Other long-term assets are classified below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Loans to participants under the Share Purchase Scheme | 890 | 3,451 |
Intangible assets | 5,822 | 5,613 |
Non-current receivables | 4,648 | 2,498 |
Total1 | 11,360 | 11,562 |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Staff costs1 | \u00a0 | (12,908) | (11,890) |
Directors\u2019 remuneration | (4,551) | (4,233) | |
Advisory services | \u00a0 | (5,635) | (4,651) |
Audit and other assurance services | \u00a0 | (2,866) | (2,402) |
Companies\u2019 administration2 | \u00a0 | (2,710) | (5,118) |
Depreciation charge for Photovoltaic panels | (447) | - | |
Depreciation charge for other property, plant and equipment3 | (490) | (648) | |
Travel and accommodation | \u00a0 | (1,695) | (1,655) |
Stock exchange expenses | \u00a0 | (851) | (772) |
Share based payment expense | \u00a0 | (3,040) | (2,000) |
Total | \u00a0 | (35,193) | (33,369) |
NEPI Rockcastle N.V. (\u201cthe Company\u201d, \u201cNEPI Rockcastle\u201d, \u201cthe Group\u201d) is a public limited company domiciled in the Netherlands, having its registered office at Strawinskylaan 563, WTC Zuidas, Tower Ten, 5th Floor, 1077 XX Amsterdam, with registration number at the Dutch Chamber of Commerce 87488329. The Company\u2019s shares are listed on the Main Board of the JSE Limited (\u201cJSE\u201d), Euronext Amsterdam and A2X.
NEPI Rockcastle is the premier owner and operator of shopping centres in Central and Eastern Europe (\u201cCEE\u201d). The Group benefits from a highly-skilled internal management team which combines asset management, development, investment, leasing and financial expertise.
The Group\u2019s Consolidated Financial Statements and the Company\u2019s Separate Financial Statements are collectively referred to as the Financial Statements. The Financial Statements for the year ended 31 December 2024 were approved by the Board of Directors on 18 March 2025 and authorised for publication on 19 March 2025.
The Consolidated Financial Statements are presented in thousands of Euros (\u201c\u20ac\u2019000s\u201d), rounded off to the nearest thousand, unless stated otherwise.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "general-data-entity-i18138": { "value": "NEPI Rockcastle N.V.", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "general-data-legalform-i18139": { "value": "public limited company", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "general-data-domicile-i18140": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "general-data-address-i18141": { "value": "Strawinskylaan 563, WTC Zuidas, Tower Ten, 5th Floor, 1077 XX Amsterdam", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "general-data-natureofoperations-i18142": { "value": "NEPI Rockcastle is the premier owner and operator of shopping centres in Central and Eastern Europe (\u201cCEE\u201d)", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i18143-1": { "value": "The Group\u2019s Consolidated Financial Statements and the Company\u2019s Separate Financial Statements are collectively referred to as the Financial Statements. The Financial Statements for the year ended 31 December 2024 were approved by the Board of Directors on 18 March 2025 and authorised for publication on 19 March 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18144-1": { "value": "The Consolidated Financial Statements have been consistently prepared in accordance with IFRS \u24c7 Accounting Standards as issued by the International Accounting Standards Board (\"IASB\"), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements, IFRS Accounting Standards as adopted by the European Union and with Title 9 of Book 2 of the Dutch Civil Code. They comprise the Company and its subsidiaries, as detailed in \u201cBasis of consolidation\u201d in Note 3.2.
The material accounting policies applied in the preparation of these Consolidated Financial Statements are set out below in Note 3 and are consistent with those applied for the preparation of the annual Consolidated Financial Statements as at 31 December 2023, except for the new mandatory standards and interpretations effective as of 1 January 2024, described below:
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
IFRS 16 Leases: Lease Liability in a Sale and Leaseback (Amendments)
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosure - Supplier Finance Arrangements (Amendments)
These standards, amendments and interpretations did not have a significant impact on the Consolidated Financial Statements as at 31 December 2024, except as indicated below:
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
The Amendments clarify what is meant by a right to defer settlement, that a right to defer settlement must exist at the end of the reporting period, that classification is unaffected by the likelihood that an entity will exercise its deferral right and the required disclosures. An entity is required to disclose when a liability arising from a loan agreement is classified as non-current and the entity\u2019s right to defer settlement is contingent on compliance with future covenants within twelve months. The Amendments have resulted in additional disclosures in Note 19, but have not had an impact on the classification of the Group\u2019s liabilities.
The Group is subject to the scope of the OECD Pillar Two model rules (\"Pillar Two\") from 1 January 2025. Pillar Two applies to multinational groups with global revenues exceeding \u20ac750 million for two consecutive years, imposing a minimum 15% tax on adjusted accounting profit on a jurisdiction-by-jurisdiction basis. If the Group's effective tax rate in certain jurisdictions falls below 15%, then the Group will be required to pay an additional tax (so-called top-up tax) to reach the 15% tax rate threshold. Based on the preliminary calculation under OECD Safe Harbour rules, the top-up tax anticipated in 2025 for the NEPI Rockcastle\u2019s jurisdictions is immaterial.
Management has prepared the financial statements on a going concern basis. Having considered the potential impact of the military conflict in Ukraine and the overall macroeconomic environment on the Company\u2019s and the wider NEPI Rockcastle Group revenues, profits, cash flows, operations, liquidity position and debt facilities, management concluded that despite the market events generated by these circumstances during 2024 and subsequent to the year-end, there are no material uncertainties relating to the Group\u2019s ability to continue as a going concern.
NEPI Rockcastle acknowledges that climate change poses both risks and opportunities to its business. The Company has conducted a comprehensive analysis of climate-related risks and opportunities for its portfolio, which is comprehensively described in the Sustainability section of the Annual Report.
Key initiatives include transitioning to renewable energy, increasing waste recycling rate, and conserving natural resources. Additionally, the Group continues to focus on BREEAM-certifying 100% of its eligible properties, fostering local employment, and enhancing visitor satisfaction. The Group also prioritises supply chain decarbonisation through local sourcing, promoting digitalisation, and evaluating procurement activities.
In 2024, NEPI Rockcastle reaffirmed its commitment to addressing climate change through strategic actions aligned with the principles of the energy hierarchy. These efforts are driving progress towards its Science-Based Targets initiative (SBTi) validated key performance indicators, establishing a structured pathway to achieve net-zero greenhouse gas (GHG) emissions by 2050. SBTi-aligned targets include reducing Scope 1 and 2 emissions by 80% by 2030 (from a 2019 baseline) and cutting Scope 3 emissions (downstream leased assets and capital expenditure) by 25% (from a 2022 baseline).
During the year, NEPI Rockcastle completed the installation of photovoltaic panels in Romania and Lithuania, achieving a total installed capacity of 38 MW across 28 properties (30 installations) and supplying 6% of the Group\u2019s total electricity consumption.
The planned extension of the green energy programme will contribute an additional 159 MW in greenfield photovoltaic plants and 15 MW in on-site production capacity, aiming to cover an additional 42% of the Group\u2019s electricity consumption1. By the end of 2026, the Group estimates a resulting combined capacity of 212 MW, covering 48% of its electricity needs (in this way, the carbon footprint will be 39% lower by reference to using non-renewable energy).
The implementation of these initiatives has an impact on the Group\u2019s financial statements, mainly through its investment strategy and the implementation of costs incurred with the aim of addressing sustainability related targets and environmental challenges.
Valuation of investment properties
In determining fair value measurement, the impact of potential climate-related matters, including legislation, which may affect the fair value measurement of assets and liabilities in the financial statements has been considered. For investment properties, the Group considers the effect of physical and transition risks and whether investors would consider those risks in their valuation. The Group has assessed whether its properties are exposed to physical risks, such as flooding and increasing wildfires, but believes that this is currently not the case. However, the Group believes it is, to some extent, impacted by transition risks, and, more specifically, increasing requirements for energy efficiency of buildings due to climate-related legislation and regulations as well as tenants\u2019 increasing demands for low-emission buildings. The Group, therefore, takes into account necessary upgrades required to ensure future compliance with those requirements when measuring the fair value of investment properties.
The value of investment properties is positively impacted by the certification of all of Group\u2019s shopping malls with the Building Research Establishment Environmental Assessment Method (BREEAM) In-Use certificates, attesting their recognition as environmentally friendly.
Operating expenses
Increased energy costs due to higher energy prices or increased energy consumption as a result of climate change could impact operating expenses. In addition, there are increased costs associated with the implementation of measures aimed at reducing GHG emissions during the construction process. At the same time, there are costs reductions associated with the implementation of lower emission technology such as solar panels, which can save on energy costs.
Energy efficiency measures underpin the Group\u2019s operational strategy, with 91% of common areas converted to LED lighting Sustainable construction practices, including the use of low-emission materials and BREEAM New Construction certifications, further supporting the Group\u2019s decarbonisation objectives, while enhancing the sustainability profile of its assets.
Funding Activity
In 2023, the Group has launched its Sustainability-Linked Finance Framework (the \u201cFramework\u201d) which can be applied for bilateral financing agreements such as Sustainability-Linked term loans, revolving credit facilities, etc, aiming to reduce the greenhouse gas emissions and increase the energy efficiency of the Group\u2019s property portfolio.
In 2024, NEPI Rockcastle extended the contractual maturities related to its unsecured committed revolving credit facilities having the sustainability-linked features, as follows:
the revolving credit facility from Raiffeisen Bank International was extended for a maturity of three years plus two extensions of one year, currently expiring in January 2028, with the maximum principal available increased to \u20ac200 million, having Erste Group Bank joining the facility
the revolving credit facility from a three-bank syndicate led by Deutsche Bank AG as arranger, was extended for one year, until January 2028, with the maximum principal available increased to \u20ac200 million, having SMBC joining the three-bank syndicate
As at 31 December 2024, the total credit revolving facilities linked either to the ESG performance of the Group through the sustainability rating provided by Sustainalytics or sustainability-linked KPIs amounted to \u20ac670 million.
Also in 2024, NEPI Rockcastle disbursed in two tranches a \u20ac445 million IFC green loan with sustainability-linked features, concluded in December 2023.
Under the existing Green Finance Framework, NEPI Rockcastle has issued \u20ac1.5 billion green bonds, including the one issued in October 2024. The Group has committed to use proceeds from green bonds to finance or refinance existing and future projects which improve the environmental performance of the Group\u2019s property portfolio, which translate into allocating all resources to environmentally sustainable assets (buildings certified as BREEAM \u201cexcellent\u201d or \u201cvery good\u201d). Going forward, both newly issued and currently outstanding bonds will be governed under the updated framework, with allocation to a single portfolio of assets, in alignment with the more rigorous eligibility criteria in the framework.
The Consolidated Financial Statements are prepared on the historical cost basis, except for investment property in use, land for investment property under development, and interest rate derivatives, which are measured at fair value.
The preparation of Consolidated Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Estimates and associated assumptions are based on experience and other factors believed to be reasonable under the circumstances and enable judgements to be made about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period when the estimate is revised.
The Consolidated Financial Statements are presented in thousands of Euros (\u201c\u20ac\u2019000s\u201d), rounded off to the nearest thousand, unless stated otherwise.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18145-1": { "value": "The material accounting policies applied in the preparation of these Consolidated Financial Statements are set out below in Note 3 and are consistent with those applied for the preparation of the annual Consolidated Financial Statements as at 31 December 2023, except for the new mandatory standards and interpretations effective as of 1 January 2024, described below:
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
IFRS 16 Leases: Lease Liability in a Sale and Leaseback (Amendments)
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosure - Supplier Finance Arrangements (Amendments)
These standards, amendments and interpretations did not have a significant impact on the Consolidated Financial Statements as at 31 December 2024, except as indicated below:
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
The Amendments clarify what is meant by a right to defer settlement, that a right to defer settlement must exist at the end of the reporting period, that classification is unaffected by the likelihood that an entity will exercise its deferral right and the required disclosures. An entity is required to disclose when a liability arising from a loan agreement is classified as non-current and the entity\u2019s right to defer settlement is contingent on compliance with future covenants within twelve months. The Amendments have resulted in additional disclosures in Note 19, but have not had an impact on the classification of the Group\u2019s liabilities.
The Group is subject to the scope of the OECD Pillar Two model rules (\"Pillar Two\") from 1 January 2025. Pillar Two applies to multinational groups with global revenues exceeding \u20ac750 million for two consecutive years, imposing a minimum 15% tax on adjusted accounting profit on a jurisdiction-by-jurisdiction basis. If the Group's effective tax rate in certain jurisdictions falls below 15%, then the Group will be required to pay an additional tax (so-called top-up tax) to reach the 15% tax rate threshold. Based on the preliminary calculation under OECD Safe Harbour rules, the top-up tax anticipated in 2025 for the NEPI Rockcastle\u2019s jurisdictions is immaterial.
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for 31 December 2024 reporting periods and have not been early adopted by the Group.
Lack of exchangeability \u2013 Amendments to IAS 21
In August 2023, the IASB issued amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity\u2019s financial performance, financial position and cash flows. The amendments will be effective for annual reporting periods beginning on or after 1 January 2025. This amendment is not expected to have a material impact on the Group.
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18, which replaces IAS 1 Presentation of Financial Statements, introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new. It also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and includes new requirements for aggregation and disaggregation of financial information based on the identified \u2018roles\u2019 of the primary financial statements (PFS) and the notes. IFRS 18, and the amendments to the other standards, is effective for reporting periods beginning on or after 1 January 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
The amendments address and acknowledge inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary. This amendment is not expected to have a material impact on the Group.
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Classification and Measurement of Financial Instruments (Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2026. Early adoption of amendments related to the classification of financial assets and the related disclosures is permitted, with the option to apply the other amendments at a later date. The amendments clarify that a financial liability is derecognised on the \u2018settlement date\u2019, when the obligation is discharged, cancelled, expired, or otherwise qualifies for derecognition. They introduce an accounting policy option to derecognise liabilities settled via electronic payment systems before the settlement date, subject to specific conditions. They also provide guidance on assessing the contractual cash flow characteristics of financial assets with environmental, social, and governance (ESG)-linked features or other similar contingent features. Additionally, they clarify the treatment of non-recourse assets and contractually linked instruments and require additional disclosures under IFRS 7 for financial assets and liabilities with contingent event references (including ESG-linked) and equity instruments classified at fair value through other comprehensive income. The amendments have not yet been endorsed by the EU. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Contracts Referencing Nature-dependent Electricity (Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2026, with earlier application permitted. The amendments include clarifying the application of the 'own-use' requirements, permitting hedge accounting if contracts in scope of the amendments are used as hedging instruments, and introduce new disclosure requirements to enable investors to understand the impact of these contracts on a company's financial performance and cash flows. The clarifications regarding the 'own-use' requirements must be applied retrospectively, but the guidance permitting hedge accounting have to be applied prospectively to new hedging relationships designated on or after the date of initial application. The amendments have not yet been endorsed by the EU. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
Annual Improvements to IFRS Accounting Standards \u2013 Volume 11
The IASB\u2019s annual improvements process deals with non-urgent, but necessary, clarifications and amendments to IFRS. In July 2024, the IASB issued Annual Improvements to IFRS Accounting Standards \u2014 Volume 11. An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2026. The Annual Improvements to IFRS Accounting Standards - Volume 11, includes amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10, and IAS 7. These amendments aim to clarify wording, correct minor unintended consequences, oversights, or conflicts between requirements in the standards. The standard has not been endorsed by the EU. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18145-2": { "value": "The material accounting policies applied in the preparation of these Consolidated Financial Statements are set out below in Note 3 and are consistent with those applied for the preparation of the annual Consolidated Financial Statements as at 31 December 2023, except for the new mandatory standards and interpretations effective as of 1 January 2024, described below:
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
IFRS 16 Leases: Lease Liability in a Sale and Leaseback (Amendments)
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosure - Supplier Finance Arrangements (Amendments)
These standards, amendments and interpretations did not have a significant impact on the Consolidated Financial Statements as at 31 December 2024, except as indicated below:
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
The Amendments clarify what is meant by a right to defer settlement, that a right to defer settlement must exist at the end of the reporting period, that classification is unaffected by the likelihood that an entity will exercise its deferral right and the required disclosures. An entity is required to disclose when a liability arising from a loan agreement is classified as non-current and the entity\u2019s right to defer settlement is contingent on compliance with future covenants within twelve months. The Amendments have resulted in additional disclosures in Note 19, but have not had an impact on the classification of the Group\u2019s liabilities.
The Group is subject to the scope of the OECD Pillar Two model rules (\"Pillar Two\") from 1 January 2025. Pillar Two applies to multinational groups with global revenues exceeding \u20ac750 million for two consecutive years, imposing a minimum 15% tax on adjusted accounting profit on a jurisdiction-by-jurisdiction basis. If the Group's effective tax rate in certain jurisdictions falls below 15%, then the Group will be required to pay an additional tax (so-called top-up tax) to reach the 15% tax rate threshold. Based on the preliminary calculation under OECD Safe Harbour rules, the top-up tax anticipated in 2025 for the NEPI Rockcastle\u2019s jurisdictions is immaterial.
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for 31 December 2024 reporting periods and have not been early adopted by the Group.
Lack of exchangeability \u2013 Amendments to IAS 21
In August 2023, the IASB issued amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity\u2019s financial performance, financial position and cash flows. The amendments will be effective for annual reporting periods beginning on or after 1 January 2025. This amendment is not expected to have a material impact on the Group.
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18, which replaces IAS 1 Presentation of Financial Statements, introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new. It also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and includes new requirements for aggregation and disaggregation of financial information based on the identified \u2018roles\u2019 of the primary financial statements (PFS) and the notes. IFRS 18, and the amendments to the other standards, is effective for reporting periods beginning on or after 1 January 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
The amendments address and acknowledge inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary. This amendment is not expected to have a material impact on the Group.
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Classification and Measurement of Financial Instruments (Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2026. Early adoption of amendments related to the classification of financial assets and the related disclosures is permitted, with the option to apply the other amendments at a later date. The amendments clarify that a financial liability is derecognised on the \u2018settlement date\u2019, when the obligation is discharged, cancelled, expired, or otherwise qualifies for derecognition. They introduce an accounting policy option to derecognise liabilities settled via electronic payment systems before the settlement date, subject to specific conditions. They also provide guidance on assessing the contractual cash flow characteristics of financial assets with environmental, social, and governance (ESG)-linked features or other similar contingent features. Additionally, they clarify the treatment of non-recourse assets and contractually linked instruments and require additional disclosures under IFRS 7 for financial assets and liabilities with contingent event references (including ESG-linked) and equity instruments classified at fair value through other comprehensive income. The amendments have not yet been endorsed by the EU. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Contracts Referencing Nature-dependent Electricity (Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2026, with earlier application permitted. The amendments include clarifying the application of the 'own-use' requirements, permitting hedge accounting if contracts in scope of the amendments are used as hedging instruments, and introduce new disclosure requirements to enable investors to understand the impact of these contracts on a company's financial performance and cash flows. The clarifications regarding the 'own-use' requirements must be applied retrospectively, but the guidance permitting hedge accounting have to be applied prospectively to new hedging relationships designated on or after the date of initial application. The amendments have not yet been endorsed by the EU. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
Annual Improvements to IFRS Accounting Standards \u2013 Volume 11
The IASB\u2019s annual improvements process deals with non-urgent, but necessary, clarifications and amendments to IFRS. In July 2024, the IASB issued Annual Improvements to IFRS Accounting Standards \u2014 Volume 11. An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2026. The Annual Improvements to IFRS Accounting Standards - Volume 11, includes amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10, and IAS 7. These amendments aim to clarify wording, correct minor unintended consequences, oversights, or conflicts between requirements in the standards. The standard has not been endorsed by the EU. The Group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18145-3": { "value": "Management has prepared the financial statements on a going concern basis. Having considered the potential impact of the military conflict in Ukraine and the overall macroeconomic environment on the Company\u2019s and the wider NEPI Rockcastle Group revenues, profits, cash flows, operations, liquidity position and debt facilities, management concluded that despite the market events generated by these circumstances during 2024 and subsequent to the year-end, there are no material uncertainties relating to the Group\u2019s ability to continue as a going concern.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18147-3": { "value": "The Consolidated Financial Statements have been consistently prepared in accordance with IFRS \u24c7 Accounting Standards as issued by the International Accounting Standards Board (\"IASB\"), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements, IFRS Accounting Standards as adopted by the European Union and with Title 9 of Book 2 of the Dutch Civil Code. They comprise the Company and its subsidiaries, as detailed in \u201cBasis of consolidation\u201d in Note 3.2.
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18156-1": { "value": "The preparation of Consolidated Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Estimates and associated assumptions are based on experience and other factors believed to be reasonable under the circumstances and enable judgements to be made about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period when the estimate is revised.
The Group\u2019s management discusses with the Audit Committee the development, selection and disclosure of the Group\u2019s material accounting policies, as well as their application.
The estimates and associated assumptions are based on historical experience and various other factors which are considered reasonable under the circumstances. These are used to make judgements about the carrying values of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates.
The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period when the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both.
Judgements that have the most significant effect on the amounts recognised in the Consolidated Financial Statements and estimates that can cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year are detailed below.
Investment property is stated at its fair value based on valuation reports prepared by international appraisers as at 30 June and 31 December each year. Valuations are based on discounted cash flow projections based on reliable estimates of future cash flows, using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows. These are supported by the terms of any existing lease and other contracts and by external evidence such as current market rents for similar properties in the same location and condition.
In preparing the valuation reports on the Group\u2019s investment property, the external appraisers excluded distressed sales when considering comparable sales prices (used for valuation of plots of land held for development). Management reviewed the appraisers\u2019 assumptions relating to the discounted cash flow models used in the valuations and confirmed that factors such as the discount rate applied have been appropriately determined considering the market conditions at the end of the reporting period.
Valuations of the income generating properties are based on cash flow statements, in which the present value of net operating income during a ten-year period and the residual value of the property at the end of the period are calculated.
Forecasts of net operating income are based on leases signed at the time of the valuation date, the estimated rental values for existing leases when they expire and the estimated achievable rental values of the existing vacancies. The value of long-term vacancies is estimated based on the properties\u2019 location and condition. The valuers\u2019 assessments of non-recoverable expenses are based on their experience of comparable properties and historical costs provided by the Group.
The discount rates used are nominal returns on total capital before tax and vary between 7.80% and 11.95% (2023: 7.90% and 11.95%). The required rates of return are based on assessments of the market\u2019s required returns for similar properties. The discount rate is set individually for each property and is based on the condition and location, the stability of the tenants and lease duration.
Further information relating to sensitivity of material accounting estimates used in the valuation of investment property is presented in Note 8.
In assessing the functional currency of the Group, including the Company and its subsidiaries, management considers factors such as the local currencies of the countries where the Group operates, as well as the currency that mainly influences rental prices for its properties, the currency that mostly influences labour, material and other costs of providing its services, the currency in which funding is accessed by the Group.
Although the competitive forces and regulations that determine the sales prices of goods and services are present in the countries which use different currencies than EUR, the macroeconomic developments in these countries to some extent is influenced by the eurozone. In addition, in real estate, leases agreements in the countries where the Group operates, as well as the financing of properties are generally denominated in EUR.
The Group predominately concludes its lease agreements in Euro (or, if these contracts are not concluded in Euro, they are indexed to the Euro exchange rate), even if invoiced in local currencies. Agreements for construction and development of investment properties are negotiated and concluded in EUR. Administrative and corporate expenses, such as advisory fees, audit fees, valuation fees, asset management fees are mostly negotiated and contracted in EUR. Salary and other employee related costs, although denominated in local currencies, are benchmarked to EUR.
Financing contracted by the Group, which include bonds, unsecured credit facilities and secured bank loans is denominated and settled in EUR. Interest paid on bank loans is linked to Euribor. Intra-group funding for property development is also denominated and settled in EUR.
In terms of transactions on the real estate market, acquisitions and sales of properties are negotiated and contracted in EUR in all jurisdictions the Group operate, due to the active international investors in those markets. This is also substantiated in external valuation reports, as valuations of properties are prepared in EUR.
In conclusion, management assessed that EUR is the functional currency for the Group, including the Company and its subsidiaries.
The Group is subject to income taxes on taxable profits of its companies\u2019 operating in all jurisdictions. The calculation of the Group\u2019s tax charge and provisions for income taxes necessarily involves a degree of estimation and judgment in evaluating the nature of its companies\u2019 transactions and their respective tax treatment.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.
Portfolio valuation: sensitivity to changes in the discount rate, exit rate and rental income
The tables below present the change in the valuation of the shopping centre portfolio using different discount rate, exit rate and rental income assumptions than those used by the appraisers as at 31 December 2024:
Discount rate variance | ||||
|---|---|---|---|---|
Country | (50 bps) | (25 bps) | 25 bps | 50 bps |
Romania | 3.39% | 1.69% | -1.60% | -3.19% |
Poland | 3.15% | 1.24% | -2.25% | -3.50% |
Slovakia | 3.52% | 1.76% | -1.72% | -3.39% |
Hungary | 3.67% | 1.81% | -1.78% | -3.50% |
Bulgaria | 2.04% | 1.00% | -0.97% | -1.91% |
Croatia | 3.20% | 1.62% | -1.70% | -3.39% |
Czech Republic | 3.54% | 1.74% | -1.74% | -3.38% |
Lithuania | 3.30% | 1.65% | -1.65% | -3.24% |
Total | 3.22% | 1.49% | -1.81% | -3.25% |
Exit rate variance | ||||
|---|---|---|---|---|
Country | (50 bps) | (25 bps) | 25 bps | 50 bps |
Romania | 6.94% | 3.36% | -3.10% | -6.03% |
Poland | 7.76% | 3.73% | -3.47% | -6.71% |
Slovakia | 7.60% | 3.65% | -3.41% | -6.62% |
Hungary | 8.15% | 3.92% | -3.65% | -7.06% |
Bulgaria | 5.06% | 2.39% | -2.14% | -4.06% |
Croatia | 5.80% | 2.98% | -3.20% | -6.63% |
Czech Republic | 7.46% | 3.65% | -3.38% | -6.48% |
Lithuania | 6.41% | 3.05% | -2.93% | -5.68% |
Total | 7.09% | 3.43% | -3.21% | -6.24% |
Rental Income (ERV) | ||||
|---|---|---|---|---|
Country | -10% | -5% | 5% | 10% |
Romania | -9.99% | -4.98% | 5.03% | 10.04% |
Poland | -7.49% | -3.74% | 3.79% | 7.57% |
Slovakia | -8.53% | -4.27% | 4.23% | 8.48% |
Hungary | -8.33% | -4.17% | 4.16% | 8.33% |
Bulgaria | -7.27% | -3.65% | 3.67% | 7.37% |
Croatia | -7.42% | -3.73% | 3.69% | 7.39% |
Czech Republic | -8.27% | -4.14% | 4.14% | 8.27% |
Lithuania | -5.68% | -2.87% | 2.87% | 5.80% |
Total | -8.46% | -4.23% | 4.26% | 8.51% |
The preparation of Consolidated Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Estimates and associated assumptions are based on experience and other factors believed to be reasonable under the circumstances and enable judgements to be made about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period when the estimate is revised.
The Group\u2019s management discusses with the Audit Committee the development, selection and disclosure of the Group\u2019s material accounting policies, as well as their application.
The estimates and associated assumptions are based on historical experience and various other factors which are considered reasonable under the circumstances. These are used to make judgements about the carrying values of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates.
The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period when the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both.
Judgements that have the most significant effect on the amounts recognised in the Consolidated Financial Statements and estimates that can cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year are detailed below.
Investment property is stated at its fair value based on valuation reports prepared by international appraisers as at 30 June and 31 December each year. Valuations are based on discounted cash flow projections based on reliable estimates of future cash flows, using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows. These are supported by the terms of any existing lease and other contracts and by external evidence such as current market rents for similar properties in the same location and condition.
In preparing the valuation reports on the Group\u2019s investment property, the external appraisers excluded distressed sales when considering comparable sales prices (used for valuation of plots of land held for development). Management reviewed the appraisers\u2019 assumptions relating to the discounted cash flow models used in the valuations and confirmed that factors such as the discount rate applied have been appropriately determined considering the market conditions at the end of the reporting period.
Valuations of the income generating properties are based on cash flow statements, in which the present value of net operating income during a ten-year period and the residual value of the property at the end of the period are calculated.
Forecasts of net operating income are based on leases signed at the time of the valuation date, the estimated rental values for existing leases when they expire and the estimated achievable rental values of the existing vacancies. The value of long-term vacancies is estimated based on the properties\u2019 location and condition. The valuers\u2019 assessments of non-recoverable expenses are based on their experience of comparable properties and historical costs provided by the Group.
The discount rates used are nominal returns on total capital before tax and vary between 7.80% and 11.95% (2023: 7.90% and 11.95%). The required rates of return are based on assessments of the market\u2019s required returns for similar properties. The discount rate is set individually for each property and is based on the condition and location, the stability of the tenants and lease duration.
Further information relating to sensitivity of material accounting estimates used in the valuation of investment property is presented in Note 8.
In assessing the functional currency of the Group, including the Company and its subsidiaries, management considers factors such as the local currencies of the countries where the Group operates, as well as the currency that mainly influences rental prices for its properties, the currency that mostly influences labour, material and other costs of providing its services, the currency in which funding is accessed by the Group.
Although the competitive forces and regulations that determine the sales prices of goods and services are present in the countries which use different currencies than EUR, the macroeconomic developments in these countries to some extent is influenced by the eurozone. In addition, in real estate, leases agreements in the countries where the Group operates, as well as the financing of properties are generally denominated in EUR.
The Group predominately concludes its lease agreements in Euro (or, if these contracts are not concluded in Euro, they are indexed to the Euro exchange rate), even if invoiced in local currencies. Agreements for construction and development of investment properties are negotiated and concluded in EUR. Administrative and corporate expenses, such as advisory fees, audit fees, valuation fees, asset management fees are mostly negotiated and contracted in EUR. Salary and other employee related costs, although denominated in local currencies, are benchmarked to EUR.
Financing contracted by the Group, which include bonds, unsecured credit facilities and secured bank loans is denominated and settled in EUR. Interest paid on bank loans is linked to Euribor. Intra-group funding for property development is also denominated and settled in EUR.
In terms of transactions on the real estate market, acquisitions and sales of properties are negotiated and contracted in EUR in all jurisdictions the Group operate, due to the active international investors in those markets. This is also substantiated in external valuation reports, as valuations of properties are prepared in EUR.
In conclusion, management assessed that EUR is the functional currency for the Group, including the Company and its subsidiaries.
The Group is subject to income taxes on taxable profits of its companies\u2019 operating in all jurisdictions. The calculation of the Group\u2019s tax charge and provisions for income taxes necessarily involves a degree of estimation and judgment in evaluating the nature of its companies\u2019 transactions and their respective tax treatment.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.
Portfolio valuation: sensitivity to changes in the discount rate, exit rate and rental income
The tables below present the change in the valuation of the shopping centre portfolio using different discount rate, exit rate and rental income assumptions than those used by the appraisers as at 31 December 2024:
Discount rate variance | ||||
|---|---|---|---|---|
Country | (50 bps) | (25 bps) | 25 bps | 50 bps |
Romania | 3.39% | 1.69% | -1.60% | -3.19% |
Poland | 3.15% | 1.24% | -2.25% | -3.50% |
Slovakia | 3.52% | 1.76% | -1.72% | -3.39% |
Hungary | 3.67% | 1.81% | -1.78% | -3.50% |
Bulgaria | 2.04% | 1.00% | -0.97% | -1.91% |
Croatia | 3.20% | 1.62% | -1.70% | -3.39% |
Czech Republic | 3.54% | 1.74% | -1.74% | -3.38% |
Lithuania | 3.30% | 1.65% | -1.65% | -3.24% |
Total | 3.22% | 1.49% | -1.81% | -3.25% |
Exit rate variance | ||||
|---|---|---|---|---|
Country | (50 bps) | (25 bps) | 25 bps | 50 bps |
Romania | 6.94% | 3.36% | -3.10% | -6.03% |
Poland | 7.76% | 3.73% | -3.47% | -6.71% |
Slovakia | 7.60% | 3.65% | -3.41% | -6.62% |
Hungary | 8.15% | 3.92% | -3.65% | -7.06% |
Bulgaria | 5.06% | 2.39% | -2.14% | -4.06% |
Croatia | 5.80% | 2.98% | -3.20% | -6.63% |
Czech Republic | 7.46% | 3.65% | -3.38% | -6.48% |
Lithuania | 6.41% | 3.05% | -2.93% | -5.68% |
Total | 7.09% | 3.43% | -3.21% | -6.24% |
Rental Income (ERV) | ||||
|---|---|---|---|---|
Country | -10% | -5% | 5% | 10% |
Romania | -9.99% | -4.98% | 5.03% | 10.04% |
Poland | -7.49% | -3.74% | 3.79% | 7.57% |
Slovakia | -8.53% | -4.27% | 4.23% | 8.48% |
Hungary | -8.33% | -4.17% | 4.16% | 8.33% |
Bulgaria | -7.27% | -3.65% | 3.67% | 7.37% |
Croatia | -7.42% | -3.73% | 3.69% | 7.39% |
Czech Republic | -8.27% | -4.14% | 4.14% | 8.27% |
Lithuania | -5.68% | -2.87% | 2.87% | 5.80% |
Total | -8.46% | -4.23% | 4.26% | 8.51% |
The material accounting policies set out below have been consistently applied to all periods presented.
The Consolidated Financial Statements are presented in Euro (\u201c\u20ac\u201d, \u201cEUR\u201d) thousands unless otherwise stated, which is NEPI Rockcastle\u2019s functional and presentation currency. The assessment of the functional currency of the Group is presented in Note 4 \u2013 Significant Accounting Estimates and Judgements in Applying Accounting Policies.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re\u2011measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year\u2011end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
The Consolidated Financial Statements incorporate the assets, liabilities, operating results and cash flows of the Company and its subsidiaries.
Subsidiaries are all entities controlled by the Company. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date the control commences until the date the control ceases.
These Consolidated Financial Statements include the Company and the fully consolidated subsidiaries, as set out below:
No | Subsidiary | Country of | Principal activity | Effective interest 2024 (%) | Effective interest 2023 (%) |
|---|---|---|---|---|---|
1 | ACE3 Sp. z o.o. | Poland | Property-owning | 100 | 100 |
2 | Arena Center Zagreb d.o.o. | Croatia | Property-owning | 100 | 100 |
3 | AUPARK Kosice SC, s.r.o. | Slovakia | Services | 100 | 100 |
4 | AUPARK Kosice, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
5 | AUPARK Piestany SC, s.r.o. | Slovakia | Services | 100 | 100 |
6 | AUPARK Piestany, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
7 | AUPARK Tower Kosice, s.r.o. | Slovakia | Property-owning | 100 | 100 |
8 | AUPARK \u017dilina SC a.s. | Slovakia | Services | 100 | 100 |
9 | AUPARK \u017dilina, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
10 | Aurora Mall Buzau SRL | Romania | Property-owning | 100 | 100 |
11 | Bia\u0142ystok Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
12 | Bonarka City Center Sp. z o.o. | Poland | Property-owning | 100 | 100 |
13 | Braila Promenada Mall SRL | Romania | Property-owning | 100 | 100 |
14 | Brasov Shopping City SRL | Romania | Property-owning | 100 | 100 |
15 | Bulfeld EOOD | Bulgaria | Property-owning | 100 | 100 |
16 | CEE Property Bulgaria EOOD | Bulgaria | Property-owning | 100 | 100 |
17 | CHP 1 Sp. z o.o. | Poland | Services | 100 | 100 |
18 | City Park Constanta SRL | Romania | Property-owning | 100 | 100 |
19 | Constanta Shopping City SRL | Romania | Property-owning | 100 | 100 |
20 | Copernicus Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
21 | Deva Shopping City SRL | Romania | Property-owning | 100 | 100 |
22 | Elco Energy Sp. z o.o.1 | Poland | Services | 100 | - |
23 | Elco ICT Sp. z o.o.1 | Poland | Services | 100 | - |
24 | Energit Sp. z o.o. | Poland | Services | 100 | 100 |
25 | E-Power Supply d.o.o. Beograd | Serbia | Services | 100 | 100 |
26 | E-power supply EOOD | Bulgaria | Services | 100 | 100 |
27 | E-power supply Kft2 | Hungary | Services | 100 | - |
28 | E-power supply management d.o.o. | Croatia | Services | 100 | 100 |
29 | E-Power Supply s.r.o. | Slovakia | Services | 100 | 100 |
30 | Expo Real Estate Project SRL | Romania | Services | 100 | 100 |
31 | Festival Shopping Center SRL | Romania | Property-owning | 100 | 100 |
32 | Floreasca Center SRL | Romania | Holding | 100 | 100 |
33 | Forum Gdansk Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
34 | FORUM Usti s.r.o. | Czech Republic | Property-owning | 100 | 100 |
35 | Galati Shopping City SRL | Romania | Property-owning | 100 | 100 |
36 | General Building Management SRL | Romania | Property-owning | 100 | 100 |
37 | General Investment SRL | Romania | Property-owning | 100 | 100 |
38 | Gontar Sp. z o.o. | Poland | Property-owning | 100 | 100 |
39 | HANSA Immobilien EOOD | Bulgaria | Property-owning | 100 | 100 |
40 | Iris Titan Shopping Center SRL | Romania | Property-owning | 100 | 100 |
41 | Karolinka Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
42 | Liberec Property s.r.o. | Czech Republic | Property-owning | 100 | 100 |
43 | Magnolia Property Sp. z o.o.1 | Poland | Property-owning | 100 | - |
44 | Mammut Zrt | Hungary | Property-owning | 100 | 100 |
45 | Mammut Management Kft | Hungary | Services | 100 | 100 |
46 | Mammut Real Estate Kft | Hungary | Property-owning | 100 | 100 |
47 | Marapi Sp. z o.o. | Poland | Property-owning | 100 | 100 |
48 | Mega Mall Bucuresti SRL | Romania | Property-owning | 100 | 100 |
49 | Milvus Sp. z o.o. | Poland | Property-owning | 100 | 100 |
50 | Mlyny a.s. | Slovakia | Property-owning | 100 | 100 |
51 | Monarda Sp. z o.o. | Poland | Property-owning | 100 | 100 |
52 | MUNTENIA BETON MAX SRL1 | Romania | Services | 100 | - |
53 | NE Property B.V. | Netherlands | Holding | 100 | 100 |
54 | NEPI Bucharest One SRL | Romania | Property-owning | 100 | 100 |
55 | NEPI Bucharest Two SRL | Romania | Property-owning | 100 | 100 |
56 | NEPI Croatia Management d.o.o. | Croatia | Services | 100 | 100 |
57 | NEPI Czech Management s.r.o. | Czech Republic | Services | 100 | 100 |
58 | Nepi Four Real Estate Solutions SRL | Romania | Holding | 100 | 100 |
59 | NEPI Investment Management SRL | Romania | Services | 100 | 100 |
60 | NEPI Project Four EOOD | Bulgaria | Property-owning | 100 | 100 |
61 | NEPI Project One EOOD | Bulgaria | Property-owning | 100 | 100 |
62 | NEPI Project Three EOOD | Bulgaria | Services | 100 | 100 |
63 | NEPI Project Two EOOD | Bulgaria | Holding | 100 | 100 |
64 | NEPI Real Estate Development d.o.o. | Serbia | Services | 100 | 100 |
65 | NEPI Real Estate Project One d.o.o. (sold in 2024) | Serbia | Property-owning | - | 100 |
66 | NEPI Rockcastle Green Energy B.V.2 | Netherlands | Services | 100 | - |
67 | NEPI Rockcastle Hungary Kft | Hungary | Services | 100 | 100 |
68 | NEPI Rockcastle Lithuania UAB | Lithuania | Services | 100 | 100 |
69 | Nepi Seventeen Land Development SRL | Romania | Services | 100 | 100 |
70 | NEPI Six Development SRL | Romania | Services | 100 | 100 |
71 | Nepi Sixteen Real Estate Investment SRL | Romania | Holding | 100 | 100 |
72 | Nepi Slovak Centres One a.s. | Slovakia | Services | 100 | 100 |
73 | NEPI Slovakia Management s.r.o. | Slovakia | Services | 100 | 100 |
74 | NEPI Ten Development Solutions SRL | Romania | Property-owning | 100 | 100 |
75 | Nepi Twenty Real Estate Development SRL | Romania | Services | 100 | 100 |
76 | Nepi Twenty-One Investment Estate SRL | Romania | Services | 100 | 100 |
77 | Nepi Twenty-Three Investment Solutions SRL | Romania | Property-owning | 100 | 100 |
78 | NEPIOM Ltd | Malta | Holding | 100 | 100 |
79 | New Energy Management SRL | Romania | Services | 100 | 100 |
80 | Nobilia Sp. z o.o. (merged with Energit Sp. z o.o. in 2024) | Poland | Services | - | 100 |
81 | NRE Sibiu Shopping City SRL | Romania | Property-owning | 100 | 100 |
82 | Olsztyn Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
83 | Otopeni Warehouse and Logistics SRL (sold in 2024) | Romania | Property-owning | - | 100 |
84 | Piotrk\u00f3w Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
85 | Platan Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
86 | Ploiesti Shopping City SRL | Romania | Property-owning | 100 | 100 |
87 | Pogoria Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
88 | Promenada Mall Bucuresti SRL | Romania | Property-owning | 100 | 100 |
89 | Ramnicu Valcea Shopping City SRL | Romania | Property-owning | 100 | 100 |
90 | Real Estate Asset Management SRL | Romania | Services | 100 | 100 |
91 | Retail Park Pitesti SRL | Romania | Property-owning | 100 | 100 |
92 | Rockcastle Europe Limited (wound up in 2024) | Mauritius | Holding | - | 100 |
93 | Rockcastle Poland Sp. z o.o. | Poland | Services | 100 | 100 |
94 | Satu Mare Shopping City SRL | Romania | Property-owning | 100 | 100 |
95 | SCP s.r.o. | Slovakia | Property-owning | 100 | 100 |
96 | Severin Shopping Center SRL | Romania | Property-owning | 100 | 100 |
97 | Shopping City Piatra Neamt SRL | Romania | Property-owning | 100 | 100 |
98 | Sibiu Shopping City 2 SRL | Romania | Property-owning | 100 | 100 |
99 | Silesia Property Sp. z o.o.1 | Poland | Property-owning | 100 | - |
100 | Shopping City Timisoara SRL | Romania | Property-owning | 100 | 100 |
101 | ShoppingSpot Sp. z o.o. | Poland | Services | 100 | 100 |
102 | Sofia Commercial Centre EOOD | Bulgaria | Services | 100 | 100 |
103 | Solpower Energy SRL1 | Romania | Services | 100 | - |
104 | Stichting NEPI Rockcastle Incentive Plan Foundation | Netherlands | Services | 100 | 100 |
105 | Symmetry Arena Kft | Hungary | Property-owning | 100 | 100 |
106 | Targu Jiu Development SRL | Romania | Property-owning | 100 | 100 |
107 | Targu Mures Shopping City SRL | Romania | Property-owning | 100 | 100 |
108 | Tummam Kft | Hungary | Property-owning | 100 | 100 |
109 | U\u017edaroji akcin\u0117 bendrov\u0117 Ozantis | Lithuania | Property-owning | 100 | 100 |
110 | Vulcan Residential Park SRL | Romania | Property-owning | 100 | 100 |
111 | Vulcan Value Centre SRL | Romania | Property-owning | 100 | 100 |
112 | Zielona G\u00f3ra Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
Intra-group balances and transactions, and any gains and losses or income and expenses arising from intra-group transactions, as well as investments in subsidiaries and corresponding equity in the subsidiaries are eliminated in preparing the Consolidated Financial Statements.
Investment property is held to earn rental income, capital appreciation or both.
The cost of investment property acquired by any other means than a business combination consists of the purchase price and directly attributable expenditure.
Subsequent expenditure relating to investment property is capitalised when future economic benefits from the use of the asset are probable and the cost of the item can be measured reliably. All other subsequent expenditure is recognised as an expense during the period it is incurred.
After initial recognition, investment property in use is measured at fair value. Fair value is determined semi-annually by external, independent professional valuers, with appropriate and recognised qualifications and recent experience in the location and category of property being valued. Valuations are based on the income method, respectively, the applied method used for all investment property in use is discounted cash flow (\u201cDCF\u201d).
