GTC Russia, through a subsidiary, has concluded a preliminary agreement to purchase a 50% interest in the company that is going to develop a 110,000 m² office project on a 4.3 hectare site in the Vyborgsky district. GTC Russia will pay about €26.8 million for its share in the project. The acquisition is expected to be completed by the end of May 2008. The site is located about 1.5 km from the St. Petersburg city center.
The project is scheduled to be completed in 2011-2013 and is expected to generate annually about €53 million of net rental income upon full completed.
St. Petersburg is the second-largest city in Russia, with a population of 4.6 million. As of the end of 2007, there was a total of about 590,000 m² of Class A and Class B office space in the city. About 170,000 m² of office space was completed in 2007.
The transaction is a joint venture between GTC and a company controlled by Menora Mivtachim Holdings. Menora Mivtachim is one of the leading insurance companies in Israel, with total assets of over USD 14 billion and premium turnover of USD 1 billion. Menora Mivtachim has real estate activity in Western Europe and has been active in St. Petersburg for the last year and a half.
Globe Trade Centre S.A. holds 95% in GTC Russia.
GTC has vast real estate experience in office development. The company has completed 300,000 m² of net office space and is now developing, in stages, 860,000 m² of net office rentable area.
GTC's tenant list includes some 200 leading international and domestic corporations, among them such renowned firms as Exxon Mobil, IBM, Hewlett Packard, Citibank, Allianz, Raiffeisen and many others. In expanding its activity into Russia, GTC plans to capitalize on its close relations with the world's largest corporate tenants and its experience in development of high-quality office space that meets international standards.