WOOD Flash – GTC: 3Q24 – recurring broadly in line, risk-on after the German acquisition

We do not expect the results – which were broadly in line on the recurring lines – to drive the stock. Disposals are key for the equity story, in our view, especially after the acquisition of the German residential portfolio (please see our flash note, for further details). The falling interest rates in Europe and the constructive market sentiment towards high-yield issuers are supportive. If sustained, these could make it easier for GTC to refinance part of the 2026E EUR 500m bond. That said, the German resi deal, in our view, increases GTC's risk profile significantly. With less than EUR 50m of cash as of the end of 3Q24, GTC needs to raise material funds from asset sales over the next 6-12M. It should get EUR 37m of net proceeds from the sale of two office buildings (GTC X and Matrix C), due to close in 4Q24E. We expect GTC to try to exit the data-centre project in Dublin, the land plot in Warsaw, and some of its office assets in 2025E. If the company fails to close these additional disposals, the cost of debt it may need to accept in a prospective refinancing would likely reflect the resulting tight liquidity position and high LTV, in our view.