Gains or losses arising from changes in the fair values are included in the Statement of comprehensive income for the period during which they arise. Unrealised gains or losses, net of deferred tax, are non-distributable.
Lease incentives, such as rent-free periods, discounts during the lease or payment of fit-out works for the benefit of the tenants, are part of value of the investment property and are straight-lined over the lease term. The lease term corresponds to the contractual duration for the majority of the leases, except for the anchor tenants, for which the lease duration is assessed by the Group based on past experience and taking into account factors such as: GLA of the property where the anchor tenant is located, catchment area, dominance/competition in the catchment area or purchasing power.
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use.
Property that is being constructed or developed for future use as investment property is classified as investment property under development and carried at cost until construction or development is complete, or its fair value can be reliably determined.
The land on which investment property is constructed or developed is carried at fair value, which is determined semi-annually by external, independent professional valuers, with appropriate and recognised qualifications and recent experience in the location and category of property being valued. Valuations are performed using the market comparable approach or residual approach.
Gains or losses arising from changes in the fair values are included in the Statement of comprehensive income during the period when they arise. Unrealised gains or losses, net of deferred tax, are non-distributable.
An investment property or a group of assets including an investment property (disposal group) are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. For this to be the case:
the assets must be available for immediate sale in their present condition;
the Group must be committed to sell;
there must be a plan to locate a buyer; and
it is highly probable that a sale will be completed within one year from the date of classification.\u00a0
On re-classification as held for sale, investment property that is measured at fair value continues to be measured in this way.
An investment property or disposal group classified as held for sale is presented separately in the Statement of financial position as assets or liabilities classified as held for sale.
Property, plant and equipment are valued at their cost price, net of accumulated depreciation and accumulated impairment losses, if any. The cost price includes all directly attributable costs and the relevant part of the indirect costs incurred to make the asset ready for use. Subsequent costs are included in the asset\u2019s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance costs are recognised in profit or loss as incurred.
Construction in progress is stated at cost, net of accumulated impairment losses, if any.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:
Photovoltaic panels | 15-20 years |
Office equipment | 2-16 years |
Office improvements | over the term of the underlying lease |
Equipment used in owner-managed activities | 3-22 years |
The expected useful lives of assets and methods of depreciation are reviewed at least annually.
Goodwill arises upon business combination and represents the excess of the consideration transferred over the Group\u2019s interest in net fair value of the net identifiable assets, liabilities, and contingent liabilities of the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (\u201cCGUs\u201d), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and it is represented by the individual properties.
Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non\u2011financial assets, other than goodwill and intangible assets with infinitive useful life, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date, if indicators of reversal exist.
In line with IFRS 9 \u201cFinancial instruments\u201d, the Group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value through profit or loss; and
those to be measured at amortised cost.
The classification and subsequent measurement of debt instruments financial assets depends on: (i) the Group\u2019s business model for managing the related assets portfolio and (ii) the cash flow characteristics of the asset.
For financial assets measured at fair value through profit or loss (\u201cFVTPL\u201d), gains and losses are recorded in profit or loss.
All purchases and sales of financial assets that require delivery within the time frame established by regulation or market convention (\u201cregular way\u201d purchases and sales) are recorded at trade date, which is the date when the Group commits to deliver a financial instrument. All other purchases and sales are recognized when the entity becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group have transferred substantially all the risks and rewards of ownership.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Fair value at initial recognition is best evidenced by the transaction price.
Subsequent measurement of debt instruments depends on the Group\u2019s business model for managing the asset and the cash flow characteristics of the asset: assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest (\u201cSPPI\u201d) are measured at amortised cost. Any gain or loss arising on derecognition is recognised directly in profit or loss. Impairment losses are presented as separate line item in the Statement of comprehensive income. Financial assets measured at amortised cost (\u201cAC\u201d) comprise cash and cash equivalents, loans to participants in the Share Purchase Scheme, long-term receivables and trade and other receivables (excluding prepaid expenses).
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period.
In line with IFRS 9 \u201cFinancial instruments\u201d, the Group assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost. The Group measures ECL and recognises credit loss allowance on an annual basis. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of any loss is recognised in the Statement of comprehensive income (profit or loss). Debt instruments measured at amortised cost are presented in the balance sheet net of the allowance for ECL.
ECLs are recognised for loans granted in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Expected credit losses for trade receivables are recognised using the simplified approach. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Financial instruments are reclassified only when the business model for managing those assets changes. The reclassification has a prospective effect and takes place from the start of the first reporting period following the change.
Financial assets are written-off, in whole or in part, when the Group has exhausted all practical recovery efforts and has concluded that there is no reasonable expectation of recovery. The write-off represents a derecognition event. Indicators that there is no reasonable expectation of recovery include, among others, insolvency or significant financial difficulties of the tenant, default on payment terms and vacation or abandonment of the leased premises. Impaired trade and other receivables are derecognised when all reasonable efforts to collect the amounts outstanding have failed and they are assessed as uncollectable.
The Group sometimes renegotiates or otherwise modifies the contractual terms of the financial assets. The Group assesses whether the modification of contractual cash flows is substantial considering, among other, the following factors: new contractual terms that substantially affect the risk profile of the asset, significant change in interest rate, change in the currency denomination.
If the modified terms are substantially different, the rights to cash flows from the original asset expire and the Group derecognises the original financial asset and recognises a new asset at its fair value. The date of renegotiation is considered to be the date of initial recognition for subsequent impairment calculation purposes, including determining whether a significant increase in credit risk has occurred. The Company also assesses whether the new loan or debt instrument meets the SPPI criterion. Any difference between the carrying amount of the original asset derecognised and fair value of the new substantially modified asset is recognised in profit or loss, unless the substance of the difference is attributed to a capital transaction with owners.
In a situation where the renegotiation was driven by financial difficulties of the counterparty and inability to make the originally agreed payments, the Company compares the original and revised expected cash flows to assess whether the risks and rewards of the asset are substantially different as a result of the contractual modification. If the risks and rewards do not change, the modified asset is not substantially different from the original asset and the modification does not result in derecognition. The Company recalculates the gross carrying amount by discounting the modified contractual cash flows by the original effective interest rate and recognises a modification gain or loss in profit or loss.
Specific valuation techniques used to value financial assets include:
The use of quoted market prices or dealer quotes for similar instruments (for financial assets/liabilities at fair value through profit or loss);
Discounted cash flow analysis (for the remaining financial instruments).
Financial liabilities are initially recognised at fair value and classified and subsequently measured at amortised cost, except for financial liabilities at FVTPL: this classification is applied to interest rate derivatives and other financial liabilities designated as such at initial recognition.
Borrowings are recognised initially at the fair value of the liability (determined using the prevailing market rate of interest if significantly different from the transaction price) and net of transaction costs incurred. In subsequent periods, borrowings are subsequently carried at amortized cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of comprehensive income over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.
Borrowings are removed from the balance sheet when the obligation specified in the contract is extinguished (i.e. discharged, cancelled or expires). The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the Statement of comprehensive income.
An exchange between the Group and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached to the instrument and change in loan covenants are also considered.
If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a cumulative catch-up method, with any gain or loss recognised in the Statement of comprehensive income.
Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with the arrangement of borrowings to the extent that they are regarded as an adjustment to interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use (such as properties developed for future sale, capital appreciation or rental income) are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.
Cash and cash equivalents include cash balances, cash deposits and short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are carried at amortised cost because: (i) they are held for collection of contractual cash flows and those cash flows represent solely payments of principal and interest (SPPI), and (ii) they are not designated at FVTPL.
Trade receivables are amounts due from customers for rental and service charge income from tenants in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value, generally at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation, is held as inventory property and is measured at the lower of cost and net realisable value (\u201cNRV\u201d). Principally, this is residential property that the Group develops and intends to sell on completion of development.
The commencement of development with a plan or a prior agreement to sell represents a change in use and accordingly the project is transferred from investment property to inventory property.
Costs incurred in inventory property include:
freehold and leasehold rights for land;
amounts paid to contractors for development; and
planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, development overheads and other related costs.
NRV is the estimated selling price in the ordinary course of business, based on market prices at the reporting date, less estimated costs of completion and the estimated costs necessary to make the sale.
When an inventory property is sold, the carrying amount of the property is recognised as an expense in the period in which the related revenue is recognised. The carrying amount of inventory property recognised in profit or loss is determined with reference to the directly attributable costs incurred on the property sold and an allocation of any other related costs based on the relative size of the property sold.
Ordinary shares are classified as equity. Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
The consideration paid, including any directly attributable incremental costs (net of income taxes for the purchases of the Company\u2019s equity instruments by any of the Group\u2019s subsidiaries, as a result of a share buy-back or for a share-based incentive plan) is presented within \u201cOther reserves\u201d, until the shares are cancelled or reissued. Where such ordinary shares are cancelled, their nominal value is debited to Share capital, with the corresponding difference up to their purchase price (including any attributable incremental cost, net of taxes) debited from Share premium. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Group. Usually, shares are purchased for the debt-free Long-Term Share Incentive Plan (Note 3.16 (b)).
To date, NEPI Rockcastle has initiated two types of incentive programs that offered share-based payments in exchange for services provided to it by its directors and employees (equity-settled transactions), which are detailed below.
This program was put in place before the 2017 merger of the former groups New Europe Property Investments plc (\u201cNEPI\u201d) and Rockcastle Global Real Estate Company Ltd (\u201cRockcastle\u201d). Under this program, participants were granted loans to acquire shares in the Company at fair value at the grant date. These loans were classified as \u201cloans to participants in the incentive plan\u201d and included in Other long-term assets (Note 10). The loans are carried at amortised cost and the accrued interest is recognised as finance income in the Statement of Comprehensive Income. The costs under this program are nil.
This program was put in place after the 2017 merger of the former groups NEPI and Rockcastle. Under this incentive plan, shares may be issued by the Group to executive directors and other key personnel for no cash consideration. Awards under this plan are at the discretion of the Board of Directors and are based on the performance of the Group and the employees. The costs related to the LTSIP are measured based on the fair value of the shares at the grant date and are recognized over the vesting period.
The costs are presented as part of the Administrative expenses in the Statement of comprehensive income and within Other reserves in the Statement of changes in equity.
The balance on the Statement of comprehensive income is transferred to accumulated profit at the end of each financial period. Distributions paid in cash are deducted from accumulated profit. Distributions for which shareholders elected to receive a return of capital are accounted for as an issue of share capital with a corresponding deduction from the share premium account.
Revenue is recognised at the fair value of the consideration received or receivable. Revenue comprises rental and related income and recovery of expenses, excluding VAT.
Rental income receivable from operating leases is recognised on a straight-line basis over the duration of the lease, except for variable lease payments which are recognized when they arise.
Contractually agreed and signed concessions granted to, and obtained from, tenants are treated according to IFRS 16 \u201cLeases\u201d. IFRS 16 defines \u201clease modification\u201d as a change in scope, or consideration, of the lease, not part of the original terms and conditions, such as rent discounts, lease extensions, increase in variable rent (overage/turnover), introduction of break options, etc. Lease modifications are recognised prospectively over the new lease term and accounted for by the Group from the date the modification is contractually agreed and signed by both parties. Agreed lease modifications are recognised as lease incentives from the date the modification was signed. Such modifications are straight-lined over the new lease term and recognised in the Consolidated Statement of comprehensive income as a reduction of Gross rental income.
Revenue from service and property management charges is recognised in the accounting period in which control of the services are passed to the customer, which is when the service is rendered. For certain service contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services.
As specified in the lease agreements, the Group has the primary responsibility for providing services to tenants (electricity, water and gas utilities, interior and exterior cleaning, security, maintenance, repairs, etc). The Group has determined that these services constitute distinct non-lease components (transferred separately from the right to use the underlying asset) and are within the scope of IFRS 15. The Group allocates the consideration in the contract to the separate lease and revenue (non-lease) components on a relative stand-alone selling price basis. In respect of the revenue component, these services represent a series of daily services that are individually satisfied over time because the tenants simultaneously receive and consume the benefits provided by the Group. The Group applies the time elapsed method to measure progress.
The Group negotiates directly with the suppliers all contracts for services provided to tenants. These contracts are concluded between the Group subsidiaries which own the properties and the direct supplier. As the Group sometimes uses the same providers for services across most of its portfolio, it can negotiate better prices through the economies of scale. The Group is considered principal in these transactions, in terms of the IFRS 15 requirements.
The Group negotiates and pays all expenses incurred by the tenants and then re-invoices these costs to them as defined in the contractual clauses included in the lease agreements. A flat fee is charged monthly during the year. This fee is estimated based on the previous year\u2019s actual costs, with an annual service charge reconciliation performed based on current year\u2019s actual costs incurred by the Group. For contracts terminated during the year, the Group estimates the service charge to be collected based on the current budget and last year\u2019s actual costs.
Revenue is recognised when the performance obligation associated with the sale is completed. The transaction price comprises the fair value of the consideration received or receivable, net of value added tax, rebates and discounts.
The sale of completed property constitutes a single performance obligation and the Group has determined that this is satisfied at the point in time when control transfers. The Group\u2019s sales contracts qualify as unconditional exchange of contracts, which occurs when legal title transfers to the customer. Payments are usually received on the date when contracts are signed or with several days delay.
Revenue from energy is generated through the sale of electricity, based on agreements between the Group\u2019s property companies and the tenants of Group\u2019s properties in a particular jurisdiction. Revenue recognition in a period is based on the delivery of electricity, taking into account the contractual price per kilowatt-hour (kWh) and the amount of electricity delivered in the period.
Property operating expenses and administrative expenses are recognised on an accrual basis.
A distribution is recorded as a liability and deducted from equity in the period in which it is declared and approved. Any distribution declared after the reporting period and before the financial statements are authorised for issue is disclosed in Note 17.
Taxation on the profit or loss for the year comprises current and deferred tax. Current income tax and liabilities are measured at the amount expected to be recovered from, or paid to, taxation authorities. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax is determined using the liability method and is based on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases.
The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries that are unlikely to reverse in the foreseeable future.
A deferred tax asset is recognised based on the assumption that it is probable that future taxable profits will be available against which it can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The current tax expense incurred by the Group reflects tax accrued in the subsidiaries of the Group located in Bulgaria, Croatia, Czech Republic, Hungary, Lithuania, Malta, Poland, Romania, Serbia, Slovakia, and the Netherlands.
In accordance with IFRS 8, operating segments are identified on the basis of the internal reporting used by management when evaluating performance and allocating resources.
The Group has a homogeneous asset base (real estate properties), with similar economic characteristics, which provide similar nature of services, i.e. leasing of its properties, that generate rental income.
The Group\u2019s Chief Operating Decision Makers (CODM) are the executive directors, and they take decisions based on detailed reports. These are prepared regularly and are presented to the Board of Directors, which approves the results and gives guidance on the subsequent strategy to be undertaken.
In particular, the financial information in respect of investment property is provided to the Board of Directors focuses primarily on net rentals (including rental income, service charge income and property operating expenses) and valuation gains and losses.
The operating segments for management purposes are the individual properties. For reporting purposes, the Group aggregates the retail properties (shopping malls and retail centres) on country level and presents the financial information on the following geographic reportable segments for retail properties: Bulgaria, Croatia, Czech Republic, Hungary, Lithuania, Poland, Romania, Serbia, Slovakia.
In addition, the CODM are separately monitoring the activities related to the residential property development and sale (\"Residential\" segment) and the activities related to the green energy generation which is supplied to the Group's tenants. The Residential segment, based on a Board decision in August 2024, will be expanded from one development in 2023 to another 3 developments in the following years. The Energy business involves investment in photovoltaic panels on the rooftops of Group properties, as well as greenfield photovoltaic plants. The Energy segment has generated revenues in 2024 from the panels installed on Romanian properties' rooftops and is realised from the sale of electricity to the tenants of the Group\u2019s retail properties. This revenue will increase in the coming years following the roll-out of the rooftops panels in other countries and investments in greenfield plants.
Lastly, the Group\u2019s CODM closely follow changes in distributable earnings to its shareholders as a measure of profitability and as a result of successful implementation of the Group\u2019s strategy. Distributable earnings per share is calculated in terms of the SA REIT Association\u2019s Best Practice Recommendations Second Edition.
The Group acquires subsidiaries that own real estate. At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. The Group accounts for an acquisition as a business combination where an integrated set of activities and assets, including property, is acquired. More specifically the following criteria, which indicate an acquisition of a business, are considered: the number of properties acquired, the extent to which strategic management processes and operation processes are acquired and the complexity of the processes acquired. In line with amended IFRS 3 since 1 January 2020 the Group may also apply optional concentration test.
Business combinations are accounted for using the acquisition method. When the acquisition of subsidiaries does not represent a business combination, it is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and no goodwill or deferred tax is recognised.
The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets for all leases, except for short-term leases and leases of low-value assets. The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use).
Right-of-use assets are measured at cost, adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised and lease payments made at or before the commencement date.
Lease liabilities are measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments. The present value of lease payments is recognised by discounting the contractual lease payments using the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
Investment property is stated at its fair value based on valuation reports prepared by international appraisers as at 30 June and 31 December each year. Valuations are based on discounted cash flow projections based on reliable estimates of future cash flows, using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows. These are supported by the terms of any existing lease and other contracts and by external evidence such as current market rents for similar properties in the same location and condition.
In preparing the valuation reports on the Group\u2019s investment property, the external appraisers excluded distressed sales when considering comparable sales prices (used for valuation of plots of land held for development). Management reviewed the appraisers\u2019 assumptions relating to the discounted cash flow models used in the valuations and confirmed that factors such as the discount rate applied have been appropriately determined considering the market conditions at the end of the reporting period.
Valuations of the income generating properties are based on cash flow statements, in which the present value of net operating income during a ten-year period and the residual value of the property at the end of the period are calculated.
Forecasts of net operating income are based on leases signed at the time of the valuation date, the estimated rental values for existing leases when they expire and the estimated achievable rental values of the existing vacancies. The value of long-term vacancies is estimated based on the properties\u2019 location and condition. The valuers\u2019 assessments of non-recoverable expenses are based on their experience of comparable properties and historical costs provided by the Group.
The discount rates used are nominal returns on total capital before tax and vary between 7.80% and 11.95% (2023: 7.90% and 11.95%). The required rates of return are based on assessments of the market\u2019s required returns for similar properties. The discount rate is set individually for each property and is based on the condition and location, the stability of the tenants and lease duration.
Further information relating to sensitivity of material accounting estimates used in the valuation of investment property is presented in Note 8.
In assessing the functional currency of the Group, including the Company and its subsidiaries, management considers factors such as the local currencies of the countries where the Group operates, as well as the currency that mainly influences rental prices for its properties, the currency that mostly influences labour, material and other costs of providing its services, the currency in which funding is accessed by the Group.
Although the competitive forces and regulations that determine the sales prices of goods and services are present in the countries which use different currencies than EUR, the macroeconomic developments in these countries to some extent is influenced by the eurozone. In addition, in real estate, leases agreements in the countries where the Group operates, as well as the financing of properties are generally denominated in EUR.
The Group predominately concludes its lease agreements in Euro (or, if these contracts are not concluded in Euro, they are indexed to the Euro exchange rate), even if invoiced in local currencies. Agreements for construction and development of investment properties are negotiated and concluded in EUR. Administrative and corporate expenses, such as advisory fees, audit fees, valuation fees, asset management fees are mostly negotiated and contracted in EUR. Salary and other employee related costs, although denominated in local currencies, are benchmarked to EUR.
Financing contracted by the Group, which include bonds, unsecured credit facilities and secured bank loans is denominated and settled in EUR. Interest paid on bank loans is linked to Euribor. Intra-group funding for property development is also denominated and settled in EUR.
In terms of transactions on the real estate market, acquisitions and sales of properties are negotiated and contracted in EUR in all jurisdictions the Group operate, due to the active international investors in those markets. This is also substantiated in external valuation reports, as valuations of properties are prepared in EUR.
In conclusion, management assessed that EUR is the functional currency for the Group, including the Company and its subsidiaries.
The Group is subject to income taxes on taxable profits of its companies\u2019 operating in all jurisdictions. The calculation of the Group\u2019s tax charge and provisions for income taxes necessarily involves a degree of estimation and judgment in evaluating the nature of its companies\u2019 transactions and their respective tax treatment.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18160-1": { "value": "The Consolidated Financial Statements are presented in Euro (\u201c\u20ac\u201d, \u201cEUR\u201d) thousands unless otherwise stated, which is NEPI Rockcastle\u2019s functional and presentation currency. The assessment of the functional currency of the Group is presented in Note 4 \u2013 Significant Accounting Estimates and Judgements in Applying Accounting Policies.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re\u2011measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year\u2011end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18161-1": { "value": "Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re\u2011measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year\u2011end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18161-2": { "value": "The Consolidated Financial Statements are presented in Euro (\u201c\u20ac\u201d, \u201cEUR\u201d) thousands unless otherwise stated, which is NEPI Rockcastle\u2019s functional and presentation currency. The assessment of the functional currency of the Group is presented in Note 4 \u2013 Significant Accounting Estimates and Judgements in Applying Accounting Policies.
In assessing the functional currency of the Group, including the Company and its subsidiaries, management considers factors such as the local currencies of the countries where the Group operates, as well as the currency that mainly influences rental prices for its properties, the currency that mostly influences labour, material and other costs of providing its services, the currency in which funding is accessed by the Group.
Although the competitive forces and regulations that determine the sales prices of goods and services are present in the countries which use different currencies than EUR, the macroeconomic developments in these countries to some extent is influenced by the eurozone. In addition, in real estate, leases agreements in the countries where the Group operates, as well as the financing of properties are generally denominated in EUR.
The Group predominately concludes its lease agreements in Euro (or, if these contracts are not concluded in Euro, they are indexed to the Euro exchange rate), even if invoiced in local currencies. Agreements for construction and development of investment properties are negotiated and concluded in EUR. Administrative and corporate expenses, such as advisory fees, audit fees, valuation fees, asset management fees are mostly negotiated and contracted in EUR. Salary and other employee related costs, although denominated in local currencies, are benchmarked to EUR.
Financing contracted by the Group, which include bonds, unsecured credit facilities and secured bank loans is denominated and settled in EUR. Interest paid on bank loans is linked to Euribor. Intra-group funding for property development is also denominated and settled in EUR.
In terms of transactions on the real estate market, acquisitions and sales of properties are negotiated and contracted in EUR in all jurisdictions the Group operate, due to the active international investors in those markets. This is also substantiated in external valuation reports, as valuations of properties are prepared in EUR.
In conclusion, management assessed that EUR is the functional currency for the Group, including the Company and its subsidiaries.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18164-1": { "value": "The Consolidated Financial Statements incorporate the assets, liabilities, operating results and cash flows of the Company and its subsidiaries.
Subsidiaries are all entities controlled by the Company. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date the control commences until the date the control ceases.
These Consolidated Financial Statements include the Company and the fully consolidated subsidiaries, as set out below:
No | Subsidiary | Country of | Principal activity | Effective interest 2024 (%) | Effective interest 2023 (%) |
|---|---|---|---|---|---|
1 | ACE3 Sp. z o.o. | Poland | Property-owning | 100 | 100 |
2 | Arena Center Zagreb d.o.o. | Croatia | Property-owning | 100 | 100 |
3 | AUPARK Kosice SC, s.r.o. | Slovakia | Services | 100 | 100 |
4 | AUPARK Kosice, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
5 | AUPARK Piestany SC, s.r.o. | Slovakia | Services | 100 | 100 |
6 | AUPARK Piestany, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
7 | AUPARK Tower Kosice, s.r.o. | Slovakia | Property-owning | 100 | 100 |
8 | AUPARK \u017dilina SC a.s. | Slovakia | Services | 100 | 100 |
9 | AUPARK \u017dilina, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
10 | Aurora Mall Buzau SRL | Romania | Property-owning | 100 | 100 |
11 | Bia\u0142ystok Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
12 | Bonarka City Center Sp. z o.o. | Poland | Property-owning | 100 | 100 |
13 | Braila Promenada Mall SRL | Romania | Property-owning | 100 | 100 |
14 | Brasov Shopping City SRL | Romania | Property-owning | 100 | 100 |
15 | Bulfeld EOOD | Bulgaria | Property-owning | 100 | 100 |
16 | CEE Property Bulgaria EOOD | Bulgaria | Property-owning | 100 | 100 |
17 | CHP 1 Sp. z o.o. | Poland | Services | 100 | 100 |
18 | City Park Constanta SRL | Romania | Property-owning | 100 | 100 |
19 | Constanta Shopping City SRL | Romania | Property-owning | 100 | 100 |
20 | Copernicus Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
21 | Deva Shopping City SRL | Romania | Property-owning | 100 | 100 |
22 | Elco Energy Sp. z o.o.1 | Poland | Services | 100 | - |
23 | Elco ICT Sp. z o.o.1 | Poland | Services | 100 | - |
24 | Energit Sp. z o.o. | Poland | Services | 100 | 100 |
25 | E-Power Supply d.o.o. Beograd | Serbia | Services | 100 | 100 |
26 | E-power supply EOOD | Bulgaria | Services | 100 | 100 |
27 | E-power supply Kft2 | Hungary | Services | 100 | - |
28 | E-power supply management d.o.o. | Croatia | Services | 100 | 100 |
29 | E-Power Supply s.r.o. | Slovakia | Services | 100 | 100 |
30 | Expo Real Estate Project SRL | Romania | Services | 100 | 100 |
31 | Festival Shopping Center SRL | Romania | Property-owning | 100 | 100 |
32 | Floreasca Center SRL | Romania | Holding | 100 | 100 |
33 | Forum Gdansk Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
34 | FORUM Usti s.r.o. | Czech Republic | Property-owning | 100 | 100 |
35 | Galati Shopping City SRL | Romania | Property-owning | 100 | 100 |
36 | General Building Management SRL | Romania | Property-owning | 100 | 100 |
37 | General Investment SRL | Romania | Property-owning | 100 | 100 |
38 | Gontar Sp. z o.o. | Poland | Property-owning | 100 | 100 |
39 | HANSA Immobilien EOOD | Bulgaria | Property-owning | 100 | 100 |
40 | Iris Titan Shopping Center SRL | Romania | Property-owning | 100 | 100 |
41 | Karolinka Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
42 | Liberec Property s.r.o. | Czech Republic | Property-owning | 100 | 100 |
43 | Magnolia Property Sp. z o.o.1 | Poland | Property-owning | 100 | - |
44 | Mammut Zrt | Hungary | Property-owning | 100 | 100 |
45 | Mammut Management Kft | Hungary | Services | 100 | 100 |
46 | Mammut Real Estate Kft | Hungary | Property-owning | 100 | 100 |
47 | Marapi Sp. z o.o. | Poland | Property-owning | 100 | 100 |
48 | Mega Mall Bucuresti SRL | Romania | Property-owning | 100 | 100 |
49 | Milvus Sp. z o.o. | Poland | Property-owning | 100 | 100 |
50 | Mlyny a.s. | Slovakia | Property-owning | 100 | 100 |
51 | Monarda Sp. z o.o. | Poland | Property-owning | 100 | 100 |
52 | MUNTENIA BETON MAX SRL1 | Romania | Services | 100 | - |
53 | NE Property B.V. | Netherlands | Holding | 100 | 100 |
54 | NEPI Bucharest One SRL | Romania | Property-owning | 100 | 100 |
55 | NEPI Bucharest Two SRL | Romania | Property-owning | 100 | 100 |
56 | NEPI Croatia Management d.o.o. | Croatia | Services | 100 | 100 |
57 | NEPI Czech Management s.r.o. | Czech Republic | Services | 100 | 100 |
58 | Nepi Four Real Estate Solutions SRL | Romania | Holding | 100 | 100 |
59 | NEPI Investment Management SRL | Romania | Services | 100 | 100 |
60 | NEPI Project Four EOOD | Bulgaria | Property-owning | 100 | 100 |
61 | NEPI Project One EOOD | Bulgaria | Property-owning | 100 | 100 |
62 | NEPI Project Three EOOD | Bulgaria | Services | 100 | 100 |
63 | NEPI Project Two EOOD | Bulgaria | Holding | 100 | 100 |
64 | NEPI Real Estate Development d.o.o. | Serbia | Services | 100 | 100 |
65 | NEPI Real Estate Project One d.o.o. (sold in 2024) | Serbia | Property-owning | - | 100 |
66 | NEPI Rockcastle Green Energy B.V.2 | Netherlands | Services | 100 | - |
67 | NEPI Rockcastle Hungary Kft | Hungary | Services | 100 | 100 |
68 | NEPI Rockcastle Lithuania UAB | Lithuania | Services | 100 | 100 |
69 | Nepi Seventeen Land Development SRL | Romania | Services | 100 | 100 |
70 | NEPI Six Development SRL | Romania | Services | 100 | 100 |
71 | Nepi Sixteen Real Estate Investment SRL | Romania | Holding | 100 | 100 |
72 | Nepi Slovak Centres One a.s. | Slovakia | Services | 100 | 100 |
73 | NEPI Slovakia Management s.r.o. | Slovakia | Services | 100 | 100 |
74 | NEPI Ten Development Solutions SRL | Romania | Property-owning | 100 | 100 |
75 | Nepi Twenty Real Estate Development SRL | Romania | Services | 100 | 100 |
76 | Nepi Twenty-One Investment Estate SRL | Romania | Services | 100 | 100 |
77 | Nepi Twenty-Three Investment Solutions SRL | Romania | Property-owning | 100 | 100 |
78 | NEPIOM Ltd | Malta | Holding | 100 | 100 |
79 | New Energy Management SRL | Romania | Services | 100 | 100 |
80 | Nobilia Sp. z o.o. (merged with Energit Sp. z o.o. in 2024) | Poland | Services | - | 100 |
81 | NRE Sibiu Shopping City SRL | Romania | Property-owning | 100 | 100 |
82 | Olsztyn Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
83 | Otopeni Warehouse and Logistics SRL (sold in 2024) | Romania | Property-owning | - | 100 |
84 | Piotrk\u00f3w Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
85 | Platan Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
86 | Ploiesti Shopping City SRL | Romania | Property-owning | 100 | 100 |
87 | Pogoria Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
88 | Promenada Mall Bucuresti SRL | Romania | Property-owning | 100 | 100 |
89 | Ramnicu Valcea Shopping City SRL | Romania | Property-owning | 100 | 100 |
90 | Real Estate Asset Management SRL | Romania | Services | 100 | 100 |
91 | Retail Park Pitesti SRL | Romania | Property-owning | 100 | 100 |
92 | Rockcastle Europe Limited (wound up in 2024) | Mauritius | Holding | - | 100 |
93 | Rockcastle Poland Sp. z o.o. | Poland | Services | 100 | 100 |
94 | Satu Mare Shopping City SRL | Romania | Property-owning | 100 | 100 |
95 | SCP s.r.o. | Slovakia | Property-owning | 100 | 100 |
96 | Severin Shopping Center SRL | Romania | Property-owning | 100 | 100 |
97 | Shopping City Piatra Neamt SRL | Romania | Property-owning | 100 | 100 |
98 | Sibiu Shopping City 2 SRL | Romania | Property-owning | 100 | 100 |
99 | Silesia Property Sp. z o.o.1 | Poland | Property-owning | 100 | - |
100 | Shopping City Timisoara SRL | Romania | Property-owning | 100 | 100 |
101 | ShoppingSpot Sp. z o.o. | Poland | Services | 100 | 100 |
102 | Sofia Commercial Centre EOOD | Bulgaria | Services | 100 | 100 |
103 | Solpower Energy SRL1 | Romania | Services | 100 | - |
104 | Stichting NEPI Rockcastle Incentive Plan Foundation | Netherlands | Services | 100 | 100 |
105 | Symmetry Arena Kft | Hungary | Property-owning | 100 | 100 |
106 | Targu Jiu Development SRL | Romania | Property-owning | 100 | 100 |
107 | Targu Mures Shopping City SRL | Romania | Property-owning | 100 | 100 |
108 | Tummam Kft | Hungary | Property-owning | 100 | 100 |
109 | U\u017edaroji akcin\u0117 bendrov\u0117 Ozantis | Lithuania | Property-owning | 100 | 100 |
110 | Vulcan Residential Park SRL | Romania | Property-owning | 100 | 100 |
111 | Vulcan Value Centre SRL | Romania | Property-owning | 100 | 100 |
112 | Zielona G\u00f3ra Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
Intra-group balances and transactions, and any gains and losses or income and expenses arising from intra-group transactions, as well as investments in subsidiaries and corresponding equity in the subsidiaries are eliminated in preparing the Consolidated Financial Statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18165-1": { "value": "The Consolidated Financial Statements incorporate the assets, liabilities, operating results and cash flows of the Company and its subsidiaries.
Subsidiaries are all entities controlled by the Company. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date the control commences until the date the control ceases.
These Consolidated Financial Statements include the Company and the fully consolidated subsidiaries, as set out below:
No | Subsidiary | Country of | Principal activity | Effective interest 2024 (%) | Effective interest 2023 (%) |
|---|---|---|---|---|---|
1 | ACE3 Sp. z o.o. | Poland | Property-owning | 100 | 100 |
2 | Arena Center Zagreb d.o.o. | Croatia | Property-owning | 100 | 100 |
3 | AUPARK Kosice SC, s.r.o. | Slovakia | Services | 100 | 100 |
4 | AUPARK Kosice, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
5 | AUPARK Piestany SC, s.r.o. | Slovakia | Services | 100 | 100 |
6 | AUPARK Piestany, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
7 | AUPARK Tower Kosice, s.r.o. | Slovakia | Property-owning | 100 | 100 |
8 | AUPARK \u017dilina SC a.s. | Slovakia | Services | 100 | 100 |
9 | AUPARK \u017dilina, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
10 | Aurora Mall Buzau SRL | Romania | Property-owning | 100 | 100 |
11 | Bia\u0142ystok Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
12 | Bonarka City Center Sp. z o.o. | Poland | Property-owning | 100 | 100 |
13 | Braila Promenada Mall SRL | Romania | Property-owning | 100 | 100 |
14 | Brasov Shopping City SRL | Romania | Property-owning | 100 | 100 |
15 | Bulfeld EOOD | Bulgaria | Property-owning | 100 | 100 |
16 | CEE Property Bulgaria EOOD | Bulgaria | Property-owning | 100 | 100 |
17 | CHP 1 Sp. z o.o. | Poland | Services | 100 | 100 |
18 | City Park Constanta SRL | Romania | Property-owning | 100 | 100 |
19 | Constanta Shopping City SRL | Romania | Property-owning | 100 | 100 |
20 | Copernicus Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
21 | Deva Shopping City SRL | Romania | Property-owning | 100 | 100 |
22 | Elco Energy Sp. z o.o.1 | Poland | Services | 100 | - |
23 | Elco ICT Sp. z o.o.1 | Poland | Services | 100 | - |
24 | Energit Sp. z o.o. | Poland | Services | 100 | 100 |
25 | E-Power Supply d.o.o. Beograd | Serbia | Services | 100 | 100 |
26 | E-power supply EOOD | Bulgaria | Services | 100 | 100 |
27 | E-power supply Kft2 | Hungary | Services | 100 | - |
28 | E-power supply management d.o.o. | Croatia | Services | 100 | 100 |
29 | E-Power Supply s.r.o. | Slovakia | Services | 100 | 100 |
30 | Expo Real Estate Project SRL | Romania | Services | 100 | 100 |
31 | Festival Shopping Center SRL | Romania | Property-owning | 100 | 100 |
32 | Floreasca Center SRL | Romania | Holding | 100 | 100 |
33 | Forum Gdansk Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
34 | FORUM Usti s.r.o. | Czech Republic | Property-owning | 100 | 100 |
35 | Galati Shopping City SRL | Romania | Property-owning | 100 | 100 |
36 | General Building Management SRL | Romania | Property-owning | 100 | 100 |
37 | General Investment SRL | Romania | Property-owning | 100 | 100 |
38 | Gontar Sp. z o.o. | Poland | Property-owning | 100 | 100 |
39 | HANSA Immobilien EOOD | Bulgaria | Property-owning | 100 | 100 |
40 | Iris Titan Shopping Center SRL | Romania | Property-owning | 100 | 100 |
41 | Karolinka Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
42 | Liberec Property s.r.o. | Czech Republic | Property-owning | 100 | 100 |
43 | Magnolia Property Sp. z o.o.1 | Poland | Property-owning | 100 | - |
44 | Mammut Zrt | Hungary | Property-owning | 100 | 100 |
45 | Mammut Management Kft | Hungary | Services | 100 | 100 |
46 | Mammut Real Estate Kft | Hungary | Property-owning | 100 | 100 |
47 | Marapi Sp. z o.o. | Poland | Property-owning | 100 | 100 |
48 | Mega Mall Bucuresti SRL | Romania | Property-owning | 100 | 100 |
49 | Milvus Sp. z o.o. | Poland | Property-owning | 100 | 100 |
50 | Mlyny a.s. | Slovakia | Property-owning | 100 | 100 |
51 | Monarda Sp. z o.o. | Poland | Property-owning | 100 | 100 |
52 | MUNTENIA BETON MAX SRL1 | Romania | Services | 100 | - |
53 | NE Property B.V. | Netherlands | Holding | 100 | 100 |
54 | NEPI Bucharest One SRL | Romania | Property-owning | 100 | 100 |
55 | NEPI Bucharest Two SRL | Romania | Property-owning | 100 | 100 |
56 | NEPI Croatia Management d.o.o. | Croatia | Services | 100 | 100 |
57 | NEPI Czech Management s.r.o. | Czech Republic | Services | 100 | 100 |
58 | Nepi Four Real Estate Solutions SRL | Romania | Holding | 100 | 100 |
59 | NEPI Investment Management SRL | Romania | Services | 100 | 100 |
60 | NEPI Project Four EOOD | Bulgaria | Property-owning | 100 | 100 |
61 | NEPI Project One EOOD | Bulgaria | Property-owning | 100 | 100 |
62 | NEPI Project Three EOOD | Bulgaria | Services | 100 | 100 |
63 | NEPI Project Two EOOD | Bulgaria | Holding | 100 | 100 |
64 | NEPI Real Estate Development d.o.o. | Serbia | Services | 100 | 100 |
65 | NEPI Real Estate Project One d.o.o. (sold in 2024) | Serbia | Property-owning | - | 100 |
66 | NEPI Rockcastle Green Energy B.V.2 | Netherlands | Services | 100 | - |
67 | NEPI Rockcastle Hungary Kft | Hungary | Services | 100 | 100 |
68 | NEPI Rockcastle Lithuania UAB | Lithuania | Services | 100 | 100 |
69 | Nepi Seventeen Land Development SRL | Romania | Services | 100 | 100 |
70 | NEPI Six Development SRL | Romania | Services | 100 | 100 |
71 | Nepi Sixteen Real Estate Investment SRL | Romania | Holding | 100 | 100 |
72 | Nepi Slovak Centres One a.s. | Slovakia | Services | 100 | 100 |
73 | NEPI Slovakia Management s.r.o. | Slovakia | Services | 100 | 100 |
74 | NEPI Ten Development Solutions SRL | Romania | Property-owning | 100 | 100 |
75 | Nepi Twenty Real Estate Development SRL | Romania | Services | 100 | 100 |
76 | Nepi Twenty-One Investment Estate SRL | Romania | Services | 100 | 100 |
77 | Nepi Twenty-Three Investment Solutions SRL | Romania | Property-owning | 100 | 100 |
78 | NEPIOM Ltd | Malta | Holding | 100 | 100 |
79 | New Energy Management SRL | Romania | Services | 100 | 100 |
80 | Nobilia Sp. z o.o. (merged with Energit Sp. z o.o. in 2024) | Poland | Services | - | 100 |
81 | NRE Sibiu Shopping City SRL | Romania | Property-owning | 100 | 100 |
82 | Olsztyn Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
83 | Otopeni Warehouse and Logistics SRL (sold in 2024) | Romania | Property-owning | - | 100 |
84 | Piotrk\u00f3w Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
85 | Platan Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
86 | Ploiesti Shopping City SRL | Romania | Property-owning | 100 | 100 |
87 | Pogoria Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
88 | Promenada Mall Bucuresti SRL | Romania | Property-owning | 100 | 100 |
89 | Ramnicu Valcea Shopping City SRL | Romania | Property-owning | 100 | 100 |
90 | Real Estate Asset Management SRL | Romania | Services | 100 | 100 |
91 | Retail Park Pitesti SRL | Romania | Property-owning | 100 | 100 |
92 | Rockcastle Europe Limited (wound up in 2024) | Mauritius | Holding | - | 100 |
93 | Rockcastle Poland Sp. z o.o. | Poland | Services | 100 | 100 |
94 | Satu Mare Shopping City SRL | Romania | Property-owning | 100 | 100 |
95 | SCP s.r.o. | Slovakia | Property-owning | 100 | 100 |
96 | Severin Shopping Center SRL | Romania | Property-owning | 100 | 100 |
97 | Shopping City Piatra Neamt SRL | Romania | Property-owning | 100 | 100 |
98 | Sibiu Shopping City 2 SRL | Romania | Property-owning | 100 | 100 |
99 | Silesia Property Sp. z o.o.1 | Poland | Property-owning | 100 | - |
100 | Shopping City Timisoara SRL | Romania | Property-owning | 100 | 100 |
101 | ShoppingSpot Sp. z o.o. | Poland | Services | 100 | 100 |
102 | Sofia Commercial Centre EOOD | Bulgaria | Services | 100 | 100 |
103 | Solpower Energy SRL1 | Romania | Services | 100 | - |
104 | Stichting NEPI Rockcastle Incentive Plan Foundation | Netherlands | Services | 100 | 100 |
105 | Symmetry Arena Kft | Hungary | Property-owning | 100 | 100 |
106 | Targu Jiu Development SRL | Romania | Property-owning | 100 | 100 |
107 | Targu Mures Shopping City SRL | Romania | Property-owning | 100 | 100 |
108 | Tummam Kft | Hungary | Property-owning | 100 | 100 |
109 | U\u017edaroji akcin\u0117 bendrov\u0117 Ozantis | Lithuania | Property-owning | 100 | 100 |
110 | Vulcan Residential Park SRL | Romania | Property-owning | 100 | 100 |
111 | Vulcan Value Centre SRL | Romania | Property-owning | 100 | 100 |
112 | Zielona G\u00f3ra Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
Magnolia Park
On 1 October 2024, the Group acquired Magnolia Property Sp. z.o.o., the legal entity that owns Magnolia Park in Wroclaw, Poland. The acquisition was recognised as a property asset acquisition as the acquired entity does not represent a business as defined by IFRS 3.
The carrying amount of the identifiable assets and liabilities at the date of acquisition was as follows:
in \u20ac\u00a0thousand | Value recognised on acquisition |
|---|---|
Investment property in use | 353,277 |
Trade and other receivables | 4,360 |
Cash and cash equivalents | 4,500 |
Identifiable acquired assets | 362,137 |
Other long-term liabilities | 1,554 |
Trade and other payables | 2,747 |
Identifiable acquired liabilities | 4,301 |
Net identifiable assets | 357,836 |
Net identifiable assets of the subsidiary acquired at the date of acquisition amounted to \u20ac357,836 thousand. The net cash outflow connected with the acquisition (cash outflow adjusted for working capital items, less cash and cash equivalents acquired) amounted to \u20ac351,794 thousand, the remaining difference to the net asset value being an accrued payable adjustment to the purchase price paid. Acquisition costs of \u20ac2,715 thousand were capitalised on the value of investment property.
The investment property reflected above does not include the right-of-use assets and related lease liability, of \u20ac29,840 thousand, connected to the land under concession for Magnolia Park.
Silesia City Center
On 6 December 2024, the Group acquired Helios SCC Sp. z.o.o. (subsequently changed its name to Silesia Property Sp. z o.o.), the legal entity which owns Silesia City Center, a shopping centre located in Katowice, Poland. The Group has concurrently acquired Elco Energy Sp. z o.o. and Elco ICT Sp. z o.o., the legal entities that provide communication infrastructure and energy services for the tenants in Silesia City Center. The acquisition was recognized as a property asset acquisition as the acquired companies do not represent a business as defined by IFRS 3.
