East European shopping centre owner Nepi Rockcastle is to distance itself from the Resilient group of companies.
The company, which was formed by the merger of Romanian group Nepi and Polish-focused Rockcastle, has restructured its management team and board so that there are few links to its SA founders, who are associated with Resilient.
Since merging in July last year to create a R95bn fund, Nepi Rockcastle’s board has been reconstituted so that its executive management now only consists of Romania-based professionals.
Long-standing SA directors Spiro Noussis and Nick Matulovich are leaving the group at the end of 2018.
The Romanian team led by CEO Alex Morar and CFO Mirela Covasa produced a strong set of results for the six months to June with Nepi Rockcastle growing its dividend nearly 13%, market analysts said on Wednesday.
Keillen Ndlovu, head of listed property funds at Stanlib, said it had been business as usual for the group and that a probe into the trading of its shares had not affected the performance of a strong property portfolio.
Nepi’s share price has fallen more than 36% so far this year. It was at R135.56 on Wednesday.
The Financial Sector Conduct Authority (FSCA) is investigating the share trades of Resilient, Nepi Rockcastle, Fortress and Greenbay after allegations were made that prices had been manipulated.
Nepi Rockcastle’s directors have told investors they are co-operating with the FSCA.
Some of the partners that formed Nepi and Rockcastle were directors from Resilient and companies associated with it. Nepi was created in 2007 and Rockcastle in 2012.
On Wednesday, the company reported results for the six months to June, growing its distributable earnings per share 12.9% to €0. 2649.
Few JSE-listed property companies have managed to grow their dividends at double-digit rates in the current reporting season, with some SA-focused Reits warning that their income payouts are set to shrink over the next year.
Nesi Chetty, head of property at MMI Investments said Nepi Rockcastle has become a "well-managed shopping centre powerhouse" in Central and East Europe that operated in "markets very different from SA".
CEO Alex Morar said Nepi’s growth strategies worked.
"During the first half of the year we have consolidated our portfolio in existing markets through further acquisitions of high-quality retail properties and asset management initiatives, while expanding into the affluent Baltic states with our first deal in Lithuania," he said.
Nepi Rockcastle’s portfolio grew in value from €4.9bn to €5.3bn during the reporting period while the company firmed its position in nine countries in Central and East Europe.
Leasing activity was strong in the first half of 2018, as retailers wanted to expand into Central and East Europe to benefit from increased consumption across the region.
The company signed 360 new lease agreements for more than 107,000m² of gross lettable area, with 242 leases for 54,000m² being for units in existing shopping centres.