NEPI Rockcastle, the largest owner, developer and manager of shopping centers in Central and Eastern Europe, recorded a 12.6 percent increase in net operating income (NOI) in the first quarter (Q1) of 2025, compared to the same period in 2024.
In the first three months of this year, the value of net operating income reached EUR 152 million. The positive development was mainly driven by the two major acquisitions made in Poland in the second half of 2024, as well as operational optimization measures of the existing portfolio.
Net operating income increased by 5 percent, based on the LFL (like-for-like) index. In the context of falling inflation, rent increases resulting from indexation were lower than in the previous year, but this effect was offset by operational adjustments such as the reconfiguration of some retail spaces and the optimization of the tenant mix. Short-term revenues and improved cost recovery also contributed to this development.
Tenant sales, excluding supermarkets, increased by 3.7 percent in Q1 2025 compared to the same period in 2024, based on the LFL index. The average shopping basket value was 9.7 percent higher, mainly due to new properties acquired in Poland in 2024, which added to the trend of increasing spending per visitor, manifested in recent years.
“Growing net operating income through value-adding acquisitions has been a pillar of our strategy in recent years, and the first quarter results validate the positive impact of the two investments made in Poland in 2024. In parallel, we are constantly adapting the tenant mix and carrying out modernization works in our shopping centers to better respond to consumer preferences. Alternative sources of income, such as renewable energy, parking or media spaces, have grown at a faster pace than rents, which were indexed at a lower percentage compared to previous years due to the decline in inflation.
The beginning of 2025 was marked by global economic uncertainties and political instability in our region. Such circumstances create both risks and opportunities, and with our solid financial position and strong asset base, we are well prepared to manage the volatility of the current climate and continue our sustainable growth strategy,” said Rüdiger Dany, CEO of NEPI Rockcastle.