NEPI Rockcastle, the biggest owner of shopping centres in CEE, recorded a net operating income (NOI) of €241 million in H1 2023, up by 23% compared to the same period of last year over strong rental growth and leasing activity, alongside improved cost recovery
The group’s retail sales across its portfolio of shopping centres rose by 17% in H1 2023, while the valuation of its investment assets gained 2%.
On a like-for-like basis, excluding the very positive contribution of the assets acquired in H2 2022, NOI rose 15% in the first half of this year.
“Economic growth is predicted for the majority of the markets that we operate in, and inflationary pressures seem to be receding, although the macroeconomic environment remains challenging. We continue to see growing interest from international retailers seeking to establish or expand their presence across the CEE in our shopping centres attracted by the solid underlying market fundamentals. We continue to maintain high levels of liquidity and a conservative loan to value ratio, while also rewarding our shareholders,” said Rüdiger Dany, CEO of NEPI Rockcastle.
The group signed 534 new leases and lease extensions for a total area of 123,600 sqm in H1 2023. More than 60% of the new leases were signed with international retailers. Moreover, the average rental uplift in H1 2023 was 7.5% on top of indexation, supported by asset management initiatives.
At the same time, the group’s costs of projects under construction, or permitting, is approximately €722 million (of which €287 million has already been invested). The total planned development and capex for H2 2023 is approximately €150 million.
On the financial side, the group maintained a strong liquidity profile, with €347 million in cash and €620 million in undrawn committed credit facilities at the end of H1 2023. Finance costs (including bank charges) increased by 13% from H1 2022 to H1 2023, mainly due to additional interest on the €200 million used for the financing of the acquisitions completed in 2022 and the €50 million vendor loan related to the acquisition of Forum Gdansk Shopping Centre.
The group’s board approved a dividend of €0.25 per share for H1 2023, corresponding to a 90% dividend pay-out ratio.
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