The carrying amount of the identifiable assets and liabilities at the date of acquisition was as follows:
in \u20ac\u00a0thousand | Value recognised on acquisition |
|---|---|
Investment property in use | 406,389 |
Property, plant and equipment under construction | 513 |
Property, plant and equipment - Other | 41 |
Trade and other receivables | 9,420 |
Cash and cash equivalents | 9,320 |
Identifiable acquired assets | 425,683 |
Other long-term liabilities | 1,667 |
Trade and other payables | 14,991 |
Identifiable acquired liabilities | 16,658 |
Net identifiable assets | 409,025 |
Net identifiable assets of the subsidiaries acquired at the date of acquisition amounted to \u20ac409,025 thousand. The net cash outflow connected with the acquisition (cash outflow adjusted for working capital items, less cash and cash equivalents acquired) amounted to \u20ac400,270 thousand. Accrued receivable from the seller of \u20ac565 thousand was recognised as adjustment to the purchase price paid. Acquisition costs of \u20ac2,287 thousand were capitalised on the value of investment property.
Solpower Energy SRL
On 18 November 2024, the Group acquired 100% of the share capital of Solpower Energy SRL, a Romanian legal entity with in place land rights, building permits and grid connection permits aimed at the development of a photovoltaic power plant with a targeted capacity of 50 MWp. The acquired property will be used by the Group for the development of one of its greenfield photovoltaic projects in Romania. The acquisition was recognised as an asset acquisition as the acquired entity does not represent a business as defined by IFRS 3.
The carrying amount of the identifiable assets and liabilities at the date of acquisition was as follows:
in \u20ac\u00a0thousand | Value recognised on acquisition |
|---|---|
Property, plant and equipment under construction | 5,143 |
Trade and other receivables | 326 |
Cash and cash equivalents | 10 |
Identifiable acquired assets | 5,479 |
Trade and other payables | 2 |
Identifiable acquired liabilities | 2 |
Net identifiable assets | 5,477 |
Net identifiable assets of the subsidiaries acquired at the date of acquisition amounted to \u20ac5,477 thousand. The net cash outflow connected with the acquisition (cash outflow adjusted for working capital items, less cash and cash equivalents acquired) amounted to \u20ac5,450 thousand, the remaining difference to the net asset value being an accrued payable adjustment to the purchase price paid.
Muntenia Beton Max SRL
On 27 December 2024, the Group acquired 100% of the share capital of Muntenia Beton Max SRL, a Romanian legal entity with in place land rights, building permits and grid connection permits aimed at the development of a photovoltaic power plant with a targeted capacity of 109 MWp. The acquired property will be used by the Group for the development of one of its greenfield photovoltaic projects in Romania. The acquisition was recognised as an asset acquisition as the acquired entity does not represent a business as defined by IFRS 3.
The carrying amount of the identifiable assets and liabilities at the date of acquisition was as follows:
in \u20ac\u00a0thousand | Value recognised on acquisition |
|---|---|
Property, plant and equipment under construction | 4,903 |
Trade and other receivables | 78 |
Cash and cash equivalents | 179 |
Identifiable acquired assets | 5,160 |
Trade and other payables | 314 |
Identifiable acquired liabilities | 314 |
Net identifiable assets | 4,846 |
Net identifiable assets of the subsidiaries acquired at the date of acquisition amounted to \u20ac4,846 thousand. The net cash outflow connected with the acquisition (cash outflow adjusted for working capital items, less cash and cash equivalents acquired) payable to the seller as at 31 December 2024 is \u20ac4,667 thousand. The consideration was paid in January 2025.
No acquisitions were made in 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18165-2": { "value": "The Consolidated Financial Statements incorporate the assets, liabilities, operating results and cash flows of the Company and its subsidiaries.
Subsidiaries are all entities controlled by the Company. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date the control commences until the date the control ceases.
These Consolidated Financial Statements include the Company and the fully consolidated subsidiaries, as set out below:
No | Subsidiary | Country of | Principal activity | Effective interest 2024 (%) | Effective interest 2023 (%) |
|---|---|---|---|---|---|
1 | ACE3 Sp. z o.o. | Poland | Property-owning | 100 | 100 |
2 | Arena Center Zagreb d.o.o. | Croatia | Property-owning | 100 | 100 |
3 | AUPARK Kosice SC, s.r.o. | Slovakia | Services | 100 | 100 |
4 | AUPARK Kosice, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
5 | AUPARK Piestany SC, s.r.o. | Slovakia | Services | 100 | 100 |
6 | AUPARK Piestany, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
7 | AUPARK Tower Kosice, s.r.o. | Slovakia | Property-owning | 100 | 100 |
8 | AUPARK \u017dilina SC a.s. | Slovakia | Services | 100 | 100 |
9 | AUPARK \u017dilina, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
10 | Aurora Mall Buzau SRL | Romania | Property-owning | 100 | 100 |
11 | Bia\u0142ystok Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
12 | Bonarka City Center Sp. z o.o. | Poland | Property-owning | 100 | 100 |
13 | Braila Promenada Mall SRL | Romania | Property-owning | 100 | 100 |
14 | Brasov Shopping City SRL | Romania | Property-owning | 100 | 100 |
15 | Bulfeld EOOD | Bulgaria | Property-owning | 100 | 100 |
16 | CEE Property Bulgaria EOOD | Bulgaria | Property-owning | 100 | 100 |
17 | CHP 1 Sp. z o.o. | Poland | Services | 100 | 100 |
18 | City Park Constanta SRL | Romania | Property-owning | 100 | 100 |
19 | Constanta Shopping City SRL | Romania | Property-owning | 100 | 100 |
20 | Copernicus Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
21 | Deva Shopping City SRL | Romania | Property-owning | 100 | 100 |
22 | Elco Energy Sp. z o.o.1 | Poland | Services | 100 | - |
23 | Elco ICT Sp. z o.o.1 | Poland | Services | 100 | - |
24 | Energit Sp. z o.o. | Poland | Services | 100 | 100 |
25 | E-Power Supply d.o.o. Beograd | Serbia | Services | 100 | 100 |
26 | E-power supply EOOD | Bulgaria | Services | 100 | 100 |
27 | E-power supply Kft2 | Hungary | Services | 100 | - |
28 | E-power supply management d.o.o. | Croatia | Services | 100 | 100 |
29 | E-Power Supply s.r.o. | Slovakia | Services | 100 | 100 |
30 | Expo Real Estate Project SRL | Romania | Services | 100 | 100 |
31 | Festival Shopping Center SRL | Romania | Property-owning | 100 | 100 |
32 | Floreasca Center SRL | Romania | Holding | 100 | 100 |
33 | Forum Gdansk Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
34 | FORUM Usti s.r.o. | Czech Republic | Property-owning | 100 | 100 |
35 | Galati Shopping City SRL | Romania | Property-owning | 100 | 100 |
36 | General Building Management SRL | Romania | Property-owning | 100 | 100 |
37 | General Investment SRL | Romania | Property-owning | 100 | 100 |
38 | Gontar Sp. z o.o. | Poland | Property-owning | 100 | 100 |
39 | HANSA Immobilien EOOD | Bulgaria | Property-owning | 100 | 100 |
40 | Iris Titan Shopping Center SRL | Romania | Property-owning | 100 | 100 |
41 | Karolinka Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
42 | Liberec Property s.r.o. | Czech Republic | Property-owning | 100 | 100 |
43 | Magnolia Property Sp. z o.o.1 | Poland | Property-owning | 100 | - |
44 | Mammut Zrt | Hungary | Property-owning | 100 | 100 |
45 | Mammut Management Kft | Hungary | Services | 100 | 100 |
46 | Mammut Real Estate Kft | Hungary | Property-owning | 100 | 100 |
47 | Marapi Sp. z o.o. | Poland | Property-owning | 100 | 100 |
48 | Mega Mall Bucuresti SRL | Romania | Property-owning | 100 | 100 |
49 | Milvus Sp. z o.o. | Poland | Property-owning | 100 | 100 |
50 | Mlyny a.s. | Slovakia | Property-owning | 100 | 100 |
51 | Monarda Sp. z o.o. | Poland | Property-owning | 100 | 100 |
52 | MUNTENIA BETON MAX SRL1 | Romania | Services | 100 | - |
53 | NE Property B.V. | Netherlands | Holding | 100 | 100 |
54 | NEPI Bucharest One SRL | Romania | Property-owning | 100 | 100 |
55 | NEPI Bucharest Two SRL | Romania | Property-owning | 100 | 100 |
56 | NEPI Croatia Management d.o.o. | Croatia | Services | 100 | 100 |
57 | NEPI Czech Management s.r.o. | Czech Republic | Services | 100 | 100 |
58 | Nepi Four Real Estate Solutions SRL | Romania | Holding | 100 | 100 |
59 | NEPI Investment Management SRL | Romania | Services | 100 | 100 |
60 | NEPI Project Four EOOD | Bulgaria | Property-owning | 100 | 100 |
61 | NEPI Project One EOOD | Bulgaria | Property-owning | 100 | 100 |
62 | NEPI Project Three EOOD | Bulgaria | Services | 100 | 100 |
63 | NEPI Project Two EOOD | Bulgaria | Holding | 100 | 100 |
64 | NEPI Real Estate Development d.o.o. | Serbia | Services | 100 | 100 |
65 | NEPI Real Estate Project One d.o.o. (sold in 2024) | Serbia | Property-owning | - | 100 |
66 | NEPI Rockcastle Green Energy B.V.2 | Netherlands | Services | 100 | - |
67 | NEPI Rockcastle Hungary Kft | Hungary | Services | 100 | 100 |
68 | NEPI Rockcastle Lithuania UAB | Lithuania | Services | 100 | 100 |
69 | Nepi Seventeen Land Development SRL | Romania | Services | 100 | 100 |
70 | NEPI Six Development SRL | Romania | Services | 100 | 100 |
71 | Nepi Sixteen Real Estate Investment SRL | Romania | Holding | 100 | 100 |
72 | Nepi Slovak Centres One a.s. | Slovakia | Services | 100 | 100 |
73 | NEPI Slovakia Management s.r.o. | Slovakia | Services | 100 | 100 |
74 | NEPI Ten Development Solutions SRL | Romania | Property-owning | 100 | 100 |
75 | Nepi Twenty Real Estate Development SRL | Romania | Services | 100 | 100 |
76 | Nepi Twenty-One Investment Estate SRL | Romania | Services | 100 | 100 |
77 | Nepi Twenty-Three Investment Solutions SRL | Romania | Property-owning | 100 | 100 |
78 | NEPIOM Ltd | Malta | Holding | 100 | 100 |
79 | New Energy Management SRL | Romania | Services | 100 | 100 |
80 | Nobilia Sp. z o.o. (merged with Energit Sp. z o.o. in 2024) | Poland | Services | - | 100 |
81 | NRE Sibiu Shopping City SRL | Romania | Property-owning | 100 | 100 |
82 | Olsztyn Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
83 | Otopeni Warehouse and Logistics SRL (sold in 2024) | Romania | Property-owning | - | 100 |
84 | Piotrk\u00f3w Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
85 | Platan Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
86 | Ploiesti Shopping City SRL | Romania | Property-owning | 100 | 100 |
87 | Pogoria Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
88 | Promenada Mall Bucuresti SRL | Romania | Property-owning | 100 | 100 |
89 | Ramnicu Valcea Shopping City SRL | Romania | Property-owning | 100 | 100 |
90 | Real Estate Asset Management SRL | Romania | Services | 100 | 100 |
91 | Retail Park Pitesti SRL | Romania | Property-owning | 100 | 100 |
92 | Rockcastle Europe Limited (wound up in 2024) | Mauritius | Holding | - | 100 |
93 | Rockcastle Poland Sp. z o.o. | Poland | Services | 100 | 100 |
94 | Satu Mare Shopping City SRL | Romania | Property-owning | 100 | 100 |
95 | SCP s.r.o. | Slovakia | Property-owning | 100 | 100 |
96 | Severin Shopping Center SRL | Romania | Property-owning | 100 | 100 |
97 | Shopping City Piatra Neamt SRL | Romania | Property-owning | 100 | 100 |
98 | Sibiu Shopping City 2 SRL | Romania | Property-owning | 100 | 100 |
99 | Silesia Property Sp. z o.o.1 | Poland | Property-owning | 100 | - |
100 | Shopping City Timisoara SRL | Romania | Property-owning | 100 | 100 |
101 | ShoppingSpot Sp. z o.o. | Poland | Services | 100 | 100 |
102 | Sofia Commercial Centre EOOD | Bulgaria | Services | 100 | 100 |
103 | Solpower Energy SRL1 | Romania | Services | 100 | - |
104 | Stichting NEPI Rockcastle Incentive Plan Foundation | Netherlands | Services | 100 | 100 |
105 | Symmetry Arena Kft | Hungary | Property-owning | 100 | 100 |
106 | Targu Jiu Development SRL | Romania | Property-owning | 100 | 100 |
107 | Targu Mures Shopping City SRL | Romania | Property-owning | 100 | 100 |
108 | Tummam Kft | Hungary | Property-owning | 100 | 100 |
109 | U\u017edaroji akcin\u0117 bendrov\u0117 Ozantis | Lithuania | Property-owning | 100 | 100 |
110 | Vulcan Residential Park SRL | Romania | Property-owning | 100 | 100 |
111 | Vulcan Value Centre SRL | Romania | Property-owning | 100 | 100 |
112 | Zielona G\u00f3ra Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
Magnolia Park
On 1 October 2024, the Group acquired Magnolia Property Sp. z.o.o., the legal entity that owns Magnolia Park in Wroclaw, Poland. The acquisition was recognised as a property asset acquisition as the acquired entity does not represent a business as defined by IFRS 3.
The carrying amount of the identifiable assets and liabilities at the date of acquisition was as follows:
in \u20ac\u00a0thousand | Value recognised on acquisition |
|---|---|
Investment property in use | 353,277 |
Trade and other receivables | 4,360 |
Cash and cash equivalents | 4,500 |
Identifiable acquired assets | 362,137 |
Other long-term liabilities | 1,554 |
Trade and other payables | 2,747 |
Identifiable acquired liabilities | 4,301 |
Net identifiable assets | 357,836 |
Net identifiable assets of the subsidiary acquired at the date of acquisition amounted to \u20ac357,836 thousand. The net cash outflow connected with the acquisition (cash outflow adjusted for working capital items, less cash and cash equivalents acquired) amounted to \u20ac351,794 thousand, the remaining difference to the net asset value being an accrued payable adjustment to the purchase price paid. Acquisition costs of \u20ac2,715 thousand were capitalised on the value of investment property.
The investment property reflected above does not include the right-of-use assets and related lease liability, of \u20ac29,840 thousand, connected to the land under concession for Magnolia Park.
Silesia City Center
On 6 December 2024, the Group acquired Helios SCC Sp. z.o.o. (subsequently changed its name to Silesia Property Sp. z o.o.), the legal entity which owns Silesia City Center, a shopping centre located in Katowice, Poland. The Group has concurrently acquired Elco Energy Sp. z o.o. and Elco ICT Sp. z o.o., the legal entities that provide communication infrastructure and energy services for the tenants in Silesia City Center. The acquisition was recognized as a property asset acquisition as the acquired companies do not represent a business as defined by IFRS 3.
The carrying amount of the identifiable assets and liabilities at the date of acquisition was as follows:
in \u20ac\u00a0thousand | Value recognised on acquisition |
|---|---|
Investment property in use | 406,389 |
Property, plant and equipment under construction | 513 |
Property, plant and equipment - Other | 41 |
Trade and other receivables | 9,420 |
Cash and cash equivalents | 9,320 |
Identifiable acquired assets | 425,683 |
Other long-term liabilities | 1,667 |
Trade and other payables | 14,991 |
Identifiable acquired liabilities | 16,658 |
Net identifiable assets | 409,025 |
Net identifiable assets of the subsidiaries acquired at the date of acquisition amounted to \u20ac409,025 thousand. The net cash outflow connected with the acquisition (cash outflow adjusted for working capital items, less cash and cash equivalents acquired) amounted to \u20ac400,270 thousand. Accrued receivable from the seller of \u20ac565 thousand was recognised as adjustment to the purchase price paid. Acquisition costs of \u20ac2,287 thousand were capitalised on the value of investment property.
Solpower Energy SRL
On 18 November 2024, the Group acquired 100% of the share capital of Solpower Energy SRL, a Romanian legal entity with in place land rights, building permits and grid connection permits aimed at the development of a photovoltaic power plant with a targeted capacity of 50 MWp. The acquired property will be used by the Group for the development of one of its greenfield photovoltaic projects in Romania. The acquisition was recognised as an asset acquisition as the acquired entity does not represent a business as defined by IFRS 3.
The carrying amount of the identifiable assets and liabilities at the date of acquisition was as follows:
in \u20ac\u00a0thousand | Value recognised on acquisition |
|---|---|
Property, plant and equipment under construction | 5,143 |
Trade and other receivables | 326 |
Cash and cash equivalents | 10 |
Identifiable acquired assets | 5,479 |
Trade and other payables | 2 |
Identifiable acquired liabilities | 2 |
Net identifiable assets | 5,477 |
Net identifiable assets of the subsidiaries acquired at the date of acquisition amounted to \u20ac5,477 thousand. The net cash outflow connected with the acquisition (cash outflow adjusted for working capital items, less cash and cash equivalents acquired) amounted to \u20ac5,450 thousand, the remaining difference to the net asset value being an accrued payable adjustment to the purchase price paid.
Muntenia Beton Max SRL
On 27 December 2024, the Group acquired 100% of the share capital of Muntenia Beton Max SRL, a Romanian legal entity with in place land rights, building permits and grid connection permits aimed at the development of a photovoltaic power plant with a targeted capacity of 109 MWp. The acquired property will be used by the Group for the development of one of its greenfield photovoltaic projects in Romania. The acquisition was recognised as an asset acquisition as the acquired entity does not represent a business as defined by IFRS 3.
The carrying amount of the identifiable assets and liabilities at the date of acquisition was as follows:
in \u20ac\u00a0thousand | Value recognised on acquisition |
|---|---|
Property, plant and equipment under construction | 4,903 |
Trade and other receivables | 78 |
Cash and cash equivalents | 179 |
Identifiable acquired assets | 5,160 |
Trade and other payables | 314 |
Identifiable acquired liabilities | 314 |
Net identifiable assets | 4,846 |
Net identifiable assets of the subsidiaries acquired at the date of acquisition amounted to \u20ac4,846 thousand. The net cash outflow connected with the acquisition (cash outflow adjusted for working capital items, less cash and cash equivalents acquired) payable to the seller as at 31 December 2024 is \u20ac4,667 thousand. The consideration was paid in January 2025.
No acquisitions were made in 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18166-1": { "value": "The Consolidated Financial Statements incorporate the assets, liabilities, operating results and cash flows of the Company and its subsidiaries.
Subsidiaries are all entities controlled by the Company. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date the control commences until the date the control ceases.
These Consolidated Financial Statements include the Company and the fully consolidated subsidiaries, as set out below:
No | Subsidiary | Country of | Principal activity | Effective interest 2024 (%) | Effective interest 2023 (%) |
|---|---|---|---|---|---|
1 | ACE3 Sp. z o.o. | Poland | Property-owning | 100 | 100 |
2 | Arena Center Zagreb d.o.o. | Croatia | Property-owning | 100 | 100 |
3 | AUPARK Kosice SC, s.r.o. | Slovakia | Services | 100 | 100 |
4 | AUPARK Kosice, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
5 | AUPARK Piestany SC, s.r.o. | Slovakia | Services | 100 | 100 |
6 | AUPARK Piestany, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
7 | AUPARK Tower Kosice, s.r.o. | Slovakia | Property-owning | 100 | 100 |
8 | AUPARK \u017dilina SC a.s. | Slovakia | Services | 100 | 100 |
9 | AUPARK \u017dilina, spol. s.r.o. | Slovakia | Property-owning | 100 | 100 |
10 | Aurora Mall Buzau SRL | Romania | Property-owning | 100 | 100 |
11 | Bia\u0142ystok Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
12 | Bonarka City Center Sp. z o.o. | Poland | Property-owning | 100 | 100 |
13 | Braila Promenada Mall SRL | Romania | Property-owning | 100 | 100 |
14 | Brasov Shopping City SRL | Romania | Property-owning | 100 | 100 |
15 | Bulfeld EOOD | Bulgaria | Property-owning | 100 | 100 |
16 | CEE Property Bulgaria EOOD | Bulgaria | Property-owning | 100 | 100 |
17 | CHP 1 Sp. z o.o. | Poland | Services | 100 | 100 |
18 | City Park Constanta SRL | Romania | Property-owning | 100 | 100 |
19 | Constanta Shopping City SRL | Romania | Property-owning | 100 | 100 |
20 | Copernicus Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
21 | Deva Shopping City SRL | Romania | Property-owning | 100 | 100 |
22 | Elco Energy Sp. z o.o.1 | Poland | Services | 100 | - |
23 | Elco ICT Sp. z o.o.1 | Poland | Services | 100 | - |
24 | Energit Sp. z o.o. | Poland | Services | 100 | 100 |
25 | E-Power Supply d.o.o. Beograd | Serbia | Services | 100 | 100 |
26 | E-power supply EOOD | Bulgaria | Services | 100 | 100 |
27 | E-power supply Kft2 | Hungary | Services | 100 | - |
28 | E-power supply management d.o.o. | Croatia | Services | 100 | 100 |
29 | E-Power Supply s.r.o. | Slovakia | Services | 100 | 100 |
30 | Expo Real Estate Project SRL | Romania | Services | 100 | 100 |
31 | Festival Shopping Center SRL | Romania | Property-owning | 100 | 100 |
32 | Floreasca Center SRL | Romania | Holding | 100 | 100 |
33 | Forum Gdansk Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
34 | FORUM Usti s.r.o. | Czech Republic | Property-owning | 100 | 100 |
35 | Galati Shopping City SRL | Romania | Property-owning | 100 | 100 |
36 | General Building Management SRL | Romania | Property-owning | 100 | 100 |
37 | General Investment SRL | Romania | Property-owning | 100 | 100 |
38 | Gontar Sp. z o.o. | Poland | Property-owning | 100 | 100 |
39 | HANSA Immobilien EOOD | Bulgaria | Property-owning | 100 | 100 |
40 | Iris Titan Shopping Center SRL | Romania | Property-owning | 100 | 100 |
41 | Karolinka Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
42 | Liberec Property s.r.o. | Czech Republic | Property-owning | 100 | 100 |
43 | Magnolia Property Sp. z o.o.1 | Poland | Property-owning | 100 | - |
44 | Mammut Zrt | Hungary | Property-owning | 100 | 100 |
45 | Mammut Management Kft | Hungary | Services | 100 | 100 |
46 | Mammut Real Estate Kft | Hungary | Property-owning | 100 | 100 |
47 | Marapi Sp. z o.o. | Poland | Property-owning | 100 | 100 |
48 | Mega Mall Bucuresti SRL | Romania | Property-owning | 100 | 100 |
49 | Milvus Sp. z o.o. | Poland | Property-owning | 100 | 100 |
50 | Mlyny a.s. | Slovakia | Property-owning | 100 | 100 |
51 | Monarda Sp. z o.o. | Poland | Property-owning | 100 | 100 |
52 | MUNTENIA BETON MAX SRL1 | Romania | Services | 100 | - |
53 | NE Property B.V. | Netherlands | Holding | 100 | 100 |
54 | NEPI Bucharest One SRL | Romania | Property-owning | 100 | 100 |
55 | NEPI Bucharest Two SRL | Romania | Property-owning | 100 | 100 |
56 | NEPI Croatia Management d.o.o. | Croatia | Services | 100 | 100 |
57 | NEPI Czech Management s.r.o. | Czech Republic | Services | 100 | 100 |
58 | Nepi Four Real Estate Solutions SRL | Romania | Holding | 100 | 100 |
59 | NEPI Investment Management SRL | Romania | Services | 100 | 100 |
60 | NEPI Project Four EOOD | Bulgaria | Property-owning | 100 | 100 |
61 | NEPI Project One EOOD | Bulgaria | Property-owning | 100 | 100 |
62 | NEPI Project Three EOOD | Bulgaria | Services | 100 | 100 |
63 | NEPI Project Two EOOD | Bulgaria | Holding | 100 | 100 |
64 | NEPI Real Estate Development d.o.o. | Serbia | Services | 100 | 100 |
65 | NEPI Real Estate Project One d.o.o. (sold in 2024) | Serbia | Property-owning | - | 100 |
66 | NEPI Rockcastle Green Energy B.V.2 | Netherlands | Services | 100 | - |
67 | NEPI Rockcastle Hungary Kft | Hungary | Services | 100 | 100 |
68 | NEPI Rockcastle Lithuania UAB | Lithuania | Services | 100 | 100 |
69 | Nepi Seventeen Land Development SRL | Romania | Services | 100 | 100 |
70 | NEPI Six Development SRL | Romania | Services | 100 | 100 |
71 | Nepi Sixteen Real Estate Investment SRL | Romania | Holding | 100 | 100 |
72 | Nepi Slovak Centres One a.s. | Slovakia | Services | 100 | 100 |
73 | NEPI Slovakia Management s.r.o. | Slovakia | Services | 100 | 100 |
74 | NEPI Ten Development Solutions SRL | Romania | Property-owning | 100 | 100 |
75 | Nepi Twenty Real Estate Development SRL | Romania | Services | 100 | 100 |
76 | Nepi Twenty-One Investment Estate SRL | Romania | Services | 100 | 100 |
77 | Nepi Twenty-Three Investment Solutions SRL | Romania | Property-owning | 100 | 100 |
78 | NEPIOM Ltd | Malta | Holding | 100 | 100 |
79 | New Energy Management SRL | Romania | Services | 100 | 100 |
80 | Nobilia Sp. z o.o. (merged with Energit Sp. z o.o. in 2024) | Poland | Services | - | 100 |
81 | NRE Sibiu Shopping City SRL | Romania | Property-owning | 100 | 100 |
82 | Olsztyn Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
83 | Otopeni Warehouse and Logistics SRL (sold in 2024) | Romania | Property-owning | - | 100 |
84 | Piotrk\u00f3w Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
85 | Platan Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
86 | Ploiesti Shopping City SRL | Romania | Property-owning | 100 | 100 |
87 | Pogoria Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
88 | Promenada Mall Bucuresti SRL | Romania | Property-owning | 100 | 100 |
89 | Ramnicu Valcea Shopping City SRL | Romania | Property-owning | 100 | 100 |
90 | Real Estate Asset Management SRL | Romania | Services | 100 | 100 |
91 | Retail Park Pitesti SRL | Romania | Property-owning | 100 | 100 |
92 | Rockcastle Europe Limited (wound up in 2024) | Mauritius | Holding | - | 100 |
93 | Rockcastle Poland Sp. z o.o. | Poland | Services | 100 | 100 |
94 | Satu Mare Shopping City SRL | Romania | Property-owning | 100 | 100 |
95 | SCP s.r.o. | Slovakia | Property-owning | 100 | 100 |
96 | Severin Shopping Center SRL | Romania | Property-owning | 100 | 100 |
97 | Shopping City Piatra Neamt SRL | Romania | Property-owning | 100 | 100 |
98 | Sibiu Shopping City 2 SRL | Romania | Property-owning | 100 | 100 |
99 | Silesia Property Sp. z o.o.1 | Poland | Property-owning | 100 | - |
100 | Shopping City Timisoara SRL | Romania | Property-owning | 100 | 100 |
101 | ShoppingSpot Sp. z o.o. | Poland | Services | 100 | 100 |
102 | Sofia Commercial Centre EOOD | Bulgaria | Services | 100 | 100 |
103 | Solpower Energy SRL1 | Romania | Services | 100 | - |
104 | Stichting NEPI Rockcastle Incentive Plan Foundation | Netherlands | Services | 100 | 100 |
105 | Symmetry Arena Kft | Hungary | Property-owning | 100 | 100 |
106 | Targu Jiu Development SRL | Romania | Property-owning | 100 | 100 |
107 | Targu Mures Shopping City SRL | Romania | Property-owning | 100 | 100 |
108 | Tummam Kft | Hungary | Property-owning | 100 | 100 |
109 | U\u017edaroji akcin\u0117 bendrov\u0117 Ozantis | Lithuania | Property-owning | 100 | 100 |
110 | Vulcan Residential Park SRL | Romania | Property-owning | 100 | 100 |
111 | Vulcan Value Centre SRL | Romania | Property-owning | 100 | 100 |
112 | Zielona G\u00f3ra Property Sp. z o.o. | Poland | Property-owning | 100 | 100 |
Identity of related parties with whom material transactions have occurred
The Directors are related parties for the Group.
Material related party transactions
Fees paid to Directors, together with the performance bonus, during the current and previous year are detailed below. No other payments were made to Directors by NEPI Rockcastle, except reimbursements for travel and accommodation.
| \u00a0 | 31 Dec 2024 | 31 Dec 2023 | |||
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | Directors\u2019 fees | Performance related remuneration | Directors\u2019 fees | Performance related remuneration | Reconciling differences between 2022 performance related remuneration paid vs. accrual |
R\u00fcdiger Dany | 675 | 1,067 | 675 | 1,009 | (3) |
Eliza Predoiu | 385 | 554 | 385 | 543 | (12) |
Marek Noetzel | 385 | 628 | 385 | 601 | (7) |
George Aase | 157 | - | 102 | - | - |
Antoine Dijkstra | 102 | - | 88 | - | - |
Andre van der Veer | 109 | - | 98 | - | - |
Andreas Klingen | 101 | - | 89 | - | - |
Steve Brown | 87 | - | 75 | - | - |
Andries de Lange | 77 | - | 63 | - | - |
Jonathan Lurie | 79 | - | 68 | - | - |
Ana Maria Mihaescu | 89 | - | 74 | - | - |
Jeanine Holscher1 | 56 | - | - | - | - |
Total | 2,302 | 2,249 | 2,102 | 2,153 | (22) |
Name of Director | Number of shares held as at 31 Dec 2024 | Number of shares held as at 31 Dec 20231 |
|---|---|---|
Marek Noetzel | 88,358 | 88,358 |
Total | 88,358 | 88,358 |
Name of Director | Number of shares unvested at 31 Dec 2024 | Number of shares unvested at 31 Dec 2023 |
|---|---|---|
R\u00fcdiger Dany | 399,740 | 271,983 |
Eliza Predoiu | 256,194 | 174,922 |
Marek Noetzel | 275,256 | 210,532 |
Total | 931,190 | 657,437 |
The share based payment expense related to the directors of the Group amounted to \u20ac1,325 thousand in 2024 (31 December 2023: \u20ac393 thousand).
The Directors of the Group hold 1,854,569 shares as at 31 December 2024 (31 December 2023: 1,304,296 shares), which represents 0.26% of the outstanding shares (31 December 2023: 0.2% of the outstanding shares). Out of the above-mentioned shareholding, 560,858 shares (31 December 2023: 343,052 shares) which represent 0.08% of the outstanding shares (31 December 2023: 0.05% of the outstanding shares) are held by the non-Executive Directors. There were no changes to the Director\u2019s interests from 31 December 2024 to the approval of the annual audited Consolidated Financial Statements, other than the shares awarded in March 2024, as detailed in the Remuneration section of this Annual Report, on pages . Other than as set out in note 37(a) above, none of the shares of the Director are subject to security, guarantee, collateral, and they are not encumbered in any way.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18167-1": { "value": "The Consolidated Financial Statements incorporate the assets, liabilities, operating results and cash flows of the Company and its subsidiaries.
Subsidiaries are all entities controlled by the Company. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date the control commences until the date the control ceases.
The Consolidated Financial Statements incorporate the assets, liabilities, operating results and cash flows of the Company and its subsidiaries.
Subsidiaries are all entities controlled by the Company. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date the control commences until the date the control ceases.
Investment property is held to earn rental income, capital appreciation or both.
The cost of investment property acquired by any other means than a business combination consists of the purchase price and directly attributable expenditure.
Subsequent expenditure relating to investment property is capitalised when future economic benefits from the use of the asset are probable and the cost of the item can be measured reliably. All other subsequent expenditure is recognised as an expense during the period it is incurred.
After initial recognition, investment property in use is measured at fair value. Fair value is determined semi-annually by external, independent professional valuers, with appropriate and recognised qualifications and recent experience in the location and category of property being valued. Valuations are based on the income method, respectively, the applied method used for all investment property in use is discounted cash flow (\u201cDCF\u201d).
Gains or losses arising from changes in the fair values are included in the Statement of comprehensive income for the period during which they arise. Unrealised gains or losses, net of deferred tax, are non-distributable.
Lease incentives, such as rent-free periods, discounts during the lease or payment of fit-out works for the benefit of the tenants, are part of value of the investment property and are straight-lined over the lease term. The lease term corresponds to the contractual duration for the majority of the leases, except for the anchor tenants, for which the lease duration is assessed by the Group based on past experience and taking into account factors such as: GLA of the property where the anchor tenant is located, catchment area, dominance/competition in the catchment area or purchasing power.
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use.
Property that is being constructed or developed for future use as investment property is classified as investment property under development and carried at cost until construction or development is complete, or its fair value can be reliably determined.
The land on which investment property is constructed or developed is carried at fair value, which is determined semi-annually by external, independent professional valuers, with appropriate and recognised qualifications and recent experience in the location and category of property being valued. Valuations are performed using the market comparable approach or residual approach.
Gains or losses arising from changes in the fair values are included in the Statement of comprehensive income during the period when they arise. Unrealised gains or losses, net of deferred tax, are non-distributable.
Investment property is stated at its fair value based on valuation reports prepared by international appraisers as at 30 June and 31 December each year. Valuations are based on discounted cash flow projections based on reliable estimates of future cash flows, using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows. These are supported by the terms of any existing lease and other contracts and by external evidence such as current market rents for similar properties in the same location and condition.
In preparing the valuation reports on the Group\u2019s investment property, the external appraisers excluded distressed sales when considering comparable sales prices (used for valuation of plots of land held for development). Management reviewed the appraisers\u2019 assumptions relating to the discounted cash flow models used in the valuations and confirmed that factors such as the discount rate applied have been appropriately determined considering the market conditions at the end of the reporting period.
Valuations of the income generating properties are based on cash flow statements, in which the present value of net operating income during a ten-year period and the residual value of the property at the end of the period are calculated.
Forecasts of net operating income are based on leases signed at the time of the valuation date, the estimated rental values for existing leases when they expire and the estimated achievable rental values of the existing vacancies. The value of long-term vacancies is estimated based on the properties\u2019 location and condition. The valuers\u2019 assessments of non-recoverable expenses are based on their experience of comparable properties and historical costs provided by the Group.
The discount rates used are nominal returns on total capital before tax and vary between 7.80% and 11.95% (2023: 7.90% and 11.95%). The required rates of return are based on assessments of the market\u2019s required returns for similar properties. The discount rate is set individually for each property and is based on the condition and location, the stability of the tenants and lease duration.
Further information relating to sensitivity of material accounting estimates used in the valuation of investment property is presented in Note 8.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18968-2": { "value": "Investment property is held to earn rental income, capital appreciation or both.
The cost of investment property acquired by any other means than a business combination consists of the purchase price and directly attributable expenditure.
Subsequent expenditure relating to investment property is capitalised when future economic benefits from the use of the asset are probable and the cost of the item can be measured reliably. All other subsequent expenditure is recognised as an expense during the period it is incurred.
After initial recognition, investment property in use is measured at fair value. Fair value is determined semi-annually by external, independent professional valuers, with appropriate and recognised qualifications and recent experience in the location and category of property being valued. Valuations are based on the income method, respectively, the applied method used for all investment property in use is discounted cash flow (\u201cDCF\u201d).
Gains or losses arising from changes in the fair values are included in the Statement of comprehensive income for the period during which they arise. Unrealised gains or losses, net of deferred tax, are non-distributable.
Lease incentives, such as rent-free periods, discounts during the lease or payment of fit-out works for the benefit of the tenants, are part of value of the investment property and are straight-lined over the lease term. The lease term corresponds to the contractual duration for the majority of the leases, except for the anchor tenants, for which the lease duration is assessed by the Group based on past experience and taking into account factors such as: GLA of the property where the anchor tenant is located, catchment area, dominance/competition in the catchment area or purchasing power.
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use.
Property that is being constructed or developed for future use as investment property is classified as investment property under development and carried at cost until construction or development is complete, or its fair value can be reliably determined.
The land on which investment property is constructed or developed is carried at fair value, which is determined semi-annually by external, independent professional valuers, with appropriate and recognised qualifications and recent experience in the location and category of property being valued. Valuations are performed using the market comparable approach or residual approach.
Gains or losses arising from changes in the fair values are included in the Statement of comprehensive income during the period when they arise. Unrealised gains or losses, net of deferred tax, are non-distributable.
Investment property is stated at its fair value based on valuation reports prepared by international appraisers as at 30 June and 31 December each year. Valuations are based on discounted cash flow projections based on reliable estimates of future cash flows, using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows. These are supported by the terms of any existing lease and other contracts and by external evidence such as current market rents for similar properties in the same location and condition.
In preparing the valuation reports on the Group\u2019s investment property, the external appraisers excluded distressed sales when considering comparable sales prices (used for valuation of plots of land held for development). Management reviewed the appraisers\u2019 assumptions relating to the discounted cash flow models used in the valuations and confirmed that factors such as the discount rate applied have been appropriately determined considering the market conditions at the end of the reporting period.
Valuations of the income generating properties are based on cash flow statements, in which the present value of net operating income during a ten-year period and the residual value of the property at the end of the period are calculated.
Forecasts of net operating income are based on leases signed at the time of the valuation date, the estimated rental values for existing leases when they expire and the estimated achievable rental values of the existing vacancies. The value of long-term vacancies is estimated based on the properties\u2019 location and condition. The valuers\u2019 assessments of non-recoverable expenses are based on their experience of comparable properties and historical costs provided by the Group.
The discount rates used are nominal returns on total capital before tax and vary between 7.80% and 11.95% (2023: 7.90% and 11.95%). The required rates of return are based on assessments of the market\u2019s required returns for similar properties. The discount rate is set individually for each property and is based on the condition and location, the stability of the tenants and lease duration.
Further information relating to sensitivity of material accounting estimates used in the valuation of investment property is presented in Note 8.
Movement in investment property in use | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Carrying value at beginning of year | \u00a0 | 6,627,247 | 6,331,793 |
Additions from asset deals | 759,666 | - | |
Capital expenditure | \u00a0 | 51,373 | 44,982 |
Transferred from investment property under development | 65,798 | 214,177 | |
Fair value adjustments | 183,942 | 168,185 | |
Remeasurement of right-of-use assets | - | 20,062 | |
Additions to the right-of-use assets from acquired assets | 29,840 | - | |
Fair value adjustment of right-of-use asset | (412) | (742) | |
Investment property reclassified as held for sale | - | (151,210) | |
Transfers from property, plant and equipment | 556 | - | |
Investment property reclassified to property, plant and equipment | (23,212) | - | |
CARRYING VALUE | \u00a0 | 7,694,798 | 6,627,247 |
As at 31 December 2024, the balance of investment property included also right-of-use assets of \u20ac85,949 thousand (2023: \u20ac56,520 thousand) representing long-term land concessions for the Group's Polish properties contracted from local government.
Investment property is carried at fair value and is independently assessed on a semi-annual basis, as at 30 June and 31 December.
For the year ended 31 December 2024, the Group commissioned independent appraisal reports on its investment property from Colliers International, Cushman&Wakefield and Affiliate Partners and Jones Lang LaSalle (for the year ended 31 December 2023: Colliers International and Cushman&Wakefield and Affiliate Partners), all of whom are members of the Royal Institution of Chartered Surveyors (RICS). Valuations are prepared in accordance with the RICS Valuation \u2013 Global Standards 2021 (the \u201cRed Book\") and ANEVAR Valuation Standards - 2022 Edition which incorporate the International Valuation Standards (\u201cIVS\u201d)
All investment property in use is valued by the Income Method. For the years ended 31 December 2024 and 31 December 2023 respectively, the applied method used for all investment property in use was discounted cash flow (\u201cDCF\u201d).
DCF uses explicit assumptions regarding the benefits and liabilities of ownership over the asset\u2019s life, including an exit, or terminal, value. As an accepted method within the Income Method to valuation, the DCF method involves the projection of a series of cash flows onto a real property interest. To these projected cash flow series, an appropriate, market-derived discount rate is applied to establish the present value of cash inflows associated with the real property.
The duration of cash flow, and the specific timing of inflows and outflows, are determined by events such as rent reviews, lease renewal and related lease-up periods, re-letting, redevelopment or refurbishment. The appropriate duration is typically driven by market behaviour. In the case of investment property, periodic cash flow is typically estimated as gross income less vacancy, non-recoverable expenses, collection losses, lease incentives, maintenance costs, agent and commission fees, and other operating and management expenses. The series of periodic net cash inflows, combined with the estimated terminal value anticipated at the end of the projection period, is then discounted. For all investment property in use, the current use equates to the highest and best use.
The Group provides all information necessary for the valuations, including detailed tenancy schedules, comprising information on occupied and vacant units, unit areas and numbers, lease commencement and expiry dates, break options and indexation clauses. All properties are inspected by representatives of external valuers once a year.
The Group\u2019s valuers note in their valuation reports that wherever appropriate, sustainability and environmental matters are an integral part of the valuation approach. Sustainability is taken to mean the consideration of such matters as environment and climate change, health and well-being and corporate responsibility that can or do impact the valuation of an asset. In a valuation context, sustainability encompasses a wide range of physical, social, environmental, and economic factors that can affect value. The range of issues includes key environmental risks, such as energy efficiency and climate, as well as matters of design, configuration, accessibility, legislation, management, and fiscal considerations.
As at 31 December 2024, the investment property in use had an EPRA Vacancy Rate of 1.7% (31 December 2023: 2.2%). EPRA Vacancy Rate is a non-IFRS measure which is defined in section Other information, Glossary.
As compared to the valuations on 31 December 2023, the estimated rental values generally increased, supported by the good performance of the assets, with no significant changes in valuation yields.
As at 31 December 2024, the Group\u2019s portfolio included retail, office and industrial properties.
The Group currently discloses fair values according to a \u2018fair value hierarchy\u2019 (as per IFRS 13) which categorises the inputs used in valuation techniques into three levels. The hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs. The fair value hierarchy is explained below:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: use of a model with inputs (other than quoted prices included within Level 1) that are directly, or indirectly, observable market data; and
Level 3: use of a model with inputs not based on observable market data.
The Group\u2019s investment property is categorised as Level 3. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There were no transfers between hierarchy levels during the year.
