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The sale of Serbian portfolio to Indotek Group

CATEGORY
Investment Deal of the Year, CEE
The year 2021 for GTC was marked with a landmark sale of a standing office portfolio in Belgrade, including such properties as Green Heart, FortyOne, Belgrade Business Center, 19 Avenue and GTC House. In total, the whole portfolio sold to Hungarian investor Indotek comprises 122,175 sq m GLA. All the buildings were accredited with sustainability certificates. The transaction was worth 267.6 mln euro, 2 mln euro above the book value. The deal was closed in January 2022, being one of the largest real estate transactions on the CEE market in the last 5 years. With that, GTC became one of the first companies to complete the development circle in Serbia – from land acquisition and construction, through years of enjoying the high rent levels and free cash flow, to the exit on respectable terms. This transaction re-balanced the company’s portfolio towards higher rated countries including Poland and Hungary, while the buyer, Indotek Group, entered the Serbian market with a strong portfolio.
Name of the deal
The sale of Serbian portfolio to Indotek Group
The date of closing the deal
January 2022
Value of the transaction (in EUR)
267.6 million
Yield
-
Seller, plus brief information about the company
The GTC Group is a leading real estate investor and developer focusing on Poland and capital cities in Central and Eastern Europe. During 25 years of its activity, GTC has developed 77 high standard, modern office and retail properties with a total area of approx. 1.4 million sq. m through Central and Eastern Europe. GTC now actively manages a commercial real estate portfolio of 45 commercial buildings providing ca. 763 ths. sq m of lettable office and retail space in Poland, Hungary, Bucharest, Belgrade, Zagreb and Sofia. In addition, GTC has a development pipeline of approx. 460 ths. sq m retail and office properties in capital cities of Central and Eastern Europe, 51 ths. sq m under construction. GTC S.A. is listed on the Warsaw Stock Exchange and inward listed on the Johannesburg Stock Exchange. 88% of GTC properties have environmental certification, valued at EUR 1.7 billion.
Consultancy which advised Seller
Dentons and ZSP Legal
Purchaser, plus brief information about the company
The Indotek Group has been present in the Hungarian market for almost 25 years. In the last decade the company also started to expand outside of Hungary, as a result the Group is active in 14 countries across Europe today. Assets under management are principally invested in real estate and non-performing corporate loans secured by real estate. Indotek is active across all classes, being a market leader in the class B and C segments. The Group’s ever-increasing portfolio comprises more than 1.7 million sq m of buildable and leasable area, including more than 30 office buildings and some 100 warehouses, industrial halls and logistics parks. In the mid-2010s Indotek also entered the commercial real estate market, and now operates more than 20 shopping centres in Hungary. The properties operated by Indotek accommodate over 3,500 tenants.
Consultancy which advised Purchaser
BDK Advokati and Lakatos Köves and Partners
Financing institution
n/a
Current occupancy level
90%
Please say why this deal should be considered for the award
The sale of eleven premium class office buildings in Belgrade was a bold move that allowed GTC to complete development cycle in Serbia and start a fundamentally different chapter on the market. The sale of the Serbian portfolio couldn’t have been timelier, as the company is in process of redefining the market strategy and advancing its operations to be more sustainable and future-proof, which assumes disposing of aged buildings. This is benchmark transaction in Belgrade, demonstrating liquidity post-Covid. Selling some of the old assets and relocating the free cash flow for the development of brand-new, ambitious projects in Serbia and other CEE markets was truly an exit on a strong note for GTC. Currently the developer is working on a new ambitious project in Serbia – GTC X, designed to stand out with modern building systems and the latest architecture trends to meet the most exquisite tenant requirements.