New Europe earnings grow significantly ahead of merger

New Europe Property Investments (Nepi), the largest owner of shopping centres in Romania, achieved doubledigit earnings growth during its 2016 financial year in the lead-up to its merger with Polish-focused Rockcastle Global Real Estate.

The two are set to be an R80bn property group and a new entrant to the JSE’s Alsi 40 companies.

“The merger will definitely make some waves as it will go straight into the Alsi 40 and provide strong distribution growth into the shortmedium term at least,” said Meago Asset Management director Jay Padayatchi.

“Consequently many local and global institutional investors and index trackers will be forced to hold the merged company.”

Nepi’s financial statements for the year to December showed its distributable earnings had grown 14.7% to 40.50 euro cents.

Financial director Mirela Covasa said this growth was due to the strong performance of Nepi’s assets, profitable acquisitions and developments completed during the year, as well as having maintained a moderate liquidity profile during the period.

“Our exceptional track record continued throughout 2016 with property portfolio growth of 47%, from €1.73bn on December 31 2015 to €2.55bn on December 31 2016,” she said.

Nepi owns and operates 871,800m² of retail space and 143,800m² of office space, including joint ventures.

During 2016, 286,200m² of retail property, including joint ventures, was added to the portfolio.