The retail markets in Central and Eastern Europe (CEE) are the most dynamic in the European Union overall. Economic growth and disposable household income have risen twice as fast as the Western European average in recent years. However, the region is still in the early stages of the energy transition. Poland, for example, reached a significant milestone in June of this year when it generated more electricity from renewable sources than from coal for the first time.
As the premier owner, operator, and developer of retail properties across Central and Eastern Europe, a region that is home to 155 million consumers, NEPI Rockcastle is uniquely positioned to lead the industry, in partnership with our tenants, toward the achievement of the EU’s ambitious climate goals. We are on track to becoming the largest nonenergy sector producer of renewable energy in CEE, primarily in our two biggest markets, Romania and Poland.
When our investment in a 54 MW solar park in Chișineu-Criș in western Romania goes online at the end of 2025, NEPI Rockcastle will generate nearly 50% of the total electricity required by our shopping centers and tenants in Romania. NEPI Rockcastle had managed to generate 6% of the group’s total electricity consumption internally by the end of 2024, so the project in Chișineu-Criș represents a major step forward in the further expansion of our capacity.
Our €110 million renewable energy investment program will ensure that, by the end of 2026, approximately 48% of the electricity consumption across our entire portfolio, valued at over €8 billion and comprising 60 properties and 2.4 million sq m of gross leasable area, will be covered by NEPI Rockcastle’s own energy production business unit.
Rüdiger Dany
CEO of NEPI Rockcastle
NEPI Rockcastle’s CO2-neutral “big green tent” will cover approximately 8,000 leases and 347 million visits per year to our shopping centers, which are located in eight countries. This is a remarkable achievement for an investment program that was launched from scratch in 2022, at the onset of the energy crisis in Europe and Russia’s war against Ukraine. I would argue that, in terms of scale and climate targets, it is virtually unmatched in the European retail industry, as we are also making a substantial contribution to the share of renewables in the energy mix at the national level.
NEPI Rockcastle has always aimed to cover the majority of its electricity needs, over 84%, using renewable sources. By entering the energy production business through the installation of photovoltaic systems on the roofs and parking lots of our shopping centers and by investing in independent solar parks on greenfield sites, we are now even better positioned to support our tenants in the achievement of their own sustainability goals.
NEPI Rockcastle Energy is a profitable stand-alone business that generates approximately twice the earnings per unit invested compared to our shopping centers. This business has the potential to become a significant source of revenue as it supplies nearly 100% of the energy for NEPI Rockcastle’s assets and also offers these services to other companies.
Measured by leasable area, 68% of NEPI Rockcastle’s tenants are large international retailers with annual turnovers in the billions and strong corporate sustainability policies, which we can support. NEPI Rockcastle does not have the high marketing and service costs associated with specialized energy providers, and we operate in our own closed market environments, which gives us greater flexibility when serving our tenants. Although energy accounts for only a relatively small proportion of retailers’ total operating costs, it can be a very significant and fluctuating item for businesses such as supermarkets and restaurants, which have extensive refrigeration and food preparation requirements.
The dominance of large modern shopping centers in the retail landscape of the CEE region compared to Western European markets and their role as social meeting places for dining, entertainment, and community services mean that they can have a disproportionate influence on the adoption of sustainability practices and the speed of the energy transition in these countries.
NEPI Rockcastle is aware of the significant environmental and social responsibility that comes with our position as the region’s retail real estate leader, and we will continue to be a pioneer of best practices in our markets to win the collective fight against global warming.
Credit for all images: NEPI Rockcastle
