Globalworth announces an increase of 161 percent in net operating income and a portfolio value of €2.5 billion
Globalworth, a leading office investor in Romania and Poland, announces an increase of 161 percent in 2018 net operating income (NOI) on the previous year. Following the company’s expansion in both Romania and Poland through acquisition and development completions, and another strong year in leasing activity, net operating income increased to €133.4 million. The combined portfolio expanded to 1 million sqm of GLA and increased by 36 percent in value to €2.5 billion, split 51 percent in Romania and 49 percent in Poland.
“2018 was a tremendous year for Globalworth as we continued our strong growth trajectory both through compelling investments in income producing assets with asset management potential and through development projects, delivered a significant step-up in our financial results, and demonstrated strong operating results across our portfolio in Romania and Poland. We are proud to have established Globalworth as the leading institutional office landlord in the CEE region with a portfolio of prime office assets, supported by a strong team of experienced professionals. With further investments targeted and, in our view, a compelling market outlook, we are set to take further strides forward in 2019," said Dimitris Raptis, Deputy Chief Executive Officer and Chief Investment Officer at Globalworth.
In 2018, Globalworth completed acquisitions with a total value of €538 million spanning five standing investments in Poland and three land plots in Bucharest, Romania, on which it aims to develop new office space. Globalworth also negotiated the take-up or extension of 121,800 sqm of commercial space in Romania and Poland, comprising some 67,900 sqm of new lettings or expansions and 54,000 sqm of renewals.
In terms of development, the company completed both Phase A of Globalworth Campus (following the delivery of the second tower of the project) and Renault’s new HQ, both in Bucharest, adding 70.500 sqm of new high-quality space. Construction of the 34,800 sqm third and final Campus tower is well underway and is due for completion in Q4-19 – and since year end is now 60 percent let or under offer. Two further projects have also been started - the 26,400 sqm Globalworth Square project in Bucharest and a 17,700 sqm unit at the Group’s TAP II logistics project in Timisoara - and plans are in progress for a further 76,000 sqm of new office projects in Bucharest and up to 150,000 sqm of light-industrial and logistics projects in Timisoara.
At the end of 2018, green-certified properties accounted for 71 percent of the company’s portfolio, with the potential to rise to 100% through properties currently under certification.
During 2018 Globalworth also raised a €550 million unsecured Eurobond issue in March 2018, which was more than twice oversubscribed, and Globalworth Poland completed a €450 million equity capital raise in June 2018, funding its ongoing portfolio expansion, of which €300 million was subscribed by Globalworth and €150 million by Globalworth’s largest shareholder, Growthpoint Properties.
After a dynamic year, in which the company bolstered its leading position in the CEE real estate market, Globalworth continues to evaluate a strong pipeline of further high-quality investment opportunities. With these investments in mind, and with a view to managing a long-term LTV target of below 40 percent, Globalworth will be looking to raise additional equity capital of up to €500 million in the near term.