NEPI Rockcastle : Innovation, Experience, Excellence.

Ryan GrayEditorial Team
Ryan Gray - Senior Head of Projects Editorial Team

NEPI Rockcastle has established itself as the leading owner and operator of retail assets in the CEE region, helping to uphold communities and economies in nine countries.


The past 30 years have often been described as the golden age of growth for Central and Eastern Europe (CEE), the region having flourished with the emergence of traditional market economies following the fall of the Berlin Wall.

Between 1996 and 2017, Bulgaria, Croatia, Czechia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia between them recorded an average 114 percent growth in GDP per capita. By contrast, Europe’s ‘big five’ economies – France, Germany, Italy, Spain and the UK – managed just 27 percent growth in this same metric during that period.

It is no surprise, therefore, that CEE has become one of the most attractive regions for investment globally, its industries and economies continuing to thrive.

Enter NEPI Rockcastle. The largest and dominant retail real estate group in Central and Eastern Europe, it is a company that has come to epitomise the aforementioned prosperity, having grown 15-fold in the past eight years.

“The evolution of the business in recent years has been very exciting,” explains Mirela Covasa, the firm’s Chief Financial Officer and an individual that is able to recall its impressive rise having originally joined the enterprise back in 2012.

“Real estate accounts for approximately 50 percent of global assets and the industry is constantly evolving in terms of policy, technology, investment complexity and risk. It is a highly dynamic and engaging setting – especially in rapidly growing markets such as those in Eastern Europe where we operate – which challenges everyone working in this field.

“NEPI Rockcastle has achieved a lot in the past decade. Our coverage has expanded from being solely Romanian to CEE-wide, and we are now present in nine countries.”


The organisation initially started out in 2007 when New Europe Property Investments (NEPI) invested South African capital in Romanian real estate, doing so with the mandate of creating a portfolio of individually selected assets that offered long-term sustainable rental growth.

“This comprised investments in offices, and then in shopping centres as we realised the potential that retail real estate had in converting Romania’s impressive GDP growth into shareholder wealth,” Covasa adds.

“With more experience came a better understanding of the market, and we started making significant improvements to our assets, first through management initiatives such as enhancing the tenant mix and offering more entertainment options like cinemas and skating rings, and then through more complex projects like extensions and the redevelopment of properties.”

This emphasis on diversification and upgrades led NEPI to its first landmark greenfield project – Bucharest’s Mega Mall.

With a gross leasable area of 75,800 square metres and built area of more than 200,000 square metres, it quickly became one of the capital’s and indeed country’s largest constructions aside from infrastructure developments, acknowledged as a commercial and social hub for the highly populated surrounding neighbourhoods.

“We also started expanding into other CEE countries, initially Serbia and Slovakia, and then the Czech Republic, Croatia and Bulgaria,” Covasa continues. “By 2015, we had obtained our investment-grade rating, which allowed a significant shift in our funding policy from secured, asset-based debt to unsecured, group-level funding.”

Such distinct headway in turn opened a number of new doors for the company, particularly in the way of investment opportunities.

It began to further expand its portfolio with flagship malls in capital cities, acquiring Arena Centar, the largest shopping mall in Zagreb, Croatia, and the Serdika Center and Paradise Center – the top two shopping locations in Sofia, Bulgaria.

“The most significant milestone in our history to date, however, was the successful merger between NEPI and Rockcastle in 2017,” Covasa claims.

Here, the South African entity joined forces with a Poland-focussed group, Rockcastle, that had a similar investment strategy and shareholding base. The assets, expertise and knowledge of the two were combined, creating the market leader in CEE’s retail real estate.

The CFO continues: “Our Polish portfolio now includes the Bonarka City Center, Krakow, Galeria Warminska, Olsztyn and Karolinka Shopping Centre, Opole, and the merger also resulted in a credit rating upgrade to BBB, which bolstered our access to capital markets and decreased the cost of funding.”

“NEPI Rockastle has achieved a lot in the past decade. Our coverage has expanded from being solely Romanian to CEE-wide, and we are now present in nine countries”

Mirela Covasa


Indeed, the pace of progress has not slowed in the near three years since the successful completion of this merger either.

In the past three years it has proceeded to delve across borders once again into Hungary and Lithuania as well as reinforce its position in Romania and Poland, investing into existing centres and new assets such as Promenada Sibiu – a flagship development and major tourist attraction in one of Romania’s most affluent cities.

“In 2018 we also finalised our first greenfield development in Serbia, Promenada Novi Sad, after only 16 months of work,” Covasa states. “This is the largest mall in Serbia, located in the country’s second largest city which will be a 2021 European capital of culture. The mall serves a catchment area of more than 600,000 people.”

Indeed, the sheer size and breadth of NEPI Rockcastle’s portfolio is a key differentiator of the company, providing the platform for sound, consistent long-term growth prospects and a leading investment rating. Many of its assets are dominant in their individual catchment areas with limited or no competition, and are located in geographically diverse areas that are generally densely populated.

In fact, 97 percent of its assets can be found in cities with catchment areas of more than 150,000 people, with 45 percent based in capital cities and Krakow, which is of a similar size.

Its investment strategy has been crucial in facilitating this climb. Yet it is not the only way in which the company continues to stand out from the crowd, it also bringing unrivalled expertise and industry knowledge to the table.

With more than 12 years’ experience in retail real estate, NEPI Rockcastle has mastered the intricate and specialist nuances of successful asset management, leasing and development, underpinned by a best-in-industry workforce and exceptional track record.

