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AIM's Romania-based Globalworth more than doubles 2017 net after Griffin buy

The Globalworth Tower © Globalworth

Globalworth, the Romania-based listed office group, more than doubled net attributable profit to €23.7m in 2017, the year in which it also entered Poland by buying 72% of Griffin Premium from US private equity group Oaktree Capital.

Registered in Guernsey and listed on London's junior AIM market, Globalworth completed its strategic investment in Griffin Premium Real Estate in December, resulting in a shareholding of 71.66% at a discount of 20% to last reported EPRA NAV. GPRE has now been fully consolidated for last year, and rebranded Globalworth Poland.

Founded and run by Greece-born Ioannis Papalekas and Dimitris Raptis, Globalworth is now 29.5% held by South Africa's largest REIT Growthpoint Properties after the latter in late 2016 paid €186m for an agreed stake of nearly 27% and raised it late last year in a capital raise.

At 31 December the Bucharest-headquartered group held a combined real estate portfolio that nearly doubled to €1.82bn from €976m in December 2016. Of this, at end 2017, it held assets worth €1.13bn in Romania and €680m in Poland, and had rental income of €115.9m, more than doubling €49.5m in 2016. Occupancy rose to 93.3% from 83.1% at end-2016. In Romania, like-for-like occupancy improved by 10.2pts. At year end the group had LTV of 34.3% up from 20.7% at end-2016, and held cash and equivalents of €273.3m. The weighted average interest rate on its debt was 2.62%, half of the rates of 5.25% it was paying end-2016.

The company paid its maiden dividend in 2017, at 22 cents per share, followed by a second dividend of the same amount this January for last year. Consistent with the target of a sustainable and growing dividend, paid on a semi-annual basis, it has indicated a prospective 1H18 dividend of not less than €0.27 per share or €0.54 annualised.

"These results highlight the significant progress achieved by Globalworth in 2017 across the business, with the strengthened capital structure placing us in a strong position going into 2018," said Raptis, deputy CEO and CIO of Globalworth. "Our two markets, Romania and Poland, continue to offer above-average economic growth prospects and we see a strong backdrop of tenant demand. By targeting the right sectors in the right markets, we believe we are well positioned to capitalise on the dynamic structural trends we are witnessing today. We are focused on our objective of establishing Globalworth as the region's leading office landlord and to build on our ambition of being the partner of choice for the wide variety of high-quality tenants in the region."

In 2017, Globalworth successfully negotiated the take-up or extension of 57.4k sqm of commercial space in its Romanian portfolio, resulting in 747.9k sqm let or pre-let in Romania and Poland as at 31 December with a weighted average lease length of 5.7 years. The company now has a diversified tenant base which includes some 440 corporates from 28 countries and 37 different industries. Last year, the group more than doubled its GLA with 242.6k sqm through GPRE and the delivery of 51.0k sqm of developments. The company's portfolio now includes 18 properties certified with LEED Gold / BREEAM Very Good or higher certifications, including Globalworth Tower, the first property in southeastern Europe to be awarded LEED Platinum certification.

To help fund its expansion, Globalworth in December successfully closed a €340 m equity placing with solid support from both existing and new shareholders. Combined with it debut €550m eurobond in June, the company last year raised €890m from the capital markets.

At the end of December the group has EPRA NAV per share of €8.84, up slightly frm €8.57 12 months earlier.

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