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Rüdiger Dany, CEO of NEPI Rockcastle, believes that one of the biggest mistakes made in the last 15 years was not being able to seize and take advantage of opportunities during a crisis or difficult situation. He has worked in very different markets, with different stories and problems, but his general takeaway is clear: The investments and development plans of a company should never be stopped unless it is absolutely necessary.

The last 15 years have been one of the most intense periods in the history of retail real estate. Our industry went through a major crisis in 2008, followed by several years of dealing with its aftermath. As a result, all major players had to adapt and redefine their business strategies. Like any crisis, and especially a major one, that one served as an extraordinary learning and development opportunity, a turning point that paved the way for a new era in the real estate industry.

The retail sector has been characterized by constant change for centuries, and that trait has carried over into retail real estate. Frankly, the constant state of change is one of my favorite aspects, because it forces you to evolve, whether you want to or not, and whether you are ready to or not. You have to adapt to changing consumer behavior, which is influenced by so many factors: from the economic and geopolitical climate to technological advances, new lifestyle trends, new generation peculiarities, or completely atypical phenomena, such as the COVID-19 pandemic.


Some of the most important transformations that have redefined our industry and led to key achievements in the last decade and a half include: (1) the shift in focus among developers and investors to the CEE emerging markets, which have grown significantly and continue to show tremendous growth potential; (2) the greater emphasis placed on sustainability, ESG norms and the use of green energy; (3) the integration of the digital component and of technology, in general, into all aspects of our business; (4) the penetration of mixed-use projects in the market; (5) the rise of e-commerce and omnichannel strategies; (6) the greater emphasis on the innovative component of projects; (7) the increased involvement in community life in the vicinity of shopping centers and, implicitly, a much more responsible role for the developer to play in this context; (8) Western brands pushing into Eastern European markets; (9) retailers that are very active in Russia and Ukraine moving into CEE markets. Finally, the pandemic has shown us the importance of adhering to the strictest standards of hygiene and public health for our shopping center tenants, employees, and visitors.

Of these 15 years, the last three have been, in my opinion, the most challenging, difficult, and painful, but they have also been interesting and responsible for bringing more maturity and healthy growth not only to our industry, but to the global economy as well as – and to us, as human beings.

As was the case in the late 2000s, we are currently being confronted by the impact of a major crisis. The conflict in Ukraine, which began in February 2022, was yet another blow to the collective psyche, which had already been affected by the pandemic, and to the global economy as well. The major challenges presented by this period are escalating energy prices, high inflation, and higher interest rates, which may affect household purchasing power, the need to optimize supply costs for retailers and developers, and the need for better compliance with ESG requirements to better address climate change.

For NEPI Rockcastle, the silver lining is that the nine markets in which we are active have recovered much more quickly post-COVID-19. Our tenant sales have exceeded the levels reached in 2019, and we are experiencing strong retailer demand. We are managing inflationary pressure on energy and other operating costs through cost-saving initiatives. Most importantly, we have continued to invest in growth-generating opportunities. Our development pipeline is on schedule, and we have made significant progress in terms of our commitment to improving the sustainability of the Group’s portfolio and reducing our environmental footprint. In 2022, we launched a green energy program in Romania, the largest market in our portfolio. It involves lowering the environmental impact of all 30 of our properties in the country through the installation of photovoltaic panels, thereby increasing the share of renewable energy used. Ten photovoltaic systems have already been installed, and we plan to continue at an even faster pace in 2023. At present, the company has a development pipeline of 660 million euros in assets under construction, including greenfield developments.

We have major projects that are in the construction and permitting stages. In Romania, for example, we are making progress with the construction of Promenada Mall Craiova and the Vulcan Residence complex. The expansion of Promenada Mall Bucharest remains on schedule, and we have applied for building permits for Promenada Plovdiv and Galați Retail Park. We have also expanded our Polish portfolio through the acquisition of Copernicus Shopping Center, located in the city of Torun, and Forum Gdańsk shopping center. The most recent activity was securing a syndicated green loan of 60 million euros that will be used for refurbishment work at Ploiesti Shopping City in Romania.


I have made this short overview of NEPI Rockcastle’s latest actions to illustrate an important conclusion: Every predicament has the potential to inspire you. Every hardship results in lessons learned, and if you are open to learning, you might thrive more than you ever could have imagined. Over the past 15 years in the industry, I have learned that you should never let panic get the best of you. The investments and development plans of a company should never be stopped unless it is absolutely necessary. Adjust your activities to the particularities of the market and the region in which you operate, and try to proceed, to the extent possible, with the projects that bring value to your activity and your industry. Remain cautious, but do not freeze your business without conducting a proper assessment. I believe that one of the biggest mistakes made in the last 15 years was not being able to seize and take advantage of opportunities during a crisis or difficult situation.

As for the next decade, I think that it is difficult to make accurate predictions in an industry as dynamic and fast-changing as ours. However, I do believe that we have entered a decade of responsible development that will encompass much more than statutory changes, a shift in consciousness is on the horizon as well. No major company in our industry will be able to avoid integrating ESG standards into all of its activities. Finding solutions to generate alternative energy will become more and more of a mission for any large or medium sized company. I also think that the innovative component and digitalization will bring about a great deal of advancement in our industry, which has been underdeveloped in these areas for many years.


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