“We have a holistically integrated platform, a team with expertise covering all areas of real estate finance, development and investment, and understand the CEE retail markets inside out, as is illustrated by our first-class indicators,” Covasa states confidently.

“Our dynamic leasing strategy, managed by our in-house team, delivers constant and seamless cross-border dialogue with anchor tenants, and these strong relationships bring notable market entries throughout our portfolio.”

To say that this vast experience makes the company conservative or static, however, would be false. Its consistent reinvestment strategy into refurbishments and expansions reflect its proactive mindset, the firm also always on the lookout to bring successful brands on board and implement progressive retail real estate concepts.

Further, the company consistently adapts its business model in line with changing consumer preferences, currently focussed on improving its portfolio in the way of food outlets, entertainment options and general user wellness in the aim of positioning its assets as pillars of communities.

Likewise, the emergence of ecommerce is undoubtedly a challenge to retail real estate, yet it is one that NEPI Rockcastle is embracing and overcoming proactively.

“Our response to ecommerce is omnichannel-focussed,” Covasa affirms.

“Lower ecommerce penetration, highly popular shopping centres and less high street outlets in Central and Eastern Europe create the perfect opportunity to successfully combine offline and online retail, providing customers with the best of both worlds. 

Monitoring tenants’ sales and effort ratios, replacing low-performing tenants with exciting new stores, and integrating online and offline by implementing online shopping pickup points and concept stores are all examples of our efforts.

“The assimilation of online delivery into the physical retail environment, through click-and-collect, delivery points and the integration of retailers’ operations with customers’ habits, also results in higher footfall and increased sales due to upselling. And we host events like light shows, TED talks, stand-up comedy, fashions shows, rooftop parties, food truck events, culinary performances, exhibitions and science fairs to back this up and increase community integration.”


Ongoing asset development and operational changes are not the only ways in which NEPI Rockcastle provides benefit to the populations that it serves.

While Covasa is happy to admit that it is highly rewarding for the company to see how these efforts contribute to growing local economies and truly impact people’s lives in a positive way, corporate governance is an alternative way in which the company delivers this in a socially responsible manner.

Indeed, it has been a major focus for the company in recent times. The firm has vastly improved its corporate governance, recognised by Sustainalytics – a leading independent provider of environmental, social and corporate governance (ESG) research and ratings – which appraised its ESG risk as low.

Likewise, FTSE4GOOD Index, which measures the performance of companies demonstrating strong ESG activities, included the company in its latest listing.

“We are committed to being a responsible corporate citizen, focussed on long-term sustainable growth,” Covasa comments. “We consistently invest in improving our buildings’ energy efficiency. All properties have good access to public transport, and we encourage green transportation alternatives such as bicycles by providing adequate facilities.

“Communities are a key stakeholder, and we focus on three main pillars in order to contribute to healthier and more responsible ecosystems, thus improving people’s lives. 

These are social and health, the environment and educating communities. We organise hundreds of activities for our customers, and we also partner with local and international NGOs by donating or designing and implementing community programmes.”

The company’s HR strategy also makes a difference, this time to the benefit of the its own employees.

“This includes targeted training programmes which empower people to add value in their current roles and help the organisation to adapt more quickly to changing business environments,” the CFO adds.


Indeed, owing to continual results in its operational endeavours, the company looks set to be able to further make inroads in the way of CSR and employee empowerment moving forward.

The company’s highly impressive 2019 financial results, published February 20, 2020, are reflective of this.

12 years on since its inception and three years since the completed merger, its assets continue to prosper and bolster the company’s already sound business profile, helping it to maintain strong liquidity, a growing pipeline and the opportunity to further capitalise on attractive opportunities in the markets in which it operates.

“We have achieved our targeted results in a competitive market,” Covasa says proudly.

“Net operating income grew 16 percent by comparison to the previous year, and this translated into a growth of 6.6 percent in dividends per share. Tenants turnovers and footfalls increased, and the value of our assets was over €6.2 billion at the end of the year 2019.

“We also maintained our investment grade rating, issued €1 billion unsecured Eurobonds and extended debt maturities, while our loan-to-value ratio remained prudent at 32 percent, and liquidity improved.”

With such impressive performance in mind, the future looks incredibly bright for NEPI Rockcastle.

Moving forward, the company will continue to improve its portfolio in an attempt to maximise returns for its shareholders and other stakeholders, as well as focus on honing its investment and development strategy in line with changes in the market.

Indeed, the global outbreak of COVID-19 may have some adverse effects, many of which have already come to fruition across industries of all kinds. Yet Covasa is still able to end our conversation on a confident note, iterating that the core assets of this company are strong and stable.

She concludes: “We expect to open several new projects, including finalising a new mall in Targu Mures, Romania, and are considering investments in other real estate sectors, including mixed-use projects. We are also developing a green framework, aimed at improving asset efficiency and attracting environmentally friendly financing.

“Are we optimistic? Absolutely. We have a strong business profile, strong liquidity and a highly experienced team of professionals who are constantly seeking new opportunities. We are confident that our skills and expertise will contribute to consolidating our position within the CEE – the region which registered the highest growth rate in Europe.”

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By Ryan Gray Senior Head of Projects
Ryan Gray is a Senior Head of Projects for Outlook Publishing. Ryan is responsible for showcasing corporate stories in our digital B2B magazines and Digital Platforms, and sourcing collaborations with Business Leaders, Brands, and C-suite Executives to feature in future editions. Ryan is actively seeking opportunities to collaborate. Reach out to Ryan to discover how you and your business could be our next cover story.