The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy of the Group\u2019s property portfolio, together with the impact of significant movements in these inputs on the fair value measurement, are detailed below:
Unobservable input | Impact on fair value of increase in input |
|---|---|
Estimated rental value | Increase |
Discount rate | Decrease |
Capitalisation rate for terminal value | Decrease |
Information relating to fair value measurement using significant unobservable inputs (Level 3) as at 31 December 2024 for retail properties is presented in the table below:
Segment | Valuation technique | Estimated market rental value | Discount rate | Capitalisation rate for terminal value |
|---|---|---|---|---|
| \u00a0 | \u00a0 | (yearly amount in \u2018000 \u20ac) | (%) | (%) |
Romania | Discounted cash flow | 323 - 27,509 (13,945)1 | 8.95% - 10.45%(9.73)1 | 6.75% - 8.25% (7.53)1 |
Poland | Discounted cash flow | 2,973 - 26,710 (17,530)1 | 7.80% - 10.20% (8.34)1 | 6.60% - 9.00% (7.08)1 |
Slovakia | Discounted cash flow | 3,287 - 12,855 (9,816)1 | 9.00% - 10.25% (9.12)1 | 7.00% - 8.25% (7.12)1 |
Hungary | Discounted cash flow | 19,617 - 20,949 (20,343)1 | 8.60% - 9.20% (8.87)1 | 6.60% - 7.20% (6.87)1 |
Bulgaria | Discounted cash flow | 17,224 - 28,872 (24,423)1 | 10.43% | 7.50% - 7.75% (7.60)1 |
Croatia | Discounted cash flow | 1,723 - 19,666 (18,281)1 | 9.75% | 7.50% - 7.75% (7.73)1 |
Czech Republic | Discounted cash flow | 6,850 - 6,974 (6,913)1 | 9.75% | 7.25% |
Lithuania | Discounted cash flow | 13,256 | 10.00% | 8.25% |
Information relating to fair value measurement using significant unobservable inputs (Level 3) as at 31 December 2023 for retail properties is presented in the table below:
Segment | Valuation technique | Estimated market rental value | Discount rate | Capitalisation rate for terminal value |
|---|---|---|---|---|
| \u00a0 | \u00a0 | (yearly amount in \u2018000 \u20ac) | (%) | (%) |
Romania | Discounted cash flow | 311 - 26,281 (13,128)1 | 8.95% - 10.45% (9.73)1 | 6.75% - 8.25% (7.53)1 |
Poland | Discounted cash flow | 2,817 - 23,746 (14,110)1 | 7.90% - 10.80% (8.72)1 | 5.80% - 8.70% (6.62)1 |
Slovakia | Discounted cash flow | 3,307 - 12,784 (9,734)1 | 9.10% - 10.35% (9.22)1 | 7.00% - 8.25% (7.12)1 |
Hungary | Discounted cash flow | 19,602 - 21,309 (20,515)1 | 8.75% - 9.00% (8.87)1 | 6.65% - 6.90% (6.77)1 |
Bulgaria | Discounted cash flow | 17,022 - 26,148 (22,514)1 | 10.30%1 | 7.50% -7.75% (7.60)1 |
Croatia | Discounted cash flow | 1,550 - 19,433 (18,138)1 | 9.60% - 9.85% (9.83)1 | 7.50% - 7.75% (7.73)1 |
Czech Republic | Discounted cash flow | 6,737 - 6,748 (6,743)1 | 9.35%1 | 7.25% |
Serbia | Discounted cash flow | 13,321 | 11.10% | 9.00% |
Lithuania | Discounted cash flow | 12,767 | 10.00% | 7.90% |
Portfolio valuation: sensitivity to changes in the discount rate, exit rate and rental income
The tables below present the change in the valuation of the shopping centre portfolio using different discount rate, exit rate and rental income assumptions than those used by the appraisers as at 31 December 2024:
Discount rate variance | ||||
|---|---|---|---|---|
Country | (50 bps) | (25 bps) | 25 bps | 50 bps |
Romania | 3.39% | 1.69% | -1.60% | -3.19% |
Poland | 3.15% | 1.24% | -2.25% | -3.50% |
Slovakia | 3.52% | 1.76% | -1.72% | -3.39% |
Hungary | 3.67% | 1.81% | -1.78% | -3.50% |
Bulgaria | 2.04% | 1.00% | -0.97% | -1.91% |
Croatia | 3.20% | 1.62% | -1.70% | -3.39% |
Czech Republic | 3.54% | 1.74% | -1.74% | -3.38% |
Lithuania | 3.30% | 1.65% | -1.65% | -3.24% |
Total | 3.22% | 1.49% | -1.81% | -3.25% |
Exit rate variance | ||||
|---|---|---|---|---|
Country | (50 bps) | (25 bps) | 25 bps | 50 bps |
Romania | 6.94% | 3.36% | -3.10% | -6.03% |
Poland | 7.76% | 3.73% | -3.47% | -6.71% |
Slovakia | 7.60% | 3.65% | -3.41% | -6.62% |
Hungary | 8.15% | 3.92% | -3.65% | -7.06% |
Bulgaria | 5.06% | 2.39% | -2.14% | -4.06% |
Croatia | 5.80% | 2.98% | -3.20% | -6.63% |
Czech Republic | 7.46% | 3.65% | -3.38% | -6.48% |
Lithuania | 6.41% | 3.05% | -2.93% | -5.68% |
Total | 7.09% | 3.43% | -3.21% | -6.24% |
Rental Income (ERV) | ||||
|---|---|---|---|---|
Country | -10% | -5% | 5% | 10% |
Romania | -9.99% | -4.98% | 5.03% | 10.04% |
Poland | -7.49% | -3.74% | 3.79% | 7.57% |
Slovakia | -8.53% | -4.27% | 4.23% | 8.48% |
Hungary | -8.33% | -4.17% | 4.16% | 8.33% |
Bulgaria | -7.27% | -3.65% | 3.67% | 7.37% |
Croatia | -7.42% | -3.73% | 3.69% | 7.39% |
Czech Republic | -8.27% | -4.14% | 4.14% | 8.27% |
Lithuania | -5.68% | -2.87% | 2.87% | 5.80% |
Total | -8.46% | -4.23% | 4.26% | 8.51% |
Movement in investment property under development | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Carrying value at beginning of year | \u00a0 | 197,743 | 264,344 |
Additions from construction in progress | \u00a0 | 88,061 | 150,219 |
Fair value adjustments | 12,020 | (2,643) | |
Assets which became operational and were transferred to Investment property in use | (65,798) | (214,177) | |
Investment property under development reclassified to property, plant and equipment | (229) | - | |
Carrying value | \u00a0 | 231,797 | 197,743 |
Land included in Investment property under development is carried at fair value and is independently assessed on a semiannual basis. For the year ended 31 December 2024 the Group commissioned independent year-end reports to Colliers International, Cushman&Wakefield and Affiliate Partners and Jones Lang LaSalle (for the year ended 31 December 2023: Colliers International and Cushman&Wakefield and Affiliate Partners), based on which the fair value of land was adjusted. Land included in Investment property under development is classified Level 3 on the fair value hierarchy as defined in IFRS 13.
The valuation technique is sales comparison or residual approach, in accordance with RICS Valuation Standards and ANEVAR Valuation Standards (for Romanian properties). Land under sales comparison method was valued by the external appraisers using the recent transactions of similar land for development in the proximity of the subject property.
The estimated fair value of Investment property under development would increase/(decrease) if the market comparable price per square meter is higher/(lower) as there is a direct relationship between the fair value and the market comparable price per square meter.
The residual approach determines the residual land value by subtracting purchase and development cost from the expected gross development value of the project at completion. The construction works in the investment property under development are held at cost, and their carrying value is a reasonable approximation of their fair value. The methods have been consistently applied for the comparative period.
Borrowing costs capitalised in 2024 amount to \u20ac4,379 thousand (2023: \u20ac5,085 thousand) and were calculated using an average annual interest rate of 2.7% (2023: 2.5%).
The balance of Investment property under development split by land carried at fair value and additions from construction works held at cost (which approximate fair value) is detailed below:
Investment property under development | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
Land (at fair value) | 108,314 | 104,316 |
Construction works (at cost) | 123,483 | 93,427 |
Total | 231,797 | 197,743 |
An investment property or a group of assets including an investment property (disposal group) are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. For this to be the case:
the assets must be available for immediate sale in their present condition;
the Group must be committed to sell;
there must be a plan to locate a buyer; and
it is highly probable that a sale will be completed within one year from the date of classification.\u00a0
On re-classification as held for sale, investment property that is measured at fair value continues to be measured in this way.
An investment property or disposal group classified as held for sale is presented separately in the Statement of financial position as assets or liabilities classified as held for sale.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18970-2": { "value": "An investment property or a group of assets including an investment property (disposal group) are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. For this to be the case:
the assets must be available for immediate sale in their present condition;
the Group must be committed to sell;
there must be a plan to locate a buyer; and
it is highly probable that a sale will be completed within one year from the date of classification.\u00a0
On re-classification as held for sale, investment property that is measured at fair value continues to be measured in this way.
An investment property or disposal group classified as held for sale is presented separately in the Statement of financial position as assets or liabilities classified as held for sale.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18970-4": { "value": "An investment property or a group of assets including an investment property (disposal group) are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. For this to be the case:
the assets must be available for immediate sale in their present condition;
the Group must be committed to sell;
there must be a plan to locate a buyer; and
it is highly probable that a sale will be completed within one year from the date of classification.\u00a0
On re-classification as held for sale, investment property that is measured at fair value continues to be measured in this way.
An investment property or disposal group classified as held for sale is presented separately in the Statement of financial position as assets or liabilities classified as held for sale.
Disposals in the year
In July 2024, the Group entered into a binding agreement to dispose of 100% of the shares in the subsidiary holding Promenada Novi Sad in Serbia. The disposal was successfully concluded on 7 October 2024 in accordance with the terms of the agreement for a transaction value of \u20ac177 million, generating a gain on sale (adjusted for working capital) of \u20ac25.5 million.
In January 2024, the Group sold the industrial property in Romania, Otopeni Warehouse and Logistics, for a transaction value of \u20ac4.4 million and a gain on disposal of \u20ac0.4 million.
Disposals in the comparative year
In May 2023, the Group sold a plot of excess land owned by General Building Management S.R.L., owner of Promenada Craiova, for a net consideration received of \u20ac8 million and a net gain on disposal of \u20ac1.6\u00a0million.
In January 2023, the Group sold at cost a non-core property in Romania held by Nepi Bucharest One S.R.L.
In July 2023, the Group sold the land plot in Kosice, Slovakia held by INLOGIS VI s.r.o, in a share deal, for a cash consideration of \u20ac13.2\u00a0million and a gain on disposal of \u20ac4\u00a0million.
Assets held for sale as at 31 December 2024
At 31 December 2024, the assets held for sale included one non-core property located in Romania.
The major classes of assets and liabilities of subsidiaries which are presented as held for sale at the end of the reporting period are as follows:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Non-current assets | 559 | 154,150 |
Investment property at fair value | 559 | 151,820 |
Deferred tax assets | - | 2,330 |
Current assets | - | 6,765 |
Trade and other receivables | - | 4,406 |
Cash and cash equivalents | - | 2,359 |
Assets held for sale | 559 | 160,915 |
Non-current liabilities | - | 1,539 |
Deferred tax liabilities | - | 657 |
Other long-term liabilities | - | 882 |
Current liabilities | - | 2,127 |
Liabilities held for sale | - | 3,666 |
Net assets held for sale | 559 | 157,249 |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Carrying value at beginning of year | \u00a0 | 151,820 | 18,666 |
Transfer from investment property in use | - | 151,210 | |
Additions during the period | \u00a0 | 119 | 10 |
Fair value adjustments | (170) | (330) | |
Disposals | \u00a0 | (151,210) | (17,736) |
CARRYING VALUE | \u00a0 | 559 | 151,820 |
An investment property or a group of assets including an investment property (disposal group) are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. For this to be the case:
the assets must be available for immediate sale in their present condition;
the Group must be committed to sell;
there must be a plan to locate a buyer; and
it is highly probable that a sale will be completed within one year from the date of classification.\u00a0
On re-classification as held for sale, investment property that is measured at fair value continues to be measured in this way.
An investment property or disposal group classified as held for sale is presented separately in the Statement of financial position as assets or liabilities classified as held for sale.
Disposals in the year
In July 2024, the Group entered into a binding agreement to dispose of 100% of the shares in the subsidiary holding Promenada Novi Sad in Serbia. The disposal was successfully concluded on 7 October 2024 in accordance with the terms of the agreement for a transaction value of \u20ac177 million, generating a gain on sale (adjusted for working capital) of \u20ac25.5 million.
In January 2024, the Group sold the industrial property in Romania, Otopeni Warehouse and Logistics, for a transaction value of \u20ac4.4 million and a gain on disposal of \u20ac0.4 million.
Disposals in the comparative year
In May 2023, the Group sold a plot of excess land owned by General Building Management S.R.L., owner of Promenada Craiova, for a net consideration received of \u20ac8 million and a net gain on disposal of \u20ac1.6\u00a0million.
In January 2023, the Group sold at cost a non-core property in Romania held by Nepi Bucharest One S.R.L.
In July 2023, the Group sold the land plot in Kosice, Slovakia held by INLOGIS VI s.r.o, in a share deal, for a cash consideration of \u20ac13.2\u00a0million and a gain on disposal of \u20ac4\u00a0million.
Assets held for sale as at 31 December 2024
At 31 December 2024, the assets held for sale included one non-core property located in Romania.
The major classes of assets and liabilities of subsidiaries which are presented as held for sale at the end of the reporting period are as follows:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Non-current assets | 559 | 154,150 |
Investment property at fair value | 559 | 151,820 |
Deferred tax assets | - | 2,330 |
Current assets | - | 6,765 |
Trade and other receivables | - | 4,406 |
Cash and cash equivalents | - | 2,359 |
Assets held for sale | 559 | 160,915 |
Non-current liabilities | - | 1,539 |
Deferred tax liabilities | - | 657 |
Other long-term liabilities | - | 882 |
Current liabilities | - | 2,127 |
Liabilities held for sale | - | 3,666 |
Net assets held for sale | 559 | 157,249 |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Carrying value at beginning of year | \u00a0 | 151,820 | 18,666 |
Transfer from investment property in use | - | 151,210 | |
Additions during the period | \u00a0 | 119 | 10 |
Fair value adjustments | (170) | (330) | |
Disposals | \u00a0 | (151,210) | (17,736) |
CARRYING VALUE | \u00a0 | 559 | 151,820 |
Property, plant and equipment are valued at their cost price, net of accumulated depreciation and accumulated impairment losses, if any. The cost price includes all directly attributable costs and the relevant part of the indirect costs incurred to make the asset ready for use. Subsequent costs are included in the asset\u2019s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance costs are recognised in profit or loss as incurred.
Construction in progress is stated at cost, net of accumulated impairment losses, if any.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:
Photovoltaic panels | 15-20 years |
Office equipment | 2-16 years |
Office improvements | over the term of the underlying lease |
Equipment used in owner-managed activities | 3-22 years |
The expected useful lives of assets and methods of depreciation are reviewed at least annually.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18971-3": { "value": "Property, plant and equipment are valued at their cost price, net of accumulated depreciation and accumulated impairment losses, if any. The cost price includes all directly attributable costs and the relevant part of the indirect costs incurred to make the asset ready for use. Subsequent costs are included in the asset\u2019s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance costs are recognised in profit or loss as incurred.
Construction in progress is stated at cost, net of accumulated impairment losses, if any.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:
Photovoltaic panels | 15-20 years |
Office equipment | 2-16 years |
Office improvements | over the term of the underlying lease |
Equipment used in owner-managed activities | 3-22 years |
The expected useful lives of assets and methods of depreciation are reviewed at least annually.
The photovoltaic panels that were built on the rooftops of Romanian and Lithuanian retail properties during 2022, 2023 and 2024, were recognised in Investment property as at 31 December 2023 and measured at fair value as part of those individual properties. In August 2024, the Board approved the roll-out of the energy project to the remaining countries in the portfolio and investment in greenfield ready-to-build photovoltaic fields in Romania. The investments will expand the Group's green energy generating capacity and increase the coverage of electricity consumption needs of its tenants across the portfolio, as well as grow the revenues from green energy activity.
Consequently, these were reclassified from Investment property to Property, plant and equipment effective from 1 September 2024. The initial cost of recognition of the panels as plant and equipment is the fair value of the assets at the date of the transfer. The Group adopted the cost model for subsequent measurement of photovoltaic panels, whereby assets are valued at their cost price, net of accumulated depreciation and accumulated impairment losses, if any.
In 2024 NEPI Rockcastle started to produce solar power energy from 38MW of power-generating capacity installed on the 27 properties from Romania and one in Lithuania.
Other equipment presented in the table below include office furniture, improvements and equipment. As at 31 December 2023, these were presented in Other long-term assets. At 31 December 2024, these items were reclassified to Property, plant and equipment, to enhance presentation.
in \u20ac\u00a0thousand | Note | Photovoltaic panels | Photovoltaic panels under construction | Other | Total |
|---|---|---|---|---|---|
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
At 1 January 2024 | \u00a0 | - | - | 8,103 | 8,103 |
Investment property reclassified to property, plant and equipment | 23,212 | - | - | 23,212 | |
Investment property under development reclassified to property, plant and equipment | - | 229 | - | 229 | |
Additions from assets deals | - | 10,559 | 41 | 10,600 | |
Additions | \u00a0 | 538 | 2,184 | 1,609 | 4,331 |
Transfers to Investment property in use | \u00a0 | - | - | (556) | (556) |
At 31 December 2024 | \u00a0 | 23,750 | 12,972 | 9,197 | 45,919 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Depreciation | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
At 1 January 2024 | \u00a0 | - | - | 3,358 | 3,358 |
Depreciation charge for the year | \u00a0 | 447 | - | 490 | 937 |
At 31 December 2024 | \u00a0 | 447 | - | 3,848 | 4,295 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Net book value | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
At 1 January 2024 | \u00a0 | - | - | 4,745 | 4,745 |
At 31 December 2024 | \u00a0 | 23,303 | 12,972 | 5,349 | 41,624 |
Goodwill arises upon business combination and represents the excess of the consideration transferred over the Group\u2019s interest in net fair value of the net identifiable assets, liabilities, and contingent liabilities of the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (\u201cCGUs\u201d), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and it is represented by the individual properties.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18987-2": { "value": "Goodwill arises upon business combination and represents the excess of the consideration transferred over the Group\u2019s interest in net fair value of the net identifiable assets, liabilities, and contingent liabilities of the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (\u201cCGUs\u201d), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and it is represented by the individual properties.
Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non\u2011financial assets, other than goodwill and intangible assets with infinitive useful life, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date, if indicators of reversal exist.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18987-3": { "value": "Goodwill arises upon business combination and represents the excess of the consideration transferred over the Group\u2019s interest in net fair value of the net identifiable assets, liabilities, and contingent liabilities of the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (\u201cCGUs\u201d), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and it is represented by the individual properties.
The Group recognised goodwill for the following business acquisitions:
in \u20ac\u00a0thousand | Balance at | Balance at |
|---|---|---|
Pitesti Retail Park (Romania) | 1,671 | 1,671 |
Internalisation of NEPI Investment Management (Romania) | 5,882 | 5,882 |
Aupark Kosice Mall (Slovakia) | 5,189 | 5,189 |
Iris Titan Shopping Center (Romania) | 934 | 934 |
Forum Usti nad Labem (Czech Republic) | 5,646 | 5,646 |
Shopping City Sibiu (Romania) | 9,850 | 9,850 |
Korzo Shopping Centrum (Slovakia) | 2,899 | 2,899 |
Aupark Shopping Center Piestany (Slovakia) | 1,585 | 1,585 |
Arena Centar and Retail Park (Croatia) | 13,512 | 13,512 |
Energit (Poland) | 6,976 | 6,976 |
Paradise Center (Bulgaria) | 9,311 | 9,311 |
Arena Mall (Hungary) | 7,905 | 7,905 |
Galeria Mlyny (Slovakia) | 5,444 | 5,444 |
Total | 76,804 | 76,804 |
There were no movements of goodwill in 2024 and 2023.
According to the Group\u2019s accounting policies based on IFRS, goodwill is tested at least annually for impairment or whenever there is an indication that it may be impaired. The lowest level within the Group at which the goodwill is allocated and monitored for internal management purposes is the CGU, represented by each individual property. CGUs to which the goodwill has been allocated were tested for impairment by comparing their net asset value with the recoverable value, which is the higher of value in use and fair value less cost to sell.
All the goodwill summarised in the table above, with the exception of NEPI Investment Management and Energit, resulted from business combinations, as the difference between the deferred tax liability recognised in the balance sheet of the business acquired and the expected tax to be paid in case of a future disposal.
As a consequence, impairment tests performed on this type of goodwill at each reporting date consist in comparing its carrying amount with the amounts expected to arise from deferred taxes payable, should a disposal occur, at the level of each CGU.
As a result of this test in 2024, no impairment arose in respect to the goodwill from recognition of deferred taxes at the date of the business combination (31 December 2023: nil).
Goodwill arising at the level of management company, NEPI Investment Management, is monitored at the level of this subsidiary, which employs part of the Group\u2019s key management and charges management fees to property operating companies.
The recoverable amount of NEPI Investment Management and Energit is represented by their value in use, determined based on the DCF derived from the five-year financial budgets for these two entities approved by management. Cash flows beyond the five-year period were extrapolated using the estimated cash flow of year 5. The discount rate used was based on the weighted average cost of capital in the specific geography of the two entities.
As a result of this test, no impairment arose in connection with the above two entities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18987-4": { "value": "Goodwill arises upon business combination and represents the excess of the consideration transferred over the Group\u2019s interest in net fair value of the net identifiable assets, liabilities, and contingent liabilities of the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (\u201cCGUs\u201d), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and it is represented by the individual properties.
Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non\u2011financial assets, other than goodwill and intangible assets with infinitive useful life, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date, if indicators of reversal exist.
According to the Group\u2019s accounting policies based on IFRS, goodwill is tested at least annually for impairment or whenever there is an indication that it may be impaired. The lowest level within the Group at which the goodwill is allocated and monitored for internal management purposes is the CGU, represented by each individual property. CGUs to which the goodwill has been allocated were tested for impairment by comparing their net asset value with the recoverable value, which is the higher of value in use and fair value less cost to sell.
All the goodwill summarised in the table above, with the exception of NEPI Investment Management and Energit, resulted from business combinations, as the difference between the deferred tax liability recognised in the balance sheet of the business acquired and the expected tax to be paid in case of a future disposal.
As a consequence, impairment tests performed on this type of goodwill at each reporting date consist in comparing its carrying amount with the amounts expected to arise from deferred taxes payable, should a disposal occur, at the level of each CGU.
As a result of this test in 2024, no impairment arose in respect to the goodwill from recognition of deferred taxes at the date of the business combination (31 December 2023: nil).
Goodwill arising at the level of management company, NEPI Investment Management, is monitored at the level of this subsidiary, which employs part of the Group\u2019s key management and charges management fees to property operating companies.
The recoverable amount of NEPI Investment Management and Energit is represented by their value in use, determined based on the DCF derived from the five-year financial budgets for these two entities approved by management. Cash flows beyond the five-year period were extrapolated using the estimated cash flow of year 5. The discount rate used was based on the weighted average cost of capital in the specific geography of the two entities.
As a result of this test, no impairment arose in connection with the above two entities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18987-5": { "value": "Goodwill arises upon business combination and represents the excess of the consideration transferred over the Group\u2019s interest in net fair value of the net identifiable assets, liabilities, and contingent liabilities of the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (\u201cCGUs\u201d), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and it is represented by the individual properties.
Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non\u2011financial assets, other than goodwill and intangible assets with infinitive useful life, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date, if indicators of reversal exist.
Other long-term assets are classified below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Loans to participants under the Share Purchase Scheme | 890 | 3,451 |
Intangible assets | 5,822 | 5,613 |
Non-current receivables | 4,648 | 2,498 |
Total1 | 11,360 | 11,562 |
The Group recognised goodwill for the following business acquisitions:
in \u20ac\u00a0thousand | Balance at | Balance at |
|---|---|---|
Pitesti Retail Park (Romania) | 1,671 | 1,671 |
Internalisation of NEPI Investment Management (Romania) | 5,882 | 5,882 |
Aupark Kosice Mall (Slovakia) | 5,189 | 5,189 |
Iris Titan Shopping Center (Romania) | 934 | 934 |
Forum Usti nad Labem (Czech Republic) | 5,646 | 5,646 |
Shopping City Sibiu (Romania) | 9,850 | 9,850 |
Korzo Shopping Centrum (Slovakia) | 2,899 | 2,899 |
Aupark Shopping Center Piestany (Slovakia) | 1,585 | 1,585 |
Arena Centar and Retail Park (Croatia) | 13,512 | 13,512 |
Energit (Poland) | 6,976 | 6,976 |
Paradise Center (Bulgaria) | 9,311 | 9,311 |
Arena Mall (Hungary) | 7,905 | 7,905 |
Galeria Mlyny (Slovakia) | 5,444 | 5,444 |
Total | 76,804 | 76,804 |
There were no movements of goodwill in 2024 and 2023.
According to the Group\u2019s accounting policies based on IFRS, goodwill is tested at least annually for impairment or whenever there is an indication that it may be impaired. The lowest level within the Group at which the goodwill is allocated and monitored for internal management purposes is the CGU, represented by each individual property. CGUs to which the goodwill has been allocated were tested for impairment by comparing their net asset value with the recoverable value, which is the higher of value in use and fair value less cost to sell.
All the goodwill summarised in the table above, with the exception of NEPI Investment Management and Energit, resulted from business combinations, as the difference between the deferred tax liability recognised in the balance sheet of the business acquired and the expected tax to be paid in case of a future disposal.
As a consequence, impairment tests performed on this type of goodwill at each reporting date consist in comparing its carrying amount with the amounts expected to arise from deferred taxes payable, should a disposal occur, at the level of each CGU.
As a result of this test in 2024, no impairment arose in respect to the goodwill from recognition of deferred taxes at the date of the business combination (31 December 2023: nil).
Goodwill arising at the level of management company, NEPI Investment Management, is monitored at the level of this subsidiary, which employs part of the Group\u2019s key management and charges management fees to property operating companies.
The recoverable amount of NEPI Investment Management and Energit is represented by their value in use, determined based on the DCF derived from the five-year financial budgets for these two entities approved by management. Cash flows beyond the five-year period were extrapolated using the estimated cash flow of year 5. The discount rate used was based on the weighted average cost of capital in the specific geography of the two entities.
As a result of this test, no impairment arose in connection with the above two entities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18988-1": { "value": "Goodwill arises upon business combination and represents the excess of the consideration transferred over the Group\u2019s interest in net fair value of the net identifiable assets, liabilities, and contingent liabilities of the acquiree.
The Group acquires subsidiaries that own real estate. At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. The Group accounts for an acquisition as a business combination where an integrated set of activities and assets, including property, is acquired. More specifically the following criteria, which indicate an acquisition of a business, are considered: the number of properties acquired, the extent to which strategic management processes and operation processes are acquired and the complexity of the processes acquired. In line with amended IFRS 3 since 1 January 2020 the Group may also apply optional concentration test.
Business combinations are accounted for using the acquisition method. When the acquisition of subsidiaries does not represent a business combination, it is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and no goodwill or deferred tax is recognised.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18988-2": { "value": "Goodwill arises upon business combination and represents the excess of the consideration transferred over the Group\u2019s interest in net fair value of the net identifiable assets, liabilities, and contingent liabilities of the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (\u201cCGUs\u201d), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and it is represented by the individual properties.
Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non\u2011financial assets, other than goodwill and intangible assets with infinitive useful life, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date, if indicators of reversal exist.
The Group acquires subsidiaries that own real estate. At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. The Group accounts for an acquisition as a business combination where an integrated set of activities and assets, including property, is acquired. More specifically the following criteria, which indicate an acquisition of a business, are considered: the number of properties acquired, the extent to which strategic management processes and operation processes are acquired and the complexity of the processes acquired. In line with amended IFRS 3 since 1 January 2020 the Group may also apply optional concentration test.
Business combinations are accounted for using the acquisition method. When the acquisition of subsidiaries does not represent a business combination, it is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and no goodwill or deferred tax is recognised.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18988-3": { "value": "For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (\u201cCGUs\u201d), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and it is represented by the individual properties.
Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non\u2011financial assets, other than goodwill and intangible assets with infinitive useful life, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date, if indicators of reversal exist.
In line with IFRS 9 \u201cFinancial instruments\u201d, the Group assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost. The Group measures ECL and recognises credit loss allowance on an annual basis. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of any loss is recognised in the Statement of comprehensive income (profit or loss). Debt instruments measured at amortised cost are presented in the balance sheet net of the allowance for ECL.
ECLs are recognised for loans granted in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Expected credit losses for trade receivables are recognised using the simplified approach. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18988-4": { "value": "For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (\u201cCGUs\u201d), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and it is represented by the individual properties.
Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non\u2011financial assets, other than goodwill and intangible assets with infinitive useful life, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date, if indicators of reversal exist.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18991-5": { "value": "Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non\u2011financial assets, other than goodwill and intangible assets with infinitive useful life, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date, if indicators of reversal exist.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18991-7": { "value": "Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non\u2011financial assets, other than goodwill and intangible assets with infinitive useful life, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date, if indicators of reversal exist.
Other long-term assets are classified below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Loans to participants under the Share Purchase Scheme | 890 | 3,451 |
Intangible assets | 5,822 | 5,613 |
Non-current receivables | 4,648 | 2,498 |
Total1 | 11,360 | 11,562 |
In line with IFRS 9 \u201cFinancial instruments\u201d, the Group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value through profit or loss; and
those to be measured at amortised cost.
The classification and subsequent measurement of debt instruments financial assets depends on: (i) the Group\u2019s business model for managing the related assets portfolio and (ii) the cash flow characteristics of the asset.
For financial assets measured at fair value through profit or loss (\u201cFVTPL\u201d), gains and losses are recorded in profit or loss.
All purchases and sales of financial assets that require delivery within the time frame established by regulation or market convention (\u201cregular way\u201d purchases and sales) are recorded at trade date, which is the date when the Group commits to deliver a financial instrument. All other purchases and sales are recognized when the entity becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group have transferred substantially all the risks and rewards of ownership.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Fair value at initial recognition is best evidenced by the transaction price.
Subsequent measurement of debt instruments depends on the Group\u2019s business model for managing the asset and the cash flow characteristics of the asset: assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest (\u201cSPPI\u201d) are measured at amortised cost. Any gain or loss arising on derecognition is recognised directly in profit or loss. Impairment losses are presented as separate line item in the Statement of comprehensive income. Financial assets measured at amortised cost (\u201cAC\u201d) comprise cash and cash equivalents, loans to participants in the Share Purchase Scheme, long-term receivables and trade and other receivables (excluding prepaid expenses).
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period.
In line with IFRS 9 \u201cFinancial instruments\u201d, the Group assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost. The Group measures ECL and recognises credit loss allowance on an annual basis. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of any loss is recognised in the Statement of comprehensive income (profit or loss). Debt instruments measured at amortised cost are presented in the balance sheet net of the allowance for ECL.
ECLs are recognised for loans granted in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Expected credit losses for trade receivables are recognised using the simplified approach. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Financial instruments are reclassified only when the business model for managing those assets changes. The reclassification has a prospective effect and takes place from the start of the first reporting period following the change.
Financial assets are written-off, in whole or in part, when the Group has exhausted all practical recovery efforts and has concluded that there is no reasonable expectation of recovery. The write-off represents a derecognition event. Indicators that there is no reasonable expectation of recovery include, among others, insolvency or significant financial difficulties of the tenant, default on payment terms and vacation or abandonment of the leased premises. Impaired trade and other receivables are derecognised when all reasonable efforts to collect the amounts outstanding have failed and they are assessed as uncollectable.
The Group sometimes renegotiates or otherwise modifies the contractual terms of the financial assets. The Group assesses whether the modification of contractual cash flows is substantial considering, among other, the following factors: new contractual terms that substantially affect the risk profile of the asset, significant change in interest rate, change in the currency denomination.
If the modified terms are substantially different, the rights to cash flows from the original asset expire and the Group derecognises the original financial asset and recognises a new asset at its fair value. The date of renegotiation is considered to be the date of initial recognition for subsequent impairment calculation purposes, including determining whether a significant increase in credit risk has occurred. The Company also assesses whether the new loan or debt instrument meets the SPPI criterion. Any difference between the carrying amount of the original asset derecognised and fair value of the new substantially modified asset is recognised in profit or loss, unless the substance of the difference is attributed to a capital transaction with owners.
In a situation where the renegotiation was driven by financial difficulties of the counterparty and inability to make the originally agreed payments, the Company compares the original and revised expected cash flows to assess whether the risks and rewards of the asset are substantially different as a result of the contractual modification. If the risks and rewards do not change, the modified asset is not substantially different from the original asset and the modification does not result in derecognition. The Company recalculates the gross carrying amount by discounting the modified contractual cash flows by the original effective interest rate and recognises a modification gain or loss in profit or loss.
Specific valuation techniques used to value financial assets include:
The use of quoted market prices or dealer quotes for similar instruments (for financial assets/liabilities at fair value through profit or loss);
Discounted cash flow analysis (for the remaining financial instruments).
Cash and cash equivalents include cash balances, cash deposits and short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are carried at amortised cost because: (i) they are held for collection of contractual cash flows and those cash flows represent solely payments of principal and interest (SPPI), and (ii) they are not designated at FVTPL.
Trade receivables are amounts due from customers for rental and service charge income from tenants in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value, generally at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18992-2": { "value": "In line with IFRS 9 \u201cFinancial instruments\u201d, the Group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value through profit or loss; and
those to be measured at amortised cost.
The classification and subsequent measurement of debt instruments financial assets depends on: (i) the Group\u2019s business model for managing the related assets portfolio and (ii) the cash flow characteristics of the asset.
For financial assets measured at fair value through profit or loss (\u201cFVTPL\u201d), gains and losses are recorded in profit or loss.
All purchases and sales of financial assets that require delivery within the time frame established by regulation or market convention (\u201cregular way\u201d purchases and sales) are recorded at trade date, which is the date when the Group commits to deliver a financial instrument. All other purchases and sales are recognized when the entity becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group have transferred substantially all the risks and rewards of ownership.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Fair value at initial recognition is best evidenced by the transaction price.
Subsequent measurement of debt instruments depends on the Group\u2019s business model for managing the asset and the cash flow characteristics of the asset: assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest (\u201cSPPI\u201d) are measured at amortised cost. Any gain or loss arising on derecognition is recognised directly in profit or loss. Impairment losses are presented as separate line item in the Statement of comprehensive income. Financial assets measured at amortised cost (\u201cAC\u201d) comprise cash and cash equivalents, loans to participants in the Share Purchase Scheme, long-term receivables and trade and other receivables (excluding prepaid expenses).
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period.
In line with IFRS 9 \u201cFinancial instruments\u201d, the Group assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost. The Group measures ECL and recognises credit loss allowance on an annual basis. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of any loss is recognised in the Statement of comprehensive income (profit or loss). Debt instruments measured at amortised cost are presented in the balance sheet net of the allowance for ECL.
ECLs are recognised for loans granted in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Expected credit losses for trade receivables are recognised using the simplified approach. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Financial instruments are reclassified only when the business model for managing those assets changes. The reclassification has a prospective effect and takes place from the start of the first reporting period following the change.
Financial assets are written-off, in whole or in part, when the Group has exhausted all practical recovery efforts and has concluded that there is no reasonable expectation of recovery. The write-off represents a derecognition event. Indicators that there is no reasonable expectation of recovery include, among others, insolvency or significant financial difficulties of the tenant, default on payment terms and vacation or abandonment of the leased premises. Impaired trade and other receivables are derecognised when all reasonable efforts to collect the amounts outstanding have failed and they are assessed as uncollectable.
The Group sometimes renegotiates or otherwise modifies the contractual terms of the financial assets. The Group assesses whether the modification of contractual cash flows is substantial considering, among other, the following factors: new contractual terms that substantially affect the risk profile of the asset, significant change in interest rate, change in the currency denomination.
If the modified terms are substantially different, the rights to cash flows from the original asset expire and the Group derecognises the original financial asset and recognises a new asset at its fair value. The date of renegotiation is considered to be the date of initial recognition for subsequent impairment calculation purposes, including determining whether a significant increase in credit risk has occurred. The Company also assesses whether the new loan or debt instrument meets the SPPI criterion. Any difference between the carrying amount of the original asset derecognised and fair value of the new substantially modified asset is recognised in profit or loss, unless the substance of the difference is attributed to a capital transaction with owners.
In a situation where the renegotiation was driven by financial difficulties of the counterparty and inability to make the originally agreed payments, the Company compares the original and revised expected cash flows to assess whether the risks and rewards of the asset are substantially different as a result of the contractual modification. If the risks and rewards do not change, the modified asset is not substantially different from the original asset and the modification does not result in derecognition. The Company recalculates the gross carrying amount by discounting the modified contractual cash flows by the original effective interest rate and recognises a modification gain or loss in profit or loss.
Specific valuation techniques used to value financial assets include:
The use of quoted market prices or dealer quotes for similar instruments (for financial assets/liabilities at fair value through profit or loss);
Discounted cash flow analysis (for the remaining financial instruments).
Financial liabilities are initially recognised at fair value and classified and subsequently measured at amortised cost, except for financial liabilities at FVTPL: this classification is applied to interest rate derivatives and other financial liabilities designated as such at initial recognition.
Borrowings are recognised initially at the fair value of the liability (determined using the prevailing market rate of interest if significantly different from the transaction price) and net of transaction costs incurred. In subsequent periods, borrowings are subsequently carried at amortized cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of comprehensive income over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.
Borrowings are removed from the balance sheet when the obligation specified in the contract is extinguished (i.e. discharged, cancelled or expires). The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the Statement of comprehensive income.
An exchange between the Group and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached to the instrument and change in loan covenants are also considered.
If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a cumulative catch-up method, with any gain or loss recognised in the Statement of comprehensive income.
Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with the arrangement of borrowings to the extent that they are regarded as an adjustment to interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use (such as properties developed for future sale, capital appreciation or rental income) are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.
Cash and cash equivalents include cash balances, cash deposits and short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are carried at amortised cost because: (i) they are held for collection of contractual cash flows and those cash flows represent solely payments of principal and interest (SPPI), and (ii) they are not designated at FVTPL.
Trade receivables are amounts due from customers for rental and service charge income from tenants in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value, generally at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18992-3": { "value": "In line with IFRS 9 \u201cFinancial instruments\u201d, the Group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value through profit or loss; and
those to be measured at amortised cost.
The classification and subsequent measurement of debt instruments financial assets depends on: (i) the Group\u2019s business model for managing the related assets portfolio and (ii) the cash flow characteristics of the asset.
For financial assets measured at fair value through profit or loss (\u201cFVTPL\u201d), gains and losses are recorded in profit or loss.
All purchases and sales of financial assets that require delivery within the time frame established by regulation or market convention (\u201cregular way\u201d purchases and sales) are recorded at trade date, which is the date when the Group commits to deliver a financial instrument. All other purchases and sales are recognized when the entity becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group have transferred substantially all the risks and rewards of ownership.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Fair value at initial recognition is best evidenced by the transaction price.
Subsequent measurement of debt instruments depends on the Group\u2019s business model for managing the asset and the cash flow characteristics of the asset: assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest (\u201cSPPI\u201d) are measured at amortised cost. Any gain or loss arising on derecognition is recognised directly in profit or loss. Impairment losses are presented as separate line item in the Statement of comprehensive income. Financial assets measured at amortised cost (\u201cAC\u201d) comprise cash and cash equivalents, loans to participants in the Share Purchase Scheme, long-term receivables and trade and other receivables (excluding prepaid expenses).
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period.
In line with IFRS 9 \u201cFinancial instruments\u201d, the Group assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost. The Group measures ECL and recognises credit loss allowance on an annual basis. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of any loss is recognised in the Statement of comprehensive income (profit or loss). Debt instruments measured at amortised cost are presented in the balance sheet net of the allowance for ECL.
ECLs are recognised for loans granted in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Expected credit losses for trade receivables are recognised using the simplified approach. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Financial instruments are reclassified only when the business model for managing those assets changes. The reclassification has a prospective effect and takes place from the start of the first reporting period following the change.
Financial assets are written-off, in whole or in part, when the Group has exhausted all practical recovery efforts and has concluded that there is no reasonable expectation of recovery. The write-off represents a derecognition event. Indicators that there is no reasonable expectation of recovery include, among others, insolvency or significant financial difficulties of the tenant, default on payment terms and vacation or abandonment of the leased premises. Impaired trade and other receivables are derecognised when all reasonable efforts to collect the amounts outstanding have failed and they are assessed as uncollectable.
The Group sometimes renegotiates or otherwise modifies the contractual terms of the financial assets. The Group assesses whether the modification of contractual cash flows is substantial considering, among other, the following factors: new contractual terms that substantially affect the risk profile of the asset, significant change in interest rate, change in the currency denomination.
If the modified terms are substantially different, the rights to cash flows from the original asset expire and the Group derecognises the original financial asset and recognises a new asset at its fair value. The date of renegotiation is considered to be the date of initial recognition for subsequent impairment calculation purposes, including determining whether a significant increase in credit risk has occurred. The Company also assesses whether the new loan or debt instrument meets the SPPI criterion. Any difference between the carrying amount of the original asset derecognised and fair value of the new substantially modified asset is recognised in profit or loss, unless the substance of the difference is attributed to a capital transaction with owners.
In a situation where the renegotiation was driven by financial difficulties of the counterparty and inability to make the originally agreed payments, the Company compares the original and revised expected cash flows to assess whether the risks and rewards of the asset are substantially different as a result of the contractual modification. If the risks and rewards do not change, the modified asset is not substantially different from the original asset and the modification does not result in derecognition. The Company recalculates the gross carrying amount by discounting the modified contractual cash flows by the original effective interest rate and recognises a modification gain or loss in profit or loss.
Specific valuation techniques used to value financial assets include:
The use of quoted market prices or dealer quotes for similar instruments (for financial assets/liabilities at fair value through profit or loss);
Discounted cash flow analysis (for the remaining financial instruments).
Financial liabilities are initially recognised at fair value and classified and subsequently measured at amortised cost, except for financial liabilities at FVTPL: this classification is applied to interest rate derivatives and other financial liabilities designated as such at initial recognition.
Borrowings are recognised initially at the fair value of the liability (determined using the prevailing market rate of interest if significantly different from the transaction price) and net of transaction costs incurred. In subsequent periods, borrowings are subsequently carried at amortized cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of comprehensive income over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.
Borrowings are removed from the balance sheet when the obligation specified in the contract is extinguished (i.e. discharged, cancelled or expires). The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the Statement of comprehensive income.
An exchange between the Group and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached to the instrument and change in loan covenants are also considered.
If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a cumulative catch-up method, with any gain or loss recognised in the Statement of comprehensive income.
Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with the arrangement of borrowings to the extent that they are regarded as an adjustment to interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use (such as properties developed for future sale, capital appreciation or rental income) are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.
Cash and cash equivalents include cash balances, cash deposits and short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are carried at amortised cost because: (i) they are held for collection of contractual cash flows and those cash flows represent solely payments of principal and interest (SPPI), and (ii) they are not designated at FVTPL.
Trade receivables are amounts due from customers for rental and service charge income from tenants in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value, generally at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
This program was put in place before the 2017 merger of the former groups New Europe Property Investments plc (\u201cNEPI\u201d) and Rockcastle Global Real Estate Company Ltd (\u201cRockcastle\u201d). Under this program, participants were granted loans to acquire shares in the Company at fair value at the grant date. These loans were classified as \u201cloans to participants in the incentive plan\u201d and included in Other long-term assets (Note 10). The loans are carried at amortised cost and the accrued interest is recognised as finance income in the Statement of Comprehensive Income. The costs under this program are nil.
The Group has exposure to the following risks due to its use of financial instruments: credit, liquidity, and market, including currency and interest rate. This note presents information about the Group\u2019s exposure to each, as well as its objectives, policies and processes for measuring and managing risk.
The Board of Directors has overall responsibility for the establishment and oversight of the Group\u2019s risk management framework. The Board of Directors has delegated the responsibility for developing this framework to the Risk Committee. This Committee reports to the Board of Directors on its activities, oversees how management monitors compliance policies and procedures, and reviews the adequacy of the framework regarding the risks faced.
The Group\u2019s policies are established to identify and analyse the risks it may encounter by performing its activities, to set appropriate limits and controls, and to monitor risks and adherence to limits. These policies and systems are reviewed regularly to reflect changes in market conditions and Group activities.
The Group's operations have demonstrated resilience in the face of macroeconomic headwinds and geopolitical events in 2024. While the military conflicts did not directly impact the Group's operations, the broader macroeconomic and geopolitical landscape influenced investor sentiment and the European commercial real estate sector. \u00a0
Despite challenges like sluggish global economic growth and geopolitical tensions, the CEE region, where Nepi Rockcastle operates, demonstrated resilience with positive GDP growth and an expanding middle class. This resilience is reflected in the Group's strong financial performance in 2024, with significant NOI growth and proactive debt management. \u00a0
The following risks were assessed:
Surge in operational costs due to increased energy prices
The majority of energy costs incurred by the Group are recovered from its tenants, which were able to absorb them due to the strong growth in sales in substantially all jurisdictions of operation. The completion of the first phase of the solar energy project in Romania further mitigated this risk. This project will be expanded to other jurisdictions in 2025.
Impact on credit risk tenant receivable
The Group did not experience significant changes in the collection rate of receivables from tenants in 2024. Tenant sales continued to grow, indicating their financial robustness. Collection rate has been consistently high at 99%.
Disruptions in the Group\u2019s development program
The Group's in-house development team actively manages construction projects, mitigating potential disruptions due to price fluctuations and availability of construction materials. Fixed-price contracts with suppliers further mitigate this risk.
Refinancing risk and impact on loan covenants
The Group successfully raised considerable funding in 2024 through green loans and bonds, ensuring ample liquidity and no material debt maturities until the end of 2026. The Group actively monitors loan covenants, which show ample headroom. \u00a0
Broader economic impact in the jurisdictions where the Group operates
The Group's diversified portfolio across 8 CEE countries and a wide range of tenants mitigates risks associated with adverse macroeconomic conditions. The annual rent indexation mechanism provides an economic hedge against inflation. Rents paid by the top ten tenants represented 25.3% of the Group\u2019s revenues in the year ended 31 December 2024. The Group\u2019s main tenants are leading companies in their sectors and all tenants are subject to a financial review before signing leases with the Group.
