NEPI Rockcastle boosts 2024 retail development pipeline to over 650 million Euro

Resilient economic growth and rising household consumption in CEE is outpacing Western European countries, driving consumers through NEPI Rockcastle’s shopping center doors, and attracting growing numbers of international retailers, as well as local companies, seeking space within its largest portfolios in Romania and Poland and seven other regional markets.

Rüdiger Dany, NEPI Rockcastle CEO, said: “NEPI Rockcastle is carefully calibrating its development pipeline and financing to match the strong demand for space we’re seeing from international and local retailers in CEE, as well as from other sectors such as entertainment and hospitality. The region is under-supplied for retail space in comparison with Western Europe, but economies in CEE countries are growing at twice the rate…

When these factors are combined with the central economic and social role our dominant shopping centers play in their markets, which is much more significant than in the rest of the EU, the megatrends and corporate strategy driving NEPI’s record financial results last year and our ambitious development and refurbishment programme, alongside the large acquisitions we made at the end of 2022, become very clear. We expect the current development pipeline to become accretive to earnings from 2027. ”

NEPI Rockcastle, the largest owner, operator and developer of shopping centers in CEE, has 168,800 sq m of development and refurbishment projects underway, or planned this year in Bulgaria, Hungary, Poland and Romania, foremost of which are:

• Promenada Mall Extension, Bucharest – A c. 282 million Euro, 55,400 sq m mixed-use extension being built alongside the Promenada Mall in Bucharest’s central business district and due to be completed by the end of 2026. The project involves excavating the deepest building basement in CEE, 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.
• Promenada Plovdiv, Bulgaria – A planned 173 million Euro, 60,500 sq m greenfield development in Bulgaria’s second largest city. NEPI Rockcastle is in the process of securing final permitting permission from the local municipality for the construction and operation of the mall, which will provide a significant boost to the local economy, creating an estimated 1,500 new jobs. Completion of the project is expected in 2026.
• Promenada Plovdiv would be the Company’s third investment in the country alongside the Serdika Center and Paradise Center in the capital Sofia and would extend Bulgaria’s position as the third-largest market in the company’s portfolio by gross lettable area (GLA) and value of assets, behind Romania and Poland and ahead of Hungary.
• Bonarka City Center Mall, Krakow, Poland – A 79 million Euro refurbishment where an ingenious internal architectural redesign has added 4,700 sq m to the 74,700 sq m center.
• Galati, Romania – Plans are being progressed for a new 48 million Euro, 33,200sq m retail park on the outskirts of this port town on the Danube Riverin northeast Romania on the border with Moldova.
• Arena Mall, Budapest – A comprehensive 31 million Euro, five-year refurbishment programme.
• Other NEPI Rockcastle projects underway – total investments of 39 million Euro are being made in a 7,400sqm extension at Ploiesti Shopping City in Romania, adding 2,800 sq m at Galeria Wolomin, Wolomin, and 4,800 sq m at the Pogoria Shopping Centre, Dabrowa Gornicza, both in Poland.

NEPI Rockcastle also plans to extend its highly successful pilot solar energy production project, where photovoltaic panels installed on its Romanian assets in 2023 are now producing around 25% of the total energy needs of its shopping centers in the country, to the rest of its portfolio across CEE markets. The returns on investment in the production and sale of renewable energy to tenants has proved to be on average around double the returns of investing in the underlying retail real estate in Romania.