Globalworth Real Estate has released its interims covering the six months ended 30 June 2015 and a trading update that covers the period to the middle of September. On 15 September the portfolio had a gross lettable area of 335,883sqm, a value of €808.4m and the projected value once all developments have been completed was €1.049bn. Occupancy of the standing portfolio is 81.2% with a weighted average unexpired lease life of 5.6 years.
At the end of June, the company reported an NAV per share of €7.97 (31 December 2014: €7.32) up 8.9% as compared to 31 December 2014 and an EPRA NAV per share of €9.094 (31 December 2014: €8.09) up 12.3% as compared to 31 December 2014. Net operating income was €11.8 m (H1 2014: €3.9 m) up 200% as compared to H1 2014. Earnings before tax of €39.7 m (H1 2014: €76.7 m) down 48.2% as compared to H1 2014, mainly due to the significant gain on acquisition of subsidiaries in H1 2014(5).
Globalworth’s total debt exposure increased in H1-15 by c.€161.7 m mainly due to c.€109 m of new 3(rd) party financings achieved during the period and the roll-over of the debt facility associated with Nusco Tower and UniCredit buildings of c.€52.7 m. In spite of the new financings, the Company’s LTV as at 30 June 2015 remained at the moderate level of c.44.9%. They say their ability to finance acquisitions and development projects, can be further evidenced by the two new loan facilities concluded in Q3-15 for a total of c.€32.5 m (pro-forma LTV of 48.9 %).
In Bucharest they own 7 standing office properties and a residential complex, while in Timisoara they own a logistics park. In addition to their commercial portfolio, they currently own 442 apartments at “Upground Towers”, a modern two-tower residential complex offering a total of 571 apartments benefiting from fine views of the nearby Tei lake. The property is ideally situated in the New CBD, in close proximity to the commercial portfolio located in the area, thus allowing them to leverage its use and provide a complete package to many of their international tenants looking for turnkey solutions when relocating operations.
Since Q2-15, underpinned by the gradual improvement in the residential investment market, they actively marketed residential units in Upground Towers and as a result sold five apartments between May and September at an average price per unit of EUR148,000. In addition, they currently have 199 apartments leased, generating EUR1.5 million of rental income per annum.
Looking at their development properties, the construction of the structure of Bucharest One has reached the 23rd floor and the facade has been completed up to the 20th floor (September 4, 2015). Mechanical and electrical works also under way and the construction of the project is expected to be completed in Q4-15, in line with the estimated timeline. The property has been pre-certified with the Green Certification of LEED Platinum.
For Globalworth Campus, the concept design has been finalised and the demolition works and site preparation have been completed. Following a tender process, the Company selected Bog’Art as the general contractor for the construction of Phase I. Construction is expected to reach the ground floor in October 2015.
The development of the Gara Herastrau project is in progress, with excavation works and piling now completed and the tower has reached the 4th floor. The property is adjacent to Green Court Building “A”, around 200 metres from Nusco Tower and Bucharest One, and is expected to be completed in Q1-16. We will seek to achieve Green certifications similar to those of other assets in the existing portfolio, for both Globalworth Campus and Gara Herastrau.
All three Bucharest developments are located in the new CBD area, the fastest growing office hub in the country, which is attracting a significant number of multinational tenants. The appraised value of the Development Projects was EUR150.7 million (“As Is” valuation). On completion, these projects are expected to deliver c.200,271 sqm of new office and light-industrial space, with an appraised value of EUR391.6 million (“Completion” valuation) as at 30 June 2015.
The Company also owns land plots in two prime locations (Herastrau lake and the historical CBD) in Bucharest for future development, with a total land area of c.9,767 sqm and an appraised value of EUR18.6 million at 30 June 2015.
GWI : Globalworth eyes €1bn portfolio