WOOD Flash – GTC: tops off a record year with a higher-than-expected dividend proposal
GTC has reported a solid set of 4Q17 numbers, and topped its record year off with a higher dividend proposal than we expected, at PLN 0.33/share (we were looking for PLN 0.25/share). We remain fans of GTC. Going forward, its earnings growth should continue to be driven by developments. Currently, GTC has five projects, with 128k sqm GLA under construction, of which 49k sqm is scheduled for completion in 2018E and 79k sqm in 2019E. On top of this, GTC plans to launch the construction of another five projects, with an additional 128k sqm of office space in 2018E, including The Twist, the 36k sqm GLA high-rise in Budapest. Combined, these projects could generate around EUR 50m of additional NOI. The company also benefits from benign macro and strong leasing conditions across its portfolio (barring, perhaps, the Polish offices). We believe that its development pipeline puts GTC firmly at the top of the European listed real estate universe in terms of organic growth potential, realisable in the next two-to-three years.We reiterate our BUY recommendation on GTC (although we admit that the technical pressure related to the perceived risk of a share overhang and, to a lesser extent, the uncertainty related to Wilanow could hold the share price in check in the short term). Our PLN 11.3/share price target (PT) includes PLN 0.60/share as our estimate for the value of Galeria Wilanow, which we appraised in a separate DCF and risked by 50%. Even if we assign zero value to Galeria Wilanow, our PT would still stand at PLN 10.7/share, offering 13% upside.
Globe Trade Centre is the parent company of the capital group, Globe Trade Centre (the Group). The Group is engaged in the development and rental of office and retail space and the development and sale of residential units. The Group is a real estate company in Central and Eastern Europe and South-eastern Europe, operating in Poland, Romania, Hungary, Croatia, Serbia, Bulgaria, and Slovakia. Additionally, it co-owns land in Ukraine and Russia and operates in the Czech Republic. The Group's portfolio comprises: completed office buildings and office parks as well as retail and entertainment centres; residential projects; and undeveloped plots of land and suspended projects.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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