Real estate developer GTC, which owns several office buildings, residential and retail projects in Romania, has sold three shopping centers in Romania under the Galleria brand, to an undisclosed private investor. Each of the three properties sold comprises between 10,000 and 14,000 sqm of net leasable area, while all other GTC shopping centers exceed 30,000 sqm and are more focused on international tenants. “GTC decided to focus on its large scale shopping centers due to the change in market conditions, relatively high operational costs for smaller assets and their different tenant mix, which results in lack of synergies with the larger retail assets in the Group,”said Alain Ickovics, Chairman of the Supervisory Board of Globe Trade Centre.

The three shopping centers, in Buzau, Piatra Neamt and Suceava, were reporting losses and were opened in 2008 and 2009.

The value of the deal was not announced, but the Romanian media places it at some EUR 7 million.

“The transaction will improve both the cash flow and profit and loss statement by EUR 3 to EUR 4 million on an annual basis, as the properties were loss making. As a result of this transaction, GTC will recognize a revaluation loss of EUR 19 million in the third quarter of 2012. In this specific case, GTC decided to choose immediate operational improvement over longer term value preservation due to current market conditions,” the developer also explained upon announcing the sale.

GTC owns another Galleria mall in Romania, at Arad. Its other projects in Romania include the City Gate offices in Bucharest, the future Ana Tower offices also in Bucharest, as well as Rose Garden and Felicity residential projects.

Corina Chirileasa, corina@romania-insider.com

(photo source: GTC)