 (€54 million in Q1-Q3 2020)
• Investment of €339 million into the acquisition of income-generating assets and land bank for future development
• Occupancy at 91% as of 30 September 2021 (91% as of 31 December 2020)

Transitioning from secured to predominantly unsecured debt

• Repayment of loans from €500 million green bonds completed
• Unsecured debt at 50% and unencumbered properties up to 45% (9% as of 31 December 2020)
• WAIR at a historical low of 2.14%  (2.3% as of 31 December 2020)

“The acquisitions that we conducted over 2021 allowed to recognize approx. €7 million of additional gross margin, which more than compensated the negative impact from COVID-19 and sale of Spiral. The results after the three quarters of 2021 are showing an upward trend with all the main parameters above the comparable for 2020. Leasing activity is not as strong as in pre-COVID times however we have been able to keep our occupancy at the 91% level. We see retail tenants expanding in all our markets and shopping malls. Our malls, especially in Poland and Serbia, are reviving after each lockdown and showing the turnover results better than even in 2019. In terms of office tenants, they tend to stay in their current locations and not looking for new office space, which works in our favour. Towards the end of the year, we still have a capital increase in front of us. We have identified income-generating assets that we want to invest in. We would like to deploy the new funds coming into the Company to grow the business further” commented Yovav Carmi, GTC’s President of the Management Board.

“We completed the repayment of loans from the green Eurobonds we issued in June 2021. We refinanced 9 loans for a total of €452 million. As we said earlier this year our goal is to be predominantly funded with unsecured debt and to be able to meet this goal we will tap the bonds market again at the latest at the beginning of 2022,” commented Ariel Ferstman, GTC’s CFO and Member of the Management Board.     

Offices: A mix of acquisitions and disposals combined with stronger leasing activity

• €310 million invested in 5 office buildings and one mix-use project in Hungary – Váci Greens D, Ericsson HQ and evosoft HQ, V188, Hegyvidék Retail and Office Centre in Budapest and Forest Offices (Debrecen) – will contribute €19.2 million p.a. to in-place rent
• Acquisition of a land plot in Sofia and Budapest
• Disposal of Serbian office buildings for €268 million (above the book value) to be closed in Q4 2021
• Commencement of construction of GTC X: 16,800 sqm Class A office space to be completed in Q3 2022
• Leasing activity reached over 71,000 sqm in Q1-Q3 2021 (66,700 sqm in Q1-Q3 2020)

Retail: Currently 100% of space operational, however, COVID-19 related restrictions in the region are in place

• Currently, 100% of retail GLA is allowed to trade, however, certain restrictions are introduced through the region
• Occupancy at 95% as of 30 September 2021 (95% as of 31 December 2020)
• Avenue Mall and Ada Mall showed an increase in gross margin from operations of €1.1 million while Polish and Bulgarian assets were negatively impacted by €2.1 million
• Polish and Serbian assets continued to show improvement in the malls’ turnover in Q3 2021

Financials

• Rental and service revenues were up to €124 million in Q1-Q3 2021 as compared to €122 million in Q1-Q3 2020. GTC recognized an increase in rental revenues due to the acquisition of new properties and the completion of Green Heart, Advance Business Center, Matrix in the amount of €7.4 million. The increase was partially offset by a decrease in rental revenues of shopping centres in Poland and Bulgaria of €2.8 million due to COVID-19 related closures and a decrease in rental revenues following the sale of Spiral in the fourth quarter of 2020 of €3.0 million.
• Gross margin from operations increased to €93 million in Q1-Q3 2021 as compared to €91 million in Q1-Q3 2020, mainly resulting from an increase in the rental revenues due to acquisitions and completion of new properties, partially offset by a loss in rental and service revenues due to the sale of Spiral and COVID-19 related lockdowns in our shopping malls.
• Adjusted EBITDA was at €83 million (€82 million in Q1-Q3 2020), the net profit amounted to €33 million in Q1-Q3 2021 (€17 million loss in Q1-Q3 2020). This mainly resulted from a strong operating performance combined with lower loss from revaluation/impairment of assets by €65 million and lower foreign exchange difference loss, partially offset by an increase in finance cost by €9 million and recognition of tax expenses of €13 million (€3 million tax in Q1-Q3 2020).