After reporting a net loss of €177m in 2013, GTC unveiled a new strategy for the company this week. Controlled by the US fund Lone Star, the company’s board announced that in order to make business more cost efficient, GTC will increase its focus on distressed investments in the coming year, specifically targeting capital cities in the CEE region, as well as Poland’s regional markets. GTC’s Erez Boniel said the company is prepared to invest up to €100m in new acquisitions.
“The market has changed, and from what we see at the moment, the times when pricing on existing properties were flying up are gone,” said Boniel. “It’s cheaper now to buy an existing project then get involved in the development process.” He added that GTC’s distressed investments will most likely remain in the company’s portfolio. “We’ll be adding value to these projects and improving the management in order to provide stable income,” said Boniel.
At the same time, GTC will start offloading non-core assets from its portfolio. This mostly includes residential projects which have not brought any substantial income to the company over the past few years. While the company’s existing housing projects are already on the market, GTC plans to offload its entire residential land portfolio. “The commercial sector continues to bring in the biggest profits at the moment,” said Alain Ickovics, CEO of GTC.
