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Acquisition of Magnolia Park (Wroclaw, Poland) and business updates
NEPI Rockcastle N.V.
Incorporated and registered in the Netherlands
Registration number 87488329
Share code: NRP
ISIN: NL0015000RT3
('NEPI Rockcastle' or 'the Group' or 'the Company')
ACQUISITION OF MAGNOLIA PARK (WROCLAW, POLAND) AND BUSINESS UPDATES
ACQUISITION OF MAGNOLIA PARK
Stakeholders are advised that, on 27 September 2024, NEPI Rockcastle, through its wholly owned
subsidiary NE Property B.V., entered into binding agreement to acquire all the issued shares in Kasama
Investments sp. z.o.o. ('the Target'), owning Magnolia Park ('Magnolia' or 'the Property'), from
Union Investment Real Estate GmbH* on the account of open-ended real estate fund UniImmo: Europa
('the Transaction').
Magnolia is a 100,000 m2 gross lettable area ('GLA') shopping center, situated in Wroclaw, the third
largest city in Poland by population, with over 670,000 inhabitants. Wroclaw is economically one of the
strongest cities in Poland with an average spending power which exceeds the national average by 37.5%.
The city has a steadily growing population, which has accelerated in recent years, driven by Wroclaw's
status as a major university and business centre attracting many young people from the provinces, its
proximity to other major urban areas, and a significant influx of foreigners.
* Union Investment Real Estate GmbH is 90% directly held by Union Asset Management Holding AG and the
remainder held by various investors, none of whom are related parties to the Company.
RATIONALE FOR THE TRANSACTION
The acquisition represents the biggest single asset shopping centre transaction by value in CEE since at
least 2022 and is accretive to the Group's distributable earnings. The Transaction is in line with NEPI
Rockcastle's investment strategy to increase the concentration of its portfolio in countries with an
investment grade rating and focus on core dominant properties in their local markets.
With an immediate catchment area of over 360,000 people (within 15 minutes' drive) and a regional
catchment of almost 1.4 million people (within a one-hour drive), the Property enjoys a strategic location
in the city, with excellent visibility and access both by car and public transport.
Magnolia has a BREEAM Excellent (Asset Performance) certification and an outstanding occupancy
rate of more than 99%, including anchor tenants such as Carrefour, Primark, Castorama, Decathlon,
Media Markt, Peek & Cloppenburg, Zara, Half Price, H&M, Reserved, TK Maxx and Helios. The
Property has outstanding operational performance and is well positioned for future growth, both
organically and through further value enhancement.
"NEPI Rockcastle has just acquired one of the top retail assets in Poland. Magnolia has a GLA of
100,000 m2 and is a dominant shopping centre in one of the country's largest and richest cities. The
acquisition will significantly strengthen the Group's portfolio, consolidating its position as the premier
retail real estate owner in CEE with a solid track record of adding significant value to the assets acquired, as
evidenced by our most recent acquisitions. The Property has significant upside that will fuel NEPI
Rockcastle's growth in coming years." – Rudiger Dany, CEO.
SALIENT TERMS OF THE TRANSACTION
The aggregate purchase price for the Transaction is €373 million ('Purchase Price'), including the full
settlement of the Target's outstanding debt.
Closing of the Transaction is conditional only on settlement of the Purchase Price with the effective date
of the Transaction estimated to be 1 October 2024. The Purchase Price will be funded from the
Company's cash resources and credit facilities.
The purchase agreement for the Transaction contains undertakings, warranties and indemnities, which
are typical for a transaction of this nature.
DETAILS OF THE PROPERTY
Property Location Sector Monthly GLA Purchase Valuation Total cash
average m2 Price consideration
weighted paid
rent per
m2
Magnolia Wroclaw, €373 €373 €353
Park Poland Retail €19.40 100,300 million million** million
**The Purchase Price reflects the price for the acquisition of the issued shares in the Target and settlement
of debt, whilst the valuation amount reflects the value attributed to the Property by the directors of the
Company. The directors of the Company are not independent and are not registered as professional
valuers or as professional associate valuers in terms of the Property Valuers Profession Act, No 47 of
2000 in South Africa.
NEPI Rockcastle estimates the net operating income for financial year 2024 to be €25 million while the
net operating income to be achieved following the integration of the Property in the NEPI Rockcastle
group is expected to be €26.9 million. This forecast, including the assumptions on which it is based and
the financial information from which it has been prepared, is the responsibility of the directors of the
Company and has not been reviewed or reported on by the Company's auditors.
As required by the JSE Listings Requirements, NEPI Rockcastle reports that the Target registered a
statutory profit of PLN 15,756 thousand for the year ended 31 December 2023. This information has
been extracted from the 2023 annual audited financial statements of the Target, prepared in terms of
Polish accounting standards. For the purposes of this announcement NEPI Rockcastle is satisfied with
the quality of the financial statements of the Target.
CATEGORISATION OF THE TRANSACTION
The Transaction is classified as a category 2 transaction in terms of the JSE Listings Requirements and
accordingly does not require approval by NEPI Rockcastle's shareholders.
BUSINESS UPDATES
FURTHER GROWTH OPPORTUNITIES
Resilient economic growth and rising household consumption in Central and Eastern Europe (CEE),
mean NEPI Rockcastle is benefitting from strong demand from international retailers seeking space in
its core markets. As the region's leading owner, operator, and developer of shopping centres, the Group
is well-positioned to capitalize on these trends while actively advancing its acquisition pipeline. The CEE
retail sector remains one of the most attractive real estate asset classes, backed by solid operational
fundamentals, and NEPI Rockcastle continues to invest in and optimize its portfolio to enhance asset
performance.
Building on this favorable macroeconomic backdrop, the Group is also seeing increased interest from
analysts, debt, and equity investors, providing further opportunities to optimize its capital structure and
expand its shareholder base. NEPI Rockcastle remains committed to evaluating a range of financing
options, including both debt and equity, to support its growth ambitions and capitalize on market
opportunities as they emerge.
FUNDING
NEPI Rockcastle issued a EUR 500 million green bond maturing January 2032. The considerable interest
for the issue, which was 6 times oversubscribed, and the very competitive coupon of 4.25% over more
than 7 years, are strong indicators of the Group's attractiveness for capital providers.
The Company is also pleased to announce the successful increase of one of its existing revolving credit
facilities (RCF) by EUR 50 million. This increase, made possible through strong collaboration with the
Group's funding partners, raising the total available committed RCFs of the Group from EUR 620 million
to EUR 670 million, further enhances NEPI Rockcastle's financial flexibility and liquidity to support its
strategic growth initiatives.
SUSTAINABILITY FOCUS
In the 2024 European Public Real Estate Association (EPRA) Awards, NEPI Rockcastle was awarded
the EPRA Gold in Sustainability Best Practices Recommendations (sBPR), an improvement from the
Silver award received in 2023. This distinction reflects the Group's ongoing dedication to enhancing
environmental, social, and governance (ESG) reporting and performance. NEPI Rockcastle has also
successfully maintained its EPRA Gold award for Financial Best Practices Recommendations (BPR),
highlighting the Company's continued focus on transparency and the highest standards of financial
disclosures.
For further information please contact:
NEPI Rockcastle N.V.
Rudiger Dany/Eliza Predoiu +31 202 38 40 30
JSE sponsor
Java Capital +27 11 722 3050
Euronext Listing Agent
ING Bank +31 20 563 6685
Media Relations mediarelations@nepirockcastle.com
27 September 2024
Date: 27-09-2024 05:35:00
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