Globalworth, the leading office investor in Central and Eastern Europe, is pleased to provide a comprehensive update of its operations, along with a preliminary release of its unaudited Consolidated Financial Statements for the year ended 31 December 2024.
The Company intends to announce its audited Financial Results for the year ended 31 December 2024 and publish its 2024 Annual Report towards the end of March 2025.
Dennis Selinas, Chief Executive Officer of Globalworth, commented: “Throughout 2024, Globalworth has successfully achieved key milestones aimed at strengthening our business and improving our financial profile. Our performance remained robust as we have continued to focus on core-business resilience by implementing our “local landlord” approach.”
Operational Highlights
- Portfolio Value: The total combined portfolio value stood at €2.6 billion, 13.2% lower compared to the end of previous year, mainly impacted by the disposal of non-core assets
o Like-for-like appraised value of standing commercial properties slightly decreased to €2.4 billion, down 1.6% from 31 December 2023
- Divestments: We have successfully divested our interests in non-core assets with the aim of deleveraging and enhancing liquidity:
o During the first quarter, we sold Bliski Centrum in Warsaw, a 4.9k sqm office property, which we deemed a non-core asset due to its smaller size
o In May, we sold our fully owned Romanian logistics portfolio comprising facilities located in Timisoara, Arad, Oradea and Pitesti as well as a majority stake in two small business units in Bucharest
o Furthermore, in July, we disposed of our 50% share in logistic assets in Romania which were owned via joint venture companies
- Standing Portfolio Footprint: Net reduction of 372.0k sqm, bringing our standing-portfolio footprint down to 1.0 million sqm across 56 properties
- Leasing: 162.9k sqm of commercial space leased or extended, with an average WALL of 5.4 years, despite continued challenging market conditions
- Commercial Occupancy: The average occupancy of our combined standing portfolio was 86.7% as of 31 December 2024, down 1.5% from 2023 year-end, mainly driven by the sale of non-core assets having average occupancy higher than portfolio average.
o Like-for-like occupancy slightly increased by 0.8pps, thanks to positive evolutions for the assets that we own in Bucharest and Warsaw
- Contracted Rent: Annualised contracted rents decreased by 6.8% to €187.5 million, driven by asset disposals
o Like-for-like annualised commercial contracted rents in our portfolio increased by 4.5% to €177.6 million, mainly as effect of rent indexation
o 99.3% of the rent comes from office and mixed-use properties
o 96.9% of contracted rent is active on 31 December 2024, with the remainder to commence in the future
- Credit Ratings: In July, Fitch reaffirmed Globalworth’s investment grade rating and upgraded the outlook to stable. S&P maintained our BB+ rating with a negative outlook throughout the year.
- Sustainability:
o 51 green-certified properties with a total value of €2.4 billion in our portfolio
o We have certified or recertified 36 properties during the year with BREEAM Excellent, LEED Gold or higher certifications
o Issued the Group’s sixth sustainable development report
o Maintained our “low-risk” rating by Sustainalytics and “A” rating by MSCI
Financial Highlights
- Debt Management: Net debt was reduced by €292.5 million
o In April 2024, we successfully refinanced €450 million 2025 Notes and €400 million 2026 Notes with new 6.25% Notes due in 2029 (€307 million) and 2030 (€333 million) via an Exchange Offer and Consent Solicitation.
o As part of the exchange, we repaid €143 million of 2025 Notes and €67 million of 2026 Notes in cash.
o Following the sale of our fully owned Romanian industrial portfolio to CTP, €97.5 million secured loans were derecognized and €65 million Notes (€45 million of 2029 Notes and €20 million of 2030 Notes) were repaid.
o In July, we conducted a Bond Buy Back exercise and repurchased €38.2 million of 2029 Notes and €45 million of 2030 Notes by paying a total price of €80.3 million plus the accrued interest.
o The Company drew down €163 million of asset-secured financing on our Romanian portfolio.
- Operating Income: Net Operating Income decreased by 2.2% year-on-year to €143.7 million.
o Like-for-like net operating income, excluding disposals, grew by 3.9% to €137.6 million, reflecting higher occupancy in our properties in Romania offset by lower occupancies in our Regional Polish submarkets.
- Finance Costs: Increased by €23.4 million year-on-year, including €12.1 million in non-recurring costs related to the refinancing of the 2025 and 2026 Notes in April 2024.
