NEPI Rockcastle, Europe’s third largest listed retail real estate company by portfolio size and CEE’s market-leading owner, operator and developer of shopping centres, delivered a 23 percent uplift in Net Operating Income (‘NOI’) for the first six months of 2023 (‘H1 2023’) to €241 million (H1 2022: €196 million). Distributable earnings per share increased by 24.9 percent to 28.52 euro cents for H1 2023 compared to H1 2022.
Strong rental growth and leasing activity, alongside improved cost recovery, were achieved through highly calibrated operational management, while steadily improving consumer spending and higher footfall resulted in a 17 percent jump in H1 2023 retail sales across NEPI Rockcastle’s shopping centres in the CEE region compared with the same period of 2022. The Group also recorded a 2 percent valuation increase on its investment assets.
On a like-for-like (‘LFL’) basis, excluding the very positive contribution of the assets acquired in the second half of 2022, NOI rose 15 percent in the first half of this year.
Rüdiger Dany, CEO of NEPI Rockcastle said: “NEPI Rockcastle delivered operational excellence against a backdrop of resilient growth in CEE economies underpinned by higher consumer spending and retail sales in our markets. We have achieved a very strong increase in net operating income driven by solid rental growth, lower vacancy rates and disciplined cost control, together with the positive contribution of the acquisitions completed in the second half of 2022.
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. The scrip dividend for the H2 2022 distribution, which had an 85 percent take-up rate, contributed to bringing down the loan-to-value ratio to below our 35 percent threshold. An upward revaluation of the Group’s property portfolio reflected the increasing operational performance of our shopping centres and further reduced the LTV. Distributable earnings per share increased by 25 percent in H1 2023 year-on-year and we are on track to deliver the estimated growth for the entire year.”
