NEPI Rockcastle: Ambitious Development And Refurbishment Investment Pipeline

“Central and Eastern Europe is expected to have double the average GDP growth of Western EU states this year. Countries such as Romania and Poland, NEPI Rockcastle’s two largest markets, are projected to be among Europe’s top 10 fastest-growing countries and outperform economies like France and Germany. This dynamic is also driving a robust expansion in disposable household income in CEE countries that are undersupplied with retail space compared to their saturated market counterparts in the West,” said Rüdiger Dany, NEPI Rockcastle’s CEO. 

“NEPI Rockcastle is therefore maintaining the momentum of its ambitious development and refurbishment investment pipeline to deliver the most modern and sustainable shopping centers in CEE, combined with the mixed-use expansion of our assets in growing segments such as entertainment. We are carefully calibrating this supply to meet the high demand for space in CEE from international and local retailers and other tenants,” he added.

In 2024, the majority of NEPI Rockcastle’s planned development investments in progress are concentrated in three projects in Romania, Bulgaria and Poland, including:

Promenade Mall, Bucharest, Romania – Extension

NEPI Rockcastle is constructing an additional 58,000 sq m of GLA for mixed-use, including retail and offices, in a development extension alongside its Promenade Mall in Bucharest’s central business district. The extension is due to be completed by the end of 2025.

The project involves excavating the deepest building basement in Central and Eastern Europe, at 26 meters, to accommodate 2,400 car parking spaces over six levels. This presents a significant engineering challenge due to the construction site’s complex geological profile, which includes sand, clay, and gravel.

Image: NEPI Rockcastle

The development will have strong sustainability credentials, with 600 kW of photovoltaic panels installed on the ‘green roof,’ which extends the planting on the neighboring mall rooftop garden and provides rainwater harvesting.

Leading international fashion and entertainment brands among NEPI Rockcastle’s tenants are committed to opening stores in the Promenade extension, and the leasing team is in the final stage of negotiations. The concept’s goal is to introduce new tenants to the shopping center and fine-tune the tenant mix in the original part of the project.

The estimated costs of this project are 250 million euros.

Promenada Plovdiv, Bulgaria – New Development

The 60,500 sq m GLA Promenada Plovdiv greenfield development in Bulgaria’s second-largest city. Known for its seven hills and cultural and historical importance, it is likely to be the biggest NEPI Rockcastle project getting underway this year, subject to final permissions from the local municipality. The construction and operation of the mall would provide a significant boost to the local economy, with the creation of an estimated 1,500 new jobs. Completion is expected in 2026.

Promenada Plovdiv would be NPR’s third investment in the country alongside the Serdika Center and Paradise Center in Sofia, the capital. It would extend Bulgaria’s position as the third-largest market in the company’s portfolio by GLA and value of assets behind Romania and Poland and ahead of Hungary. 

Image: NEPI Rockcastle

The development will bring NEPI Rockcastle’s ‘Promenada’ concept, which focuses on fashion combined with extensive entertainment and dining components, to a leading position in Plovdiv’s city center, adjacent to its historical buildings and near the pedestrian area. The plans include an open-air terrace with spectacular views of the city on the mall’s second level, where visitors can enjoy drinks and international cuisine from the cafés and restaurants.  

Around 20% of the site, or two hectares, has been given over to green planting to form a new public urban park, which will also act as a shortcut for pedestrians to reach the mall. Another planned sustainability feature is a photovoltaic plant, which will be constructed over the rooftop parking area.

“NEPI Rockcastle decided that instead of having a small strip of green around the mall, which is what generally happens in the industry, we would make a significant contribution to improving the natural environment in the city for people to enjoy by creating this public park on a large portion of our site,” Andrei Radu, NEPI Rockcastle’s Director of Development, said.

“Having presented this project to many international and national retailers, the feedback we received assures us that it will be a great success. It is a long-awaited development that will reshape the local retail market and create a new, high-quality destination for the local community,” Radu added.

The estimated costs of this project are 188 million euros.

Bonarka City Center Mall, Kraków, Poland – Refurbishment

The ingenious internal architectural redesign and refurbishment of the Bonarka City Center mall in Kraków, southern Poland, is transforming what had previously been a rather shabby and poorly managed asset before NEPI Rockcastle turned it into an attractive modern shopping, dining, and entertainment experience.

By recalibrating the internal geometry of the shopping center by reducing the width of the unnecessarily wide public walkways and extending the store frontages, NRP added considerable retail rental space value to its asset, with the refurbishment expanding the existing 74,700 sq m area by a further 4,700 sq m.

Image: NEPI Rockcastle

“We are not extending the envelope of the building itself. Instead, all the modifications are taking place within the Bonarka Mall while the shopping center is still in operation. While that makes it a slow and costly process, implemented over several years, it minimizes the disruption to the commercial operations of our retailers. We had to take extra safety measures, such as temporarily closing some floors. Still, if customers are there again in the morning, you have to make sure, for example, that broken tiles from work overnight are cleared away before the customers arrive,” Andrei Radu said.

“We are transforming absolutely everything in Bonarka City Center Mall, from the tiles to the ceilings, cladding, toilets, and underground parking, and this beautification is adding considerable commercial value for our tenants as well as over a 20% uplift in rental value for our investors,” he concluded.

The estimated costs of this project are 80 million euros.

Ploiesti Shopping City, Romania – Extension

NEPI Rockcastle bought out its joint venture partner at Ploiesti Shopping City in 2022, acquiring its 50% share of the center for 55.5 million euros. The mall, which was initially developed in 2012, offers some 46,800 sq m of retail space and 146 tenants, including a Carrefour Hypermarket, Deichmann DIY Store, and Cinema City, alongside fashion retailers such as Adidas, Berksha, H&M, Pull & Bear, and Zara.

NEPI Rockcastle is in the process of adding another 7,400 sq m of GLA, adding some 26 new shops. On top of the extension will be a 21,000 sq m three-level car park, increasing the parking on site by 300 spaces. The extension will cost around 25 million euros and be completed in the second half of 2024.

Image: NEPI Rockcastle