- Finance Income: During 2024 we recorded €12.1 million as finance income, including €7.7 million interest earned on cash deposits (2023: €3.8 million), representing an increase of €4.3 million compared with prior year, excluding the one-off net gain from Notes Buy-backs (€0.4 million in 2024, €15.8 million in 2023).
- Earnings: EPRA earnings dropped by €5.2 million to €56.1 million (2023: €61.3 million), impacted mainly by asset disposals and higher finance costs.
o On a like-for-like basis, excluding divested non-core assets, EPRA earnings improved by €1.0 million (or 1.8%).
- EBITDA: Adjusted normalised EBITDA decreased by 3.9% to €126.2 million (2023: €131.4 million).
o On a like-for-like basis, excluding divested non-core assets, Adjusted EBITDA improved by €2.8 million (or 2.4% increase).
- Equity: Loss attributable to equity holders rose to €81.6 million (2023: loss of €54.2 million), driven by:
o A fair value loss of €99.8 million on investment property.
o A €24.6 million loss from subsidiary sales and a €8.4 million share of loss from joint venture investments.
o In 2023, we recorded a one-off finance net gain of €15.8 million from bond buybacks at a discounted price.
- Dividends: Scrip Dividend elections representing an average of 98.4% of total share capital were received in April and October 2024, with total cash dividends of €0.8 million (€0.21 per share) paid to the remaining shareholders.
- Valuation: Preliminary EPRA Net Reinstatement Value (NRV) stands at €1.76 billion (€5.89 per share), 15.3% decrease per share from €6.94 as of 31 December 2023. This reduction is due to revaluation losses on the property portfolio, losses from joint venture investments, and the dilutive impact of €0.66 per share from the 26.5 million new scrip dividend shares issued in 2024.
o We revalue 100% of the portfolio every six months period. For 2024, Portfolio value on like-for-like basis decreased by 1.6%: Romania increased by 1.3% (€14.3 million), Poland decreased by 4.0% (€58.4 million), with a 2.6% decrease (€38.4 million) in Regional properties and 3.0% (€23.6 million) in Warsaw.
o Total investment in our portfolio during 2024 was €60 million (capex, tenant fitouts and improvements).
o These movements largely account for the €99.8 million loss in the income statement during 2024.
- Earnings per Share: IFRS Earnings per share was -31 cents in 2024 (2023: -22 cents).
- Liquidity: We maintained a strong cash balance of €333.6 million as of 31 December 2024 (€396.3 million on 31 December 2023) providing several strategic opportunities for future.
- LTV: Significant improvement in LTV to 38.1% as of 31 December 2024 (from 42.2% on 31 December 2023) following divestments aimed at deleveraging and enhancing liquidity.
Outlook
For the year ahead, we stay cautiously optimistic, as we are witnessing positive signs from both a macroeconomic perspective and from the real estate markets that we operate in. Nevertheless, we are aware that trade frictions and geopolitical risks will continue to weigh on the prospects of CEE economies.
We resolutely believe that offices will continue to be an integral part of business life by bringing a sense of belonging to professionals across the world. Our focus on state-of-the-art, sustainable spaces that facilitate and enhance the success of our partners will continue to be aligned with initiatives aimed at financial strengthening and portfolio efficiency and optimization.