Valuers included in their valuation assumptions factors resulting from the indirect impact of the current macroeconomic environment, through:
stable valuation yields, with no significant changes compared with previous period;
adjusting future cash flows with risk premia, to account for additional unrecoverable expenses and potential collection difficulties (on average 0.5%);
indexing the future cash flows with projected inflation rates for the next period (in the average of 2.2%).
More details on valuation assumptions and inputs are provided in Notes 8 and 9.
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group\u2019s receivables from tenants and cash and cash equivalents.
The gross carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is set out below:
Credit exposure on financial instruments | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Tenant receivables | \u00a0 | 106,650 | 82,422 |
Cash and cash equivalents | 448,498 | 338,519 | |
Derivative financial assets at fair value through profit or loss1 | 9,662 | 21,568 | |
Loans to participants in the Share Purchase Scheme2 | 890 | 3,451 | |
Total | \u00a0 | 565,700 | 445,960 |
Out of the above maximum credit exposure, the balance of Loans to participants in the Share Purchase Scheme is not considered to present credit risk as these are guaranteed with the Company\u2019s shares held as security (see details in Note 18).
When monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, the industry they work in, business size and previous financial difficulties.
The exposure to credit risk is mainly influenced by the tenant\u2019s individual characteristics. The Group\u2019s widespread customer base reduces credit risk. The majority of rental income (68% at 31 December 2024 and at 31 December 2023) is derived from type A tenants (large international and national tenants; large listed tenants; government and major franchisees and companies with assets and/or turnovers exceeding \u20ac200 million), and there is no concentration of credit risk with respect to trade debtors: top 10 tenants account for 25.3% of the rental income as at 31 December 2024 (31 December 2023: 25.2%).
Management has established a credit policy where new customers are analysed individually for creditworthiness before standard payment terms and conditions are offered. When available, the analysis includes external ratings.
The Group establishes an allowance for impairment based on a simplified expected credit loss model in respect of Trade and other receivables. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
The carrying value of financial assets approximates their fair value. The Group\u2019s exposure to credit risk associated cash and cash equivalents is limited through using financial institutions of good standing for investment and cash handling purposes.
An overview of the tenant receivables net of impairment provision is set out below:
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Tenant receivables \u2013 gross | \u00a0 | 106,650 | 82,422 |
Less: Impairment provisions | \u00a0 | (10,796) | (10,701) |
TENANT RECEIVABLES - NET OF IMPAIRMENT PROVISION | 95,854 | 71,721 |
Reconciliation of impairment provisions is set out below:
Movement of provisions for doubtful debtors | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
Carrying value at beginning of the year | (10,701) | (9,342) |
Additional provision from properties acquired during the year | (2,607) | - |
Additional expected credit losses | (3,138) | (5,485) |
Write-off of receivables | 2,062 | 1,900 |
Recovery of previously expected credit losses | 3,702 | 2,366 |
Transfers to assets held for sale | - | 100 |
Released in relation to assets held for sale disposed during the year | 116 | - |
Foreign exchange loss | (230) | (240) |
Carrying value | (10,796) | (10,701) |
The expected loss rates are based on the historical payment profiles of tenants and the corresponding historical credit losses, adjusting for forward looking macroeconomic data. For example, if forecast economic conditions are expected to deteriorate over the next year which can lead to an increased number of defaults in a customer segment, the historical default rates are adjusted upwards. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. On that basis, the provision for doubtful debtors as at 31 December 2024 was determined as follows for trade receivables:
31 December 2024 | Current | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected loss rate | 0% | 0% | 6% | 25% | 87% | \u00a0 |
Gross carrying amount \u2013 trade receivables | 81,730 | 10,759 | 1,250 | 958 | 11,953 | 106,650 |
PROVISION FOR DOUBTFUL DEBTORS | (69) | (16) | (76) | (241) | (10,394) | (10,796) |
The impairment provision for trade receivables as at 31 December 2023 is set out below:
31 December 2023 | Current | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected loss rate | 0% | 2% | 7% | 81% | 96% | \u00a0 |
Gross carrying amount \u2013 trade receivables | 60,458 | 9,299 | 1,979 | 332 | 10,354 | 82,422 |
PROVISION FOR DOUBTFUL DEBTORS | (219) | (172) | (135) | (268) | (9,907) | (10,701) |
The contractual maturity profile of the Financial assets at fair value through profit or loss is disclosed below:
31 December 2024 | 3\u201312 months | 1\u20135 years | over 5 years | Total |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Financial assets at fair value through profit or loss | 55 | 9,607 | - | 9,662 |
31 December 2023 | 3\u201312 months | 1\u20135 years | over 5 years | Total |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Financial assets at fair value through profit or loss | 2,626 | 18,942 | - | 21,568 |
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the expected credit losses are immaterial.
For purposes of liquidity management, the Group has\u00a0various\u00a0deposit accounts and negotiated current account agreements with several banks.\u00a0The arrangements in place result in an optimized mix between flexibility and reduced interest charges or best interest offered. The banks\u2019 credit ratings, as well as exposure per each bank are constantly monitored. At 31 December 2024, 79% of the Group's cash was held with investment-grade rated banks (31 December 2023: 97%), as detailed below:
Cash and cash equivalents | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Held with banks as rated by Moody\u2019s | \u00a0 | \u00a0 |
A1 | 38% | 49% |
A2 | 8% | 10% |
A3 | 9% | 10% |
Aa3 | 6% | 8% |
Baa1 | 18% | 19% |
Baa2 | 0% | 1% |
Held with banks without a formal credit rating | 21%1 | 3% |
Total | 100% | 100% |
Liquidity risk is the risk that the Group will not be able to meet its financial obligations when due. The Group\u2019s approach to managing this risk ensures, as far as possible, it will always have enough liquidity to meet its liabilities when due, under normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation. To ensure this occurs, the Group prepares budgets, cash flow analyses and forecasts, which enable the Directors to assess the level of financing required for future periods. Budgets and projections are used to assess any future potential investments and are compared to existing funds held to evaluate the nature, and extent of any future funding requirements.
Further reference to bank loan maturity analysis is made in Note 19.
The table below presents undiscounted cash flows for all financial liabilities, computed at the contractual rates:
31 Dec 2024 | Note | under 3 months | 3\u201312 months | 1\u20135 years | over 5 years | Total undiscounted cash flows | Total carrying amount |
|---|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Bonds (including estimated future interest) | 37,548 | 38,518 | 1,144,924 | 1,042,568 | 2,263,558 | 2,001,423 | |
Bank loans (including estimated future interest) | 15,989 | 45,079 | 1,003,416 | 79,292 | 1,143,776 | 962,945 | |
Trade and other payables | 143,876 | 43,208 | - | - | 187,084 | 187,084 | |
Other long-term liabilities | - | - | 24,288 | 6,305 | 30,593 | 30,593 | |
Lease liabilities (including estimated future interest) | 2,889 | - | 11,728 | 179,163 | 193,780 | 85,949 | |
Total | \u00a0 | 200,302 | 126,805 | 2,184,356 | 1,307,328 | 3,818,791 | 3,267,994 |
31 Dec 2023 | Note | under 3 months | 3\u201312 months | 1\u20135 years | over 5 years | Total undiscounted cash flows | Total carrying amount |
|---|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Bonds (including estimated future interest) | 30,076 | 527,589 | 1,087,805 | 509,430 | 2,154,900 | 1,999,031 | |
Bank loans (including estimated future interest) | 13,730 | 35,226 | 406,034 | 236,408 | 691,398 | 533,721 | |
Loans from third parties (including estimated future interest) | 611 | 18,264 | 17,715 | - | 36,590 | 33,405 | |
Trade and other payables | 128,388 | 25,945 | - | - | 154,333 | 154,333 | |
Income tax payable | 7,837 | 12,350 | - | - | 20,187 | 20,187 | |
Other long-term liabilities | - | - | 26,034 | 10,040 | 36,074 | 36,074 | |
Lease liabilities (including estimated future interest) | 1,545 | - | 6,181 | 97,503 | 105,229 | 56,520 | |
Total | \u00a0 | 182,187 | 619,374 | 1,543,769 | 853,381 | 3,198,711 | 2,833,271 |
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates or equity prices will affect the Group\u2019s fair value or future cash flows of financial instruments. The objective of market risk management is to manage market risk exposures within acceptable parameters, while optimising returns. The carrying value of financial assets and liabilities approximates their fair value, except for the carrying value of bonds.
Group\u2019s current assets and liabilities are exposed to foreign currency risk on purchases and receivables denominated in Romanian leu (RON), Polish zloty (PLN), Bulgarian Lev (BGN), Hungarian forint (HUF), Serbian dinar (RSD), Czech crown (CZK) and South African rand (ZAR). Cash inflows received in other currencies than Euro are converted to Euro using the spot rate available on the collection date. The amount converted to Euro is the net amount of cash inflow in a foreign currency and the estimated cash outflow in the same currency. The Group applies this policy to control its currency exposures in respect of monetary assets and liabilities denominated in currencies other than EUR. Sensitivities of profit or loss to reasonably possible changes in exchange rates applied at the financial position date relative to the local currency of the respective Group entities, with all other variables such as interest rates held constant, are immaterial.
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to interest rate risk on loans, borrowings and cash balances held. Group policy is to substantially hedge this risk through the use of derivative financial instruments. As at 31 December 2024 and 31 December 2023, the Group held interest rate instruments in the form of interest rate swaps and interest rate caps, as further disclosed in Note 20.
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Bank loans | 962,945 | 533,721 |
Rate capped | 523,549 | 432,653 |
Rate swapped | 39,400 | 112,793 |
Variable rate1 | 411,308 | - |
Accrued interest on loans and deferred loan costs | (11,312) | (11,725) |
Loans and borrowings balances are subject to change over the year. This analysis assumes that all other variables, particularly foreign currency rates, remain constant. All sensitivity analysis calculations presented below are before tax.
The benchmark rate for the bank loans with an outstanding amount of \u20ac962,945 thousand as at 31 December 2024 (2023: \u20ac533,721 thousand) is Euribor 3 months; if this rate is less than zero, Euribor shall be deemed to be zero.
Loans and borrowings with fixed or swapped interest rates are not affected by market changes in interest rates.
A change of 50 basis points (bps) in interest rates would have increased/(decreased) equity and profit for the year as shown below. Calculations are based on the cash and loans and borrowings balances outstanding at 31 December 2024.
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Loans to participants in the Share Purchase Scheme | 890 | 3,451 | |
Loans and borrowings (variable or capped rate) | \u00a0 | (934,857) | (432,653) |
Total | \u00a0 | (933,967) | (429,202) |
31 Dec 2024 | Profit or loss 50bps increase | Profit or loss 50bps decrease | Equity 50bps increase | Equity 50bps decrease |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans to participants in the Share Purchase Scheme (including accrued interest) | 4 | (4) | 4 | (4) |
Loans and borrowings (variable or capped rate)1 | (1,532) | 1,957 | (1,532) | 1,957 |
Total | (1,528) | 1,953 | (1,528) | 1,953 |
A change of 100 basis points (bps) in interest rates would have increased/(decreased) equity and profit for the year as shown below. Calculations are based on the cash and loans and borrowings balances outstanding at 31 December 2023.
31 Dec 2023 | Profit or loss 100bps increase | Profit or loss 100bps decrease | Equity 100bps increase | Equity 100bps decrease |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans to participants in the Share Purchase Scheme (including accrued interest) | 35 | (35) | 35 | (35) |
Loans and borrowings (variable or capped rate)1 | - | - | - | - |
Total | 35 | (35) | 35 | (35) |
To estimate the fair value of individual classes of financial instruments, the following methods and assumptions are used:
Cash and cash equivalents
The book value of cash approximates their fair value, as these financial instruments have a short maturity.
Receivables and payables
The book value of short-term receivables and payables approximates their fair value, as these financial instruments have a short maturity.
Short-term loans
The book value approximates their fair value, as these instruments have a floating interest rate and a short maturity.
Long-term loans
The fair value of long-term loans as at 31 December 2024 is \u20ac983,520 thousand (2023: \u20ac583,146 thousand). The valuation model of fair value of bank loans considers the present value of expected payments, discounted using risk adjusted discount rate. The Group has determined that all of its Interest-bearing loans and borrowings from financial institutions are classified within Level 2 of the fair value hierarchy. To determine the fair value of such instruments, management used a valuation technique in which all significant inputs were based on observable market data.
Bonds
The fair value of bonds outstanding as at 31 December 2024 is presented in Note 19.
Derivatives
The fair value of derivatives is based on fair value quotes from counterparty banks and are disclosed in Note 20.
Other long-term assets are classified below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Loans to participants under the Share Purchase Scheme | 890 | 3,451 |
Intangible assets | 5,822 | 5,613 |
Non-current receivables | 4,648 | 2,498 |
Total1 | 11,360 | 11,562 |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Tenant receivables (net of ECL) | 95,854 | 71,721 | |
VAT receivable | \u00a0 | 9,204 | 7,510 |
Prepaid property expenses | \u00a0 | 8,230 | 4,915 |
Other receivables | \u00a0 | 2,510 | 8,956 |
Other prepaid fees | \u00a0 | 149 | 363 |
Total | \u00a0 | 115,947 | 93,465 |
Cash and cash equivalents by currency | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
EUR | 301,218 | 213,959 |
RON | 46,398 | 54,615 |
PLN | 70,433 | 35,911 |
BGN | 11,355 | 14,050 |
HUF | 6,154 | 8,991 |
CZK | 10,930 | 9,864 |
RSD | 217 | 238 |
ZAR | 1,793 | 891 |
Total1 | 448,498 | 338,519 |
Cash and cash equivalents by type | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
Current accounts | 350,366 | 258,371 |
Deposits | 98,000 | 80,000 |
Petty cash | 132 | 148 |
Total1 | 448,498 | 338,519 |
Under this program, loans were granted to participants in the share purchase schemes (the \u201cShare Purchase Scheme\u201d or \u201cSPS\u201d) to buy shares, the repayment of which could be made in part out of the distribution payable in relation to the shares (the \u201cNRP SPS\u201d). Of the shares initially subscribed for, 20% vested annually. The Group offered each participant the immediate right to subscribe for the permitted number of shares at their market value, less a maximum discount of 5%, together with a loan to fund the purchase. Each loan carried interest at the weighted average rate that the Group can borrow money. Loans are payable in full, together with interest, ten years after its subscription date, but could be repaid earlier. The Company has security interests that ensure the repayment of the principal and interest on the loan given to participants. The NRP SPS is a full recourse scheme (i.e., recourse in relation to loans granted is not limited to shares issued). Pending repayment of the loan, the distributions on such shares are used to repay loan interest. Any excess distribution after interest payment is used to repay the loan.
No shares were issued during 2024 and 2023 under the NRP SPS.
The number of shares outstanding and the loans to participants under the Share Purchase Scheme as at the year-end are summarised below:
NRP SPS | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Number of shares outstanding, collateralizing the Loans to participants under | 114,109 | 550,990 |
Loans to participants under the Share Purchase Scheme (in \u20ac\u00a0thousand) | 890 | 3,451 |
The decrease in 2024 is due to the sale of shares of a number of participants under the SPS which determined the correspondent decrease in the outstanding loan.
The Group is currently assigned a long-term corporate credit rating of BBB (stable outlook) from Standard & Poor\u2019s Rating Services and BBB+ (stable outlook) from Fitch Ratings.
In 2024, NEPI Rockcastle extended the contractual maturities related to its unsecured committed revolving credit facilities, as follows:
the revolving credit facility from Raiffeisen Bank International was extended for a maturity of three years plus two extensions of one year, currently expiring in January 2028, with the maximum principal available increased to \u20ac200 million, having Erste Group Bank joining the facility; and
the revolving credit facility from a three-bank syndicate lead by Deutsche Bank AG as arranger, was extended for one year, until January 2028, with the maximum principal available increased to \u20ac200 million, having SMBC joining the three bank syndicate.
Consequently, as at 31 December 2024, the revolving credit facilities\u2019 capacity amounts to \u20ac670 million (31 December 2023: \u20ac570 million) and is fully undrawn.
In December 2023, NEPI Rockcastle entered into a \u20ac387 million green financing agreement with IFC, a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets. The senior unsecured facility is structured as a green loan with sustainability-linked features, aimed at reducing greenhouse gas emissions and increasing energy efficiency in the Group\u2019s property portfolio. The facility matures in January 2029 and was disbursed in mid-February 2024. During 2024, the facility was increased by an additional \u20ac58 million, disbursed in August 2024, bringing the total to \u20ac445 million. The facility has been put in place to cater for the repayment of the bond matured in November 2024.
In October 2024, the Group issued its third \u20ac500 million green unsecured Eurobond, having a 7-year tenor and maturing in January 2032. The bond carries a 4.25% fixed coupon, with an issue price of 99.124%. An amount equal to the net proceeds will be allocated to finance and/or refinance eligible green projects included in the Group portfolio.
The net average interest rate of the Group\u2019s debt, including hedging and interest income from the placement of excess liquidity from early disbursement of the IFC loan, was approximately 2.7% during 2024 (2023: 2.5%). The gross average interest rate excluding the interest income from the placement of excess liquidity was 3%. Unsecured debt represented 87% of total debt as at 31 December 2024; the un-hedged balance represents 14% of the total outstanding debt and corresponds to the IFC loan.
The fair value of all financial instruments is substantially in line with their carrying amounts as reflected in the Statement of financial position, except for loans (as disclosed in Note 5.4) and bonds. For reference, as at 31 December 2024, the \u20ac500 million bonds issued in 2019 were trading on the market at 97.84% (31 December 2023: 91.22%), the \u20ac500 million bonds issued in July 2020 were trading on the market at 100.19% (31 December 2023: 94.43%), the \u20ac500 million bonds issued in January 2022 were trading on the market at 92.72% (31 December 2023: 80.25%) and the \u20ac500 million bonds issued in October 2024 were trading on the market at 102.46%.
The repayment profile for outstanding loans, excluding future interest, is detailed below:
Interest bearing borrowings 31 Dec 2024 | Type | Payable in less than 1 year | Payable in 1-5 years | Payable over 5 years | Total |
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Netherlands | Unsecured fixed coupon bonds | - | 1,000,000 | 1,000,000 | 2,000,000 |
Netherlands | Unsecured loans | - | 518,476 | - | 518,476 |
Poland | Secured loans | 745 | 72,804 | - | 73,549 |
Slovakia | Secured loans | 5,800 | 93,737 | - | 99,537 |
Czech Republic | Secured loans | 600 | 2,400 | 36,400 | 39,400 |
Romania | Secured loans | 10,477 | 191,910 | 40,908 | 243,295 |
Accrued interest on loans and deferred loan costs | \u00a0 | (2,094) | (9,138) | (80) | (11,312) |
Accrued coupon on bonds | \u00a0 | 24,685 | - | - | 24,685 |
Deferred bond costs | \u00a0 | (2,666) | (6,663) | (1,372) | (10,701) |
Issue discount on bonds | \u00a0 | (3,453) | (7,944) | (1,164) | (12,561) |
Total | \u00a0 | 34,094 | 1,855,582 | 1,074,692 | 2,964,368 |
Interest bearing borrowings 31 Dec 2023 | Type | Payable in less than 1 year | Payable in 1-5 years | Payable over 5 years | Total |
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Netherlands | Unsecured fixed coupon bonds | 498,980 | 1,000,000 | 500,000 | 1,998,980 |
Netherlands | Unsecured loans | - | 73,521 | - | 73,521 |
Poland | Secured loans | 745 | 2,979 | 70,570 | 74,294 |
Slovakia | Secured loans | 6,475 | 23,200 | 76,337 | 106,012 |
Czech Republic | Secured loans | 600 | 2,400 | 35,848 | 38,848 |
Romania | Secured loans | 9,476 | 199,659 | 43,636 | 252,771 |
Accrued interest on loans and deferred loan costs | \u00a0 | (1,473) | (9,904) | (348) | (11,725) |
Accrued coupon on bonds | \u00a0 | 20,323 | - | - | 20,323 |
Deferred bond costs | \u00a0 | (2,459) | (5,486) | (616) | (8,561) |
Issue discount on bonds | \u00a0 | (3,434) | (7,491) | (786) | (11,711) |
Total | \u00a0 | 529,233 | 1,278,878 | 724,641 | 2,532,752 |
This section sets out an analysis of bonds and bank loans outstanding and the related movements for the periods presented.
in \u20ac\u00a0thousand | Bank loans | Bonds | Total1 |
|---|---|---|---|
Debt as at 31 December 2023 | 533,721 | 1,999,031 | 2,532,752 |
Cash repayments of principal | (17,297) | (498,980) | (516,277) |
Cash proceeds from bank loans or bonds | 446,107 | 500,000 | 946,107 |
Cash payments of interest on bank loans or coupon on bonds | (55,355) | (44,982) | (100,337) |
Interest expense1 | 55,029 | 49,344 | 104,373 |
Amortisation of capitalised borrowing costs | 3,213 | 2,622 | 5,835 |
Amortisation of bond discount | - | 3,529 | 3,529 |
Additional capitalised borrowing costs in the period | (2,473) | (4,761) | (7,234) |
Additional bond discount in the period | - | (4,380) | (4,380) |
Debt as at 31 December 2024 | 962,945 | 2,001,423 | 2,964,368 |
in \u20ac\u00a0thousand | Bank loans | Bonds | Total1 |
|---|---|---|---|
Debt as at 31 December 2022 | 557,901 | 1,992,971 | 2,550,872 |
Cash repayments of principal | (214,815) | - | (214,815) |
Cash proceeds from bank loans or bonds | 200,000 | - | 200,000 |
Cash payments of interest on bank loans or coupon on bonds | (28,428) | (44,982) | (73,410) |
Interest expense1 | 29,584 | 44,952 | 74,536 |
Amortisation of capitalised borrowing costs | 1,758 | 2,504 | 4,262 |
Amortisation of bond discount | - | 3,586 | 3,586 |
Additional capitalised borrowing costs in the period | (12,279) | - | (12,279) |
Debt as at 31 December 2023 | 533,721 | 1,999,031 | 2,532,752 |
Further details for the Group\u2019s loans and bonds are presented below:
The Group has secured term loans contracted by some of its subsidiaries in Poland, Slovakia, Czech Republic, and Romania. The secured loans contracted by the entities in Czech Republic and Romania are subject to compliance with covenants within twelve months after the reporting date (prospective debt service cover ratio). The Group has no indication that it will have difficulty complying with these covenants.
Securities
General security over the properties (fair values as at 31 December 2024), current assets, cash inflows from operating activities, accounts and receivables; and
General security over the shares in the property-owning entities.
Covenants
Debt service cover ratio (historical and prospective) of a minimum between 110% and 140%; and
Loan to value ratio of a maximum between 55% and 70%.
The Group has two green unsecured financing agreements with IFC, one which matures in June 2028 in amount of \u20ac73.5 million and another one maturing in January 2029 in amount of \u20ac445\u00a0million.
The \u20ac445 million loan has sustainability-linked KPIs in line with the Group\u2019s Sustainability-Linked Financing Framework. Management considers that the sustainability related variability feature does not meet the definition of a derivative, as defined in Appendix A of IFRS 9, on the basis that these KPIs are non\u2013financial variables specific to the Group.
At 31 December 2024, there were \u20ac670 million revolving facilities available for drawdown.
All available revolving facilities are linked either to the ESG performance of the Group through the sustainability rating provided by Sustainalytics or have sustainability-linked KPIs in line with the Group\u2019s Sustainability-Linked Financing Framework.
Management considers that the above ESG related variability feature does not meet the definition of a derivative, as defined in Appendix A of IFRS 9, on the basis that the external rating is a non\u2013financial variable specific to the Group.
The Group successfully issued fixed coupon bonds as follows:
October 2019: \u20ac500 million of unsecured, 7-year Eurobonds. The bonds mature on 9 October 2026 and carry a 1.875% fixed coupon, with an issue price of 98.927%;
July 2020: \u20ac500 million of green unsecured, 7-year Eurobonds. The bonds mature on 14 July 2027 and carry a 3.375% fixed coupon, with an issue price of 98.172%;
January 2022: \u20ac500 million of green unsecured, 8-year Eurobonds. The bonds mature on 21 January 2030 and carry a 2.00% fixed coupon, with an issue price of 98.713%; and
October 2024: \u20ac500 million of green unsecured, 7-year Eurobonds. The bonds mature on 21 January 2032 and carry a
4.25% fixed coupon, with an issue price of 99.124%.
All the bonds include early redemption options. At each date of bond issue initial recognition management has performed an assessment whether those options are closely related to the host contract, considering the IFRS 9 clauses, which states that early repayment options are closely related to the host debt, if either:
the option\u2019s exercise price is approximately equal on each exercise date to the host debt instrument\u2019s amortised cost; or
the exercise price of a prepayment option reimburses the lender for an amount up to the approximate present value of lost interest for the remaining term of the host contract.
Based on management assessment in case of the exercise of any of the early redemption options either first or second criteria will be met, therefore those were considered as closely related to the bond and thus not separately valued and disclosed.
NEPI Rockcastle has complied with all financial covenants related to its unsecured green loans, unsecured committed revolving facilities and unsecured fixed coupon bonds during 2024 and 2023. The ratios calculated for all unsecured loans and bonds showed ample headroom compared to the covenants:
Covenants | Requirement | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Solvency Ratio | Maximum 0.60 | 0.38 | 0.38 |
Consolidated Coverage Ratio | Minimum 2:1 | 5.01 | 6.06 |
Unsecured Ratio | Minimum 150% | 261% | 269% |
The Group uses derivative instruments to hedge variable interest rate (Euribor) exposure. Their fair value is summarised below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Derivative financial assets \u2013 long-term | 5,392 | 12,241 |
Derivative financial assets \u2013 short-term | 4,270 | 9,327 |
Total | 9,662 | 21,568 |
The above financial assets consist of interest rate caps and fixed interest rate swaps which are not designated as cash flow hedges. The fair value was categorised in Level 2 of the fair value hierarchy.
The derivative financial assets classification to non-current or current sections of the Statement of financial position is driven by the contractual maturities of the instruments.
At 31 December 2024, \u20ac524 million of debt exposed to Euribor was hedged with interest rate caps and \u20ac39 million with interest rate swaps (Note 5.3.2).
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Property related payables | 79,110 | 65,674 |
Advances from tenants | 55,365 | 49,453 |
Advances from residential customers | 309 | 3,474 |
Payable for investment property and property, plant and equipment under construction | 22,927 | 17,892 |
Accrued administrative expenses | 10,243 | 14,192 |
Tenant security deposits | 13,289 | 2,824 |
Deferred consideration on acquisitions of subsidiaries and asset deals | 5,841 | 824 |
Total | 187,084 | 154,333 |
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Tenant security deposits | 30,109 | 35,011 |
Other long-term payables | 484 | 1,063 |
Total | 30,593 | 36,074 |
As part of the deal for the acquisition of Forum Gdansk Property Sp. z o.o. in 2022, the Group obtained vendor financing in the form of a three-year unsecured loan from the seller, for part of the purchase price amounting to \u20ac50,000 thousand, bearing an interest rate of 6.5%. The outstanding loan was fully repaid in October 2024.
This section sets out the movements in loans from third parties for the periods presented.
in \u20ac\u00a0thousand | Loans from third parties |
|---|---|
Loans from third parties as at 31 December 2023 | 33,405 |
Out of which short-term | 16,738 |
Cash payments of principal | (33,333) |
Cash payments of interest | (1,835) |
Interest expense | 1,763 |
Loans from third parties as at 31 December 2024 | - |
Out of which short-term | - |
in \u20ac\u00a0thousand | Loans from third parties |
|---|---|
Loans from third parties as at 31 December 2022 | 50,107 |
Out of which short-term | 16,774 |
Cash payments of principal | (16,666) |
Cash payments of interest | (3,250) |
Interest expense | 3,214 |
Loans from third parties as at 31 December 2023 | 33,405 |
Out of which short-term | 16,738 |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Interest on Loan to participants under Share Purchase Scheme | \u00a0 | 67 | 96 |
Interest on bank deposits | \u00a0 | 19,840 | 6,795 |
Finance income | \u00a0 | 19,907 | 6,891 |
Bonds borrowing costs1 | (55,495) | (51,042) | |
Interest expense on bank borrowings | (58,242) | (31,343) | |
Interest rate derivatives settlements | \u00a0 | 12,454 | 11,950 |
Interest expense on borrowings from third parties | (1,763) | (3,214) | |
Interest expense on lease liabilities | (1,470) | (804) | |
Interest expense other borrowings | \u00a0 | (7) | - |
Interest expense capitalised on developments and inventory property2 | \u00a0 | 4,379 | 5,401 |
Finance costs | \u00a0 | (100,144) | (69,052) |
Bank charges, commissions, and fees | \u00a0 | (4,381) | (3,297) |
Total | \u00a0 | (84,618) | (65,458) |
As at 31 December 2024, the Group had received letters of guarantee from tenants worth \u20ac152,131 thousand (31 December 2023: \u20ac132,297 thousand) and from suppliers worth \u20ac32,565 thousand (31 December 2023: \u20ac29,789 thousand) related to ongoing developments.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18993-1": { "value": "In line with IFRS 9 \u201cFinancial instruments\u201d, the Group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value through profit or loss; and
those to be measured at amortised cost.
The classification and subsequent measurement of debt instruments financial assets depends on: (i) the Group\u2019s business model for managing the related assets portfolio and (ii) the cash flow characteristics of the asset.
For financial assets measured at fair value through profit or loss (\u201cFVTPL\u201d), gains and losses are recorded in profit or loss.
All purchases and sales of financial assets that require delivery within the time frame established by regulation or market convention (\u201cregular way\u201d purchases and sales) are recorded at trade date, which is the date when the Group commits to deliver a financial instrument. All other purchases and sales are recognized when the entity becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group have transferred substantially all the risks and rewards of ownership.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Fair value at initial recognition is best evidenced by the transaction price.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period.
Financial liabilities are initially recognised at fair value and classified and subsequently measured at amortised cost, except for financial liabilities at FVTPL: this classification is applied to interest rate derivatives and other financial liabilities designated as such at initial recognition.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i18994-2": { "value": "In line with IFRS 9 \u201cFinancial instruments\u201d, the Group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value through profit or loss; and
those to be measured at amortised cost.
The classification and subsequent measurement of debt instruments financial assets depends on: (i) the Group\u2019s business model for managing the related assets portfolio and (ii) the cash flow characteristics of the asset.
For financial assets measured at fair value through profit or loss (\u201cFVTPL\u201d), gains and losses are recorded in profit or loss.
All purchases and sales of financial assets that require delivery within the time frame established by regulation or market convention (\u201cregular way\u201d purchases and sales) are recorded at trade date, which is the date when the Group commits to deliver a financial instrument. All other purchases and sales are recognized when the entity becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group have transferred substantially all the risks and rewards of ownership.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Fair value at initial recognition is best evidenced by the transaction price.
Subsequent measurement of debt instruments depends on the Group\u2019s business model for managing the asset and the cash flow characteristics of the asset: assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest (\u201cSPPI\u201d) are measured at amortised cost. Any gain or loss arising on derecognition is recognised directly in profit or loss. Impairment losses are presented as separate line item in the Statement of comprehensive income. Financial assets measured at amortised cost (\u201cAC\u201d) comprise cash and cash equivalents, loans to participants in the Share Purchase Scheme, long-term receivables and trade and other receivables (excluding prepaid expenses).
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period.
Financial liabilities are initially recognised at fair value and classified and subsequently measured at amortised cost, except for financial liabilities at FVTPL: this classification is applied to interest rate derivatives and other financial liabilities designated as such at initial recognition.
The Group uses derivative instruments to hedge variable interest rate (Euribor) exposure. Their fair value is summarised below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Derivative financial assets \u2013 long-term | 5,392 | 12,241 |
Derivative financial assets \u2013 short-term | 4,270 | 9,327 |
Total | 9,662 | 21,568 |
The above financial assets consist of interest rate caps and fixed interest rate swaps which are not designated as cash flow hedges. The fair value was categorised in Level 2 of the fair value hierarchy.
The derivative financial assets classification to non-current or current sections of the Statement of financial position is driven by the contractual maturities of the instruments.
At 31 December 2024, \u20ac524 million of debt exposed to Euribor was hedged with interest rate caps and \u20ac39 million with interest rate swaps (Note 5.3.2).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i18996-1": { "value": "Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group have transferred substantially all the risks and rewards of ownership.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19002-1": { "value": "Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19002-2": { "value": "Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19002-4": { "value": "Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period.
The Group uses derivative instruments to hedge variable interest rate (Euribor) exposure. Their fair value is summarised below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Derivative financial assets \u2013 long-term | 5,392 | 12,241 |
Derivative financial assets \u2013 short-term | 4,270 | 9,327 |
Total | 9,662 | 21,568 |
The above financial assets consist of interest rate caps and fixed interest rate swaps which are not designated as cash flow hedges. The fair value was categorised in Level 2 of the fair value hierarchy.
The derivative financial assets classification to non-current or current sections of the Statement of financial position is driven by the contractual maturities of the instruments.
At 31 December 2024, \u20ac524 million of debt exposed to Euribor was hedged with interest rate caps and \u20ac39 million with interest rate swaps (Note 5.3.2).
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19003-2": { "value": "In line with IFRS 9 \u201cFinancial instruments\u201d, the Group assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost. The Group measures ECL and recognises credit loss allowance on an annual basis. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of any loss is recognised in the Statement of comprehensive income (profit or loss). Debt instruments measured at amortised cost are presented in the balance sheet net of the allowance for ECL.
ECLs are recognised for loans granted in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Expected credit losses for trade receivables are recognised using the simplified approach. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19003-3": { "value": "In line with IFRS 9 \u201cFinancial instruments\u201d, the Group assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost. The Group measures ECL and recognises credit loss allowance on an annual basis. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of any loss is recognised in the Statement of comprehensive income (profit or loss). Debt instruments measured at amortised cost are presented in the balance sheet net of the allowance for ECL.
ECLs are recognised for loans granted in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Expected credit losses for trade receivables are recognised using the simplified approach. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Trade receivables are amounts due from customers for rental and service charge income from tenants in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value, generally at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19003-4": { "value": "In line with IFRS 9 \u201cFinancial instruments\u201d, the Group assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost. The Group measures ECL and recognises credit loss allowance on an annual basis. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of any loss is recognised in the Statement of comprehensive income (profit or loss). Debt instruments measured at amortised cost are presented in the balance sheet net of the allowance for ECL.
ECLs are recognised for loans granted in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Expected credit losses for trade receivables are recognised using the simplified approach. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
The Group establishes an allowance for impairment based on a simplified expected credit loss model in respect of Trade and other receivables. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
An overview of the tenant receivables net of impairment provision is set out below:
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Tenant receivables \u2013 gross | \u00a0 | 106,650 | 82,422 |
Less: Impairment provisions | \u00a0 | (10,796) | (10,701) |
TENANT RECEIVABLES - NET OF IMPAIRMENT PROVISION | 95,854 | 71,721 |
Reconciliation of impairment provisions is set out below:
Movement of provisions for doubtful debtors | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
Carrying value at beginning of the year | (10,701) | (9,342) |
Additional provision from properties acquired during the year | (2,607) | - |
Additional expected credit losses | (3,138) | (5,485) |
Write-off of receivables | 2,062 | 1,900 |
Recovery of previously expected credit losses | 3,702 | 2,366 |
Transfers to assets held for sale | - | 100 |
Released in relation to assets held for sale disposed during the year | 116 | - |
Foreign exchange loss | (230) | (240) |
Carrying value | (10,796) | (10,701) |
The expected loss rates are based on the historical payment profiles of tenants and the corresponding historical credit losses, adjusting for forward looking macroeconomic data. For example, if forecast economic conditions are expected to deteriorate over the next year which can lead to an increased number of defaults in a customer segment, the historical default rates are adjusted upwards. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. On that basis, the provision for doubtful debtors as at 31 December 2024 was determined as follows for trade receivables:
31 December 2024 | Current | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected loss rate | 0% | 0% | 6% | 25% | 87% | \u00a0 |
Gross carrying amount \u2013 trade receivables | 81,730 | 10,759 | 1,250 | 958 | 11,953 | 106,650 |
PROVISION FOR DOUBTFUL DEBTORS | (69) | (16) | (76) | (241) | (10,394) | (10,796) |
The impairment provision for trade receivables as at 31 December 2023 is set out below:
31 December 2023 | Current | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected loss rate | 0% | 2% | 7% | 81% | 96% | \u00a0 |
Gross carrying amount \u2013 trade receivables | 60,458 | 9,299 | 1,979 | 332 | 10,354 | 82,422 |
PROVISION FOR DOUBTFUL DEBTORS | (219) | (172) | (135) | (268) | (9,907) | (10,701) |
In line with IFRS 9 \u201cFinancial instruments\u201d, the Group assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost. The Group measures ECL and recognises credit loss allowance on an annual basis. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of any loss is recognised in the Statement of comprehensive income (profit or loss). Debt instruments measured at amortised cost are presented in the balance sheet net of the allowance for ECL.
ECLs are recognised for loans granted in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Expected credit losses for trade receivables are recognised using the simplified approach. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group\u2019s receivables from tenants and cash and cash equivalents.
The gross carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is set out below:
Credit exposure on financial instruments | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Tenant receivables | \u00a0 | 106,650 | 82,422 |
Cash and cash equivalents | 448,498 | 338,519 | |
Derivative financial assets at fair value through profit or loss1 | 9,662 | 21,568 | |
Loans to participants in the Share Purchase Scheme2 | 890 | 3,451 | |
Total | \u00a0 | 565,700 | 445,960 |
Out of the above maximum credit exposure, the balance of Loans to participants in the Share Purchase Scheme is not considered to present credit risk as these are guaranteed with the Company\u2019s shares held as security (see details in Note 18).
When monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, the industry they work in, business size and previous financial difficulties.
The exposure to credit risk is mainly influenced by the tenant\u2019s individual characteristics. The Group\u2019s widespread customer base reduces credit risk. The majority of rental income (68% at 31 December 2024 and at 31 December 2023) is derived from type A tenants (large international and national tenants; large listed tenants; government and major franchisees and companies with assets and/or turnovers exceeding \u20ac200 million), and there is no concentration of credit risk with respect to trade debtors: top 10 tenants account for 25.3% of the rental income as at 31 December 2024 (31 December 2023: 25.2%).
Management has established a credit policy where new customers are analysed individually for creditworthiness before standard payment terms and conditions are offered. When available, the analysis includes external ratings.
The Group establishes an allowance for impairment based on a simplified expected credit loss model in respect of Trade and other receivables. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
The carrying value of financial assets approximates their fair value. The Group\u2019s exposure to credit risk associated cash and cash equivalents is limited through using financial institutions of good standing for investment and cash handling purposes.
An overview of the tenant receivables net of impairment provision is set out below:
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Tenant receivables \u2013 gross | \u00a0 | 106,650 | 82,422 |
Less: Impairment provisions | \u00a0 | (10,796) | (10,701) |
TENANT RECEIVABLES - NET OF IMPAIRMENT PROVISION | 95,854 | 71,721 |
Reconciliation of impairment provisions is set out below:
Movement of provisions for doubtful debtors | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
Carrying value at beginning of the year | (10,701) | (9,342) |
Additional provision from properties acquired during the year | (2,607) | - |
Additional expected credit losses | (3,138) | (5,485) |
Write-off of receivables | 2,062 | 1,900 |
Recovery of previously expected credit losses | 3,702 | 2,366 |
Transfers to assets held for sale | - | 100 |
Released in relation to assets held for sale disposed during the year | 116 | - |
Foreign exchange loss | (230) | (240) |
Carrying value | (10,796) | (10,701) |
The expected loss rates are based on the historical payment profiles of tenants and the corresponding historical credit losses, adjusting for forward looking macroeconomic data. For example, if forecast economic conditions are expected to deteriorate over the next year which can lead to an increased number of defaults in a customer segment, the historical default rates are adjusted upwards. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. On that basis, the provision for doubtful debtors as at 31 December 2024 was determined as follows for trade receivables:
31 December 2024 | Current | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected loss rate | 0% | 0% | 6% | 25% | 87% | \u00a0 |
Gross carrying amount \u2013 trade receivables | 81,730 | 10,759 | 1,250 | 958 | 11,953 | 106,650 |
PROVISION FOR DOUBTFUL DEBTORS | (69) | (16) | (76) | (241) | (10,394) | (10,796) |
The impairment provision for trade receivables as at 31 December 2023 is set out below:
31 December 2023 | Current | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected loss rate | 0% | 2% | 7% | 81% | 96% | \u00a0 |
Gross carrying amount \u2013 trade receivables | 60,458 | 9,299 | 1,979 | 332 | 10,354 | 82,422 |
PROVISION FOR DOUBTFUL DEBTORS | (219) | (172) | (135) | (268) | (9,907) | (10,701) |
The contractual maturity profile of the Financial assets at fair value through profit or loss is disclosed below:
31 December 2024 | 3\u201312 months | 1\u20135 years | over 5 years | Total |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Financial assets at fair value through profit or loss | 55 | 9,607 | - | 9,662 |
31 December 2023 | 3\u201312 months | 1\u20135 years | over 5 years | Total |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Financial assets at fair value through profit or loss | 2,626 | 18,942 | - | 21,568 |
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the expected credit losses are immaterial.
For purposes of liquidity management, the Group has\u00a0various\u00a0deposit accounts and negotiated current account agreements with several banks.\u00a0The arrangements in place result in an optimized mix between flexibility and reduced interest charges or best interest offered. The banks\u2019 credit ratings, as well as exposure per each bank are constantly monitored. At 31 December 2024, 79% of the Group's cash was held with investment-grade rated banks (31 December 2023: 97%), as detailed below:
Cash and cash equivalents | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Held with banks as rated by Moody\u2019s | \u00a0 | \u00a0 |
A1 | 38% | 49% |
A2 | 8% | 10% |
A3 | 9% | 10% |
Aa3 | 6% | 8% |
Baa1 | 18% | 19% |
Baa2 | 0% | 1% |
Held with banks without a formal credit rating | 21%1 | 3% |
Total | 100% | 100% |
In line with IFRS 9 \u201cFinancial instruments\u201d, the Group assesses on a forward-looking basis the ECL for debt instruments (including loans) measured at amortised cost. The Group measures ECL and recognises credit loss allowance on an annual basis. The measurement of ECL reflects: (i) an unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes, (ii) time value of money and (iii) all reasonable and supportable information that is available without undue cost and effort at the end of each reporting period about past events, current conditions and forecasts of future conditions.
The carrying amount of the financial assets is reduced through the use of an allowance account, and the amount of any loss is recognised in the Statement of comprehensive income (profit or loss). Debt instruments measured at amortised cost are presented in the balance sheet net of the allowance for ECL.
ECLs are recognised for loans granted in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
Expected credit losses for trade receivables are recognised using the simplified approach. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
The Group has exposure to the following risks due to its use of financial instruments: credit, liquidity, and market, including currency and interest rate. This note presents information about the Group\u2019s exposure to each, as well as its objectives, policies and processes for measuring and managing risk.
The Board of Directors has overall responsibility for the establishment and oversight of the Group\u2019s risk management framework. The Board of Directors has delegated the responsibility for developing this framework to the Risk Committee. This Committee reports to the Board of Directors on its activities, oversees how management monitors compliance policies and procedures, and reviews the adequacy of the framework regarding the risks faced.
The Group\u2019s policies are established to identify and analyse the risks it may encounter by performing its activities, to set appropriate limits and controls, and to monitor risks and adherence to limits. These policies and systems are reviewed regularly to reflect changes in market conditions and Group activities.
The Group's operations have demonstrated resilience in the face of macroeconomic headwinds and geopolitical events in 2024. While the military conflicts did not directly impact the Group's operations, the broader macroeconomic and geopolitical landscape influenced investor sentiment and the European commercial real estate sector. \u00a0
Despite challenges like sluggish global economic growth and geopolitical tensions, the CEE region, where Nepi Rockcastle operates, demonstrated resilience with positive GDP growth and an expanding middle class. This resilience is reflected in the Group's strong financial performance in 2024, with significant NOI growth and proactive debt management. \u00a0
The following risks were assessed:
Surge in operational costs due to increased energy prices
The majority of energy costs incurred by the Group are recovered from its tenants, which were able to absorb them due to the strong growth in sales in substantially all jurisdictions of operation. The completion of the first phase of the solar energy project in Romania further mitigated this risk. This project will be expanded to other jurisdictions in 2025.
