The crisis affected the profit of GTC

The developer has released a report for the second quarter and first half of 2011.


The most important events of the past six months in the office market with Globe Trade Center were the completion of the Platinum IV, which has been fully leased by the Group Aviva and purchase of land for an office building Ana Tower in Bucharest - says the report published by the developer.
Semi-annual rental income of the GTC amounted to 50 million EUR. Compared to the first half of 2010 it represents an increase of 5 percent. The company also reported a growing investments - a total of 104 million EUR was spent for development projects in key markets. In the January-June period, pre-tax profit from operations amounted to 47 million EUR. This profit did not allow covering the losses from the revaluation of investment property portfolio. The European debt crisis, which dominated the market in the second and early third quarter, is contributing to the high instability of real estate prices. This state will be maintained until the issues causing the crisis are resolved. The current situation is conducive to excessive risk aversion in the short-term, which in turn had an impact on the valuation of GTC projects at 30 June, 2011 We do not believe that such a trend is permanent. We expect that the current situation will be reversed as soon as the macro-economic trends improve - said Erez Boniel, Chief Financial Officer and Member of the Management Board of GTC.
Instead of a positive financial result of 2.4 million EUR that was expected by analysts, the company reported a net loss of 38 million EUR. As the company summarized, their revenues reflect fundamentals of the company, while the financial result is influenced by the overall macroeconomic situation.
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