GTC expands its protfolio in Hungary with the acquisition of 6,000 sqm plot at Vaci Ut. Street in Budapest, which is fast developing commercial area according to GTC. GTC expects to develop 23,500 sqm of modern office space called GTC Renaissance Plaza. Newly acquired plot is close to other GTC office project delivered in 2006, which is already fully rented. The price has not been disclosed.
Our view: We continue to be positive on GTC’s unique business approach, continued expansion and increasing pace of its development. Although Budapest with its vacancy rate over 10% is not as attractive as some other CEE or SEE cities, where the vacancy rates are deeper below this level we expect this acquisition to be value creative. Factoring prevailing vacancy rate, yields and achievable rent on Hungarian office market we expect this acquisition to add some PLN 0.4/share to our fair value. We reiterate our Buy recommendation.