Impact on credit risk tenant receivable
The Group did not experience significant changes in the collection rate of receivables from tenants in 2024. Tenant sales continued to grow, indicating their financial robustness. Collection rate has been consistently high at 99%.
Disruptions in the Group\u2019s development program
The Group's in-house development team actively manages construction projects, mitigating potential disruptions due to price fluctuations and availability of construction materials. Fixed-price contracts with suppliers further mitigate this risk.
Refinancing risk and impact on loan covenants
The Group successfully raised considerable funding in 2024 through green loans and bonds, ensuring ample liquidity and no material debt maturities until the end of 2026. The Group actively monitors loan covenants, which show ample headroom. \u00a0
Broader economic impact in the jurisdictions where the Group operates
The Group's diversified portfolio across 8 CEE countries and a wide range of tenants mitigates risks associated with adverse macroeconomic conditions. The annual rent indexation mechanism provides an economic hedge against inflation. Rents paid by the top ten tenants represented 25.3% of the Group\u2019s revenues in the year ended 31 December 2024. The Group\u2019s main tenants are leading companies in their sectors and all tenants are subject to a financial review before signing leases with the Group.
Valuers included in their valuation assumptions factors resulting from the indirect impact of the current macroeconomic environment, through:
stable valuation yields, with no significant changes compared with previous period;
adjusting future cash flows with risk premia, to account for additional unrecoverable expenses and potential collection difficulties (on average 0.5%);
indexing the future cash flows with projected inflation rates for the next period (in the average of 2.2%).
More details on valuation assumptions and inputs are provided in Notes 8 and 9.
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group\u2019s receivables from tenants and cash and cash equivalents.
The gross carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is set out below:
Credit exposure on financial instruments | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Tenant receivables | \u00a0 | 106,650 | 82,422 |
Cash and cash equivalents | 448,498 | 338,519 | |
Derivative financial assets at fair value through profit or loss1 | 9,662 | 21,568 | |
Loans to participants in the Share Purchase Scheme2 | 890 | 3,451 | |
Total | \u00a0 | 565,700 | 445,960 |
Out of the above maximum credit exposure, the balance of Loans to participants in the Share Purchase Scheme is not considered to present credit risk as these are guaranteed with the Company\u2019s shares held as security (see details in Note 18).
When monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, the industry they work in, business size and previous financial difficulties.
The exposure to credit risk is mainly influenced by the tenant\u2019s individual characteristics. The Group\u2019s widespread customer base reduces credit risk. The majority of rental income (68% at 31 December 2024 and at 31 December 2023) is derived from type A tenants (large international and national tenants; large listed tenants; government and major franchisees and companies with assets and/or turnovers exceeding \u20ac200 million), and there is no concentration of credit risk with respect to trade debtors: top 10 tenants account for 25.3% of the rental income as at 31 December 2024 (31 December 2023: 25.2%).
Management has established a credit policy where new customers are analysed individually for creditworthiness before standard payment terms and conditions are offered. When available, the analysis includes external ratings.
The Group establishes an allowance for impairment based on a simplified expected credit loss model in respect of Trade and other receivables. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
The carrying value of financial assets approximates their fair value. The Group\u2019s exposure to credit risk associated cash and cash equivalents is limited through using financial institutions of good standing for investment and cash handling purposes.
An overview of the tenant receivables net of impairment provision is set out below:
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Tenant receivables \u2013 gross | \u00a0 | 106,650 | 82,422 |
Less: Impairment provisions | \u00a0 | (10,796) | (10,701) |
TENANT RECEIVABLES - NET OF IMPAIRMENT PROVISION | 95,854 | 71,721 |
Reconciliation of impairment provisions is set out below:
Movement of provisions for doubtful debtors | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
Carrying value at beginning of the year | (10,701) | (9,342) |
Additional provision from properties acquired during the year | (2,607) | - |
Additional expected credit losses | (3,138) | (5,485) |
Write-off of receivables | 2,062 | 1,900 |
Recovery of previously expected credit losses | 3,702 | 2,366 |
Transfers to assets held for sale | - | 100 |
Released in relation to assets held for sale disposed during the year | 116 | - |
Foreign exchange loss | (230) | (240) |
Carrying value | (10,796) | (10,701) |
The expected loss rates are based on the historical payment profiles of tenants and the corresponding historical credit losses, adjusting for forward looking macroeconomic data. For example, if forecast economic conditions are expected to deteriorate over the next year which can lead to an increased number of defaults in a customer segment, the historical default rates are adjusted upwards. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. On that basis, the provision for doubtful debtors as at 31 December 2024 was determined as follows for trade receivables:
31 December 2024 | Current | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected loss rate | 0% | 0% | 6% | 25% | 87% | \u00a0 |
Gross carrying amount \u2013 trade receivables | 81,730 | 10,759 | 1,250 | 958 | 11,953 | 106,650 |
PROVISION FOR DOUBTFUL DEBTORS | (69) | (16) | (76) | (241) | (10,394) | (10,796) |
The impairment provision for trade receivables as at 31 December 2023 is set out below:
31 December 2023 | Current | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected loss rate | 0% | 2% | 7% | 81% | 96% | \u00a0 |
Gross carrying amount \u2013 trade receivables | 60,458 | 9,299 | 1,979 | 332 | 10,354 | 82,422 |
PROVISION FOR DOUBTFUL DEBTORS | (219) | (172) | (135) | (268) | (9,907) | (10,701) |
The contractual maturity profile of the Financial assets at fair value through profit or loss is disclosed below:
31 December 2024 | 3\u201312 months | 1\u20135 years | over 5 years | Total |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Financial assets at fair value through profit or loss | 55 | 9,607 | - | 9,662 |
31 December 2023 | 3\u201312 months | 1\u20135 years | over 5 years | Total |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Financial assets at fair value through profit or loss | 2,626 | 18,942 | - | 21,568 |
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the expected credit losses are immaterial.
For purposes of liquidity management, the Group has\u00a0various\u00a0deposit accounts and negotiated current account agreements with several banks.\u00a0The arrangements in place result in an optimized mix between flexibility and reduced interest charges or best interest offered. The banks\u2019 credit ratings, as well as exposure per each bank are constantly monitored. At 31 December 2024, 79% of the Group's cash was held with investment-grade rated banks (31 December 2023: 97%), as detailed below:
Cash and cash equivalents | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Held with banks as rated by Moody\u2019s | \u00a0 | \u00a0 |
A1 | 38% | 49% |
A2 | 8% | 10% |
A3 | 9% | 10% |
Aa3 | 6% | 8% |
Baa1 | 18% | 19% |
Baa2 | 0% | 1% |
Held with banks without a formal credit rating | 21%1 | 3% |
Total | 100% | 100% |
Liquidity risk is the risk that the Group will not be able to meet its financial obligations when due. The Group\u2019s approach to managing this risk ensures, as far as possible, it will always have enough liquidity to meet its liabilities when due, under normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation. To ensure this occurs, the Group prepares budgets, cash flow analyses and forecasts, which enable the Directors to assess the level of financing required for future periods. Budgets and projections are used to assess any future potential investments and are compared to existing funds held to evaluate the nature, and extent of any future funding requirements.
Further reference to bank loan maturity analysis is made in Note 19.
The table below presents undiscounted cash flows for all financial liabilities, computed at the contractual rates:
31 Dec 2024 | Note | under 3 months | 3\u201312 months | 1\u20135 years | over 5 years | Total undiscounted cash flows | Total carrying amount |
|---|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Bonds (including estimated future interest) | 37,548 | 38,518 | 1,144,924 | 1,042,568 | 2,263,558 | 2,001,423 | |
Bank loans (including estimated future interest) | 15,989 | 45,079 | 1,003,416 | 79,292 | 1,143,776 | 962,945 | |
Trade and other payables | 143,876 | 43,208 | - | - | 187,084 | 187,084 | |
Other long-term liabilities | - | - | 24,288 | 6,305 | 30,593 | 30,593 | |
Lease liabilities (including estimated future interest) | 2,889 | - | 11,728 | 179,163 | 193,780 | 85,949 | |
Total | \u00a0 | 200,302 | 126,805 | 2,184,356 | 1,307,328 | 3,818,791 | 3,267,994 |
31 Dec 2023 | Note | under 3 months | 3\u201312 months | 1\u20135 years | over 5 years | Total undiscounted cash flows | Total carrying amount |
|---|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Bonds (including estimated future interest) | 30,076 | 527,589 | 1,087,805 | 509,430 | 2,154,900 | 1,999,031 | |
Bank loans (including estimated future interest) | 13,730 | 35,226 | 406,034 | 236,408 | 691,398 | 533,721 | |
Loans from third parties (including estimated future interest) | 611 | 18,264 | 17,715 | - | 36,590 | 33,405 | |
Trade and other payables | 128,388 | 25,945 | - | - | 154,333 | 154,333 | |
Income tax payable | 7,837 | 12,350 | - | - | 20,187 | 20,187 | |
Other long-term liabilities | - | - | 26,034 | 10,040 | 36,074 | 36,074 | |
Lease liabilities (including estimated future interest) | 1,545 | - | 6,181 | 97,503 | 105,229 | 56,520 | |
Total | \u00a0 | 182,187 | 619,374 | 1,543,769 | 853,381 | 3,198,711 | 2,833,271 |
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates or equity prices will affect the Group\u2019s fair value or future cash flows of financial instruments. The objective of market risk management is to manage market risk exposures within acceptable parameters, while optimising returns. The carrying value of financial assets and liabilities approximates their fair value, except for the carrying value of bonds.
Group\u2019s current assets and liabilities are exposed to foreign currency risk on purchases and receivables denominated in Romanian leu (RON), Polish zloty (PLN), Bulgarian Lev (BGN), Hungarian forint (HUF), Serbian dinar (RSD), Czech crown (CZK) and South African rand (ZAR). Cash inflows received in other currencies than Euro are converted to Euro using the spot rate available on the collection date. The amount converted to Euro is the net amount of cash inflow in a foreign currency and the estimated cash outflow in the same currency. The Group applies this policy to control its currency exposures in respect of monetary assets and liabilities denominated in currencies other than EUR. Sensitivities of profit or loss to reasonably possible changes in exchange rates applied at the financial position date relative to the local currency of the respective Group entities, with all other variables such as interest rates held constant, are immaterial.
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to interest rate risk on loans, borrowings and cash balances held. Group policy is to substantially hedge this risk through the use of derivative financial instruments. As at 31 December 2024 and 31 December 2023, the Group held interest rate instruments in the form of interest rate swaps and interest rate caps, as further disclosed in Note 20.
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Bank loans | 962,945 | 533,721 |
Rate capped | 523,549 | 432,653 |
Rate swapped | 39,400 | 112,793 |
Variable rate1 | 411,308 | - |
Accrued interest on loans and deferred loan costs | (11,312) | (11,725) |
Loans and borrowings balances are subject to change over the year. This analysis assumes that all other variables, particularly foreign currency rates, remain constant. All sensitivity analysis calculations presented below are before tax.
The benchmark rate for the bank loans with an outstanding amount of \u20ac962,945 thousand as at 31 December 2024 (2023: \u20ac533,721 thousand) is Euribor 3 months; if this rate is less than zero, Euribor shall be deemed to be zero.
Loans and borrowings with fixed or swapped interest rates are not affected by market changes in interest rates.
A change of 50 basis points (bps) in interest rates would have increased/(decreased) equity and profit for the year as shown below. Calculations are based on the cash and loans and borrowings balances outstanding at 31 December 2024.
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Loans to participants in the Share Purchase Scheme | 890 | 3,451 | |
Loans and borrowings (variable or capped rate) | \u00a0 | (934,857) | (432,653) |
Total | \u00a0 | (933,967) | (429,202) |
31 Dec 2024 | Profit or loss 50bps increase | Profit or loss 50bps decrease | Equity 50bps increase | Equity 50bps decrease |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans to participants in the Share Purchase Scheme (including accrued interest) | 4 | (4) | 4 | (4) |
Loans and borrowings (variable or capped rate)1 | (1,532) | 1,957 | (1,532) | 1,957 |
Total | (1,528) | 1,953 | (1,528) | 1,953 |
A change of 100 basis points (bps) in interest rates would have increased/(decreased) equity and profit for the year as shown below. Calculations are based on the cash and loans and borrowings balances outstanding at 31 December 2023.
31 Dec 2023 | Profit or loss 100bps increase | Profit or loss 100bps decrease | Equity 100bps increase | Equity 100bps decrease |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans to participants in the Share Purchase Scheme (including accrued interest) | 35 | (35) | 35 | (35) |
Loans and borrowings (variable or capped rate)1 | - | - | - | - |
Total | 35 | (35) | 35 | (35) |
The Board of Directors is responsible for the Group\u2019s system of internal control and for reviewing its effectiveness. This system is designed to mitigate rather than eliminate the risk of failure to meet business objectives, and can only provide reasonable, not absolute, assurance against material misstatement or loss.
The key features of the Group\u2019s system of internal control include:
Strategic and business planning: the Group prepares, and agrees, a business plan each year, to which the performance of the business is regularly monitored;
Investment appraisal: capital projects, major contracts and business and property acquisitions are reviewed in detail and approved by the Investment Committee, and/or the Board of Directors where appropriate, in accordance with delegated authority limits;
Financial monitoring: profitability, cash flow and capital expenditure are closely monitored, and key financial information is reported to the Board of Directors regularly, including explanations of variances between actual and budgeted performance; and
Systems of control procedures and delegated authority: clearly defined guidelines and approval limits exist for capital and operating expenditure and other key business transactions and decisions.
The net average interest rate of the Group\u2019s debt, including hedging and interest income from the placement of excess liquidity from early disbursement of the IFC loan, was approximately 2.7% during 2024 (2023: 2.5%). The gross average interest rate excluding the interest income from the placement of excess liquidity was 3%. Unsecured debt represented 87% of total debt as at 31 December 2024; the un-hedged balance represents 14% of the total outstanding debt and corresponds to the IFC loan.
The repayment profile for outstanding loans, excluding future interest, is detailed below:
Interest bearing borrowings 31 Dec 2024 | Type | Payable in less than 1 year | Payable in 1-5 years | Payable over 5 years | Total |
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Netherlands | Unsecured fixed coupon bonds | - | 1,000,000 | 1,000,000 | 2,000,000 |
Netherlands | Unsecured loans | - | 518,476 | - | 518,476 |
Poland | Secured loans | 745 | 72,804 | - | 73,549 |
Slovakia | Secured loans | 5,800 | 93,737 | - | 99,537 |
Czech Republic | Secured loans | 600 | 2,400 | 36,400 | 39,400 |
Romania | Secured loans | 10,477 | 191,910 | 40,908 | 243,295 |
Accrued interest on loans and deferred loan costs | \u00a0 | (2,094) | (9,138) | (80) | (11,312) |
Accrued coupon on bonds | \u00a0 | 24,685 | - | - | 24,685 |
Deferred bond costs | \u00a0 | (2,666) | (6,663) | (1,372) | (10,701) |
Issue discount on bonds | \u00a0 | (3,453) | (7,944) | (1,164) | (12,561) |
Total | \u00a0 | 34,094 | 1,855,582 | 1,074,692 | 2,964,368 |
Interest bearing borrowings 31 Dec 2023 | Type | Payable in less than 1 year | Payable in 1-5 years | Payable over 5 years | Total |
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Netherlands | Unsecured fixed coupon bonds | 498,980 | 1,000,000 | 500,000 | 1,998,980 |
Netherlands | Unsecured loans | - | 73,521 | - | 73,521 |
Poland | Secured loans | 745 | 2,979 | 70,570 | 74,294 |
Slovakia | Secured loans | 6,475 | 23,200 | 76,337 | 106,012 |
Czech Republic | Secured loans | 600 | 2,400 | 35,848 | 38,848 |
Romania | Secured loans | 9,476 | 199,659 | 43,636 | 252,771 |
Accrued interest on loans and deferred loan costs | \u00a0 | (1,473) | (9,904) | (348) | (11,725) |
Accrued coupon on bonds | \u00a0 | 20,323 | - | - | 20,323 |
Deferred bond costs | \u00a0 | (2,459) | (5,486) | (616) | (8,561) |
Issue discount on bonds | \u00a0 | (3,434) | (7,491) | (786) | (11,711) |
Total | \u00a0 | 529,233 | 1,278,878 | 724,641 | 2,532,752 |
The Group successfully issued fixed coupon bonds as follows:
October 2019: \u20ac500 million of unsecured, 7-year Eurobonds. The bonds mature on 9 October 2026 and carry a 1.875% fixed coupon, with an issue price of 98.927%;
July 2020: \u20ac500 million of green unsecured, 7-year Eurobonds. The bonds mature on 14 July 2027 and carry a 3.375% fixed coupon, with an issue price of 98.172%;
January 2022: \u20ac500 million of green unsecured, 8-year Eurobonds. The bonds mature on 21 January 2030 and carry a 2.00% fixed coupon, with an issue price of 98.713%; and
October 2024: \u20ac500 million of green unsecured, 7-year Eurobonds. The bonds mature on 21 January 2032 and carry a
4.25% fixed coupon, with an issue price of 99.124%.
The Group uses derivative instruments to hedge variable interest rate (Euribor) exposure. Their fair value is summarised below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Derivative financial assets \u2013 long-term | 5,392 | 12,241 |
Derivative financial assets \u2013 short-term | 4,270 | 9,327 |
Total | 9,662 | 21,568 |
The above financial assets consist of interest rate caps and fixed interest rate swaps which are not designated as cash flow hedges. The fair value was categorised in Level 2 of the fair value hierarchy.
The derivative financial assets classification to non-current or current sections of the Statement of financial position is driven by the contractual maturities of the instruments.
At 31 December 2024, \u20ac524 million of debt exposed to Euribor was hedged with interest rate caps and \u20ac39 million with interest rate swaps (Note 5.3.2).
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", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19005-3": { "value": "Financial liabilities are initially recognised at fair value and classified and subsequently measured at amortised cost, except for financial liabilities at FVTPL: this classification is applied to interest rate derivatives and other financial liabilities designated as such at initial recognition.
Borrowings are recognised initially at the fair value of the liability (determined using the prevailing market rate of interest if significantly different from the transaction price) and net of transaction costs incurred. In subsequent periods, borrowings are subsequently carried at amortized cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of comprehensive income over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.
Borrowings are removed from the balance sheet when the obligation specified in the contract is extinguished (i.e. discharged, cancelled or expires). The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the Statement of comprehensive income.
An exchange between the Group and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached to the instrument and change in loan covenants are also considered.
If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a cumulative catch-up method, with any gain or loss recognised in the Statement of comprehensive income.
Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with the arrangement of borrowings to the extent that they are regarded as an adjustment to interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use (such as properties developed for future sale, capital appreciation or rental income) are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19006-1": { "value": "Borrowings are recognised initially at the fair value of the liability (determined using the prevailing market rate of interest if significantly different from the transaction price) and net of transaction costs incurred. In subsequent periods, borrowings are subsequently carried at amortized cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of comprehensive income over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.
Borrowings are removed from the balance sheet when the obligation specified in the contract is extinguished (i.e. discharged, cancelled or expires). The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the Statement of comprehensive income.
An exchange between the Group and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached to the instrument and change in loan covenants are also considered.
If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a cumulative catch-up method, with any gain or loss recognised in the Statement of comprehensive income.
Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with the arrangement of borrowings to the extent that they are regarded as an adjustment to interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use (such as properties developed for future sale, capital appreciation or rental income) are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19006-4": { "value": "Borrowings are recognised initially at the fair value of the liability (determined using the prevailing market rate of interest if significantly different from the transaction price) and net of transaction costs incurred. In subsequent periods, borrowings are subsequently carried at amortized cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of comprehensive income over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.
Borrowings are removed from the balance sheet when the obligation specified in the contract is extinguished (i.e. discharged, cancelled or expires). The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the Statement of comprehensive income.
An exchange between the Group and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached to the instrument and change in loan covenants are also considered.
If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a cumulative catch-up method, with any gain or loss recognised in the Statement of comprehensive income.
Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with the arrangement of borrowings to the extent that they are regarded as an adjustment to interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use (such as properties developed for future sale, capital appreciation or rental income) are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.
The net average interest rate of the Group\u2019s debt, including hedging and interest income from the placement of excess liquidity from early disbursement of the IFC loan, was approximately 2.7% during 2024 (2023: 2.5%). The gross average interest rate excluding the interest income from the placement of excess liquidity was 3%. Unsecured debt represented 87% of total debt as at 31 December 2024; the un-hedged balance represents 14% of the total outstanding debt and corresponds to the IFC loan.
The fair value of all financial instruments is substantially in line with their carrying amounts as reflected in the Statement of financial position, except for loans (as disclosed in Note 5.4) and bonds. For reference, as at 31 December 2024, the \u20ac500 million bonds issued in 2019 were trading on the market at 97.84% (31 December 2023: 91.22%), the \u20ac500 million bonds issued in July 2020 were trading on the market at 100.19% (31 December 2023: 94.43%), the \u20ac500 million bonds issued in January 2022 were trading on the market at 92.72% (31 December 2023: 80.25%) and the \u20ac500 million bonds issued in October 2024 were trading on the market at 102.46%.
The repayment profile for outstanding loans, excluding future interest, is detailed below:
Interest bearing borrowings 31 Dec 2024 | Type | Payable in less than 1 year | Payable in 1-5 years | Payable over 5 years | Total |
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Netherlands | Unsecured fixed coupon bonds | - | 1,000,000 | 1,000,000 | 2,000,000 |
Netherlands | Unsecured loans | - | 518,476 | - | 518,476 |
Poland | Secured loans | 745 | 72,804 | - | 73,549 |
Slovakia | Secured loans | 5,800 | 93,737 | - | 99,537 |
Czech Republic | Secured loans | 600 | 2,400 | 36,400 | 39,400 |
Romania | Secured loans | 10,477 | 191,910 | 40,908 | 243,295 |
Accrued interest on loans and deferred loan costs | \u00a0 | (2,094) | (9,138) | (80) | (11,312) |
Accrued coupon on bonds | \u00a0 | 24,685 | - | - | 24,685 |
Deferred bond costs | \u00a0 | (2,666) | (6,663) | (1,372) | (10,701) |
Issue discount on bonds | \u00a0 | (3,453) | (7,944) | (1,164) | (12,561) |
Total | \u00a0 | 34,094 | 1,855,582 | 1,074,692 | 2,964,368 |
Interest bearing borrowings 31 Dec 2023 | Type | Payable in less than 1 year | Payable in 1-5 years | Payable over 5 years | Total |
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Netherlands | Unsecured fixed coupon bonds | 498,980 | 1,000,000 | 500,000 | 1,998,980 |
Netherlands | Unsecured loans | - | 73,521 | - | 73,521 |
Poland | Secured loans | 745 | 2,979 | 70,570 | 74,294 |
Slovakia | Secured loans | 6,475 | 23,200 | 76,337 | 106,012 |
Czech Republic | Secured loans | 600 | 2,400 | 35,848 | 38,848 |
Romania | Secured loans | 9,476 | 199,659 | 43,636 | 252,771 |
Accrued interest on loans and deferred loan costs | \u00a0 | (1,473) | (9,904) | (348) | (11,725) |
Accrued coupon on bonds | \u00a0 | 20,323 | - | - | 20,323 |
Deferred bond costs | \u00a0 | (2,459) | (5,486) | (616) | (8,561) |
Issue discount on bonds | \u00a0 | (3,434) | (7,491) | (786) | (11,711) |
Total | \u00a0 | 529,233 | 1,278,878 | 724,641 | 2,532,752 |
This section sets out an analysis of bonds and bank loans outstanding and the related movements for the periods presented.
in \u20ac\u00a0thousand | Bank loans | Bonds | Total1 |
|---|---|---|---|
Debt as at 31 December 2023 | 533,721 | 1,999,031 | 2,532,752 |
Cash repayments of principal | (17,297) | (498,980) | (516,277) |
Cash proceeds from bank loans or bonds | 446,107 | 500,000 | 946,107 |
Cash payments of interest on bank loans or coupon on bonds | (55,355) | (44,982) | (100,337) |
Interest expense1 | 55,029 | 49,344 | 104,373 |
Amortisation of capitalised borrowing costs | 3,213 | 2,622 | 5,835 |
Amortisation of bond discount | - | 3,529 | 3,529 |
Additional capitalised borrowing costs in the period | (2,473) | (4,761) | (7,234) |
Additional bond discount in the period | - | (4,380) | (4,380) |
Debt as at 31 December 2024 | 962,945 | 2,001,423 | 2,964,368 |
in \u20ac\u00a0thousand | Bank loans | Bonds | Total1 |
|---|---|---|---|
Debt as at 31 December 2022 | 557,901 | 1,992,971 | 2,550,872 |
Cash repayments of principal | (214,815) | - | (214,815) |
Cash proceeds from bank loans or bonds | 200,000 | - | 200,000 |
Cash payments of interest on bank loans or coupon on bonds | (28,428) | (44,982) | (73,410) |
Interest expense1 | 29,584 | 44,952 | 74,536 |
Amortisation of capitalised borrowing costs | 1,758 | 2,504 | 4,262 |
Amortisation of bond discount | - | 3,586 | 3,586 |
Additional capitalised borrowing costs in the period | (12,279) | - | (12,279) |
Debt as at 31 December 2023 | 533,721 | 1,999,031 | 2,532,752 |
The Group successfully issued fixed coupon bonds as follows:
October 2019: \u20ac500 million of unsecured, 7-year Eurobonds. The bonds mature on 9 October 2026 and carry a 1.875% fixed coupon, with an issue price of 98.927%;
July 2020: \u20ac500 million of green unsecured, 7-year Eurobonds. The bonds mature on 14 July 2027 and carry a 3.375% fixed coupon, with an issue price of 98.172%;
January 2022: \u20ac500 million of green unsecured, 8-year Eurobonds. The bonds mature on 21 January 2030 and carry a 2.00% fixed coupon, with an issue price of 98.713%; and
October 2024: \u20ac500 million of green unsecured, 7-year Eurobonds. The bonds mature on 21 January 2032 and carry a
4.25% fixed coupon, with an issue price of 99.124%.
All the bonds include early redemption options. At each date of bond issue initial recognition management has performed an assessment whether those options are closely related to the host contract, considering the IFRS 9 clauses, which states that early repayment options are closely related to the host debt, if either:
the option\u2019s exercise price is approximately equal on each exercise date to the host debt instrument\u2019s amortised cost; or
the exercise price of a prepayment option reimburses the lender for an amount up to the approximate present value of lost interest for the remaining term of the host contract.
Based on management assessment in case of the exercise of any of the early redemption options either first or second criteria will be met, therefore those were considered as closely related to the bond and thus not separately valued and disclosed.
NEPI Rockcastle has complied with all financial covenants related to its unsecured green loans, unsecured committed revolving facilities and unsecured fixed coupon bonds during 2024 and 2023. The ratios calculated for all unsecured loans and bonds showed ample headroom compared to the covenants:
Covenants | Requirement | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Solvency Ratio | Maximum 0.60 | 0.38 | 0.38 |
Consolidated Coverage Ratio | Minimum 2:1 | 5.01 | 6.06 |
Unsecured Ratio | Minimum 150% | 261% | 269% |
Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with the arrangement of borrowings to the extent that they are regarded as an adjustment to interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use (such as properties developed for future sale, capital appreciation or rental income) are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i19007-2": { "value": "Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with the arrangement of borrowings to the extent that they are regarded as an adjustment to interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use (such as properties developed for future sale, capital appreciation or rental income) are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.
Borrowing costs capitalised in 2024 amount to \u20ac4,379 thousand (2023: \u20ac5,085 thousand) and were calculated using an average annual interest rate of 2.7% (2023: 2.5%).
This section sets out an analysis of bonds and bank loans outstanding and the related movements for the periods presented.
in \u20ac\u00a0thousand | Bank loans | Bonds | Total1 |
|---|---|---|---|
Debt as at 31 December 2023 | 533,721 | 1,999,031 | 2,532,752 |
Cash repayments of principal | (17,297) | (498,980) | (516,277) |
Cash proceeds from bank loans or bonds | 446,107 | 500,000 | 946,107 |
Cash payments of interest on bank loans or coupon on bonds | (55,355) | (44,982) | (100,337) |
Interest expense1 | 55,029 | 49,344 | 104,373 |
Amortisation of capitalised borrowing costs | 3,213 | 2,622 | 5,835 |
Amortisation of bond discount | - | 3,529 | 3,529 |
Additional capitalised borrowing costs in the period | (2,473) | (4,761) | (7,234) |
Additional bond discount in the period | - | (4,380) | (4,380) |
Debt as at 31 December 2024 | 962,945 | 2,001,423 | 2,964,368 |
in \u20ac\u00a0thousand | Bank loans | Bonds | Total1 |
|---|---|---|---|
Debt as at 31 December 2022 | 557,901 | 1,992,971 | 2,550,872 |
Cash repayments of principal | (214,815) | - | (214,815) |
Cash proceeds from bank loans or bonds | 200,000 | - | 200,000 |
Cash payments of interest on bank loans or coupon on bonds | (28,428) | (44,982) | (73,410) |
Interest expense1 | 29,584 | 44,952 | 74,536 |
Amortisation of capitalised borrowing costs | 1,758 | 2,504 | 4,262 |
Amortisation of bond discount | - | 3,586 | 3,586 |
Additional capitalised borrowing costs in the period | (12,279) | - | (12,279) |
Debt as at 31 December 2023 | 533,721 | 1,999,031 | 2,532,752 |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Interest on Loan to participants under Share Purchase Scheme | \u00a0 | 67 | 96 |
Interest on bank deposits | \u00a0 | 19,840 | 6,795 |
Finance income | \u00a0 | 19,907 | 6,891 |
Bonds borrowing costs1 | (55,495) | (51,042) | |
Interest expense on bank borrowings | (58,242) | (31,343) | |
Interest rate derivatives settlements | \u00a0 | 12,454 | 11,950 |
Interest expense on borrowings from third parties | (1,763) | (3,214) | |
Interest expense on lease liabilities | (1,470) | (804) | |
Interest expense other borrowings | \u00a0 | (7) | - |
Interest expense capitalised on developments and inventory property2 | \u00a0 | 4,379 | 5,401 |
Finance costs | \u00a0 | (100,144) | (69,052) |
Bank charges, commissions, and fees | \u00a0 | (4,381) | (3,297) |
Total | \u00a0 | (84,618) | (65,458) |
Borrowings are recognised initially at the fair value of the liability (determined using the prevailing market rate of interest if significantly different from the transaction price) and net of transaction costs incurred. In subsequent periods, borrowings are subsequently carried at amortized cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of comprehensive income over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.
Borrowings are removed from the balance sheet when the obligation specified in the contract is extinguished (i.e. discharged, cancelled or expires). The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the Statement of comprehensive income.
An exchange between the Group and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms and conditions of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached to the instrument and change in loan covenants are also considered.
If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.
Modifications of liabilities that do not result in extinguishment are accounted for as a change in estimate using a cumulative catch-up method, with any gain or loss recognised in the Statement of comprehensive income.
Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with the arrangement of borrowings to the extent that they are regarded as an adjustment to interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that necessarily takes a substantial period of time to get ready for its intended use (such as properties developed for future sale, capital appreciation or rental income) are capitalised as part of the cost of that asset, when it is probable that they will result in future economic benefits to the Group and the costs can be measured reliably.
The Group is currently assigned a long-term corporate credit rating of BBB (stable outlook) from Standard & Poor\u2019s Rating Services and BBB+ (stable outlook) from Fitch Ratings.
In 2024, NEPI Rockcastle extended the contractual maturities related to its unsecured committed revolving credit facilities, as follows:
the revolving credit facility from Raiffeisen Bank International was extended for a maturity of three years plus two extensions of one year, currently expiring in January 2028, with the maximum principal available increased to \u20ac200 million, having Erste Group Bank joining the facility; and
the revolving credit facility from a three-bank syndicate lead by Deutsche Bank AG as arranger, was extended for one year, until January 2028, with the maximum principal available increased to \u20ac200 million, having SMBC joining the three bank syndicate.
Consequently, as at 31 December 2024, the revolving credit facilities\u2019 capacity amounts to \u20ac670 million (31 December 2023: \u20ac570 million) and is fully undrawn.
In December 2023, NEPI Rockcastle entered into a \u20ac387 million green financing agreement with IFC, a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets. The senior unsecured facility is structured as a green loan with sustainability-linked features, aimed at reducing greenhouse gas emissions and increasing energy efficiency in the Group\u2019s property portfolio. The facility matures in January 2029 and was disbursed in mid-February 2024. During 2024, the facility was increased by an additional \u20ac58 million, disbursed in August 2024, bringing the total to \u20ac445 million. The facility has been put in place to cater for the repayment of the bond matured in November 2024.
In October 2024, the Group issued its third \u20ac500 million green unsecured Eurobond, having a 7-year tenor and maturing in January 2032. The bond carries a 4.25% fixed coupon, with an issue price of 99.124%. An amount equal to the net proceeds will be allocated to finance and/or refinance eligible green projects included in the Group portfolio.
The net average interest rate of the Group\u2019s debt, including hedging and interest income from the placement of excess liquidity from early disbursement of the IFC loan, was approximately 2.7% during 2024 (2023: 2.5%). The gross average interest rate excluding the interest income from the placement of excess liquidity was 3%. Unsecured debt represented 87% of total debt as at 31 December 2024; the un-hedged balance represents 14% of the total outstanding debt and corresponds to the IFC loan.
The fair value of all financial instruments is substantially in line with their carrying amounts as reflected in the Statement of financial position, except for loans (as disclosed in Note 5.4) and bonds. For reference, as at 31 December 2024, the \u20ac500 million bonds issued in 2019 were trading on the market at 97.84% (31 December 2023: 91.22%), the \u20ac500 million bonds issued in July 2020 were trading on the market at 100.19% (31 December 2023: 94.43%), the \u20ac500 million bonds issued in January 2022 were trading on the market at 92.72% (31 December 2023: 80.25%) and the \u20ac500 million bonds issued in October 2024 were trading on the market at 102.46%.
The repayment profile for outstanding loans, excluding future interest, is detailed below:
Interest bearing borrowings 31 Dec 2024 | Type | Payable in less than 1 year | Payable in 1-5 years | Payable over 5 years | Total |
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Netherlands | Unsecured fixed coupon bonds | - | 1,000,000 | 1,000,000 | 2,000,000 |
Netherlands | Unsecured loans | - | 518,476 | - | 518,476 |
Poland | Secured loans | 745 | 72,804 | - | 73,549 |
Slovakia | Secured loans | 5,800 | 93,737 | - | 99,537 |
Czech Republic | Secured loans | 600 | 2,400 | 36,400 | 39,400 |
Romania | Secured loans | 10,477 | 191,910 | 40,908 | 243,295 |
Accrued interest on loans and deferred loan costs | \u00a0 | (2,094) | (9,138) | (80) | (11,312) |
Accrued coupon on bonds | \u00a0 | 24,685 | - | - | 24,685 |
Deferred bond costs | \u00a0 | (2,666) | (6,663) | (1,372) | (10,701) |
Issue discount on bonds | \u00a0 | (3,453) | (7,944) | (1,164) | (12,561) |
Total | \u00a0 | 34,094 | 1,855,582 | 1,074,692 | 2,964,368 |
Interest bearing borrowings 31 Dec 2023 | Type | Payable in less than 1 year | Payable in 1-5 years | Payable over 5 years | Total |
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Netherlands | Unsecured fixed coupon bonds | 498,980 | 1,000,000 | 500,000 | 1,998,980 |
Netherlands | Unsecured loans | - | 73,521 | - | 73,521 |
Poland | Secured loans | 745 | 2,979 | 70,570 | 74,294 |
Slovakia | Secured loans | 6,475 | 23,200 | 76,337 | 106,012 |
Czech Republic | Secured loans | 600 | 2,400 | 35,848 | 38,848 |
Romania | Secured loans | 9,476 | 199,659 | 43,636 | 252,771 |
Accrued interest on loans and deferred loan costs | \u00a0 | (1,473) | (9,904) | (348) | (11,725) |
Accrued coupon on bonds | \u00a0 | 20,323 | - | - | 20,323 |
Deferred bond costs | \u00a0 | (2,459) | (5,486) | (616) | (8,561) |
Issue discount on bonds | \u00a0 | (3,434) | (7,491) | (786) | (11,711) |
Total | \u00a0 | 529,233 | 1,278,878 | 724,641 | 2,532,752 |
This section sets out an analysis of bonds and bank loans outstanding and the related movements for the periods presented.
in \u20ac\u00a0thousand | Bank loans | Bonds | Total1 |
|---|---|---|---|
Debt as at 31 December 2023 | 533,721 | 1,999,031 | 2,532,752 |
Cash repayments of principal | (17,297) | (498,980) | (516,277) |
Cash proceeds from bank loans or bonds | 446,107 | 500,000 | 946,107 |
Cash payments of interest on bank loans or coupon on bonds | (55,355) | (44,982) | (100,337) |
Interest expense1 | 55,029 | 49,344 | 104,373 |
Amortisation of capitalised borrowing costs | 3,213 | 2,622 | 5,835 |
Amortisation of bond discount | - | 3,529 | 3,529 |
Additional capitalised borrowing costs in the period | (2,473) | (4,761) | (7,234) |
Additional bond discount in the period | - | (4,380) | (4,380) |
Debt as at 31 December 2024 | 962,945 | 2,001,423 | 2,964,368 |
in \u20ac\u00a0thousand | Bank loans | Bonds | Total1 |
|---|---|---|---|
Debt as at 31 December 2022 | 557,901 | 1,992,971 | 2,550,872 |
Cash repayments of principal | (214,815) | - | (214,815) |
Cash proceeds from bank loans or bonds | 200,000 | - | 200,000 |
Cash payments of interest on bank loans or coupon on bonds | (28,428) | (44,982) | (73,410) |
Interest expense1 | 29,584 | 44,952 | 74,536 |
Amortisation of capitalised borrowing costs | 1,758 | 2,504 | 4,262 |
Amortisation of bond discount | - | 3,586 | 3,586 |
Additional capitalised borrowing costs in the period | (12,279) | - | (12,279) |
Debt as at 31 December 2023 | 533,721 | 1,999,031 | 2,532,752 |
Further details for the Group\u2019s loans and bonds are presented below:
The Group has secured term loans contracted by some of its subsidiaries in Poland, Slovakia, Czech Republic, and Romania. The secured loans contracted by the entities in Czech Republic and Romania are subject to compliance with covenants within twelve months after the reporting date (prospective debt service cover ratio). The Group has no indication that it will have difficulty complying with these covenants.
Securities
General security over the properties (fair values as at 31 December 2024), current assets, cash inflows from operating activities, accounts and receivables; and
General security over the shares in the property-owning entities.
Covenants
Debt service cover ratio (historical and prospective) of a minimum between 110% and 140%; and
Loan to value ratio of a maximum between 55% and 70%.
The Group has two green unsecured financing agreements with IFC, one which matures in June 2028 in amount of \u20ac73.5 million and another one maturing in January 2029 in amount of \u20ac445\u00a0million.
The \u20ac445 million loan has sustainability-linked KPIs in line with the Group\u2019s Sustainability-Linked Financing Framework. Management considers that the sustainability related variability feature does not meet the definition of a derivative, as defined in Appendix A of IFRS 9, on the basis that these KPIs are non\u2013financial variables specific to the Group.
At 31 December 2024, there were \u20ac670 million revolving facilities available for drawdown.
All available revolving facilities are linked either to the ESG performance of the Group through the sustainability rating provided by Sustainalytics or have sustainability-linked KPIs in line with the Group\u2019s Sustainability-Linked Financing Framework.
Management considers that the above ESG related variability feature does not meet the definition of a derivative, as defined in Appendix A of IFRS 9, on the basis that the external rating is a non\u2013financial variable specific to the Group.
The Group successfully issued fixed coupon bonds as follows:
October 2019: \u20ac500 million of unsecured, 7-year Eurobonds. The bonds mature on 9 October 2026 and carry a 1.875% fixed coupon, with an issue price of 98.927%;
July 2020: \u20ac500 million of green unsecured, 7-year Eurobonds. The bonds mature on 14 July 2027 and carry a 3.375% fixed coupon, with an issue price of 98.172%;
January 2022: \u20ac500 million of green unsecured, 8-year Eurobonds. The bonds mature on 21 January 2030 and carry a 2.00% fixed coupon, with an issue price of 98.713%; and
October 2024: \u20ac500 million of green unsecured, 7-year Eurobonds. The bonds mature on 21 January 2032 and carry a
4.25% fixed coupon, with an issue price of 99.124%.
All the bonds include early redemption options. At each date of bond issue initial recognition management has performed an assessment whether those options are closely related to the host contract, considering the IFRS 9 clauses, which states that early repayment options are closely related to the host debt, if either:
the option\u2019s exercise price is approximately equal on each exercise date to the host debt instrument\u2019s amortised cost; or
the exercise price of a prepayment option reimburses the lender for an amount up to the approximate present value of lost interest for the remaining term of the host contract.
Based on management assessment in case of the exercise of any of the early redemption options either first or second criteria will be met, therefore those were considered as closely related to the bond and thus not separately valued and disclosed.
NEPI Rockcastle has complied with all financial covenants related to its unsecured green loans, unsecured committed revolving facilities and unsecured fixed coupon bonds during 2024 and 2023. The ratios calculated for all unsecured loans and bonds showed ample headroom compared to the covenants:
Covenants | Requirement | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Solvency Ratio | Maximum 0.60 | 0.38 | 0.38 |
Consolidated Coverage Ratio | Minimum 2:1 | 5.01 | 6.06 |
Unsecured Ratio | Minimum 150% | 261% | 269% |
At 31 December 2024, \u20ac524 million of debt exposed to Euribor was hedged with interest rate caps and \u20ac39 million with interest rate swaps (Note 5.3.2).
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Tenant security deposits | 30,109 | 35,011 |
Other long-term payables | 484 | 1,063 |
Total | 30,593 | 36,074 |
As part of the deal for the acquisition of Forum Gdansk Property Sp. z o.o. in 2022, the Group obtained vendor financing in the form of a three-year unsecured loan from the seller, for part of the purchase price amounting to \u20ac50,000 thousand, bearing an interest rate of 6.5%. The outstanding loan was fully repaid in October 2024.
This section sets out the movements in loans from third parties for the periods presented.
in \u20ac\u00a0thousand | Loans from third parties |
|---|---|
Loans from third parties as at 31 December 2023 | 33,405 |
Out of which short-term | 16,738 |
Cash payments of principal | (33,333) |
Cash payments of interest | (1,835) |
Interest expense | 1,763 |
Loans from third parties as at 31 December 2024 | - |
Out of which short-term | - |
in \u20ac\u00a0thousand | Loans from third parties |
|---|---|
Loans from third parties as at 31 December 2022 | 50,107 |
Out of which short-term | 16,774 |
Cash payments of principal | (16,666) |
Cash payments of interest | (3,250) |
Interest expense | 3,214 |
Loans from third parties as at 31 December 2023 | 33,405 |
Out of which short-term | 16,738 |
Cash and cash equivalents include cash balances, cash deposits and short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are carried at amortised cost because: (i) they are held for collection of contractual cash flows and those cash flows represent solely payments of principal and interest (SPPI), and (ii) they are not designated at FVTPL.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19015-4": { "value": "Cash and cash equivalents include cash balances, cash deposits and short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are carried at amortised cost because: (i) they are held for collection of contractual cash flows and those cash flows represent solely payments of principal and interest (SPPI), and (ii) they are not designated at FVTPL.
Cash and cash equivalents by currency | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
EUR | 301,218 | 213,959 |
RON | 46,398 | 54,615 |
PLN | 70,433 | 35,911 |
BGN | 11,355 | 14,050 |
HUF | 6,154 | 8,991 |
CZK | 10,930 | 9,864 |
RSD | 217 | 238 |
ZAR | 1,793 | 891 |
Total1 | 448,498 | 338,519 |
Cash and cash equivalents by type | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
Current accounts | 350,366 | 258,371 |
Deposits | 98,000 | 80,000 |
Petty cash | 132 | 148 |
Total1 | 448,498 | 338,519 |
Trade receivables are amounts due from customers for rental and service charge income from tenants in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value, generally at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.
