Monday, 25 August 2025
NEPI Rockcastle NV reported a 12.6% year-on-year increase in net operating income (NOI) to €152 million in the first quarter of 2025. The result reflects contributions from two major acquisitions in Poland completed in the second half of 2024, as well as operational adjustments across the portfolio. On a like-for-like basis, NOI grew by 5%.
Lower inflation moderated rental indexation compared to previous years, but this was partially offset by active asset management strategies such as space reconfiguration and improvements in lease structures. Short-term income and higher cost recovery also supported NOI growth.
Tenant sales rose by 3.7% year-on-year on a like-for-like basis (excluding hypermarkets). Average basket size increased by 9.7%, influenced by both acquisitions and a continued trend toward higher per-visitor spending. Footfall was marginally lower by 0.7%, with variations partially attributed to the timing of Easter.
EPRA retail vacancy was 1.7% as of 31 March 2025, with overall portfolio vacancy at 2.0%. Rent collection for Q1 stood at 98%.
Leasing and Development Activity
NEPI Rockcastle signed 411 leases and lease renewals in Q1 2025, covering over 96,500 sqm. New leases accounted for 21% of gross lettable area, with international retailers representing 74% of new leasing volume. Notable new tenants include Zara, Avitela, Mohito, Boss, and Lego, with recent openings across Hungary, Poland, Romania, and Croatia.
Major development projects remain on track. In Bucharest, 68% of the additional retail area at Promenada has been pre-leased ahead of its scheduled opening in Q1 2027. Construction is progressing at Bonarka City Center and Arena Mall Budapest, and the extension of Pogoria Shopping Centre in Poland is underway, with 90% of new space pre-leased.
The Promenada Plovdiv project in Bulgaria is pending a building permit, expected in Q3 2025, with 40% of retail space already under negotiation. A similar permitting timeline applies to the Galati Retail Park development in Romania.
Green Energy Investments
The group continues to expand its renewable energy capacity. Phase two of its green energy initiative includes 15 MW of solar installations across 23 properties in Poland, Bulgaria, Hungary, and Croatia. Seven additional installations in Slovakia and Czechia are in procurement. Phase three includes two large photovoltaic plants in Romania (159 MW total), with construction already underway for the first.
As of 31 March 2025, the total value of projects under construction or in permitting, including green energy infrastructure, is approximately €788 million. €250 million had been invested by the end of the quarter.
Financial Position
NEPI Rockcastle reported cash and committed credit facilities totalling nearly €1.2 billion as of 31 March 2025. The loan-to-value ratio was 31.2%, remaining below the company’s 35% strategic threshold. Following the April 2025 dividend payment, estimated LTV rose slightly to 32.9%.
The company continues to operate within covenant requirements:
• Solvency Ratio: 0.38 (maximum allowed: 0.60)
• Consolidated Coverage Ratio: 4.89 (minimum required: 2.00)
• Unencumbered assets to unsecured debt ratio: 266% (minimum required: 150%)
Average cost of debt was 3.2% in Q1. Exposure to variable interest rates is limited to 14% of total debt, primarily linked to the IFC loan.
Outlook
The Board maintains its February 2025 guidance for distributable earnings per share to increase by approximately 1.5% compared to 2024, assuming no major geopolitical or macroeconomic disruptions and the continuation of current trading trends. The 90% dividend payout ratio remains unchanged. This forward-looking statement is subject to future revision and has not been reviewed by the company’s auditors.
