Historic transaction in Serbia: GTC sells its office portfolio to Indotek Group
- GTC has signed a sale and purchase agreement for the sale of its portfolio of permanent offices in Belgrade.
- The transaction involving 11 buildings spread over 5 projects totaling 122,175 m2 will close in the third quarter of 2021.
- The sale price is 267.6 million euros, 2 million euros above the book value.
Globe Trade Center has decided to sell its office portfolio in Belgrade to Hungarian investor Indotek Group. The proposed acquisition price is € 267.6 million, exceeding the book value of GTC’s portfolio in Serbia as at December 31, 2020. The agreement will cover the sale of 11 buildings in 5 business parks with an area of total of 122,175 m2 GLA with high occupancy rates, located in the new district of Belgrade. Once concluded in Q3 2021, the sale will become one of the largest real estate transactions of the last 5 years in the EWC market.
With the aim of optimizing its operations in Serbia, GTC signed a sale and purchase agreement for the sale of 11 high quality office buildings in 5 business parks – Green Heart, FortyOne, Belgrade Business Center, 19 Avenue and GTC House – occupying over 122 ths. m² in the heart of Belgrade business. The transaction price of 267.6 million euros is slightly higher than the book value at December 31, 2020 of 265.6 million euros, which proves the prudent valuation of the GTC portfolio.
“The sale of 11 high-end office buildings in Belgrade is a bold move that will allow us to complete our development cycle in Serbia and start a fundamentally different chapter in this market. The sale of the Serbian portfolio could not be more timely as we are currently redefining the market strategy and advancing our operations to be more sustainable and future proof. This is a benchmark transaction in Belgrade demonstrating post-covid liquidity. Selling some of our assets and relocating the free cash flow for the development of brand new ambitious projects in Serbia and other CEE markets is really a “high note exit”, which will take us forward. – mentionned Yovav Carmi, Chairman of the Board of Directors of GTC.
The deal is expected to be finalized in the third quarter of 2021. Once concluded, the deal with the Hungarian investor will represent one of the largest real estate transactions on the CEEC market in the past 5 years. With this, GTC will become one of the first companies to complete the circle of development in Serbia – from the acquisition and construction of land, through years of enjoying high levels of rents and free cash flow, until the exit on respectable conditions. This opportunity will help rebalance the company’s portfolio to higher-rated countries including Poland and Hungary, while the buyer, a Hungarian investor, Indotek Group, is happy to enter the Serbian market with a portfolio as well. solid.
“Indotek Group has been present in its domestic market for almost 25 years. In the last decade, the company has also started to expand outside of Hungary, which has enabled the Indotek group to be active in 10 countries today. We have been looking for the opportunity to enter the Serbian market for a long time and, thanks to the current transaction, we are able to significantly strengthen our position in the region. I am particularly proud that our first transaction in Serbia makes us one of the most dominant players in the Belgrade office market. – said Dániel Jellinek, Founder and CEO of Indotek Group.
GTC as sellers was represented by Dentons and ZSP Legal while the Indotek group as buyer worked with the law firms Lakatos Köves and Partners as well as BDK Advokati.
The decision to sell a portfolio of office buildings in Belgrade was motivated by the strategic plans of the GTC to restore its position in the Serbian market and to invest in other markets in Central and Eastern Europe where the developer is active . The company plans to allocate free cash flow generated by the transaction to the development of cutting edge projects in the Serbian market as well as in higher rated economies.
Recently, GTC invested 160 million euros in the acquisition of two office buildings in Budapest: the Ericsson headquarters and the Siemens Evosoft headquarters. Apart from this, the developer is planning a few ambitious projects, including those in Serbia – GTC X and Project Blaze, designed to stand out with modern building systems and the latest architectural trends to meet the most exquisite demands of tenants. These two developments will create a fundamentally new critical mass of office buildings, bringing GTC back to the pedestal of the Serbian office market.