Trade receivables are also subject to the impairment requirements of IFRS 9. The Group applies the IFRS 9 simplified approach to measuring expected credit losses.
Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
The Group establishes an allowance for impairment based on a simplified expected credit loss model in respect of Trade and other receivables. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
An overview of the tenant receivables net of impairment provision is set out below:
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Tenant receivables \u2013 gross | \u00a0 | 106,650 | 82,422 |
Less: Impairment provisions | \u00a0 | (10,796) | (10,701) |
TENANT RECEIVABLES - NET OF IMPAIRMENT PROVISION | 95,854 | 71,721 |
Reconciliation of impairment provisions is set out below:
Movement of provisions for doubtful debtors | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
Carrying value at beginning of the year | (10,701) | (9,342) |
Additional provision from properties acquired during the year | (2,607) | - |
Additional expected credit losses | (3,138) | (5,485) |
Write-off of receivables | 2,062 | 1,900 |
Recovery of previously expected credit losses | 3,702 | 2,366 |
Transfers to assets held for sale | - | 100 |
Released in relation to assets held for sale disposed during the year | 116 | - |
Foreign exchange loss | (230) | (240) |
Carrying value | (10,796) | (10,701) |
The expected loss rates are based on the historical payment profiles of tenants and the corresponding historical credit losses, adjusting for forward looking macroeconomic data. For example, if forecast economic conditions are expected to deteriorate over the next year which can lead to an increased number of defaults in a customer segment, the historical default rates are adjusted upwards. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. On that basis, the provision for doubtful debtors as at 31 December 2024 was determined as follows for trade receivables:
31 December 2024 | Current | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected loss rate | 0% | 0% | 6% | 25% | 87% | \u00a0 |
Gross carrying amount \u2013 trade receivables | 81,730 | 10,759 | 1,250 | 958 | 11,953 | 106,650 |
PROVISION FOR DOUBTFUL DEBTORS | (69) | (16) | (76) | (241) | (10,394) | (10,796) |
The impairment provision for trade receivables as at 31 December 2023 is set out below:
31 December 2023 | Current | 0-30 days | 31-60 days | 61-90 days | >90 days | Total |
|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected loss rate | 0% | 2% | 7% | 81% | 96% | \u00a0 |
Gross carrying amount \u2013 trade receivables | 60,458 | 9,299 | 1,979 | 332 | 10,354 | 82,422 |
PROVISION FOR DOUBTFUL DEBTORS | (219) | (172) | (135) | (268) | (9,907) | (10,701) |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Tenant receivables (net of ECL) | 95,854 | 71,721 | |
VAT receivable | \u00a0 | 9,204 | 7,510 |
Prepaid property expenses | \u00a0 | 8,230 | 4,915 |
Other receivables | \u00a0 | 2,510 | 8,956 |
Other prepaid fees | \u00a0 | 149 | 363 |
Total | \u00a0 | 115,947 | 93,465 |
Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation, is held as inventory property and is measured at the lower of cost and net realisable value (\u201cNRV\u201d). Principally, this is residential property that the Group develops and intends to sell on completion of development.
The commencement of development with a plan or a prior agreement to sell represents a change in use and accordingly the project is transferred from investment property to inventory property.
Costs incurred in inventory property include:
freehold and leasehold rights for land;
amounts paid to contractors for development; and
planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, development overheads and other related costs.
NRV is the estimated selling price in the ordinary course of business, based on market prices at the reporting date, less estimated costs of completion and the estimated costs necessary to make the sale.
When an inventory property is sold, the carrying amount of the property is recognised as an expense in the period in which the related revenue is recognised. The carrying amount of inventory property recognised in profit or loss is determined with reference to the directly attributable costs incurred on the property sold and an allocation of any other related costs based on the relative size of the property sold.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19020-2": { "value": "Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation, is held as inventory property and is measured at the lower of cost and net realisable value (\u201cNRV\u201d). Principally, this is residential property that the Group develops and intends to sell on completion of development.
The commencement of development with a plan or a prior agreement to sell represents a change in use and accordingly the project is transferred from investment property to inventory property.
Costs incurred in inventory property include:
freehold and leasehold rights for land;
amounts paid to contractors for development; and
planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, development overheads and other related costs.
NRV is the estimated selling price in the ordinary course of business, based on market prices at the reporting date, less estimated costs of completion and the estimated costs necessary to make the sale.
When an inventory property is sold, the carrying amount of the property is recognised as an expense in the period in which the related revenue is recognised. The carrying amount of inventory property recognised in profit or loss is determined with reference to the directly attributable costs incurred on the property sold and an allocation of any other related costs based on the relative size of the property sold.
The Group has a residential property development in Romania that was completed in 2023 and the sale of its units (apartments) started in December 2023 and continued in 2024. The residential project is held as inventory property and is measured at the lower of cost and net realisable value (\u201cNRV\u201d).
The commencement of development with a plan or a prior agreement to sell represents a change in use and accordingly the project is transferred from investment property to inventory property.
NRV is the estimated selling price in the ordinary course of business, based on market prices at the reporting date, less estimated costs of completion and the estimated costs necessary to make the sale.
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Inventory property | 4,227 | 17,266 |
Ordinary shares are classified as equity. Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
The consideration paid, including any directly attributable incremental costs (net of income taxes for the purchases of the Company\u2019s equity instruments by any of the Group\u2019s subsidiaries, as a result of a share buy-back or for a share-based incentive plan) is presented within \u201cOther reserves\u201d, until the shares are cancelled or reissued. Where such ordinary shares are cancelled, their nominal value is debited to Share capital, with the corresponding difference up to their purchase price (including any attributable incremental cost, net of taxes) debited from Share premium. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Group. Usually, shares are purchased for the debt-free Long-Term Share Incentive Plan (Note 3.16 (b)).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19021-2": { "value": "Ordinary shares are classified as equity. Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
The consideration paid, including any directly attributable incremental costs (net of income taxes for the purchases of the Company\u2019s equity instruments by any of the Group\u2019s subsidiaries, as a result of a share buy-back or for a share-based incentive plan) is presented within \u201cOther reserves\u201d, until the shares are cancelled or reissued. Where such ordinary shares are cancelled, their nominal value is debited to Share capital, with the corresponding difference up to their purchase price (including any attributable incremental cost, net of taxes) debited from Share premium. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Group. Usually, shares are purchased for the debt-free Long-Term Share Incentive Plan (Note 3.16 (b)).
Issue of shares
On 17 October 2024 NEPI Rockcastle announced its intention to conduct a non pre-emptive placing (the \u201cPlacing\u201d) of new ordinary shares in the Company, to raise proceeds that would enable the Company to execute on its ongoing growth strategy.
On 18 October 2024 the results of the Placing raised gross proceeds of EUR 300 million, comprising the issue of 41,724,618 new ordinary shares in the capital of the Company, with a nominal value of \u20ac0.01 each (the \u201cOffer Shares\u201d) in aggregate. The Offer Shares represented approximately 6.2% of the existing issued ordinary share capital of the Company prior to the Placing. The offer price per Offer Share of ZAR 137.85 (EUR 7.19) represented a discount of approximately 4.36% to the closing share price of ZAR 144.13 on 17 October 2024 and a discount of approximately 4.98% to the volume weighted average price of ZAR 145.08 on the JSE over the thirty trading days prior to 18 October 2024.
As a result of the above elections for the settlement of the final distribution for 2023, the interim distribution for 2024 and the capital raise, the impact in the Share capital and Share premium reserves has been set out below:
Movement of ordinary shares | Number of shares | Share capital | Share premium |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Balance at 1 January 2024 | 660,826,020 | 6,608 | 3,137,063 |
Share capital increase1 | - | 462,578 | (462,578) |
Share capital decrease1 | - | (284,499) | 284,499 |
Capital repayment paid to shareholders | - | (178,079) | - |
Impact of foreign exchange hedges | - | - | 1,505 |
Theoretical effect of scrip issue settlement through share premium2 | - | - | (69,888) |
Theoretical effect of issue of shares as a result of scrip issue election2 | 9,806,671 | 98 | 69,790 |
Issue of shares | 41,724,618 | 418 | 299,582 |
Issue of shares transaction costs | - | - | (4,825) |
Carried forward as at 31 December 2024 | 712,357,309 | 7,124 | 3,255,148 |
Ordinary shares carry the right to vote at general meetings, to distribution and to the surplus assets of the Group on winding-up.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19021-4": { "value": "Ordinary shares are classified as equity. Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
The consideration paid, including any directly attributable incremental costs (net of income taxes for the purchases of the Company\u2019s equity instruments by any of the Group\u2019s subsidiaries, as a result of a share buy-back or for a share-based incentive plan) is presented within \u201cOther reserves\u201d, until the shares are cancelled or reissued. Where such ordinary shares are cancelled, their nominal value is debited to Share capital, with the corresponding difference up to their purchase price (including any attributable incremental cost, net of taxes) debited from Share premium. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Group. Usually, shares are purchased for the debt-free Long-Term Share Incentive Plan (Note 3.16 (b)).
The balance on the Statement of comprehensive income is transferred to accumulated profit at the end of each financial period. Distributions paid in cash are deducted from accumulated profit. Distributions for which shareholders elected to receive a return of capital are accounted for as an issue of share capital with a corresponding deduction from the share premium account.
In February 2024, the Board declared a final distribution of 25.61 euro cents per share for the six months ended 31 December 2023, corresponding to a 90% dividend pay-out ratio, to be received as capital repayment (to be settled from Share capital). Shareholders could have also elected the settlement of the same dividend amount as ordinary cash distribution out of distributable profits (to be settled from Accumulated profit).
The results of the election by NEPI Rockcastle shareholders and their Euro equivalent have been summarised below:
Final distribution for 2023: elections | Number of NEPI Rockcastle shares election | Final distribution per share (euro cents) | EUR equivalent out of the final distribution (thousand) |
|---|---|---|---|
Capital repayment | 415,648,858 | 25.61 | 106,448 |
Dividend out of accumulated profit | 245,177,162 | 25.61 | 62,788 |
Impact of foreign exchange hedges1 | - | - | 171 |
Total | 660,826,020 | \u00a0 | 169,407 |
In August 2024, the Board declared an interim distribution of 27.11 euro cents per share for the six months ended 30 June 2024, corresponding to a 90% dividend pay-out ratio, to be received as capital repayment (to be settled from Share capital). Shareholders could have also elected the settlement of the same dividend amount as ordinary cash distribution out of distributable profits (to be settled from Accumulated profit).
As an alternative, the shareholders were given the option to elect to receive a dividend of 27.11 euro cents as a scrip issue (issue of new shares). The results of the election by NEPI Rockcastle shareholders and their Euro equivalent have been summarised below:
Interim distribution for 2024: elections | Number of NEPI Rockcastle shares election | Final distribution per share (euro cents) | EUR equivalent out of the final distribution (thousand) |
|---|---|---|---|
Capital repayment | 264,223,894 | 27.11 | 71,631 |
Dividend out of accumulated profit | 138,809,210 | 27.11 | 37,631 |
Scrip issue | 257,792,916 | 27.11 | 69,888 |
Impact of foreign exchange hedges1 | - | - | (1,676) |
Total | 660,826,020 | \u00a0 | 177,474 |
Issue of shares
On 17 October 2024 NEPI Rockcastle announced its intention to conduct a non pre-emptive placing (the \u201cPlacing\u201d) of new ordinary shares in the Company, to raise proceeds that would enable the Company to execute on its ongoing growth strategy.
On 18 October 2024 the results of the Placing raised gross proceeds of EUR 300 million, comprising the issue of 41,724,618 new ordinary shares in the capital of the Company, with a nominal value of \u20ac0.01 each (the \u201cOffer Shares\u201d) in aggregate. The Offer Shares represented approximately 6.2% of the existing issued ordinary share capital of the Company prior to the Placing. The offer price per Offer Share of ZAR 137.85 (EUR 7.19) represented a discount of approximately 4.36% to the closing share price of ZAR 144.13 on 17 October 2024 and a discount of approximately 4.98% to the volume weighted average price of ZAR 145.08 on the JSE over the thirty trading days prior to 18 October 2024.
As a result of the above elections for the settlement of the final distribution for 2023, the interim distribution for 2024 and the capital raise, the impact in the Share capital and Share premium reserves has been set out below:
Movement of ordinary shares | Number of shares | Share capital | Share premium |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Balance at 1 January 2024 | 660,826,020 | 6,608 | 3,137,063 |
Share capital increase1 | - | 462,578 | (462,578) |
Share capital decrease1 | - | (284,499) | 284,499 |
Capital repayment paid to shareholders | - | (178,079) | - |
Impact of foreign exchange hedges | - | - | 1,505 |
Theoretical effect of scrip issue settlement through share premium2 | - | - | (69,888) |
Theoretical effect of issue of shares as a result of scrip issue election2 | 9,806,671 | 98 | 69,790 |
Issue of shares | 41,724,618 | 418 | 299,582 |
Issue of shares transaction costs | - | - | (4,825) |
Carried forward as at 31 December 2024 | 712,357,309 | 7,124 | 3,255,148 |
Ordinary shares carry the right to vote at general meetings, to distribution and to the surplus assets of the Group on winding-up.
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i19022-1": { "value": "The consideration paid, including any directly attributable incremental costs (net of income taxes for the purchases of the Company\u2019s equity instruments by any of the Group\u2019s subsidiaries, as a result of a share buy-back or for a share-based incentive plan) is presented within \u201cOther reserves\u201d, until the shares are cancelled or reissued. Where such ordinary shares are cancelled, their nominal value is debited to Share capital, with the corresponding difference up to their purchase price (including any attributable incremental cost, net of taxes) debited from Share premium. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Group. Usually, shares are purchased for the debt-free Long-Term Share Incentive Plan (Note 3.16 (b)).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i19022-2": { "value": "The consideration paid, including any directly attributable incremental costs (net of income taxes for the purchases of the Company\u2019s equity instruments by any of the Group\u2019s subsidiaries, as a result of a share buy-back or for a share-based incentive plan) is presented within \u201cOther reserves\u201d, until the shares are cancelled or reissued. Where such ordinary shares are cancelled, their nominal value is debited to Share capital, with the corresponding difference up to their purchase price (including any attributable incremental cost, net of taxes) debited from Share premium. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Group. Usually, shares are purchased for the debt-free Long-Term Share Incentive Plan (Note 3.16 (b)).
", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19024-1": { "value": "To date, NEPI Rockcastle has initiated two types of incentive programs that offered share-based payments in exchange for services provided to it by its directors and employees (equity-settled transactions), which are detailed below.
This program was put in place before the 2017 merger of the former groups New Europe Property Investments plc (\u201cNEPI\u201d) and Rockcastle Global Real Estate Company Ltd (\u201cRockcastle\u201d). Under this program, participants were granted loans to acquire shares in the Company at fair value at the grant date. These loans were classified as \u201cloans to participants in the incentive plan\u201d and included in Other long-term assets (Note 10). The loans are carried at amortised cost and the accrued interest is recognised as finance income in the Statement of Comprehensive Income. The costs under this program are nil.
This program was put in place after the 2017 merger of the former groups NEPI and Rockcastle. Under this incentive plan, shares may be issued by the Group to executive directors and other key personnel for no cash consideration. Awards under this plan are at the discretion of the Board of Directors and are based on the performance of the Group and the employees. The costs related to the LTSIP are measured based on the fair value of the shares at the grant date and are recognized over the vesting period.
The costs are presented as part of the Administrative expenses in the Statement of comprehensive income and within Other reserves in the Statement of changes in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19024-2": { "value": "To date, NEPI Rockcastle has initiated two types of incentive programs that offered share-based payments in exchange for services provided to it by its directors and employees (equity-settled transactions), which are detailed below.
This program was put in place before the 2017 merger of the former groups New Europe Property Investments plc (\u201cNEPI\u201d) and Rockcastle Global Real Estate Company Ltd (\u201cRockcastle\u201d). Under this program, participants were granted loans to acquire shares in the Company at fair value at the grant date. These loans were classified as \u201cloans to participants in the incentive plan\u201d and included in Other long-term assets (Note 10). The loans are carried at amortised cost and the accrued interest is recognised as finance income in the Statement of Comprehensive Income. The costs under this program are nil.
This program was put in place after the 2017 merger of the former groups NEPI and Rockcastle. Under this incentive plan, shares may be issued by the Group to executive directors and other key personnel for no cash consideration. Awards under this plan are at the discretion of the Board of Directors and are based on the performance of the Group and the employees. The costs related to the LTSIP are measured based on the fair value of the shares at the grant date and are recognized over the vesting period.
The costs are presented as part of the Administrative expenses in the Statement of comprehensive income and within Other reserves in the Statement of changes in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19024-4": { "value": "To date, NEPI Rockcastle has initiated two types of incentive programs that offered share-based payments in exchange for services provided to it by its directors and employees (equity-settled transactions), which are detailed below.
This program was put in place before the 2017 merger of the former groups New Europe Property Investments plc (\u201cNEPI\u201d) and Rockcastle Global Real Estate Company Ltd (\u201cRockcastle\u201d). Under this program, participants were granted loans to acquire shares in the Company at fair value at the grant date. These loans were classified as \u201cloans to participants in the incentive plan\u201d and included in Other long-term assets (Note 10). The loans are carried at amortised cost and the accrued interest is recognised as finance income in the Statement of Comprehensive Income. The costs under this program are nil.
This program was put in place after the 2017 merger of the former groups NEPI and Rockcastle. Under this incentive plan, shares may be issued by the Group to executive directors and other key personnel for no cash consideration. Awards under this plan are at the discretion of the Board of Directors and are based on the performance of the Group and the employees. The costs related to the LTSIP are measured based on the fair value of the shares at the grant date and are recognized over the vesting period.
The costs are presented as part of the Administrative expenses in the Statement of comprehensive income and within Other reserves in the Statement of changes in equity.
The Group has implemented incentive plans to reward performance and align the interests of executive directors and key individuals with those of the shareholders.
The aim of the Group\u2019s incentive plan (\u201cIncentive Plan\u201d) is to motivate directors and employees to meet the Group\u2019s short-term and long-term objectives by giving such participants an opportunity to receive performance-based Awards (in cash or shares), on short-term (immediate settlement in cash or shares) or long-term (shares with a vesting component). The Board determines which executive directors are eligible to participate in the Incentive Plan, and the allocation of incentives, based on key performance indicators. The executive directors determine which key employees are eligible to participate in the Incentive Plan, and the allocation of incentives is discretionary, based on key performance indicators and other considerations regarding the employees\u2019 performance.
To date, NEPI Rockcastle has initiated two types of incentive programs that offered share-based payments in exchange for services provided to it by its directors and employees (equity-settled transactions), which are detailed below:
Under this program, loans were granted to participants in the share purchase schemes (the \u201cShare Purchase Scheme\u201d or \u201cSPS\u201d) to buy shares, the repayment of which could be made in part out of the distribution payable in relation to the shares (the \u201cNRP SPS\u201d). Of the shares initially subscribed for, 20% vested annually. The Group offered each participant the immediate right to subscribe for the permitted number of shares at their market value, less a maximum discount of 5%, together with a loan to fund the purchase. Each loan carried interest at the weighted average rate that the Group can borrow money. Loans are payable in full, together with interest, ten years after its subscription date, but could be repaid earlier. The Company has security interests that ensure the repayment of the principal and interest on the loan given to participants. The NRP SPS is a full recourse scheme (i.e., recourse in relation to loans granted is not limited to shares issued). Pending repayment of the loan, the distributions on such shares are used to repay loan interest. Any excess distribution after interest payment is used to repay the loan.
No shares were issued during 2024 and 2023 under the NRP SPS.
The number of shares outstanding and the loans to participants under the Share Purchase Scheme as at the year-end are summarised below:
NRP SPS | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Number of shares outstanding, collateralizing the Loans to participants under | 114,109 | 550,990 |
Loans to participants under the Share Purchase Scheme (in \u20ac\u00a0thousand) | 890 | 3,451 |
The decrease in 2024 is due to the sale of shares of a number of participants under the SPS which determined the correspondent decrease in the outstanding loan.
Under this incentive plan, shares are awarded by the Group to executive directors and other key employees for no cash consideration. For key employees, shares are awarded to participants on condition of employment in the Group for the next three years (vesting period), with shares being vested proportionally over each year of the corresponding vesting periods (tranche vesting). For executive directors, shares are awarded subject to a full vesting of them at the end of three years (cliff vesting) plus a further two-year lock-up period, during which the vested shares cannot be disposed of by the directors. Shares awarded under LTSIP cannot be disposed of or otherwise encumbered up to their respective vesting dates.
The number of shares granted but unvested at 31 December 2024 and their fair value at grant date are summarised below:
LTSIP | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Number of shares granted but unvested at year-end | 1,717,101 | 1,308,834 |
Fair value at the grant date (\u20ac\u00a0thousand) | 10,546 | 7,543 |
The number of shares granted during the year and their fair value at grant date are presented below. The fair value was calculated using the share price on the date of acquisition of shares allocated to LTSIP.
LTSIP | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Number of shares granted during the year | 785,206 | 882,537 |
Fair value at the grant date (\u20ac\u00a0thousand) | 5,154 | 5,158 |
The maximum number of shares which could be offered for subscription under the Incentive Plan is 5% of the issued share capital of the Company at the end of any financial year prior to each award, provided that such number shall not exceed 30,449,745 shares. The number of shares that remained available for issue in terms of the Incentive Plan were as follows:
| \u00a0 | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Number of shares that remain available for issue at year-end | 26,658,837 | 27,444,043 |
The balance on the Statement of comprehensive income is transferred to accumulated profit at the end of each financial period. Distributions paid in cash are deducted from accumulated profit. Distributions for which shareholders elected to receive a return of capital are accounted for as an issue of share capital with a corresponding deduction from the share premium account.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19028-1": { "value": "Revenue is recognised at the fair value of the consideration received or receivable. Revenue comprises rental and related income and recovery of expenses, excluding VAT.
Rental income receivable from operating leases is recognised on a straight-line basis over the duration of the lease, except for variable lease payments which are recognized when they arise.
Contractually agreed and signed concessions granted to, and obtained from, tenants are treated according to IFRS 16 \u201cLeases\u201d. IFRS 16 defines \u201clease modification\u201d as a change in scope, or consideration, of the lease, not part of the original terms and conditions, such as rent discounts, lease extensions, increase in variable rent (overage/turnover), introduction of break options, etc. Lease modifications are recognised prospectively over the new lease term and accounted for by the Group from the date the modification is contractually agreed and signed by both parties. Agreed lease modifications are recognised as lease incentives from the date the modification was signed. Such modifications are straight-lined over the new lease term and recognised in the Consolidated Statement of comprehensive income as a reduction of Gross rental income.
Revenue from service and property management charges is recognised in the accounting period in which control of the services are passed to the customer, which is when the service is rendered. For certain service contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services.
As specified in the lease agreements, the Group has the primary responsibility for providing services to tenants (electricity, water and gas utilities, interior and exterior cleaning, security, maintenance, repairs, etc). The Group has determined that these services constitute distinct non-lease components (transferred separately from the right to use the underlying asset) and are within the scope of IFRS 15. The Group allocates the consideration in the contract to the separate lease and revenue (non-lease) components on a relative stand-alone selling price basis. In respect of the revenue component, these services represent a series of daily services that are individually satisfied over time because the tenants simultaneously receive and consume the benefits provided by the Group. The Group applies the time elapsed method to measure progress.
The Group negotiates directly with the suppliers all contracts for services provided to tenants. These contracts are concluded between the Group subsidiaries which own the properties and the direct supplier. As the Group sometimes uses the same providers for services across most of its portfolio, it can negotiate better prices through the economies of scale. The Group is considered principal in these transactions, in terms of the IFRS 15 requirements.
The Group negotiates and pays all expenses incurred by the tenants and then re-invoices these costs to them as defined in the contractual clauses included in the lease agreements. A flat fee is charged monthly during the year. This fee is estimated based on the previous year\u2019s actual costs, with an annual service charge reconciliation performed based on current year\u2019s actual costs incurred by the Group. For contracts terminated during the year, the Group estimates the service charge to be collected based on the current budget and last year\u2019s actual costs.
Revenue is recognised when the performance obligation associated with the sale is completed. The transaction price comprises the fair value of the consideration received or receivable, net of value added tax, rebates and discounts.
The sale of completed property constitutes a single performance obligation and the Group has determined that this is satisfied at the point in time when control transfers. The Group\u2019s sales contracts qualify as unconditional exchange of contracts, which occurs when legal title transfers to the customer. Payments are usually received on the date when contracts are signed or with several days delay.
Revenue from energy is generated through the sale of electricity, based on agreements between the Group\u2019s property companies and the tenants of Group\u2019s properties in a particular jurisdiction. Revenue recognition in a period is based on the delivery of electricity, taking into account the contractual price per kilowatt-hour (kWh) and the amount of electricity delivered in the period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19028-3": { "value": "Revenue is recognised at the fair value of the consideration received or receivable. Revenue comprises rental and related income and recovery of expenses, excluding VAT.
Rental income receivable from operating leases is recognised on a straight-line basis over the duration of the lease, except for variable lease payments which are recognized when they arise.
Contractually agreed and signed concessions granted to, and obtained from, tenants are treated according to IFRS 16 \u201cLeases\u201d. IFRS 16 defines \u201clease modification\u201d as a change in scope, or consideration, of the lease, not part of the original terms and conditions, such as rent discounts, lease extensions, increase in variable rent (overage/turnover), introduction of break options, etc. Lease modifications are recognised prospectively over the new lease term and accounted for by the Group from the date the modification is contractually agreed and signed by both parties. Agreed lease modifications are recognised as lease incentives from the date the modification was signed. Such modifications are straight-lined over the new lease term and recognised in the Consolidated Statement of comprehensive income as a reduction of Gross rental income.
Revenue from service and property management charges is recognised in the accounting period in which control of the services are passed to the customer, which is when the service is rendered. For certain service contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services.
As specified in the lease agreements, the Group has the primary responsibility for providing services to tenants (electricity, water and gas utilities, interior and exterior cleaning, security, maintenance, repairs, etc). The Group has determined that these services constitute distinct non-lease components (transferred separately from the right to use the underlying asset) and are within the scope of IFRS 15. The Group allocates the consideration in the contract to the separate lease and revenue (non-lease) components on a relative stand-alone selling price basis. In respect of the revenue component, these services represent a series of daily services that are individually satisfied over time because the tenants simultaneously receive and consume the benefits provided by the Group. The Group applies the time elapsed method to measure progress.
The Group negotiates directly with the suppliers all contracts for services provided to tenants. These contracts are concluded between the Group subsidiaries which own the properties and the direct supplier. As the Group sometimes uses the same providers for services across most of its portfolio, it can negotiate better prices through the economies of scale. The Group is considered principal in these transactions, in terms of the IFRS 15 requirements.
The Group negotiates and pays all expenses incurred by the tenants and then re-invoices these costs to them as defined in the contractual clauses included in the lease agreements. A flat fee is charged monthly during the year. This fee is estimated based on the previous year\u2019s actual costs, with an annual service charge reconciliation performed based on current year\u2019s actual costs incurred by the Group. For contracts terminated during the year, the Group estimates the service charge to be collected based on the current budget and last year\u2019s actual costs.
Revenue is recognised when the performance obligation associated with the sale is completed. The transaction price comprises the fair value of the consideration received or receivable, net of value added tax, rebates and discounts.
The sale of completed property constitutes a single performance obligation and the Group has determined that this is satisfied at the point in time when control transfers. The Group\u2019s sales contracts qualify as unconditional exchange of contracts, which occurs when legal title transfers to the customer. Payments are usually received on the date when contracts are signed or with several days delay.
Revenue from energy is generated through the sale of electricity, based on agreements between the Group\u2019s property companies and the tenants of Group\u2019s properties in a particular jurisdiction. Revenue recognition in a period is based on the delivery of electricity, taking into account the contractual price per kilowatt-hour (kWh) and the amount of electricity delivered in the period.
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Gross rental income | 566,069 | 510,103 |
Service charge income | 259,563 | 254,369 |
Gross rental and service charge income | 825,632 | 764,472 |
Property management fees, tax, insurance, and utilities | (159,272) | (164,577) |
Property maintenance cost | (120,033) | (105,567) |
Net expected credit losses | 564 | (3,119) |
Property operating expenses | (278,741) | (273,263) |
Revenue from energy activity | 9,048 | - |
TOTAL NET RENTAL AND RELATED INCOME | 555,939 | 491,209 |
Out of the total Net rental and related income for 2024, \u20ac8 million relates to the two acquisitions made in fourth quarter of 2024 (Magnolia Park and Silesia City Center in Poland).
The Group rents its investment property under operating leases of various expiry terms. The standard terms of the leases comprise information relating to leased space, rent, rights and obligations of the landlord and tenant, including notice periods, renewal options and service charge arrangements. For most of the leases, the rent is indexed annually, over the term of the leases. Most retail leases have turnover rent clauses, which specify that if the agreed percentage of turnover from the retail unit under lease exceeds the base rent, the tenant will pay the difference to the Group.
A proportion of 5.7% (\u20ac\u00a031,999 thousand) of the Gross rental income is represented by the turnover rent (paid on top of fixed rent) as at 31 December 2024 (31 December 2023: 5.1% (\u20ac\u00a026,205 thousand)).
Lease incentives represent the non-recurring amount granted (in cash or as fit-out works) by the Group, to a new or an existing tenant, in connection with a new or renewed lease. Lease incentives are straight-lined over the lease term. The lease term corresponds to the contractual duration for the majority of the leases, except for the anchor tenants, for which the lease duration is assessed by the Group based on past experience and taking into account factors such as: GLA of the property where the anchor tenant is located, catchment area, dominance/competition in the catchment area or purchasing power.
The future minimum lease payments receivable under operating leases are detailed below:
in \u20ac\u00a0thousand | 31 Dec 20241 | 31 Dec 20231 |
|---|---|---|
No later than 1 year | 506,772 | 438,968 |
Between 1-2 years | 411,126 | 342,251 |
Between 2-3 years | 332,374 | 265,069 |
Between 3-4 years | 257,325 | 200,485 |
Between 4-5 years | 180,070 | 140,949 |
Later than 5 years | 421,540 | 358,375 |
Total | 2,109,207 | 1,746,097 |
The breakdown of the net rental and related income by country is disclosed in Note 34.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19028-4": { "value": "Revenue is recognised at the fair value of the consideration received or receivable. Revenue comprises rental and related income and recovery of expenses, excluding VAT.
Rental income receivable from operating leases is recognised on a straight-line basis over the duration of the lease, except for variable lease payments which are recognized when they arise.
Contractually agreed and signed concessions granted to, and obtained from, tenants are treated according to IFRS 16 \u201cLeases\u201d. IFRS 16 defines \u201clease modification\u201d as a change in scope, or consideration, of the lease, not part of the original terms and conditions, such as rent discounts, lease extensions, increase in variable rent (overage/turnover), introduction of break options, etc. Lease modifications are recognised prospectively over the new lease term and accounted for by the Group from the date the modification is contractually agreed and signed by both parties. Agreed lease modifications are recognised as lease incentives from the date the modification was signed. Such modifications are straight-lined over the new lease term and recognised in the Consolidated Statement of comprehensive income as a reduction of Gross rental income.
Revenue from service and property management charges is recognised in the accounting period in which control of the services are passed to the customer, which is when the service is rendered. For certain service contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services.
As specified in the lease agreements, the Group has the primary responsibility for providing services to tenants (electricity, water and gas utilities, interior and exterior cleaning, security, maintenance, repairs, etc). The Group has determined that these services constitute distinct non-lease components (transferred separately from the right to use the underlying asset) and are within the scope of IFRS 15. The Group allocates the consideration in the contract to the separate lease and revenue (non-lease) components on a relative stand-alone selling price basis. In respect of the revenue component, these services represent a series of daily services that are individually satisfied over time because the tenants simultaneously receive and consume the benefits provided by the Group. The Group applies the time elapsed method to measure progress.
The Group negotiates directly with the suppliers all contracts for services provided to tenants. These contracts are concluded between the Group subsidiaries which own the properties and the direct supplier. As the Group sometimes uses the same providers for services across most of its portfolio, it can negotiate better prices through the economies of scale. The Group is considered principal in these transactions, in terms of the IFRS 15 requirements.
The Group negotiates and pays all expenses incurred by the tenants and then re-invoices these costs to them as defined in the contractual clauses included in the lease agreements. A flat fee is charged monthly during the year. This fee is estimated based on the previous year\u2019s actual costs, with an annual service charge reconciliation performed based on current year\u2019s actual costs incurred by the Group. For contracts terminated during the year, the Group estimates the service charge to be collected based on the current budget and last year\u2019s actual costs.
Revenue is recognised when the performance obligation associated with the sale is completed. The transaction price comprises the fair value of the consideration received or receivable, net of value added tax, rebates and discounts.
The sale of completed property constitutes a single performance obligation and the Group has determined that this is satisfied at the point in time when control transfers. The Group\u2019s sales contracts qualify as unconditional exchange of contracts, which occurs when legal title transfers to the customer. Payments are usually received on the date when contracts are signed or with several days delay.
Revenue from energy is generated through the sale of electricity, based on agreements between the Group\u2019s property companies and the tenants of Group\u2019s properties in a particular jurisdiction. Revenue recognition in a period is based on the delivery of electricity, taking into account the contractual price per kilowatt-hour (kWh) and the amount of electricity delivered in the period.
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Gross rental income | 566,069 | 510,103 |
Service charge income | 259,563 | 254,369 |
Gross rental and service charge income | 825,632 | 764,472 |
Property management fees, tax, insurance, and utilities | (159,272) | (164,577) |
Property maintenance cost | (120,033) | (105,567) |
Net expected credit losses | 564 | (3,119) |
Property operating expenses | (278,741) | (273,263) |
Revenue from energy activity | 9,048 | - |
TOTAL NET RENTAL AND RELATED INCOME | 555,939 | 491,209 |
Out of the total Net rental and related income for 2024, \u20ac8 million relates to the two acquisitions made in fourth quarter of 2024 (Magnolia Park and Silesia City Center in Poland).
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i19029-1": { "value": "Revenue is recognised at the fair value of the consideration received or receivable. Revenue comprises rental and related income and recovery of expenses, excluding VAT.
Rental income receivable from operating leases is recognised on a straight-line basis over the duration of the lease, except for variable lease payments which are recognized when they arise.
Contractually agreed and signed concessions granted to, and obtained from, tenants are treated according to IFRS 16 \u201cLeases\u201d. IFRS 16 defines \u201clease modification\u201d as a change in scope, or consideration, of the lease, not part of the original terms and conditions, such as rent discounts, lease extensions, increase in variable rent (overage/turnover), introduction of break options, etc. Lease modifications are recognised prospectively over the new lease term and accounted for by the Group from the date the modification is contractually agreed and signed by both parties. Agreed lease modifications are recognised as lease incentives from the date the modification was signed. Such modifications are straight-lined over the new lease term and recognised in the Consolidated Statement of comprehensive income as a reduction of Gross rental income.
Revenue from service and property management charges is recognised in the accounting period in which control of the services are passed to the customer, which is when the service is rendered. For certain service contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services.
As specified in the lease agreements, the Group has the primary responsibility for providing services to tenants (electricity, water and gas utilities, interior and exterior cleaning, security, maintenance, repairs, etc). The Group has determined that these services constitute distinct non-lease components (transferred separately from the right to use the underlying asset) and are within the scope of IFRS 15. The Group allocates the consideration in the contract to the separate lease and revenue (non-lease) components on a relative stand-alone selling price basis. In respect of the revenue component, these services represent a series of daily services that are individually satisfied over time because the tenants simultaneously receive and consume the benefits provided by the Group. The Group applies the time elapsed method to measure progress.
The Group negotiates directly with the suppliers all contracts for services provided to tenants. These contracts are concluded between the Group subsidiaries which own the properties and the direct supplier. As the Group sometimes uses the same providers for services across most of its portfolio, it can negotiate better prices through the economies of scale. The Group is considered principal in these transactions, in terms of the IFRS 15 requirements.
The Group negotiates and pays all expenses incurred by the tenants and then re-invoices these costs to them as defined in the contractual clauses included in the lease agreements. A flat fee is charged monthly during the year. This fee is estimated based on the previous year\u2019s actual costs, with an annual service charge reconciliation performed based on current year\u2019s actual costs incurred by the Group. For contracts terminated during the year, the Group estimates the service charge to be collected based on the current budget and last year\u2019s actual costs.
The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets for all leases, except for short-term leases and leases of low-value assets. The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use).
Right-of-use assets are measured at cost, adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised and lease payments made at or before the commencement date.
Lease liabilities are measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments. The present value of lease payments is recognised by discounting the contractual lease payments using the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The Group recognises the right-of-use assets from leases of land plots on which the majority of its Polish properties are located, commissioned from the local authorities. The correspondent lease liabilities are recognised by discounting the contractual lease payments using the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The contractual lease agreements are signed for the period of 99 years with extension option by the lessee. The agreements include fixed payment terms subject to adjustment due to revaluation of land, such revaluation can be done by the lessor not more often than every three years.
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Carrying value of the lease liabilities - Opening Balance | \u00a0 | 56,520 | 37,200 |
Out of which short-term - Opening Balance | \u00a0 | 1,546 | 832 |
Additions to lease liabilities from acquired assets | 29,840 | - | |
Remeasurement of lease liability | \u00a0 | - | 20,062 |
Interest expense | 1,470 | 804 | |
Lease liability payment | \u00a0 | (1,881) | (1,546) |
Carrying value of the lease liabilities - Closing Balance | \u00a0 | 85,949 | 56,520 |
Out of which short-term - Closing Balance | \u00a0 | 2,890 | 1,546 |
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Gross rental income | 566,069 | 510,103 |
Service charge income | 259,563 | 254,369 |
Gross rental and service charge income | 825,632 | 764,472 |
Property management fees, tax, insurance, and utilities | (159,272) | (164,577) |
Property maintenance cost | (120,033) | (105,567) |
Net expected credit losses | 564 | (3,119) |
Property operating expenses | (278,741) | (273,263) |
Revenue from energy activity | 9,048 | - |
TOTAL NET RENTAL AND RELATED INCOME | 555,939 | 491,209 |
The Group rents its investment property under operating leases of various expiry terms. The standard terms of the leases comprise information relating to leased space, rent, rights and obligations of the landlord and tenant, including notice periods, renewal options and service charge arrangements. For most of the leases, the rent is indexed annually, over the term of the leases. Most retail leases have turnover rent clauses, which specify that if the agreed percentage of turnover from the retail unit under lease exceeds the base rent, the tenant will pay the difference to the Group.
A proportion of 5.7% (\u20ac\u00a031,999 thousand) of the Gross rental income is represented by the turnover rent (paid on top of fixed rent) as at 31 December 2024 (31 December 2023: 5.1% (\u20ac\u00a026,205 thousand)).
Lease incentives represent the non-recurring amount granted (in cash or as fit-out works) by the Group, to a new or an existing tenant, in connection with a new or renewed lease. Lease incentives are straight-lined over the lease term. The lease term corresponds to the contractual duration for the majority of the leases, except for the anchor tenants, for which the lease duration is assessed by the Group based on past experience and taking into account factors such as: GLA of the property where the anchor tenant is located, catchment area, dominance/competition in the catchment area or purchasing power.
The future minimum lease payments receivable under operating leases are detailed below:
in \u20ac\u00a0thousand | 31 Dec 20241 | 31 Dec 20231 |
|---|---|---|
No later than 1 year | 506,772 | 438,968 |
Between 1-2 years | 411,126 | 342,251 |
Between 2-3 years | 332,374 | 265,069 |
Between 3-4 years | 257,325 | 200,485 |
Between 4-5 years | 180,070 | 140,949 |
Later than 5 years | 421,540 | 358,375 |
Total | 2,109,207 | 1,746,097 |
Rental income receivable from operating leases is recognised on a straight-line basis over the duration of the lease, except for variable lease payments which are recognized when they arise.
Contractually agreed and signed concessions granted to, and obtained from, tenants are treated according to IFRS 16 \u201cLeases\u201d. IFRS 16 defines \u201clease modification\u201d as a change in scope, or consideration, of the lease, not part of the original terms and conditions, such as rent discounts, lease extensions, increase in variable rent (overage/turnover), introduction of break options, etc. Lease modifications are recognised prospectively over the new lease term and accounted for by the Group from the date the modification is contractually agreed and signed by both parties. Agreed lease modifications are recognised as lease incentives from the date the modification was signed. Such modifications are straight-lined over the new lease term and recognised in the Consolidated Statement of comprehensive income as a reduction of Gross rental income.
Revenue from service and property management charges is recognised in the accounting period in which control of the services are passed to the customer, which is when the service is rendered. For certain service contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services.
As specified in the lease agreements, the Group has the primary responsibility for providing services to tenants (electricity, water and gas utilities, interior and exterior cleaning, security, maintenance, repairs, etc). The Group has determined that these services constitute distinct non-lease components (transferred separately from the right to use the underlying asset) and are within the scope of IFRS 15. The Group allocates the consideration in the contract to the separate lease and revenue (non-lease) components on a relative stand-alone selling price basis. In respect of the revenue component, these services represent a series of daily services that are individually satisfied over time because the tenants simultaneously receive and consume the benefits provided by the Group. The Group applies the time elapsed method to measure progress.
The Group negotiates directly with the suppliers all contracts for services provided to tenants. These contracts are concluded between the Group subsidiaries which own the properties and the direct supplier. As the Group sometimes uses the same providers for services across most of its portfolio, it can negotiate better prices through the economies of scale. The Group is considered principal in these transactions, in terms of the IFRS 15 requirements.
The Group negotiates and pays all expenses incurred by the tenants and then re-invoices these costs to them as defined in the contractual clauses included in the lease agreements. A flat fee is charged monthly during the year. This fee is estimated based on the previous year\u2019s actual costs, with an annual service charge reconciliation performed based on current year\u2019s actual costs incurred by the Group. For contracts terminated during the year, the Group estimates the service charge to be collected based on the current budget and last year\u2019s actual costs.
The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets for all leases, except for short-term leases and leases of low-value assets. The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use).
Right-of-use assets are measured at cost, adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised and lease payments made at or before the commencement date.
Lease liabilities are measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments. The present value of lease payments is recognised by discounting the contractual lease payments using the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19033-1": { "value": "Property operating expenses and administrative expenses are recognised on an accrual basis.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19033-2": { "value": "Property operating expenses and administrative expenses are recognised on an accrual basis.
Property management fees, tax, insurance, and utility costs presented above are split as follows:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Utility expenses1 | (89,525) | (101,735) |
Property related taxes | (32,039) | (28,522) |
Property management fees | (34,890) | (31,831) |
Property insurance expenses | (2,818) | (2,489) |
Property management fees, tax, insurance, and utilities | (159,272) | (164,577) |
Property maintenance cost presented above comprises of:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Cleaning and security | (50,077) | (42,034) |
Maintenance and repairs | (38,168) | (32,900) |
Marketing | (23,921) | (21,795) |
Services and related costs | (3,640) | (3,323) |
Other | (4,227) | (5,515) |
Property maintenance cost | (120,033) | (105,567) |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Staff costs1 | \u00a0 | (12,908) | (11,890) |
Directors\u2019 remuneration | (4,551) | (4,233) | |
Advisory services | \u00a0 | (5,635) | (4,651) |
Audit and other assurance services | \u00a0 | (2,866) | (2,402) |
Companies\u2019 administration2 | \u00a0 | (2,710) | (5,118) |
Depreciation charge for Photovoltaic panels | (447) | - | |
Depreciation charge for other property, plant and equipment3 | (490) | (648) | |
Travel and accommodation | \u00a0 | (1,695) | (1,655) |
Stock exchange expenses | \u00a0 | (851) | (772) |
Share based payment expense | \u00a0 | (3,040) | (2,000) |
Total | \u00a0 | (35,193) | (33,369) |
Out of the above administrative expenses, audit fees are summarised below:
31 Dec 2024 | EY Accountants B.V. | Other EY network | Non-EY network |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Audit of financial statements | (475) | (1,911) | (31) |
Other assurance procedures | (345) | (104) | - |
Total | (820) | (2,015) | (31) |
31 Dec 2023 | EY Accountants B.V. | Other EY network | Non-EY network |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Audit of financial statements | (356) | (1,889) | (21) |
Other assurance procedures | (62) | (74) | - |
Total | (418) | (1,963) | (21) |
Property operating expenses and administrative expenses are recognised on an accrual basis.
