Nepi Rockcastle, Europe’s third-largest publicly listed retail property company by portfolio value, has reported a rise of 11.8% in full-year distributable earnings.
The growth, in line with the updated positive guidance, marks a significant boost, with its portfolio value now approaching €8bn (R154.3bn), according to the year-end results for the period to end December. This reinforces Nepi Rockcastle’s position as one of Europe’s fastest-growing retail property landlords.
“Our robust financial performance reflects the operational excellence of our portfolio and the strength of consumer demand in the Central and Eastern European markets,” said CEO Rüdiger Dany.
“The 13.2% increase in net operating income last year was fundamentally driven by higher tenant sales, allowing us to raise base rents and collect more turnover rent (up by 15% versus 2023),” Dany said.
Nepi, which is listed on the London Stock Exchange and in Joburg, owns some of the largest and most prominent shopping centres in a vast catchment area across Europe.
Since 2022, the group’s occupancy cost ratio has remained consistently sustainable, demonstrating its ability to collaborate effectively with retail partners and create shared value.
“We strive through active asset management to constantly improve our properties and make them even more attractive for both retail brands and consumers.
“As a result, we managed to bring down vacancy to 1.7% across the portfolio — a remarkable achievement. At the same time, we also look to grow through financially accretive and sustainable investments. From this point of view, 2024 was a landmark year for us,” Dany said.
Gross rental income grew 10.9% to €566m for the year. Base rent was up 7.8%, driven by indexation, rental uplifts and higher occupancy, while strong tenant sales led to a 15.3% increase in overage and turnover rent. Tenant turnover increased by 8.5% (excluding hypermarkets) compared with 2023 on a like for like basis, proof of a resilient consumer and the continuing appeal of the brands present in Nepi properties.
The group’s financial health also seems to be in good standing as the loan-to-value was 32.1% by end-December, below the 35% threshold. Nepi also added two of Poland’s sought-after retail properties to its portfolio: Magnolia Park in Wroclaw and Silesia City Centre in Katowice last year.
Property analyst Keillen Ndlovu recently noted that Reits had shifted from being net sellers to net buyers of assets, particularly in the retail sector, in 2024.
Nepi is on course to execute its ambitious development pipeline. To fund its two major acquisitions in 2024, it secured €800m from capital markets late last year, reflecting the strong confidence investors and financiers have in the company’s strategy.
The group said it plans to build on the strong relationships developed with capital providers and continue accessing capital markets to fund future opportunities.
It said it strongly believes in the positive economic prospects for its Central Eastern Europe markets, but noted that the macroeconomic environment remains unpredictable and challenging.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.