NEPI Rockcastle, the Johannesburg-listed commercial real estate group focused on Central and Eastern Europe, reported a 3.5% year-over-year rise in distributable earnings per share to 32.14 euro cents for the first half of 2026, alongside a 3.8% increase in net operating income to €318 million.
The company’s like-for-like organic NOI growth reached 3.3%, with energy-related NOI surging 37.6% to €5.7 million. Portfolio valuation climbed by €126 million to €8.4 billion, while the EPRA net initial yield held steady at 6.98%. Liquidity remained strong at €1.2 billion, including €740 million in undrawn revolving credit facilities, and the loan-to-value ratio was maintained at a conservative 33.1%.
Operational performance remained resilient, with an EPRA occupancy rate of 98.2% and a collection rate of 99.2%. Tenant sales growth on a like-for-like basis edged up 2.7%, outpacing the 2.6% average consumer price index. Average basket size increased 3.3% to €14.7 per visit, though footfall recorded a modest decline of 0.4%. Turnover per square meter rose 3.4% to €2,944, approaching the target range of €2,900 to €3,000.
Regional NOI growth varied, with Poland leading at 4.4% while Romania posted a more modest 1.7% increase. Leasing activity totaled 613 agreements covering 162,900 square meters of gross leasable area, with 61% renewals and 39% new leases. Base rental uplifts averaged 3.0%, exceeding the 2% effective indexation to reach 3.9% excluding incentives.
NEPI Rockcastle also expanded into Spain with the €252 million acquisition of MegaPark Barakaldo in the Basque region, adding 81,000 square meters of GLA at a 6.8% net initial yield. The asset boasts 97.3% occupancy, 12.75 million annual footfall, and €183 million in turnover, serving a catchment of 1.1 million people. Key tenants include Media Markt, Decathlon, and Adidas.
The company’s development pipeline for 2026–2028 totals €826 million, comprising €652 million for new retail and mixed-use projects across four countries, €127 million for photovoltaics and battery storage, and €47 million for residential developments in Romania. Major projects include the Promenada Bucharest extension (55,400 square meters, 95% pre-leased, Q1 2027 completion) and the Galati Retail Park (35,900 square meters, 88% pre-leased, Q3/Q4 2027 completion).
Financing activities included €549 million in new debt commitments, primarily green loans from international banks and the EBRD, with approximately 80% of interest rate exposure hedged. The group also declared a dividend of 28.93 euro cents per share for H1 2026, representing a 90% payout ratio.
Full-year 2026 NOI guidance was revised upward to a 3.5%–4.0% increase, while distributable EPS growth is projected at 3.5%–4.0% versus 2025. NEPI Rockcastle also confirmed its planned REIT conversion effective January 1, 2027.
