On a like-for-like basis NOI was up 5%. A reduction in the rate of inflation led to a smaller base rental uplift from rent indexation versus the previous year. This was offset by various active asset management measures such as unit rightsizing and tenant curation. Short-term income and improvements in cost recovery also contributed to NOI growth, reports NEPI Rockcastle.
Tenant sales continued to grow at an average rate above inflation for the period, increasing by 3.7% in Q1 2025 versus the same period last year. The average basket size increased by 9.7%, driven by the relatively larger average basket size of consumer spending in the new acquisitions, in addition to the continued trend of higher spend per visitor over recent years. Easter fell later in 2025 than in 2024 in some of the countries of the Group’s portfolio, which impacted year-on-year variations in both tenant sales and footfall (-0.7% LFL).
Overall, footfall was marginally lower (by 0.7% LFL) in Q1 2025 compared to Q1 2024. LFL tenant sales (excluding hypermarkets) increased by 3.7%. All product categories recorded higher sales, except Electronics (-2.5%) and Sporting Goods (-0.5%). The best performing categories were Health & Beauty (+10.9%) and Fashion Complements (+10.8%). Fashion, the largest segment, saw sales increase by 0.8%, due to changes in the Easter sales season for some of the portfolio countries and an unusually warm winter.
In Q1 2025, the Group signed 411 new leases and lease renewals, for more than 96,500 sq m, of which 21% by gross lettable area (GLA) are new leases. Strong demand from international retailers looking to expand in the CEE markets was apparent by their 74% share of newly leased GLA. Significant new leases signed in Q1 2025 include Zara (Arena Centar and Retail Park, Croatia), Avitela (Ozas Shopping and Entertainment Centre, Lithuania), Mohito (Serdika Center, Bulgaria), Boss (Silesia City Center, Poland) and Lego (Bonarka City Center, Poland).
Lease terms were signed or agreed for 68% of the additional retail GLA of Promenada Bucharest, which is scheduled to open in Q1 2027. Works for all other development projects under construction, including the redevelopment of Bonarka City Center and the refurbishment of Arena Mall Budapest, are on schedule and within budget. Among other projects, the extension of Pogoria Shopping Centre (Dąbrowa Górnicza, Poland) has also started in January 2025. Completion is expected in Q1 2026. Lease terms are in place for 90% of the additional 4,800 sq m GLA.
NEPI Rockcastle’s development pipeline under construction or permitting totals almost 788 million euros (including extensions and redevelopments of existing assets together with the green energy investments), of which the Group spent 250 million euros by 31 March 2025.
“Driving growth in NOI through earnings accretive acquisitions has been a highlight of our strategy in recent years and the strong results in Q1 validate the positive impact of the two major investments made in Poland in 2024,” says Rüdiger Dany, NEPI Rockcastle’s CEO. “At the same time, we continue to proactively manage our portfolio, regularly refreshing the tenant mix and improving the layout of our properties, to meet consumers’ evolving preferences. Alternative revenue sources, such as energy, parking and media sales revenue, are growing faster than rents, which were indexed by a lower percentage compared to previous years due to a decline in inflation. The strength of our markets, and our leading position as the largest owner, developer and operator of retail real estate in Central and Eastern Europe, is evidenced by consistently high occupancy and continued demand for space across the portfolio from international retailers.”
