NEPI Rockcastle forecasts 5.5 percent revenue growth in 2024 following H1 results

NEPI Rockcastle recorded a 13.5 percent increase in net operating income in the first half of 2024 compared to the same period in 2023. Thus, in the first six months of 2024, the amount of net operating income reached 274 million euros.

Tenant sales, excluding hypermarkets, were 8.7 percent higher in H1 2024 compared to the same period last year. The average shopping basket value also increased by 8.2 percent over the same period in 2023. Demand for company-owned retail space continued to be high, with 73 percent of new leases signed with retailers internationals, attracted by the potential offered by the Central and Eastern European markets. Rental income grew above the rate of inflation, which helped to increase the value of the company’s property portfolio by €134 million, 2 percent more than on December 31, 2023.

“We continued to deliver solid performance amid clear signs that the economic outlook for our core CEE markets is stabilizing and consumer confidence is on the rise. Tenant sales increased across all categories, and operating expenses and occupancy cost ratio remained stable. NEPI Rockcastle’s portfolio was valued at €7 billion, which contributed to a loan-to-value ratio well below our strategic threshold of 35 percent, making the group highly liquid,” said Rüdiger Dany, CEO of NEPI Rockcastle.

Work on development projects is proceeding according to the schedule and within the established budget limits. In Romania, the extension of Promenada Bucharest is planned for inauguration in the fourth quarter (Q4) of 2026, and the lease terms have already been agreed for 66 percent of the area.

The 7,400 sqm extension of Ploiești Shopping City is due to be completed in Q4 2024, and lease terms have been agreed for 96 percent of the additional area.

Following the success of Vulcan Residence, in Bucharest, the group’s first residential project, the company decided to expand its activities in this segment. Thus, the development of two new residential projects is scheduled, in Brașov and Craiova. They are currently in the permitting process, with completion planned for Q4 2026. The land they will be built on is adjacent to retail properties owned by NEPI Rockcastle in the two towns.

Also, the first phase of the company’s green energy project, which involved the installation of photovoltaic panels on 27 shopping centers in Romania, was completed. To date, the investment in this project has totaled 34 million euros, and in H1 2024, it brought in revenues of 4 million euros. The second stage is in the authorization stage and involves the implementation of the same concept in 24 properties owned by the company outside Romania, with a total investment estimated at 15 million euros. In addition, NEPI Rockcastle plans to invest approximately 100 million euros in greenfield photovoltaic projects, ready for construction, in several areas in Romania, to expand its green energy generation capacity and to be able to better cover the needs of electricity consumption of its tenants. The first installations are expected to become operational by the end of 2026 and will contribute an additional 159 MW to the group’s own generation capacity. Through this project, 80 percent of the Romanian portfolio’s energy consumption will be ensured, while reducing the carbon footprint by 36 percent.