“Capital wants to access those companies which can deliver better than the relative base, better returns. So, the bigger you are, the more access you have to investors, to debt markets, and that drives your cost of capital down. It is like a snowball effect,” Marek Noetzel, CEO of NEPI Rockcastle, said today during a press meeting.

“If you do not grow, somebody will outgrow you, and they will occupy available capital to their benefit, not to yours. So, our mission is to continuously grow, but with little risk,” he said.

“We like to take long-term little risk. It always pays off. If you take low risk over the longer term, none of the strategy ever failed,” Noetzel added.

“You risk lower growth maybe compared to what your peers do, but we would never expose our investors to excessive risk, because the consequences are, in our business, very long-lasting. Getting out of this vicious circle of too much debt, for example, is very poisonous. And each crisis in real estate starts with the problem of debt,” he stated.

“I think it would be fair to say that the market where we operate is becoming a bit too small for us in the retail area. So, either we go beyond retail areas and we start with energy, that is fine. But in a way, it is a function of what we do. We consume energy, so why not produce it ourselves,” said Marek Noetzel, CEO of NEPI Rockcastle.

Key statements

• “In energy we will continue to invest. And we have over 20 projects on the table. We will pick those using various criteria. So, we will do it. We have the ambition to quadruple the size of it. Last year energy made over EUR10 million net. And we see potential to do probably between EUR50 million and EUR70 million,” said Marek Noetzel, CEO of NEPI Rockcastle.
• “We are interested in growing the energy business. We are interested in diversifying the sources of energy. So, photovoltaics, but why not do wind? Why not do hydro? So, we are looking at various options. At the end of the day, it is the same megawatt hour, so that works for us,” he said.
• “I think it is fair to say that with all the know-how we have by now, we are much better prepared to scale up the business. It is one of those initiatives where you try it locally and if it works, and the numbers prove to deliver what we wanted, and you have the organization behind it, then scaling is much easier. This is why so many projects are on the table,” Noetzel stated.
• “Obviously, some of them are not technically possible or are very distant, so we will filter them so that timing works well with how we can develop them and when they start producing energy. That is number one. But number two is what I think would be cool — to diversify the sources,” he added.
• “You should expect us to do more energy projects in Romania and diversify the sources. And I believe if things go well, within three years we may get them up and running,” said Marek Noetzel, CEO of NEPI Rockcastle.