The strong 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. High demand for its quality retail assets also translated into a low vacancy rate of 1.6%.
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.”
And continued: “We delivered a 3.1% 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%, which allows NEPI Rockcastle to pay 90% 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
Distributable earnings per share increased by 3.1% in the first half-year
- Distributable earnings per share (DEPS) were 31.05 euro cents for the six months to 30 June 2025, 3.1% higher than in H1 2024.
- The Board has declared a dividend of 27.95 euro cents per share for H1 2025, corresponding to a 90% dividend pay-out ratio, to be settled in cash, as capital repayment (default option). Shareholders may also elect for the settlement of the same dividend amount as ordinary cash distribution out of distributable profits.
Acquisitions and organic growth combine to deliver a solid 12.1% rise in NOI
- NOI increased by 12.1% to €307 million in H1 2025 (H1 2024: €274 million). On a like-for-like (LFL) basis, NOI was 4.4% 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% from the comparative period.
- Property operating expenses increased by 10.4% 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%), as service charge income increased at a similar rate.
Strong increase in average basket (+9.7%) and tenant sales growth
- Footfall in H1 2025 was stable (-0.2%) compared to H1 2024, in LFL properties.
- Tenant sales were 3.9% 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%.
- The collection rate for H1 2025 reported revenues was over 99% by mid-August.
- European Public Real Estate Association (EPRA) occupancy rate was 98.2% on 30 June 2025.
Conservative loan-to-value ratio (LTV) of 32.1% and portfolio valuation uplift contribute to improved rating outlook from S&P
- The Group had a strong liquidity position of almost €1.1 billion on 30 June 2025, consisting of cash and cash equivalents of €386 million and undrawn committed credit facilities of €690 million.
- The Company has no significant debt maturities until October 2026.
- The property portfolio was independently valued by external appraisers on 30 June 2025, resulting in a fair value gain of €108 million (+1.4% compared to 31 December 2024).
- LTV was 32.1% on 30 June 2025, the same as of 31 December 2024 and comfortably below the 35% strategic threshold.
- The Group has an investment grade credit rating of BBB+ from Fitch (stable outlook) and BBB from S&P (positive outlook, updated from stable).
- EPRA Net Reinstatement Value (NRV) per share on 30 June 2025 was €7.58, a 2.7% increase from 31 December 2024.
- NEPI Rockcastle was included in the FTSE EPRA NAREIT Global Emerging Index in June 2025, a leading global benchmark for listed real estate investments. The index inclusion validates the Company’s performance, operational transparency and governance. This inclusion will enhance the Group’s visibility among global investors, making its shares eligible for index tracking investors and contributing to improved market liquidity.
OPERATING PERFORMANCE
Trading update
Footfall increased slightly (+0.4%) in the second quarter (Q2), on a LFL basis, after a small decrease in the first quarter (Q1) of 2025 (-0.7% vs Q1 2024). Overall, the number of visitors has been remarkably stable over the last two years, despite ongoing economic uncertainties in the region.
Growth in the average basket size accelerated (+9.7% in H1 2025 vs H1 2024). This represents the average across the entire portfolio and was positively influenced by the acquisitions of Magnolia Park and Silesia City Center, completed in 2024. Even without these acquisitions, the trend of growing spend per visit continues, showing the resilience of consumers in CEE.
LFL tenant sales in H1 2025 outpaced inflation and were 3.9% higher than H1 2024. This growth accelerated in Q2 (+4.1%) compared to Q1 (+3.7%). Tenant sales improved in all retail categories, except Sporting Goods (-2.3%) and Electronics (-2.1%), mostly due to changes in composition of tenant mix in these categories. Entertainment (+11.7%) and Health & Beauty (+10.2%) posted double-digit growth. Sales in the largest segment, Fashion, were 0.7% higher.
The occupancy cost ratio (OCR) was 13.1% (excluding hypermarkets), slightly higher than in H1 2024 (12.9%), but still at a comfortable level for our tenants.
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% of this total, of which 18% were signed with international retailers and 8% with national and local tenants, while 74% 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% 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% of the GLA. The redevelopment of Bonarka City Center is due for completion in Q2 2026, with lease terms agreed for 95% 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% of the refurbished GLA. The extension of Pogoria Shopping Centre (Dąbrowa Górnicza, Poland) started in January 2025 and is 34% complete. The additional 4,800m2 GLA will open in Q1 2026. Lease terms have been agreed for 97% 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% 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% 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.
