Wednesday, 19 August 2026
NEPI Rockcastle reported continued growth across its Central and Eastern European retail portfolio in the first half of 2026, supported by higher tenant spending, rental indexation and strong occupancy, while the company increased its development programme and prepared to enter Western Europe for the first time.
Net operating income, including the group’s energy activities, increased by 3.8% year-on-year to €318 million during H1 2026. Property-related like-for-like NOI rose by 3.3% to €312 million, supported by indexed rents, additional short-term income and improved recovery of property operating costs.
Distributable earnings per share increased by 3.5% compared with H1 2025. Following the first-half performance, NEPI Rockcastle raised its full-year guidance and now expects 2026 DEPS to increase by between 3.5% and 4% from the 62.03 euro cents per share achieved in 2025.
Operating indicators remained strong despite a more uncertain consumer environment across parts of CEE. Like-for-like tenant sales increased by 2.7% during the first half, while average spending per visit rose by 3.3%. Footfall was broadly stable, declining by just 0.4% compared with the same period last year.
The figures suggest that higher expenditure per customer rather than increasing visitor numbers is currently driving much of the sales growth across the portfolio. NEPI Rockcastle said visitor numbers have remained relatively stable over the past three years.
Health and beauty recorded the strongest tenant sales growth at 8.4%, closely followed by services at 8.3%. Fashion accessories increased by 6.9%, while the group’s largest retail category, fashion, recorded growth of 1.6%.
Occupancy remained high at 98.2%, while the cost recovery rate reached 96%, indicating continued retailer demand for space across the group’s shopping centres.
Leasing activity was also substantial. NEPI Rockcastle signed 613 new agreements and extensions covering approximately 162,900 sqm during the first six months of the year, equivalent to 6.8% of its gross lettable area.
Of these agreements, 250 represented new leases covering approximately 63,900 sqm. International retailers accounted for 46% of the space covered by these new agreements.
The leasing activity included new concepts and larger stores from international and regional brands across several of the group’s major properties. Mango is opening its largest Kraków store, while Medicine and Massimo Dutti introduced new flagship concepts at Silesia City Center and City Park Constanța respectively. Primark subsequently opened at Shopping City Sibiu in July, bringing the retailer’s presence across the NEPI Rockcastle portfolio to five stores.
The combination of leasing demand and operating performance contributed to a €126 million increase in portfolio valuation, taking the group’s property portfolio to approximately €8.4 billion.
NEPI Rockcastle is simultaneously committing substantial capital to further expansion. Developments, extensions, refurbishments and redevelopment projects either under construction or progressing through permitting represent more than €820 million of total planned expenditure. Approximately €354 million had been invested by the end of June.
One of the largest projects is the expansion of Promenada Bucharest, which is scheduled to open in April 2027. Lease agreements or commercial terms have already been secured for 95% of the new retail area, while negotiations for the office component are progressing.
In Poland, redevelopment of Bonarka City Center is scheduled for completion during the first quarter of 2027, with terms agreed for 97% of the space. The extension of Pogoria Shopping Centre in Dąbrowa Górnicza opened during Q1 2026, adding approximately 5,100 sqm.
NEPI Rockcastle is also preparing an 8,800 sqm extension of Karolinka in Opole. A building permit was obtained in May, with construction expected to begin in September 2026 and completion planned for Q2 2028.
In Hungary, refurbishment of Arena Mall is approximately 60% complete, with final completion scheduled for the second quarter of 2028.
The development pipeline extends into Bulgaria and Romania. Permitting continues for Promenada Plovdiv, a planned 60,500 sqm project in Bulgaria’s second-largest city. Meanwhile, the 36,000 sqm Galați Retail Park is planned to open during the second half of 2027, subject to permitting. Commercial terms have already been agreed or signed for 88% of its retail area.
Alongside conventional property development, energy generation is becoming a more visible component of the group’s operations. The net contribution from renewable energy reached €5.7 million during H1, an increase of 38% year-on-year as additional photovoltaic capacity became operational.
NEPI Rockcastle’s first off-site solar plant at Chișineu-Criș in Romania, with installed capacity of 54 MW, is now operating commercially and generated €1.8 million by the end of June. A second 60 MW facility at Ariceștii Rahtivani has received the required permits and is expected to be physically completed and tested by the end of 2026.
A further €10 million programme will install 12.1 MW of photovoltaic capacity at properties outside Romania and Lithuania. The energy strategy is intended to cover a greater proportion of electricity consumed by tenants while generating an additional contribution to property income.
The investment programme is supported by a relatively conservative balance sheet. Loan-to-value stood at 33.1% at the end of June, compared with 32.8% at the end of 2025 and below the group’s long-term ceiling of 35%.
Liquidity amounted to approximately €1.2 billion, comprising €461 million of cash and €740 million of available committed credit facilities. After the reporting period, the company also signed a €250 million green financing facility with the European Bank for Reconstruction and Development.
NEPI Rockcastle received a further boost in July when S&P Global Ratings upgraded the company to BBB+, improving its position as it continues to deploy capital across development and acquisitions.
The group’s investment strategy is also becoming geographically broader. In May, NEPI Rockcastle entered into a non-binding agreement concerning the potential disposal of Ozas Shopping and Entertainment Centre in Vilnius, with completion targeted before the end of 2026.
More significantly, the company agreed in August to acquire MegaPark Barakaldo in Bilbao for €252 million. Expected to close by the end of September, the acquisition represents NEPI Rockcastle’s first investment in Spain and its first move beyond its established CEE markets.
The transaction marks an important change for a business whose growth has historically been closely connected with the development of modern retail across Central and Eastern Europe. Rather than replacing its CEE strategy, the Spanish acquisition indicates that the company is beginning to use the scale and financial position built in the region to pursue opportunities further west.
Chief Executive Officer Marek Noetzel said the first-half results reflected the resilience of the portfolio and the group’s active management strategy, while highlighting Promenada Bucharest, renewable energy investment and the Bilbao acquisition as examples of where capital is being deployed for future growth.
The first-half figures also provide an indication of consumer behaviour across NEPI Rockcastle’s markets. Visitor numbers are no longer increasing materially, yet customers continue to spend more when they visit. Combined with occupancy above 98% and continued demand from international retailers, this has allowed rental income to grow despite uneven economic conditions across the region.
With an €8.4 billion portfolio, more than €820 million of development and refurbishment projects progressing and its first Western European acquisition underway, NEPI Rockcastle is entering the second half of 2026 with growth increasingly coming from several directions: existing assets, redevelopment, renewable energy and geographical expansion.
The next stage will test whether the group can maintain that momentum while consumer conditions remain mixed across Europe. For now, high occupancy, rising tenant sales and stronger earnings have given NEPI Rockcastle sufficient confidence to raise its 2026 guidance while continuing one of the largest retail property investment programmes in the region.
Photo: Bonarka City Center, Poland – NEPI Rockcastle
