GTC Galleria Burgas

Location:

Bulgaria

Project number:

40083

Business sector:

Property and tourism

Notice type:

Private

Environmental category:

B

Target board date:

08 Jun 2010

Status:

Complete

PSD disclosed:

31 Mar 2010

Translated version of this PSD: Bulgarian

Project Description

The EBRD is providing a €30 million senior loan under an A/B loan structure and an equity / shareholder loan investment of €7.6 million to Galleria Burgas EAD, wholly- owned by GTC Real Estate Investments Bulgaria B.V., which in turn is owned 100% by Globe Trade Centre S.A. Poland (“GTC”).

The proceeds are being used for the development of Galleria Burgas, a third generation shopping centre with a Gross Leasable Area (GLA) of 35,700 sq.m. in Burgas, Bulgaria.

Transition Impact

The proposed project will deliver an important response to the current crisis by providing liquidity to the commercial real estate market in regional Bulgaria, which has come to a complete freeze during the financial crisis. Additionally, the project will contribute to narrowing the gap in retail supply in Bulgaria, which has the lowest proportion of retail offering of all EU countries.

The Project will introduce a new retail/leisure model to the region, where retail and leisure markets remain both fragmented and underdeveloped. Based on the quality of this offering, the project will attract quality tenants not present in the region and will contribute to an improved competitive environment, including through a decline in rental rates.

As with other GTC Galleria developments, the Project will set a standard for innovative construction quality, including energy efficiency. The Project has very good energy efficiency technical characteristics and its emission levels are expected to significantly outperform minimum national and EU standards. Furthermore, the project will lead to the dissemination of international best practice standards to local sub-contractors and will introduce improved business standards in areas such as real estate management.

The Client

GTC has been active as a developer in the Central Eastern European real estate markets since 1994, operating in Poland, Czech Republic, Hungary, Romania, Serbia, Croatia, Ukraine, Slovakia and Bulgaria. GTC has positioned itself as one of the leading developers in CEE with 3.6 million gross sq. m. of office, retail and residential space under management. It is listed on the Warsaw Stock Exchange since May 2004 and is also a member of various prestigious equity indexes, such as the WIG 20 and GPR 250.

EBRD Finance

(i) Senior A/B Loan of €30 million, of which 50% syndicated to a B Lender

(ii) Equity / Shareholder Loan investment of €7.6 million

 

Project Cost

Up to €76 million.

Environmental Impact

Category B (2008). The project's environmental and social impacts are readily identified and addressed through adequate mitigation measures.

Information Reviewed The Bank's environmental and energy efficient specialists reviewed the completed Environmental and Social Due Diligence Questionnaire and visited the project site (March, 2010).

Due Diligence Outcomes The client, GTC is an existing client to the Bank with a number of property projects. The outcomes of the environmental, energy efficiency and social due diligence are as follows: The project is located in a former industrial zone and fully in line with the municipality Burgas' brown site re-generation plan; the project has been developed to date in accordance with national law and good international practice; the project has been notified to the public through a local news paper; the soil test was carried out for the site which indicated that there was no contamination; there are no significant environmental and social impacts associated with the project; and the project design has already incorporated many energy efficiency elements and will further enhance its energy efficiency with the Bank's specific technical advisory. An Environmental and Social Action Plan will be developed to address construction worker health and safety issues and grievance mechanisms for the construction workers and neighbouring communities.

Monitoring The Bank will monitor environmental and social performance of the project through reviewing an annual environmental and social report and monitoring visit where necessary.

Technical Cooperation

None.

Company Contact

Hagai Harel, GTC S.A.
Tel: + 48 22 60 60 770
Email: hagai.harel@gtc.com.pl

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.