GTC: unveils expansion plans

GTC stated at a press conference, held yesterday, that the company plans to increase the speed of its operations in the region by spending EUR 500m, during the period between 2006 and 2008, equalling to 500k sqm of space, out of which some 320k m2 will be devoted to commercial projects (offices and shopping malls). According to GTC, these assumptions are conservative, as they only include projects in which the land has already been purchased. In addition, GTC plans to enter, even as early as in 2006, new countries of operations Bulgaria, Slovakia and Ukraine. In Poland in 2006-2007, GTC plans to start 10 new projects, including apartment buildings and its first hotel in Krakow. The higher dynamics of operations will be facilitated through a JV cooperation with real estate funds. The company has indicated Romania, as the most promising country as far as possible price appreciation is concerned. GTC has indicated that, after record 4Q05 results, the company also expects also good results in 1Q06. We regard the level of planned investments as encouraging and the news may positively impact the stock price. However, given outperformance of the stock over the past month, recommendation is Hold.