Saturday, 15 March 2025
NEPI Rockcastle, Europe’s third-largest listed retail real estate company, achieved a record-high net operating income (NOI) of €556 million in 2024, marking a 13.2% increase from the previous year. The company’s strong financial performance was driven by higher retailer sales and resilient consumer spending in Central and Eastern Europe (CEE).
Distributable earnings per share (DEPS) for the second half of 2024 stood at 30.05 euro cents, bringing the full-year DEPS to 60.17 euro cents—5.6% higher than in 2023. The Board has declared a dividend of 27.05 euro cents per share for the second half of the year, maintaining a 90% dividend payout ratio.
Growth Through Acquisitions and Investments
NEPI Rockcastle expanded its portfolio significantly in 2024, acquiring two major retail properties in Poland—Magnolia Park in Wrocław and Silesia City Center in Katowice. These acquisitions, totaling €760 million, accounted for 40% of all retail real estate investment transactions in the CEE region last year. Portfolio value at year-end reached €7.9 billion, compared to €6.8 billion in 2023, solidifying the company’s position as a leading retail landlord in Europe.
To finance these acquisitions, the company raised €800 million in capital markets, including a €500 million green bond issue and a €300 million equity raise, the latter being its first since 2017. NEPI Rockcastle ended the year with a loan-to-value (LTV) ratio of 32.1%, below its 35% target, and a liquidity position of €1.1 billion, ensuring financial stability for future expansion.
Operational Performance and Market Trends
CEO Rüdiger Dany attributed the NOI growth to rising tenant sales, which allowed for increased base rents and a 15% rise in turnover rent. The occupancy cost ratio (OCR) remained stable, reflecting the company’s effective collaboration with retailers. Vacancy rates across the portfolio were reduced to 1.7%, a notable achievement in the sector.
Gross rental income grew by 10.9% year-on-year to €566 million, supported by rental indexation, higher occupancy, and increased turnover rent. Like-for-like tenant turnover rose by 8.5% (excluding hypermarkets), demonstrating strong consumer demand despite economic challenges. The average basket size increased by 8%, consistent with prior-year trends.
Sustainability and Green Energy Initiatives
NEPI Rockcastle advanced its sustainability commitments in 2024, focusing on emission reductions, renewable energy adoption, and waste management. The company completed the first phase of its renewable energy program, installing photovoltaic panels across 28 properties in Romania and Lithuania, with a total capacity of 38 MW. A second phase, set to add 15 MW across 23 properties outside Romania, is underway.
In the fourth quarter, the company acquired two project companies with land rights and permits for 159 MW of photovoltaic capacity, representing an estimated investment of €110 million. These projects are expected to enhance green energy production and contribute to long-term revenue growth.
Outlook for 2025
NEPI Rockcastle remains optimistic about the economic prospects of its CEE markets while acknowledging macroeconomic uncertainties. The company plans to continue expanding its portfolio through strategic acquisitions and development projects, with a pipeline totaling 187,900 square meters of gross leasable area (GLA) and a projected investment of nearly €788 million.
Looking ahead, NEPI Rockcastle aims to maintain financial discipline, strengthen its retail property portfolio, and further integrate sustainable practices. “Our record performance in 2024 has laid a strong foundation for future growth,” said Dany. “We will continue seeking opportunities that align with our strategic vision and deliver optimal returns for investors.”
