NEPI Rockcastle N.V., Europe’s third largest listed retail real estate company by portfolio value, achieved a 12.1 percent growth in NOI (net operating income) year-on-year in the first half (H1) of 2025 to €307 million as a result of the large acquisitions completed in 2024 and a continued improvement in the existing portfolio through active asset management, despite a challenging macroeconomic background. The operating performance of the Company’s properties lifted the value of its investment property portfolio to more than €8 billion for the first time in NEPI Rockcastle’s history.
Rüdiger Dany, NEPI Rockcastle’s Chief Executive Officer said “The first half of 2025 saw a consolidation of the growth generated by NEPI Rockcastle’s strategy of consistently investing in premium properties with strong fundamentals. We also continue to add value through developments, not least in the renewable energy sector, which has the potential to become an important growth segment for the Group once the current ongoing major investments therein are completed.
We delivered a 3.1 percent growth in distributable earnings per share in H1 2025 relative to H1 2024. Our loan-to-value ratio is very conservative by industry standards at 32.1 percent, which allows NEPI Rockcastle to pay 90 percent of its earnings as dividends, a higher distribution rate than most of our peers. I am proud to see that NEPI Rockcastle today combines an established portfolio with a rock-solid balance sheet and a sustainable growth story, all driven by our highly knowledgeable people, which should set the stage for future success and strong results for our shareholders for many years to come.”
BUSINESS HIGHLIGHTS
Acquisitions and organic growth combine to deliver a solid 12.1 percent rise in NOI
- NOI increased by 12.1 percent to €307 million in H1 2025 (H1 2024: €274 million). On a like-for-like (LFL) basis, NOI was 4.4 percent higher in H1 2025 compared to H1 2024, excluding the impact of acquisitions (Magnolia Park and Silesia City Center) and disposals (Promenada Novi Sad) completed after 30 June 2024.
- Revenue from energy activities was €4.9 million in H1 2025, up 19.7 percent from the comparative period.
- Property operating expenses increased by 10.4 percent between H1 2024 and H1 2025, driven mostly by higher utility expenses. However, the cost recovery rate was the same as in H1 2024 (94 percent), as service charge income increased at a similar rate.
Strong increase in average basket (+9.7 percent) and tenant sales growth
- Footfall in H1 2025 was stable (-0.2 percent) compared to H1 2024, in LFL properties.
- Tenant sales were 3.9 percent higher in H1 2025 than H1 2024 (LFL, excluding hypermarkets), while the average basket size (including the impact of properties acquired in 2024) rose by 9.7 percent.
- The collection rate for H1 2025 reported revenues was over 99 percent by mid-August.
- European Public Real Estate Association (EPRA) occupancy rate was 98.2 percent on 30 June 2025.
Leasing activity
The Group signed new leases and lease extensions for a total of 167,000m2 gross lettable area (GLA) in H1 2025. New leases accounted for 26 percent of this total, of which 18 percent were signed with international retailers and 8 percent with national and local tenants, while 74 percent of the signings were renewals of existing leases. Underpinned by continued strong demand for space in the Group’s shopping centres, the average rental uplift was 5.3 percent above indexation in H1 2025.
During H1 2025 the Group welcomed tenants to several new units including Sports Direct (Promenada Craiova), Tous (Paradise Center), Mohito (Serdika Center), Chanel (Forum Gdansk Shopping Center), Oysho (Arena Mall), House (Forum Liberec Shopping Centre).
DEVELOPMENT UPDATE
NEPI Rockcastle invested approximately €66 million in developments, photovoltaic plants and capital expenditure (capex) in H1 2025.
Works at development projects under construction are on schedule and within budget. The extension of Promenada Bucharest is expected to open in Q1 2027. Lease terms have been agreed for 68 percent of the GLA. The redevelopment of Bonarka City Center is due for completion in Q2 2026, with lease terms agreed for 95 percent of the GLA. Refurbishment works on Arena Mall in Budapest started in April 2024 and will be completed in Q2 2028. Lease terms have been agreed for 96 percent of the refurbished GLA. The extension of Pogoria Shopping Centre (Dąbrowa Górnicza, Poland) started in January 2025 and is 34 percent complete. The additional 4,800m2 GLA will open in Q1 2026. Lease terms have been agreed for 97 percent of the new space.
Permitting for Promenada Plovdiv, a 60,500m2 GLA greenfield development in Bulgaria’s second largest city, is ongoing, with the last permits expected to be obtained by Q1 2026. Opening is estimated during Q3 2027. There is strong interest from retailers and lease terms for 40 percent of the GLA have already been agreed. The building permit for the retail component of Galati Retail Park, a mixed-use scheme, is expected to be obtained in Q3 2025. The project, which includes 41,000m2 of retail GLA and 21,500m2 of residential space, is scheduled to open in Q4 2026. Lease terms have been agreed for 64 percent of the retail scheme.
Permitting was completed for the second phase of the Company’s green energy project, which involves installing photovoltaic panels in 23 locations outside Romania, with a total planned power capacity of 15 MW. There are 16 power facilities under construction (in Poland, Bulgaria, Hungary and Croatia), while seven others are in the procurement process (in Slovakia and Czech Republic).
There was significant progress with the third phase of the green energy project, which involves developing two large greenfield photovoltaic plants in Romania. The first plant will have an installed power capacity of 54 MW and is expected to become operational by the end of 2025. The second plant, with a planned power capacity of 105 MW, shall be substantially developed during 2026. These projects will significantly expand the Group’s green energy generating capacity, increase the coverage of the electricity consumption needs of its tenants and make a positive contribution to NOI.
The total cost of projects under construction or permitting is approximately €795 million, of which €276 million has already been invested as at 30 June 2025. The planned capital expenditures for 2025 are around €230-240 million, less than anticipated at the start of the year, as permitting processes for Promenada Plovdiv and Galati Retail Park have taken longer than initially anticipated.