Nepi Rockcastle rides Europe retail strength, takes a short turn to Spain

Europe’s third-largest retail property company Nepi Rockcastle lifted distributable earnings per share by 3.5% in the first half of 2026.

Strong leasing, rental indexation and resilient consumer spending drove growth across its central and eastern European portfolio, where a robust retail market continues to bolster demand.

The group, which is entering Spain through the pending €252m (about R4.75bn) acquisition of MegaPark Barakaldo in Bilbao, had buoyant demand in its core European markets, with average basket spend at its shopping centres rising 3.3%, it said in its first-half results for 2026.

Higher consumer spending lifted like-for-like tenant sales by 2.7%, while occupancy remaining close to full and strong operating performance delivered a €126m valuation uplift, taking the portfolio value to €8.4bn.

The group expects distributable earnings per share to rise 3.5%-4%.

Footfall across its shopping centres remained resilient in the first half of the year, edging down slightly from a year earlier despite continued economic uncertainty in the region.

It kept its leasing engine running, signing hundreds of new and renewed leases in the first half, with new tenants accounting for 39% of the space and the remainder coming from existing retailers.

“The group continues to shift capital towards higher-growth assets, agreeing to sell Ozas Shopping and Entertainment Centre in Lithuania while making its first investment in western Europe with the €252m acquisition of MegaPark Barakaldo," it said.

The group reported a €1.2bn liquidity buffer at the end of June, while its loan-to-value ratio remained comfortably below its long-term threshold. It also secured a €250m green loan from the European Bank for Reconstruction and Development after the period.

Its renewable energy income rose 38% in the first half helped by new solar capacity coming on stream.

The group has more than €820m of developments, extensions and refurbishments under way. These include the Promenada Bucharest extension, the largest retail development under way in central and eastern European, and the Bonarka City Centre redevelopment, both due for completion in 2027.

CEO Marek Noetzel said the first-half performance reflected the resilience of its portfolio and the strength of its balance sheet, giving the group room to keep investing in growth opportunities, including its first move outside central and eastern European with the acquisition of MegaPark Barakaldo.

“The strong results demonstrate the quality and resilience of our portfolio and are a testament to our active asset management, while the strength of our balance sheet enables us to keep placing capital into value-enhancing opportunities,” Noetzel said.