Consolidated statement of comprehensive income
For the year ended 31 December 2024
|
|
31 December
2024
€’000 |
31 December
2023
€’000 |
| Revenue |
|
238,268 |
240,429 |
| Operating expenses |
|
(94,610) |
(93,471) |
| Net operating income |
|
143,658 |
146,958 |
| Administrative expenses |
|
(17,962) |
(15,948) |
| Fair value loss on investment property |
|
(99,839) |
(164,908) |
| Share-based payment expense |
|
(352) |
(502) |
| Loss on disposal of subsidiary |
|
(24,623) |
(474) |
| (Loss)/Profit on disposal of investment property |
|
(321) |
9,579 |
| Depreciation and amortisation expense |
|
(876) |
(588) |
| Other expenses |
|
(4,693) |
(2,916) |
| Other income |
|
1,386 |
2,056 |
| Foreign exchange loss |
|
(828) |
(1,533) |
| Loss from fair value of financial instruments at fair value through profit or loss |
|
(3,206) |
(1,393) |
| Loss before net financing cost |
|
(7,656) |
(29,669) |
| Finance cost |
|
(80,589) |
(57,146) |
| Finance income |
|
12,123 |
23,220 |
| Share of (loss)/profit of equity-accounted investments in joint ventures |
|
(8,443) |
2,063 |
| Loss before tax |
|
(84,565) |
(61,532) |
| Income tax income |
|
2,991 |
7,692 |
| Loss for the year |
|
(81,574) |
(53,840) |
| Items that will not be reclassified to profit or loss |
|
|
|
| Gain on equity instruments designated at fair value through other comprehensive income |
|
90 |
– |
| Total comprehensive income for the year |
|
(81,484) |
(53,840) |
| Loss attributable to: |
|
(81,574) |
(53,840) |
| – ordinary equity holders of the Company |
|
(81,619) |
(54,152) |
| – non-controlling interests |
|
45 |
312 |
|
|
|
|
| Total comprehensive income attributable to: |
|
(81,484) |
(53,840) |
| – ordinary equity holders of the Company |
|
(81,529) |
(54,152) |
| – non-controlling interests |
|
45 |
312 |
|
|
|
|
| Earnings per share (€ cents) |
|
|
Restated* |
| – Basic |
|
(31.0) |
(22) |
| – Diluted |
|
(31.0) |
(22) |
* The IFRS earnings per share for the year 2023 have been restated following the IAS 33 ‘Earnings per share’ requirements regarding accounting for scrip dividend shares issued in 2024.
Consolidated statement of financial position
As of 31 December 2024
|
|
2024
€’000 |
2023
€’000 |
|
Assets |
|
|
|
| Investment property |
|
2,585,345 |
2,843,085 |
| Goodwill |
|
12,039 |
12,039 |
| Advances for investment property |
|
3,625 |
7,175 |
| Investments in joint ventures |
|
3,960 |
70,098 |
| Equity investments |
|
8,010 |
7,844 |
| Other long-term assets |
|
1,765 |
1,780 |
| Other receivables |
|
– |
21,182 |
| Prepayments |
|
259 |
448 |
| Non- current financial assets |
|
3,067 |
– |
| Deferred tax asset |
|
2,629 |
1,423 |
| Non-current assets |
|
2,620,699 |
2,965,074 |
|
|
|
|
| Trade and other receivables |
|
51,351 |
23,122 |
| Contract assets |
|
5,702 |
6,985 |
| Guarantees retained by tenants |
|
97 |
99 |
| Income tax receivable |
|
118 |
1,084 |
| Prepayments |
|
2,447 |
2,002 |
| Current financial assets |
|
– |
197 |
| Cash and cash equivalents |
|
333,560 |
396,259 |
|
|
393,275 |
429,748 |
| Investment property held for sale |
|
35,763 |
50,352 |
| Total current assets |
|
429,038 |
480,100 |
| Total assets |
|
3,049,737 |
3,445,174 |
|
|
2024
€’000 |
2023
€’000 |
|
Equity and liabilities |
|
|
|
| Issued share capital |
|
1,822,934 |
1,769,456 |
| Treasury shares |
|
(4,752) |
(4,797) |
| Share-based payment reserve |
|
185 |
– |
| Retained earnings |
|
(294,036) |
(158,066) |
| Fair value reserve of financial assets at FVOCI |
|
(5,379) |
(5,469) |
| Equity attributable to ordinary equity holders of the Company |
|
1,518,952 |
1,601,124 |
| Non-controlling interests |
|
– |
1,411 |
| Total equity |
|
1,518,952 |
1,602,535 |
|
|
|
|
| Interest-bearing loans and borrowings |
|
1,178,250 |
1,574,771 |
| Deferred tax liability |
|
118,184 |
139,299 |
| Lease liabilities |
|
24,414 |
20,482 |
| Deposits from tenants |
|
3,517 |
3,774 |
| Guarantees retained from contractors |
|
2,977 |
2,902 |
| Trade and other payables |
|
399 |
78 |
| Non-current liabilities |
|
1,329,623 |
1,741,306 |
|
|
|
|
| Interest-bearing loans and borrowings |
|
132,581 |
28,609 |
| Guarantees retained from contractors |
|
4,774 |
5,594 |
| Trade and other payables |
|
38,048 |
36,051 |
| Contract liability |
|
320 |
3,289 |
| Other current financial liabilities |
|
– |
1,311 |
| Current portion of lease liabilities |
|
1,946 |
1,956 |
| Deposits from tenants |
|
19,536 |
18,018 |
| Income tax payable |
|
816 |
807 |
|
|
198,021 |
95,635 |
| Liabilities directly associated with the assets held for sale |
|
3,141 |
5,698 |
| Total current liabilities |
|
201,162 |
101,333 |
| Total equity and liabilities |
|
3,049,737 |
3,445,174 |
Combined consolidated portfolio snapshot
As of 31 December 2024
Our real estate investments are in Poland and Romania, the two largest markets in the CEE. As of 31 December 2024, our portfolio was spread across 9 cities, with Poland accounting for 54.0% by value and Romania 46.0%.
