NEPI Rockcastle buys Polish shopping mall
The company acquires Alfa Centrum in Poland for €92.3m as part of its aggressive growth strategy
NEPI Rockcastle, the largest property group on the JSE with a market capitalisation of about R115bn, has bought yet another shopping centre as it continues on its aggressive growth path.
The company, which is invested across the central and eastern European region, has acquired Alfa Centrum in Bialystok in Poland for €92.3m (R1.5bn), representing an acquisition yield of about 6.7%.
NEPI Rockcastle’s share price has increased 12.59% since it was formed from the merger of New Europe Property Investments and Rockcastle Global Real Estate in July.
With a gross lettable area of 37,000m², Alfa Centrum is the largest, most dominant fashion destination in Bialystok.
According to NEPI Rockcastle, the city has about 290,000 people and Bialystok benefits from cross-border retail trade due to its proximity to the Belarussian border.
"Alfa Bialystok is located near the city centre and is close to the internal ring road, ensuring connectivity to the immediate catchment from central areas and the city’s densely inhabited districts", said NEPI Rockcastle co-CEO Spiro Noussis.
The mall was opened in 2008 and has 150 retail units.
"A positive economic environment has contributed to average tenants’ turnover growth exceeding 10% and a footfall increase of over 7% to 5.5-million in the past 12 months," said Noussis.
"We want improvements to the food court, the leisure and entertainment offering and tenant diversity," he said.
The acquisition of the Alfa Centrum mall was funded by a combination of the sale of various listed securities held by NEPI Rockcastle, in line with management’s strategy of decreasing this exposure, as well as a drawdown of its €76m, seven-year secured investment facility, provided by Berlin Hyp.
NEPI Rockcastle owns shopping centres in the eight largest economies in the central and eastern Europe region: Poland, Romania, Slovakia, the Czech Republic, Hungary, Bulgaria, Croatia and Serbia.
In October 2017 NEPI Rockcastle announced the acquisition of the Serenada shopping centre and the adjacent Krokus shopping centre, in Kraków in Poland, for €249.4m.
Fayyaz Mottiar, the head of listed property at Absa Asset Management, said NEPI Rockcastle was ably competing with foreign real estate companies.
"I believe they can deliver dividend growth of at least 15% each year. They are the biggest player in eastern Europe and have lots of room to manoeuvre. They have very low gearing of 24%, which is much lower than many other funds," he said.