GTC to develop another office building in Bulgaria

GTC Bulgaria (95% owned by GTC) has entered into an agreement to purchase a plot of land in Sofia, on the highway connecting the city centre with the airport, for EUR1.55m where it plans to develop a gross 7k sqm office building. GTC purchase was arrange together with a partner while GTC Bulgaria holds 51% in the venture. The construction should start 2Q07 and is expected to be completed by mid-2008. We see the announcement as positive and as a confirmation of GTC’s determination to focus on new markets (Bulgaria, Romania and Ukraine) where the demand for quality real estate assets is far from saturated and yield compression has larger potential compared to the traditional C3 countries. We reiterate our Buy recommendation.