NEPI Rockcastle continues impressive operational performance

NEPI Rockcastle’s Chief Executive Officer, Alex Morar,.
NEPI Rockcastle’s Chief Executive Officer, Alex Morar

Nepi Rockcastle has continued outstanding operational performance during the nine months ended on the 30th of September 2018.

Highlights include:

• Net rental and related income up 4.8%, on a like-for like basis, to €252 million*.
• Tenant turnover on direct like-for-like property portfolio up 8.5%*.
• Turnover per square metre up 5.3%*.
• Collection rate maintained at 99.9%.
• Average tenant effort ratio of 11.3%**.
• Direct property portfolio up 18% to €5.8 billion (Dec 2017: €4.9 billion).
• Net listed securities portfolio down to €286 million from €593 million in December 2017, representing a decrease from 10% to 4% of the total assets, delivering on the planned redeployment of the listed securities portfolio into direct property assets. The net listed securities portfolio is estimated to decrease further to approximately 3% of total assets by year-end.

NEPI Rockcastle updates the valuation of its property portfolio in June and December each year. Fair value is determined by external, independent professional valuers with appropriate and recognised qualifications, and recent experience in the locations and category of properties being valued. Valuations for each property in investment property in use, Investment property held for sale and land held for developments, as at 30 June 2018, were performed by Cushman&Wakefield and Jones Lang LaSalle.

The group has investment-grade credit ratings from all three major credit rating agencies (Moody’s, Standard & Poor’s and Fitch), with Fitch recently reaffirming its rating.

NEPI Rockcastle’s Chief Executive Officer, Alex Morar, affirmed:

The group has continued to pursue its strategy of converting the listed securities portfolio into direct property investments through acquisitions and developments. With a high-quality asset base and operating platform, the group is best positioned to remain the leading real estate investor and operator in Central and Eastern Europe (CEE). The macroeconomic factors combined with the retail specific dynamics of the region in which the group operates to provide long-term growth opportunities for the company.”

Annual GDP growth in the countries where NEPI Rockcastle operates is currently between 2.8% and 4.5%, compared to the EU 28 average of 2.2%. Penetration of e-commerce and retail area supply relative to population in the group’s region are presented below, highlighting lower levels in CEE compared to the more developed, western markets.

The shopping centre supply in CEE is overall lower, but more modern compared to the US or Western
Europe. NEPI Rockcastle is focusing on offering to the customers the preferred social and leisure destinations, by
actively upgrading the leisure and entertainment activities in its shopping centres.

Read more here: NEPI Rockcastle Business Update