GTC rethinks residential strategy to meet "First Home" requirements

Real estate developer Globe Trade Center (GTC) Romania states it is more attracted to the office market than to the housing market or retail, as office space rents have not plunged and demand is still high. GTC holds 150m euros in cash and can support a new office project in northern Bucharest without resorting to banking financing.

"We're one of the few real estate developers that are currently able to sustain the development of such a project with its own funds, without banking financing," said Shimon Galon, GTC's chief executive officer for Romania.

GTC announced it planned to start the construction of a new office project in northern Bucharest, close to City Gate complex it also developed. Investments amount to 60m euros and the lettable area stands at 28,000 square metres.

According to Hagai Harel, a managing board member, besides the 150m euros in cash the company also holds assets worth 1.2bn euros that could be invested in the construction of new real estate projects.

GTC built two major business centres in Bucharest, Europe House and America House, both located in Piata Victoriei.

On the Bucharest housing market, GTC is present with two housing complexes, namely Rose Garden and Eden Garden. The second complex, comprising almost 2,000 homes, will be redesigned so that apartment prices should be in line with "First Home" prices and the company should also benefit from a VAT reduction for project construction. "(...) On the housing segment, GTC does not have projects that could be included in this programme and we want to become competitive," explained Galon. According to its own estimates, GTC annually makes over 12m euros from office space rental and over 7.5m euros per year from retail.

GTC late last week launched the third Galleria mall, in Piatra Neamt, with investments revolving around 20m euros. The company opened another two Galleria malls, in Buzau and Suceava, which entailed investments worth over 40m euros.