| Combined Portfolio Snapshot (as of 31 December 2024) |
| |
Poland |
Romania |
Combined Portfolio |
| Standing Investments(1) |
18 |
14 |
32 |
| GAV(2) / Standing GAV (€m) |
€1,404m / €1,287m |
€1,196m / €1,162m |
€2,600m / €2,449m |
| Occupancy(3) |
77.8% |
96.8% |
86.7% |
| WALL(4) |
3.9 years |
5.3 years |
4.6 years |
| Standing GLA (k sqm)(5) |
530.4k sqm |
483.6k sqm |
1,014.0 sqm |
| Contracted Rent (€m)(6) |
€97.4m |
€90.1m |
€187.5m |
| GAV Split by Asset Usage |
|
|
|
| Office |
80.5% |
95.3% |
87.3% |
| Mixed-Use |
19.5% |
0.0% |
10.5% |
| Other |
0.0% |
4.7% |
2.2% |
| GAV Split by City |
|
|
|
| Bucharest |
0.0% |
98.9% |
45.5% |
| Constanta |
0.0% |
0.7% |
0.3% |
| Craiova |
0.0% |
0.4% |
0.2% |
| Warsaw |
42.7% |
0.0% |
23.0% |
| Krakow |
20.1% |
0.0% |
10.8% |
| Wroclaw |
17.4% |
0.0% |
9.4% |
| Katowice |
11.7% |
0.0% |
6.3% |
| Lodz |
4.3% |
0.0% |
2.3% |
| Gdansk |
3.9% |
0.0% |
2.1% |
| GAV as % of Total |
54.0% |
46.0% |
100.0% |
|
|
|
|
| 1. Standing Investments representing income producing properties. One investment can comprise multiple buildings. e.g. Green Court Complex comprises three buildings or one investment. |
| 2. Includes all property assets, land and development projects valued at 31 December 2024. Assets owned under JV are presented at 100% (e.g. Constanta Business Park). |
| 3. Occupancy of standing commercial properties adjusted with the active leases related to our ESG commitments (1,954 sqm in BOC Tower, Bucharest) and with the available area of the spaces leased to GW Flex Sp. Z.o.o, was 76.5%, 96.4% and 85.9% as of 31 December 2024 for Poland, Romania and at group level, respectively.
4. Includes pre-let commercial standing and development/re-development assets. |
| 5. Including 10.2k sqm of residential assets in Romania. |
| 6. Total rent comprises commercial (€181.2 million) and residential (€0.3 million in Romania) standing properties and rent from assets under redevelopment (€6.1 million in Poland). |
|
|
|
|
|
|
For further information visit www.globalworth.com or contact:
Enquiries
| Rashid Mukhtar
Group CFO
|
Tel: +40 732 800 000 |
| Panmure Liberum (Nominated Adviser and Broker)
Atholl Tweedie |
Tel: +44 20 7886 2500 |
About Globalworth / Note to Editors:
Globalworth is a listed real estate company active in Central and Eastern Europe, quoted on the AIM-segment of the London Stock Exchange. It has become the pre-eminent office investor in the CEE real estate market through its market-leading positions both in Poland and Romania. Globalworth acquires, develops and directly manages high-quality office properties in prime locations, generating rental income from reputed tenants from around the globe. Managed by over 250 professionals across Cyprus, Guernsey, Poland and Romania the combined value of its portfolio is €2.6 billion, as at 31 December 2024. Approximately 98.5% of the portfolio is in income-producing assets, predominately in the office sector, and leased to a diversified array of over 650 national and multinational corporates. In Poland Globalworth is present in Warsaw, Wroclaw, Lodz, Krakow, Gdansk and Katowice, while in Romania its assets span Bucharest, Constanta and Craiova.
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