GTC forecasts 100m-profit from apartments

Israel’s Globe Trade Center Romania (GTC) real estate company, the developer behind the America House and Europe House office projects, estimates it will gain around 100m euros when it sells the 1,100 homes, developed in two projects in Bucharest – Rose Garden and Felicity, according to a report by Austria’s Erste Bank.
The sale is expected to generate total revenues worth 321m euros, after investments in the construction of the two projects amounted to 210m euros, the latest data reveals.
GTC, one of the most dynamic players on the real estate market, last year sold America House for around 120m euros, which set a record on the Romanian real estate market, at a 5.6% yield.
The company’s first deal took place in 2003 after Europe House was sold for around 26m euros, marking one of the first deals on the domestic market.
In addition, the company expects to derive revenues worth 37.8m euros from the sale of residential units in a third housing project in Bucharest called Green Dream Residence, which is expected to include 225 apartments.
Rose Garden complex, located on Colentina Road, comprises 908 apartments in 11 buildings. The first stage of investments in the complex is due to be finalised this year. Felicity project will include 1,200 apartments in 45 buildings and will be located on Odai Road, in the northern part of Bucharest. The housing complex will be developed over several stages whilst the completion date for the entire complex is 2010.
GTC, controlled by Israel’s Kardan group, holds a portfolio of properties (either finished or under construction) that totals 1.9 million square metres, 24% of which are in Romania. GTC is one of the most important real estate developers in Central and Eastern Europe and has projects in Poland, Hungary, the Czech Republic, Romania, Serbia and Croatia. The company covers all the important market segments: office buildings, shopping centres and houses.
GTC’s projects in Romania will be executed over the next 2-3 years, whilst earmarked investments exceed 450 million euros.
Real estate market investors can make profits of around 50% of the initial value of real estate investments, because of the high number of homes being bought on the domestic market determined by the shortage of available housing.
Recently, another player on the domestic market, Britain’s European Convergence Development Company investment fund (ECDC), which owns 50% of Asmita Gardens and Cascade Euro Tower projects, announced to investors an around 85m-euro profit from the sale of the two projects. According to ECDC estimates, the sale of the 2 projects will bring investors total revenues worth above 215m euros.