NEPI Rockcastle generated a 27% rise in net operating income (NOI) in the first quarter to €120 million (R2.5 billion), extending a trend that was accelerating through 2022 and was driven by higher rents, tight cost management and an €8.8m contribution from three acquisitions.
On a like-for-like basis the increase in NOI was 17%.
The guidance released in February 2023 that distributable earnings per share for the year would be about 11% higher than recurring 2022 distributable earnings per share was maintained.
First quarter tenant sales were 25% higher versus the same period a year ago, underpinned by a 14% increase in like-for-like footfall and an 8% rise in spend per visit. Total visits were 22% higher compared to the first quarter of 2022.
CEO Rudiger Dany said in a statement: "The exceptional performance reflects the continued momentum in the very positive retail market trends coming out of the pandemic. These have been more powerful in CEE (Central and Eastern Europe) than equivalent Western European markets because our consumers have proved more resilient and shopping centres play a much greater economic and societal role in regional cities.”
International retailers had taken note of the higher growth prospects in CEE and were signing up for leases in the group’s properties in increasing numbers.
Retail vacancy fell to 2.4%, on the back of strong interest from international retailers looking to expand their presence in the region.
NEPI Rockcastle secured a €200m green loan in March. The proceeds were used to repay the revolving credit facilities utilised for the acquisition of Forum Gdansk Shopping Center and Copernicus Shopping Centre, restoring the revolving facility capacity to €620m.
The group has no significant debt due in 2023 and liquidity remained strong with €926m in cash and available committed credit facilities.
The property portfolio value of €6.6bn was 0.4% higher compared to December 2022 due to investments in developments made during Q1 2023.
An over performance of sales compared to footfall was driven by an 8% increase in average basket size.
The development pipeline under construction or under permitting amounts to €677m, of which €271m had been spent by March 31.
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