New Europe Property Investments finds rich pickings in property market

Posted On Friday, 14 August 2015 12:00 Published by
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New Europe Property Investments grows its recurring distributable earnings per share 24% year on year in the first half of this year, thanks to acquisitions and developments.

Martin Slabbert

Romania-focused shopping mall owner New Europe Property Investments (Nepi) grew its recurring distributable earnings per share 24% year on year in the first half of this year, thanks to acquisitions and developments.

The company, which was started by a South African team, has enjoyed stellar earnings and share price growth over the past few years. Now that it has become the largest retail centre owner in Romania, it is investing in Slovakia and Serbia too. Nepi owns various retail and office assets in Romania, two malls in Slovakia and one mall in Serbia.

There has been a strong investment case for Nepi this year with the company achieving a total return of 22.77% in the first half, while the South African listed property index returned 6.61%, according to Catalyst Fund Managers.

Alexandru Morar was named CEO last week after founder Martin Slabbert resigned. Nepi achieved recurring distributable earnings per share of 17.59 euro cents for the six months to end-June, in line with its guidance. As much as 0.53c included in this amount resulted from favourable funding arrangements with the minority shareholder of its Mega Mall asset in Bucharest, Romania’s capital.

Mega Mall was completed during the reporting period. It is Nepi’s largest project so far. The mall, with gross leasable area of 75,000m², opened for trade on May 14, just 15 months after the start of construction. It has a built area of 230,000m² over five levels in densely populated eastern Bucharest.

“Mega Mall has a significant impact on retail in the city and dominates retail in eastern Bucharest. Footfall averages have been very strong and trading levels have exceeded expectations,” Mr Morar said. Maurice Shapiro, the CEO of Ma’alot Investments, said he expected Nepi’s strong share price growth to continue even if some investors believed it was overvalued. Nepi closed 0.79% higher at R141.10 yesterday.

The share price has increased nearly 352% over the past five years. “Fundamentally they trade at a large premium to net asset value so it is hard to justify the price but this has not stopped the share price from going up,” Mr Shapiro said.

Source: Business Day 

Last modified on Wednesday, 19 August 2015 09:31

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