GTC announced acquisition of 33,000 sqm site in Romania which will be used for developing 25,000 sqm shopping centre in the town of Arad. The Arad project in which GTC Romania holds 75% is in cooperation with Aura Investments. Construction phase should start in next 6 months with the delivery scheduled for 4Q2008. GTC expects shopping centre to bring EUR 6m annual rental income after completion.
GTC is already developing shopping centers in four other areas as a part of 50:50 partnership with Aura Investments. We see GTC’s continuing expansion to Romania positively as the EU accession from 1 January 2007 and high economic growth is expected to result in increasing consumer consumption. The density of quality shopping centers still lacks EU level and on top of that Romania has higher potential of yield compression. Romanian retail segment yields stand at around 7.25%, while in CE3 countries they are below 6%.