Property management fees, tax, insurance, and utility costs presented above are split as follows:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Utility expenses1 | (89,525) | (101,735) |
Property related taxes | (32,039) | (28,522) |
Property management fees | (34,890) | (31,831) |
Property insurance expenses | (2,818) | (2,489) |
Property management fees, tax, insurance, and utilities | (159,272) | (164,577) |
Property maintenance cost presented above comprises of:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Cleaning and security | (50,077) | (42,034) |
Maintenance and repairs | (38,168) | (32,900) |
Marketing | (23,921) | (21,795) |
Services and related costs | (3,640) | (3,323) |
Other | (4,227) | (5,515) |
Property maintenance cost | (120,033) | (105,567) |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Staff costs1 | \u00a0 | (12,908) | (11,890) |
Directors\u2019 remuneration | (4,551) | (4,233) | |
Advisory services | \u00a0 | (5,635) | (4,651) |
Audit and other assurance services | \u00a0 | (2,866) | (2,402) |
Companies\u2019 administration2 | \u00a0 | (2,710) | (5,118) |
Depreciation charge for Photovoltaic panels | (447) | - | |
Depreciation charge for other property, plant and equipment3 | (490) | (648) | |
Travel and accommodation | \u00a0 | (1,695) | (1,655) |
Stock exchange expenses | \u00a0 | (851) | (772) |
Share based payment expense | \u00a0 | (3,040) | (2,000) |
Total | \u00a0 | (35,193) | (33,369) |
Out of the above administrative expenses, audit fees are summarised below:
31 Dec 2024 | EY Accountants B.V. | Other EY network | Non-EY network |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Audit of financial statements | (475) | (1,911) | (31) |
Other assurance procedures | (345) | (104) | - |
Total | (820) | (2,015) | (31) |
31 Dec 2023 | EY Accountants B.V. | Other EY network | Non-EY network |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Audit of financial statements | (356) | (1,889) | (21) |
Other assurance procedures | (62) | (74) | - |
Total | (418) | (1,963) | (21) |
Property operating expenses and administrative expenses are recognised on an accrual basis.
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Staff costs1 | \u00a0 | (12,908) | (11,890) |
Directors\u2019 remuneration | (4,551) | (4,233) | |
Advisory services | \u00a0 | (5,635) | (4,651) |
Audit and other assurance services | \u00a0 | (2,866) | (2,402) |
Companies\u2019 administration2 | \u00a0 | (2,710) | (5,118) |
Depreciation charge for Photovoltaic panels | (447) | - | |
Depreciation charge for other property, plant and equipment3 | (490) | (648) | |
Travel and accommodation | \u00a0 | (1,695) | (1,655) |
Stock exchange expenses | \u00a0 | (851) | (772) |
Share based payment expense | \u00a0 | (3,040) | (2,000) |
Total | \u00a0 | (35,193) | (33,369) |
Out of the above administrative expenses, audit fees are summarised below:
31 Dec 2024 | EY Accountants B.V. | Other EY network | Non-EY network |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Audit of financial statements | (475) | (1,911) | (31) |
Other assurance procedures | (345) | (104) | - |
Total | (820) | (2,015) | (31) |
31 Dec 2023 | EY Accountants B.V. | Other EY network | Non-EY network |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Audit of financial statements | (356) | (1,889) | (21) |
Other assurance procedures | (62) | (74) | - |
Total | (418) | (1,963) | (21) |
A distribution is recorded as a liability and deducted from equity in the period in which it is declared and approved. Any distribution declared after the reporting period and before the financial statements are authorised for issue is disclosed in Note 17.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19034-2": { "value": "A distribution is recorded as a liability and deducted from equity in the period in which it is declared and approved. Any distribution declared after the reporting period and before the financial statements are authorised for issue is disclosed in Note 17.
In February 2024, the Board declared a final distribution of 25.61 euro cents per share for the six months ended 31 December 2023, corresponding to a 90% dividend pay-out ratio, to be received as capital repayment (to be settled from Share capital). Shareholders could have also elected the settlement of the same dividend amount as ordinary cash distribution out of distributable profits (to be settled from Accumulated profit).
The results of the election by NEPI Rockcastle shareholders and their Euro equivalent have been summarised below:
Final distribution for 2023: elections | Number of NEPI Rockcastle shares election | Final distribution per share (euro cents) | EUR equivalent out of the final distribution (thousand) |
|---|---|---|---|
Capital repayment | 415,648,858 | 25.61 | 106,448 |
Dividend out of accumulated profit | 245,177,162 | 25.61 | 62,788 |
Impact of foreign exchange hedges1 | - | - | 171 |
Total | 660,826,020 | \u00a0 | 169,407 |
In August 2024, the Board declared an interim distribution of 27.11 euro cents per share for the six months ended 30 June 2024, corresponding to a 90% dividend pay-out ratio, to be received as capital repayment (to be settled from Share capital). Shareholders could have also elected the settlement of the same dividend amount as ordinary cash distribution out of distributable profits (to be settled from Accumulated profit).
As an alternative, the shareholders were given the option to elect to receive a dividend of 27.11 euro cents as a scrip issue (issue of new shares). The results of the election by NEPI Rockcastle shareholders and their Euro equivalent have been summarised below:
Interim distribution for 2024: elections | Number of NEPI Rockcastle shares election | Final distribution per share (euro cents) | EUR equivalent out of the final distribution (thousand) |
|---|---|---|---|
Capital repayment | 264,223,894 | 27.11 | 71,631 |
Dividend out of accumulated profit | 138,809,210 | 27.11 | 37,631 |
Scrip issue | 257,792,916 | 27.11 | 69,888 |
Impact of foreign exchange hedges1 | - | - | (1,676) |
Total | 660,826,020 | \u00a0 | 177,474 |
Taxation on the profit or loss for the year comprises current and deferred tax. Current income tax and liabilities are measured at the amount expected to be recovered from, or paid to, taxation authorities. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax is determined using the liability method and is based on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases.
The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries that are unlikely to reverse in the foreseeable future.
A deferred tax asset is recognised based on the assumption that it is probable that future taxable profits will be available against which it can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The current tax expense incurred by the Group reflects tax accrued in the subsidiaries of the Group located in Bulgaria, Croatia, Czech Republic, Hungary, Lithuania, Malta, Poland, Romania, Serbia, Slovakia, and the Netherlands.
The Group is subject to income taxes on taxable profits of its companies\u2019 operating in all jurisdictions. The calculation of the Group\u2019s tax charge and provisions for income taxes necessarily involves a degree of estimation and judgment in evaluating the nature of its companies\u2019 transactions and their respective tax treatment.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19035-2": { "value": "Taxation on the profit or loss for the year comprises current and deferred tax. Current income tax and liabilities are measured at the amount expected to be recovered from, or paid to, taxation authorities. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax is determined using the liability method and is based on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases.
The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries that are unlikely to reverse in the foreseeable future.
A deferred tax asset is recognised based on the assumption that it is probable that future taxable profits will be available against which it can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The current tax expense incurred by the Group reflects tax accrued in the subsidiaries of the Group located in Bulgaria, Croatia, Czech Republic, Hungary, Lithuania, Malta, Poland, Romania, Serbia, Slovakia, and the Netherlands.
The Group is subject to income taxes on taxable profits of its companies\u2019 operating in all jurisdictions. The calculation of the Group\u2019s tax charge and provisions for income taxes necessarily involves a degree of estimation and judgment in evaluating the nature of its companies\u2019 transactions and their respective tax treatment.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.
Tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss, except to the extent they relate to business combinations or items recognised directly in equity. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the assets are realised or the liabilities are settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets are recognised to the extent it is probable that future taxable profit will be available against which temporary differences can be utilised.
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Current tax expense | 30,563 | 28,334 |
Deferred tax expense | 31,472 | 41,527 |
INCOME TAX EXPENSE | 62,035 | 69,861 |
Deferred tax brought forward | 408,136 | 364,875 |
Other adjustments (included in the disposal proceeds) - with P&L effect | (1,762) | 61 |
Deferred tax balance transferred to Held for sale (HFS) assets - no P&L effect | - | 1,673 |
Deferred tax expense | 31,472 | 41,527 |
Net deferred tax liability carried forward, out of which: | 437,846 | 408,136 |
Deferred tax asset (other than related to HFS portfolio)1 | (107,395) | (63,555) |
Deferred tax liability (other than related to HFS portfolio)1 | 545,241 | 471,691 |
Net deferred tax liability results from the following types of differences:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Fiscal losses | 218,795 | 235,502 |
Other deductible temporary differences1 | 499,261 | 248,973 |
Deferred tax asset | 140,386 | 95,072 |
Net deferred tax asset related to HFS portfolio | - | (2,330) |
Deferred tax asset adjusted for HFS | 140,386 | 92,742 |
Temporary differences between accounting and fiscal value of investment property | (3,607,280) | (3,234,900) |
Other taxable temporary differences1 | (36,619) | (29,024) |
Deferred tax liability | (578,232) | (501,536) |
Net deferred tax liability related to HFS portfolio | - | 658 |
Deferred tax liability adjusted for HFS | (578,232) | (500,878) |
Net deferred tax liability | (437,846) | (408,136) |
The deferred tax balance as at 31 December 2024 is the net effect of deferred tax assets resulted mainly from fiscal losses (and for 2024, the tax attributes available for future use in the Maltese subsidiary, as described below) and deferred tax liabilities resulted from differences between the fiscal base and the accounting base of assets and liabilities, mainly investment property. Deferred tax liabilities are not expected to be settled within the following five years from the reporting date.
Deferred tax liabilities, which are a non-cash item, result directly from the fair value revaluation of the investment property and other local tax adjustments (e.g., local tax depreciation charges, non-capitalisation of certain items, foreign exchange impact given that tax value is recorded in local currency, etc.) which diminishes the tax value of the investment property.
in \u20ac\u00a0thousand | Consolidated Statement of | Consolidated Statement of | ||
|---|---|---|---|---|
Deferred tax liability (net) | 31 Dec 2024 | 31 Dec 2023 | 31 Dec 2024 | 31 Dec 2023 |
Valuation of investment property at fair value | (571,357) | (496,027) | (75,330) | (39,737) |
Recognised unused tax losses | 46,360 | 47,804 | (1,444) | (2,130) |
Deferred tax asset related to HFS written off upon sale | 89 | - | - | - |
Deferred tax balance transferred to HFS (no P&L impact) | - | (1,673) | - | - |
Deductible/Taxable temporary differences | 87,062 | 41,760 | 45,302 | 340 |
Total | (437,846) | (408,136) | (31,472) | (41,527) |
The Group is liable for taxation on taxable profits in the following jurisdictions at the rates below:
Corporate income tax rates | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Netherlands | 25.8% | 25.8% |
Romania | 16% | 16% |
Poland | 19% | 19% |
Slovakia1 | 21% | 21% |
Serbia | 15% | 15% |
Czech Republic | 21% | 19% |
Croatia | 18% | 18% |
Bulgaria | 10% | 10% |
Hungary | 9% | 9% |
Lithuania2 | 15% | 15% |
Malta | 35% | 35% |
A reconciliation between the current year income tax charge (current and deferred tax) and the Group consolidated profit/(loss) before tax for the years 2024 and 2023 is presented below:
Profit Before Tax Reconciliation | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Consolidated Profit Before Tax | 649,600 | 546,662 |
Weighted tax rate on consolidated Profit Before Tax | 15.40% | 14.49% |
Group income tax charge based on Group weighted | (100,035) | (79,227) |
Effect in corporate income tax resulting from | \u00a0 | \u00a0 |
Effects in changes in foreign exchange rates | (403) | 1,367 |
Recognition of Deferred Tax Asset previously unrecognised | (103) | 6,650 |
Changes in the liabilities for uncertain tax positions | (3,393) | 4,635 |
Utilisation of previously unrecognised temporary differences | 890 | 746 |
Tax rate differences inter-company transactions | (3,348) | (2,587) |
Deferred tax assets released due to fiscal losses expired and/or not utilised | (784) | (1,320) |
Deferred tax asset release following sale of subsidiary | (1,762) | - |
Increase of Deferred Tax Liability due to change of tax rate in various jurisdictions (Slovakia and Lithuania starting 2025) and Czech Republic (from 19% in 2023 to 21% starting 2024) | (10,221) | (591) |
Deferred tax asset reconised for tax attributes available to be used in the future | 56,708 | - |
Others | 416 | 466 |
Total Group tax expense | (62,035) | (69,861) |
Effective tax rate (Group consolidated Profit Before Tax) | 10% | 13% |
Deferred tax asset of \u20ac56,708 thousand is recognised on tax attributes available to be used in the future with respect to the Group\u2019s Maltese subsidiary. These tax attributes arose as a result of applying the Maltese tax legislation which allows for a Notional Interest Deduction (\"NID\"), which is a deemed deduction on equity. The company generated more NID in prior years than it could use according to the Maltese tax laws, the respective unutilised NID being carried forward according to law and intended to be used in the future. The total amount of NID carry forward available to be used at 31 December 2024 is of \u20ac302,441 thousand resulting from NID available to be carried-forward as at the end of each year during the period 2021 \u2013 2024 as follows:
in \u20ac\u00a0thousand | 31 Dec 2024 |
|---|---|
2021 | 16,835 |
2022 | 91,502 |
2023 | 83,791 |
2024 | 110,313 |
Total | 302,441 |
The Group decided to recognise this deferred tax asset at 31 December 2024 as the projections indicate that such carry-forward NID can be utilised against future taxable profits.
The Group accounts for deferred taxes assuming the theoretical future disposals of properties in the form of asset deals, triggering the full corporate income tax rate in each jurisdiction in which the Group owns property. In practice, if the Group would be in the position to dispose of certain assets, these disposals will most probably be conducted via share deals, as assets are held in separate SPVs, significantly reducing the effective tax rate on potential capital gains.
Group subsidiaries are subject to corporate tax on an annual basis. The Group carries forward aggregate fiscal losses of \u20ac328,529 thousand (31 December 2023: \u20ac314,243 thousand), which are mainly available for up to seven years to offset against any future taxable profits of the companies in which the losses arose. Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine recognisable deferred tax assets, based on the likely timing and the level of future taxable profits and future tax planning strategies. Deferred tax assets have not been recognised for fiscal losses of \u20ac109,733 thousand (31 December 2023: \u20ac78,780 thousand) as these could have been used only to offset the taxable profits of certain companies in the Group, and there is uncertainty whether these companies will either generate sufficient taxable profit in the future.
The expiry dates for these losses are as follows:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
2024 | - | 11,062 |
2025 | 21,369 | 17,385 |
2026 | 4,873 | 5,053 |
2027 | 14,721 | 17,120 |
2028 | 3,269 | 5,105 |
2029 | 8,202 | 8,818 |
2030 and later | 57,299 | 14,237 |
Total | 109,733 | 78,780 |
Deferred tax is determined using the liability method and is based on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases.
The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries that are unlikely to reverse in the foreseeable future.
A deferred tax asset is recognised based on the assumption that it is probable that future taxable profits will be available against which it can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The Group is subject to income taxes on taxable profits of its companies\u2019 operating in all jurisdictions. The calculation of the Group\u2019s tax charge and provisions for income taxes necessarily involves a degree of estimation and judgment in evaluating the nature of its companies\u2019 transactions and their respective tax treatment.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i19036-2": { "value": "Deferred tax is determined using the liability method and is based on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases.
The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries that are unlikely to reverse in the foreseeable future.
A deferred tax asset is recognised based on the assumption that it is probable that future taxable profits will be available against which it can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The Group is subject to income taxes on taxable profits of its companies\u2019 operating in all jurisdictions. The calculation of the Group\u2019s tax charge and provisions for income taxes necessarily involves a degree of estimation and judgment in evaluating the nature of its companies\u2019 transactions and their respective tax treatment.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.
Tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss, except to the extent they relate to business combinations or items recognised directly in equity. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the assets are realised or the liabilities are settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets are recognised to the extent it is probable that future taxable profit will be available against which temporary differences can be utilised.
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Current tax expense | 30,563 | 28,334 |
Deferred tax expense | 31,472 | 41,527 |
INCOME TAX EXPENSE | 62,035 | 69,861 |
Deferred tax brought forward | 408,136 | 364,875 |
Other adjustments (included in the disposal proceeds) - with P&L effect | (1,762) | 61 |
Deferred tax balance transferred to Held for sale (HFS) assets - no P&L effect | - | 1,673 |
Deferred tax expense | 31,472 | 41,527 |
Net deferred tax liability carried forward, out of which: | 437,846 | 408,136 |
Deferred tax asset (other than related to HFS portfolio)1 | (107,395) | (63,555) |
Deferred tax liability (other than related to HFS portfolio)1 | 545,241 | 471,691 |
Net deferred tax liability results from the following types of differences:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Fiscal losses | 218,795 | 235,502 |
Other deductible temporary differences1 | 499,261 | 248,973 |
Deferred tax asset | 140,386 | 95,072 |
Net deferred tax asset related to HFS portfolio | - | (2,330) |
Deferred tax asset adjusted for HFS | 140,386 | 92,742 |
Temporary differences between accounting and fiscal value of investment property | (3,607,280) | (3,234,900) |
Other taxable temporary differences1 | (36,619) | (29,024) |
Deferred tax liability | (578,232) | (501,536) |
Net deferred tax liability related to HFS portfolio | - | 658 |
Deferred tax liability adjusted for HFS | (578,232) | (500,878) |
Net deferred tax liability | (437,846) | (408,136) |
The deferred tax balance as at 31 December 2024 is the net effect of deferred tax assets resulted mainly from fiscal losses (and for 2024, the tax attributes available for future use in the Maltese subsidiary, as described below) and deferred tax liabilities resulted from differences between the fiscal base and the accounting base of assets and liabilities, mainly investment property. Deferred tax liabilities are not expected to be settled within the following five years from the reporting date.
Deferred tax liabilities, which are a non-cash item, result directly from the fair value revaluation of the investment property and other local tax adjustments (e.g., local tax depreciation charges, non-capitalisation of certain items, foreign exchange impact given that tax value is recorded in local currency, etc.) which diminishes the tax value of the investment property.
in \u20ac\u00a0thousand | Consolidated Statement of | Consolidated Statement of | ||
|---|---|---|---|---|
Deferred tax liability (net) | 31 Dec 2024 | 31 Dec 2023 | 31 Dec 2024 | 31 Dec 2023 |
Valuation of investment property at fair value | (571,357) | (496,027) | (75,330) | (39,737) |
Recognised unused tax losses | 46,360 | 47,804 | (1,444) | (2,130) |
Deferred tax asset related to HFS written off upon sale | 89 | - | - | - |
Deferred tax balance transferred to HFS (no P&L impact) | - | (1,673) | - | - |
Deductible/Taxable temporary differences | 87,062 | 41,760 | 45,302 | 340 |
Total | (437,846) | (408,136) | (31,472) | (41,527) |
Deferred tax asset of \u20ac56,708 thousand is recognised on tax attributes available to be used in the future with respect to the Group\u2019s Maltese subsidiary. These tax attributes arose as a result of applying the Maltese tax legislation which allows for a Notional Interest Deduction (\"NID\"), which is a deemed deduction on equity. The company generated more NID in prior years than it could use according to the Maltese tax laws, the respective unutilised NID being carried forward according to law and intended to be used in the future. The total amount of NID carry forward available to be used at 31 December 2024 is of \u20ac302,441 thousand resulting from NID available to be carried-forward as at the end of each year during the period 2021 \u2013 2024 as follows:
in \u20ac\u00a0thousand | 31 Dec 2024 |
|---|---|
2021 | 16,835 |
2022 | 91,502 |
2023 | 83,791 |
2024 | 110,313 |
Total | 302,441 |
The Group decided to recognise this deferred tax asset at 31 December 2024 as the projections indicate that such carry-forward NID can be utilised against future taxable profits.
The Group accounts for deferred taxes assuming the theoretical future disposals of properties in the form of asset deals, triggering the full corporate income tax rate in each jurisdiction in which the Group owns property. In practice, if the Group would be in the position to dispose of certain assets, these disposals will most probably be conducted via share deals, as assets are held in separate SPVs, significantly reducing the effective tax rate on potential capital gains.
The expiry dates for these losses are as follows:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
2024 | - | 11,062 |
2025 | 21,369 | 17,385 |
2026 | 4,873 | 5,053 |
2027 | 14,721 | 17,120 |
2028 | 3,269 | 5,105 |
2029 | 8,202 | 8,818 |
2030 and later | 57,299 | 14,237 |
Total | 109,733 | 78,780 |
In accordance with IFRS 8, operating segments are identified on the basis of the internal reporting used by management when evaluating performance and allocating resources.
The Group has a homogeneous asset base (real estate properties), with similar economic characteristics, which provide similar nature of services, i.e. leasing of its properties, that generate rental income.
The Group\u2019s Chief Operating Decision Makers (CODM) are the executive directors, and they take decisions based on detailed reports. These are prepared regularly and are presented to the Board of Directors, which approves the results and gives guidance on the subsequent strategy to be undertaken.
In particular, the financial information in respect of investment property is provided to the Board of Directors focuses primarily on net rentals (including rental income, service charge income and property operating expenses) and valuation gains and losses.
The operating segments for management purposes are the individual properties. For reporting purposes, the Group aggregates the retail properties (shopping malls and retail centres) on country level and presents the financial information on the following geographic reportable segments for retail properties: Bulgaria, Croatia, Czech Republic, Hungary, Lithuania, Poland, Romania, Serbia, Slovakia.
In addition, the CODM are separately monitoring the activities related to the residential property development and sale (\"Residential\" segment) and the activities related to the green energy generation which is supplied to the Group's tenants. The Residential segment, based on a Board decision in August 2024, will be expanded from one development in 2023 to another 3 developments in the following years. The Energy business involves investment in photovoltaic panels on the rooftops of Group properties, as well as greenfield photovoltaic plants. The Energy segment has generated revenues in 2024 from the panels installed on Romanian properties' rooftops and is realised from the sale of electricity to the tenants of the Group\u2019s retail properties. This revenue will increase in the coming years following the roll-out of the rooftops panels in other countries and investments in greenfield plants.
Lastly, the Group\u2019s CODM closely follow changes in distributable earnings to its shareholders as a measure of profitability and as a result of successful implementation of the Group\u2019s strategy. Distributable earnings per share is calculated in terms of the SA REIT Association\u2019s Best Practice Recommendations Second Edition.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19041-2": { "value": "In accordance with IFRS 8, operating segments are identified on the basis of the internal reporting used by management when evaluating performance and allocating resources.
The Group has a homogeneous asset base (real estate properties), with similar economic characteristics, which provide similar nature of services, i.e. leasing of its properties, that generate rental income.
The Group\u2019s Chief Operating Decision Makers (CODM) are the executive directors, and they take decisions based on detailed reports. These are prepared regularly and are presented to the Board of Directors, which approves the results and gives guidance on the subsequent strategy to be undertaken.
In particular, the financial information in respect of investment property is provided to the Board of Directors focuses primarily on net rentals (including rental income, service charge income and property operating expenses) and valuation gains and losses.
The operating segments for management purposes are the individual properties. For reporting purposes, the Group aggregates the retail properties (shopping malls and retail centres) on country level and presents the financial information on the following geographic reportable segments for retail properties: Bulgaria, Croatia, Czech Republic, Hungary, Lithuania, Poland, Romania, Serbia, Slovakia.
In addition, the CODM are separately monitoring the activities related to the residential property development and sale (\"Residential\" segment) and the activities related to the green energy generation which is supplied to the Group's tenants. The Residential segment, based on a Board decision in August 2024, will be expanded from one development in 2023 to another 3 developments in the following years. The Energy business involves investment in photovoltaic panels on the rooftops of Group properties, as well as greenfield photovoltaic plants. The Energy segment has generated revenues in 2024 from the panels installed on Romanian properties' rooftops and is realised from the sale of electricity to the tenants of the Group\u2019s retail properties. This revenue will increase in the coming years following the roll-out of the rooftops panels in other countries and investments in greenfield plants.
Lastly, the Group\u2019s CODM closely follow changes in distributable earnings to its shareholders as a measure of profitability and as a result of successful implementation of the Group\u2019s strategy. Distributable earnings per share is calculated in terms of the SA REIT Association\u2019s Best Practice Recommendations Second Edition.
The operating segments for management purposes are the individual properties. For reporting purposes, the Group aggregates the retail properties (shopping malls and street retail centres) on geographic regions of operation. There are a total of nine reportable segments for retail properties, which include Romania, Poland, Bulgaria, Slovakia, Hungary, Croatia, Serbia, Czech Republic, and Lithuania.
Retail properties are considered to have a different economic and risk profiles compared to other types of properties in the Group portfolio, therefore are aggregated and reported separately on geographies.
The office and industrial businesses are immaterial for the Group from both operational and financial statements disclosure points of view. The weight of these categories are below 1% of the total Group portfolio. These properties, together with the corporate entities (group holding companies), are separately disclosed in the \u201cUnallocated\u201d section below.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
In 2024, the Group started to voluntarily present two new business segments - Residential and Energy. The Residential segment, based on a Board decision in August 2024, will be expanded from one development in 2023 to another 3 developments in Romania in the following years. The Energy business involves investment in photovoltaic panels on the rooftops of Group properties, as well as greenfield photovoltaic plants. The Energy segment has generated revenues in 2024 from the panels installed on Romanian properties' rooftops, and is realised from the sale of electricity to the tenants of the Group\u2019s retail properties. This revenue will increase in the coming years following the roll-out of the rooftops' panels in other countries and investments in greenfield plants.
The gain on disposal of assets held for sale is realised by NE Property B.V., the Dutch direct parent of the sold properties.
The Chief Operating Decision Makers (\"CODM\") monitor the results of each reportable segment independently for the purposes of allocating resources to the segment and assessing its performance, as this is the key IFRS 8 driver of segmentation. The measure of reporting segment performance is Profit before net finance costs and other items, as disclosed in the following tables. The Group\u2019s financing policy (including its impact on financial income and expenses), corporate activities and income tax matters are handled at Group level, and the resulting impacts are not allocated to the operating segments.
For the balance sheet, the relevant measure of segment analysis is considered the investment properties and property, plant and equipment for the Energy segment, as the CODM are monitoring closely the asset performance at each reporting date.
Segment investments over a period is the total cost incurred during the period to acquire and develop investment properties, as well as capital expenditure spent on investment properties and property, plant and equipment.
Segment results 31 Dec 2024 | Romania | Poland | Hungary | Slovakia | Bulgaria | Croatia | Czech Republic | Lithuania | Serbia | Total Retail Segments | Residential | Energy | Unallocated | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross rental income | 215,537 | 153,037 | 39,251 | 39,994 | 47,282 | 24,775 | 13,374 | 15,318 | 11,603 | 560,171 | - | - | 5,898 | 566,069 |
Service charge income | 106,054 | 69,258 | 17,816 | 15,800 | 18,924 | 9,673 | 9,346 | 5,432 | 5,090 | 257,393 | - | - | 2,170 | 259,563 |
Property operating expenses | (110,956) | (80,125) | (19,313) | (15,974) | (19,438) | (9,812) | (9,558) | (5,772) | (5,163) | (276,111) | - | - | (2,630) | (278,741) |
Revenue from energy activity | - | - | - | - | - | - | - | - | - | - | - | 9,048 | - | 9,048 |
Net rental and related income | 210,635 | 142,170 | 37,754 | 39,820 | 46,768 | 24,636 | 13,162 | 14,978 | 11,530 | 541,453 | - | 9,048 | 5,438 | 555,939 |
Administrative expenses | (12,368) | (4,320) | (33) | (21) | (62) | (138) | (12) | (25) | (272) | (17,251) | (133) | (851)1 | (16,958) | (35,193) |
Revenues from sales of inventory property | - | - | - | - | - | - | - | - | - | - | 18,680 | - | - | 18,680 |
Cost of sales of inventory property | - | - | - | - | - | - | - | - | - | - | (13,546) | - | - | (13,546) |
EBIT2 | 198,267 | 137,850 | 37,721 | 39,799 | 46,706 | 24,498 | 13,150 | 14,953 | 11,258 | 524,202 | 5,001 | 8,197 | (11,520) | 525,880 |
Fair value adjustments of investment property | 95,846 | 63,928 | (27,965) | 6,640 | 45,031 | 2,846 | 1,790 | 6,687 | - | 194,803 | - | - | 577 | 195,380 |
Foreign exchange (loss)/gain | (88) | 893 | (806) | - | (53) | - | (250) | - | 9 | (295) | 9 | (16) | 144 | (158) |
Gain on disposal of assets held for sale | - | - | - | - | - | - | - | - | - | - | - | - | 25,934 | 25,934 |
Profit before net finance costs and other items | 294,025 | 202,671 | 8,950 | 46,439 | 91,684 | 27,344 | 14,690 | 21,640 | 11,267 | 718,710 | 5,010 | 8,181 | 15,135 | 747,036 |
Finance income | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 19,907 | 19,907 |
Finance costs | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (100,144) | (100,144) |
Bank charges, commissions and fees | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (4,381) | (4,381) |
Fair value adjustments of derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (12,818) | (12,818) |
Profit before tax | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 649,600 |
Income tax expense | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (62,035) | (62,035) |
Current tax expense | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (30,563) | (30,563) |
Deferred tax expense | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (31,472) | (31,472) |
Profit after tax | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 587,565 |
Segment results 31 Dec 2023 | Romania | Poland | Hungary | Slovakia | Bulgaria | Croatia | Czech Republic | Lithuania | Serbia | Total Retail Segments | Residential | Unallocated | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gross rental income | 192,993 | 131,272 | 38,167 | 37,434 | 41,765 | 22,919 | 12,802 | 13,236 | 13,935 | 504,523 | - | 5,580 | 510,103 |
Service charge income | 106,126 | 58,308 | 18,855 | 19,531 | 19,045 | 11,022 | 7,146 | 5,338 | 5,912 | 251,283 | - | 3,086 | 254,369 |
Property operating expenses | (107,713) | (72,938) | (19,357) | (19,722) | (19,660) | (11,135) | (7,480) | (5,401) | (6,524) | (269,930) | - | (3,333) | (273,263) |
Net rental and related income | 191,406 | 116,642 | 37,665 | 37,243 | 41,150 | 22,806 | 12,468 | 13,173 | 13,323 | 485,876 | - | 5,333 | 491,209 |
Administrative expenses | (12,114) | (4,265) | (119) | 257 | 403 | (158) | 121 | (23) | (64) | (15,962) | (215) | (17,192) | (33,369) |
Revenues from sales of inventory property | - | - | - | - | - | - | - | - | - | - | 9,808 | - | 9,808 |
Cost of sales of inventory property | - | - | - | - | - | - | - | - | - | - | (7,076) | - | (7,076) |
EBIT1 | 179,292 | 112,377 | 37,546 | 37,500 | 41,553 | 22,648 | 12,589 | 13,150 | 13,259 | 469,914 | 2,517 | (11,859) | 460,572 |
Fair value adjustments of investment property | 131,634 | (32,781) | (16,718) | 20,262 | 38,217 | 16,262 | 928 | 3,339 | 8,264 | 169,407 | - | (4,937) | 164,470 |
Foreign exchange (loss)/gain | (709) | 288 | (186) | - | (28) | 1 | (447) | - | 14 | (1,067) | (3) | (117) | (1,187) |
Gain on disposal of assets held for sale | 1,649 | - | - | - | - | - | - | - | - | 1,649 | - | 3,992 | 5,641 |
Profit before net finance costs and other items | 311,866 | 79,884 | 20,642 | 57,762 | 79,742 | 38,911 | 13,070 | 16,489 | 21,537 | 639,903 | 2,514 | (12,921) | 629,496 |
Finance income | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 6,891 | 6,891 |
Finance costs | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (69,052) | (69,052) |
Bank charges, commissions and fees | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (3,297) | (3,297) |
Fair value adjustments of derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (17,376) | (17,376) |
Profit before tax | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 546,662 |
Income tax expense | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (69,861) | (69,861) |
Current tax expense | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (28,334) | (28,334) |
Deferred tax expense | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (41,527) | (41,527) |
Profit after tax | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 476,801 |
The value of investment property, inventory property and property, plant and equipment (PPE) by operating segment, as shown in the consolidated statement of financial position, is presented below:
Segment per country assets 31 Dec 2024 | Note | Romania | Poland1 | Hungary | Slovakia | Bulgaria | Croatia | Czech Republic | Lithuania | Total Retail Segments | Residential | Energy | Unallocated | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Investment property | \u00a0 | 2,857,684 | 2,700,550 | 556,000 | 535,523 | 552,674 | 294,426 | 183,700 | 164,942 | 7,845,499 | - | - | 81,096 | 7,926,595 |
-Investment property in use | 2,676,467 | 2,698,049 | 551,100 | 534,500 | 518,486 | 287,600 | 183,700 | 163,800 | 7,613,702 | - | - | 81,096 | 7,694,798 | |
-Investment property under development | 181,217 | 2,501 | 4,900 | 1,023 | 34,188 | 6,826 | - | 1,142 | 231,797 | - | - | - | 231,797 | |
Investment property held for sale | 559 | - | - | - | - | - | - | - | 559 | - | - | - | 559 | |
Property, plant and equipment - Photovoltaic panels | - | - | - | - | - | - | - | - | - | - | 23,303 | - | 23,303 | |
Property, plant and equipment - Photovoltaic panels under construction | - | - | - | - | - | - | - | - | - | - | 12,972 | - | 12,972 | |
Inventory property | - | - | - | - | - | - | - | - | - | 4,227 | - | - | 4,227 |
Segment per country assets 31 Dec 2023 | Note | Romania | Poland1 | Hungary | Slovakia | Bulgaria | Croatia | Czech Republic | Lithuania | Serbia | Total Retail Segments | Residential | Unallocated | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Investment property | \u00a0 | 2,695,522 | 1,819,636 | 576,206 | 526,123 | 503,167 | 288,930 | 179,810 | 156,560 | - | 6,745,954 | - | 79,036 | 6,824,990 |
-Investment property in use | 2,547,307 | 1,814,620 | 570,900 | 525,100 | 472,784 | 281,800 | 179,800 | 155,900 | - | 6,548,211 | - | 79,036 | 6,627,247 | |
-Investment property under development | 148,215 | 5,016 | 5,306 | 1,023 | 30,383 | 7,130 | 10 | 660 | - | 197,743 | - | - | 197,743 | |
Investment property held for sale | 610 | - | - | - | - | - | - | - | 145,600 | 146,210 | - | 5,610 | 151,820 | |
Inventory property | - | - | - | - | - | - | - | - | - | - | 17,266 | \u00a0 | 17,266 |
Segment Investments over the period 31 Dec 2024 | Note | Romania | Poland | Hungary | Slovakia | Bulgaria | Croatia | Czech Republic | Lithuania | Serbia | Total Retail Segments | Residential | Energy | Unallocated | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Development works | 73,326 | 6,107 | 4,949 | - | 2,417 | - | 4 | 1,258 | - | 88,061 | - | - | - | 88,061 | |
Capital expenditure | 15,730 | 21,456 | 2,734 | 2,759 | 1,849 | 2,506 | 2,106 | 866 | - | 50,006 | - | - | 1,367 | 51,373 | |
Additions from asset deals - Investment property in use | - | 759,666 | - | - | - | - | - | - | - | 759,666 | - | - | - | 759,666 | |
Capital expenditure on PPE - Photovoltaic panels | - | - | - | - | - | - | - | - | - | - | - | 538 | - | 538 | |
Additions from asset deals - PPE - Photovoltaic panels under construction | - | - | - | - | - | - | - | - | - | - | - | 10,559 | - | 10,559 | |
Capital expenditure on PPE - Photovoltaic panels under construction | - | - | - | - | - | - | - | - | - | - | - | 2,184 | - | 2,184 |
Segment Investments over the period 31 Dec 2023 | Note | Romania | Poland | Hungary | Slovakia | Bulgaria | Croatia | Czech Republic | Lithuania | Serbia | Total Retail Segments | Residential | Unallocated | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Development works | 125,439 | 17,015 | 4,146 | - | 1,924 | - | 1,375 | 344 | - | 150,243 | - | (24) | 150,219 | |
Capital expenditure | 15,214 | 12,506 | 2,878 | 1,957 | 7,584 | 178 | 2,307 | 847 | 236 | 43,707 | - | 1,275 | 44,982 |
RECONCILIATION OF PROFIT FOR THE YEAR TO DISTRIBUTABLE EARNINGS | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Profit per IFRS Statement of comprehensive income attributable to equity holders | 587,565 | 476,801 |
Accounting specific adjustments | (174,472) | (107,357) |
Fair value adjustments of investment property | (195,380) | (164,470) |
Depreciation and amortisation expense (in relation to intangibles and property, plant and equipment of an administrative nature)2 | 1,607 | 1,469 |
Fair value adjustments of derivatives | 12,818 | 17,376 |
Amortisation of financial assets | (3,593) | (2,997) |
Deferred tax expense | 31,472 | 41,527 |
Profit from inventory property sale3 | (4,569) | (2,732) |
Gain on disposal of assets held for sale | (25,934) | (5,641) |
Antecedent earnings | 9,107 | 8,111 |
Distributable earnings | 413,093 | 369,444 |
Interim distributable earnings | (199,044) | (181,360) |
Final distributable earnings | (214,049) | (188,084) |
Distributable earnings per share (euro cents) | 60.17 | 56.98 |
Interim distributable earnings per share (euro cents) | 30.12 | 28.52 |
Final distributable earnings per share (euro cents) | 30.05 | 28.46 |
Distribution declared | 371,784 | 332,500 |
Interim distribution | 179,140 | 163,224 |
Final distribution | 192,644 | 169,276 |
Distribution declared per share (euro cents) | 54.16 | 51.28 |
Interim distribution per share (euro cents) | 27.11 | 25.67 |
Final distribution per share (euro cents) | 27.05 | 25.61 |
Earnings not distributed | 41,309 | 36,944 |
Interim earnings not distributed | 19,904 | 18,136 |
Final earnings not distributed | 21,405 | 18,808 |
Earnings not distributed per share (euro cents) | 6.01 | 5.70 |
Earnings not distributed per share interim (euro cents) | 3.01 | 2.85 |
Earnings not distributed per share final (euro cents) | 3.00 | 2.85 |
Number of shares entitled to interim distribution | 660,826,020 | 635,830,268 |
Number of shares entitled to final distribution | 712,357,309 | 660,826,020 |
The Group acquires subsidiaries that own real estate. At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. The Group accounts for an acquisition as a business combination where an integrated set of activities and assets, including property, is acquired. More specifically the following criteria, which indicate an acquisition of a business, are considered: the number of properties acquired, the extent to which strategic management processes and operation processes are acquired and the complexity of the processes acquired. In line with amended IFRS 3 since 1 January 2020 the Group may also apply optional concentration test.
Business combinations are accounted for using the acquisition method. When the acquisition of subsidiaries does not represent a business combination, it is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their relative fair values, and no goodwill or deferred tax is recognised.
The Group recognised goodwill for the following business acquisitions:
in \u20ac\u00a0thousand | Balance at | Balance at |
|---|---|---|
Pitesti Retail Park (Romania) | 1,671 | 1,671 |
Internalisation of NEPI Investment Management (Romania) | 5,882 | 5,882 |
Aupark Kosice Mall (Slovakia) | 5,189 | 5,189 |
Iris Titan Shopping Center (Romania) | 934 | 934 |
Forum Usti nad Labem (Czech Republic) | 5,646 | 5,646 |
Shopping City Sibiu (Romania) | 9,850 | 9,850 |
Korzo Shopping Centrum (Slovakia) | 2,899 | 2,899 |
Aupark Shopping Center Piestany (Slovakia) | 1,585 | 1,585 |
Arena Centar and Retail Park (Croatia) | 13,512 | 13,512 |
Energit (Poland) | 6,976 | 6,976 |
Paradise Center (Bulgaria) | 9,311 | 9,311 |
Arena Mall (Hungary) | 7,905 | 7,905 |
Galeria Mlyny (Slovakia) | 5,444 | 5,444 |
Total | 76,804 | 76,804 |
All the goodwill summarised in the table above, with the exception of NEPI Investment Management and Energit, resulted from business combinations, as the difference between the deferred tax liability recognised in the balance sheet of the business acquired and the expected tax to be paid in case of a future disposal.
As a consequence, impairment tests performed on this type of goodwill at each reporting date consist in comparing its carrying amount with the amounts expected to arise from deferred taxes payable, should a disposal occur, at the level of each CGU.
As a result of this test in 2024, no impairment arose in respect to the goodwill from recognition of deferred taxes at the date of the business combination (31 December 2023: nil).
", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "general-data-ifrs-full-explanationofassumptionaboutfuturewithsignificantriskofresultinginmaterialadjustments-i19049": { "value": "The Group\u2019s management discusses with the Audit Committee the development, selection and disclosure of the Group\u2019s material accounting policies, as well as their application.The estimates and associated assumptions are based on historical experience and various other factors which are considered reasonable under the circumstances. These are used to make judgements about the carrying values of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates.The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period when the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both.Judgements that have the most significant effect on the amounts recognised in the Consolidated Financial Statements and estimates that can cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year are detailed below.", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19386-2": { "value": "Liquidity risk is the risk that the Group will not be able to meet its financial obligations when due. The Group\u2019s approach to managing this risk ensures, as far as possible, it will always have enough liquidity to meet its liabilities when due, under normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation. To ensure this occurs, the Group prepares budgets, cash flow analyses and forecasts, which enable the Directors to assess the level of financing required for future periods. Budgets and projections are used to assess any future potential investments and are compared to existing funds held to evaluate the nature, and extent of any future funding requirements.
Further reference to bank loan maturity analysis is made in Note 19.
The table below presents undiscounted cash flows for all financial liabilities, computed at the contractual rates:
31 Dec 2024 | Note | under 3 months | 3\u201312 months | 1\u20135 years | over 5 years | Total undiscounted cash flows | Total carrying amount |
|---|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Bonds (including estimated future interest) | 37,548 | 38,518 | 1,144,924 | 1,042,568 | 2,263,558 | 2,001,423 | |
Bank loans (including estimated future interest) | 15,989 | 45,079 | 1,003,416 | 79,292 | 1,143,776 | 962,945 | |
Trade and other payables | 143,876 | 43,208 | - | - | 187,084 | 187,084 | |
Other long-term liabilities | - | - | 24,288 | 6,305 | 30,593 | 30,593 | |
Lease liabilities (including estimated future interest) | 2,889 | - | 11,728 | 179,163 | 193,780 | 85,949 | |
Total | \u00a0 | 200,302 | 126,805 | 2,184,356 | 1,307,328 | 3,818,791 | 3,267,994 |
31 Dec 2023 | Note | under 3 months | 3\u201312 months | 1\u20135 years | over 5 years | Total undiscounted cash flows | Total carrying amount |
|---|---|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Bonds (including estimated future interest) | 30,076 | 527,589 | 1,087,805 | 509,430 | 2,154,900 | 1,999,031 | |
Bank loans (including estimated future interest) | 13,730 | 35,226 | 406,034 | 236,408 | 691,398 | 533,721 | |
Loans from third parties (including estimated future interest) | 611 | 18,264 | 17,715 | - | 36,590 | 33,405 | |
Trade and other payables | 128,388 | 25,945 | - | - | 154,333 | 154,333 | |
Income tax payable | 7,837 | 12,350 | - | - | 20,187 | 20,187 | |
Other long-term liabilities | - | - | 26,034 | 10,040 | 36,074 | 36,074 | |
Lease liabilities (including estimated future interest) | 1,545 | - | 6,181 | 97,503 | 105,229 | 56,520 | |
Total | \u00a0 | 182,187 | 619,374 | 1,543,769 | 853,381 | 3,198,711 | 2,833,271 |
The repayment profile for outstanding loans, excluding future interest, is detailed below:
Interest bearing borrowings 31 Dec 2024 | Type | Payable in less than 1 year | Payable in 1-5 years | Payable over 5 years | Total |
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Netherlands | Unsecured fixed coupon bonds | - | 1,000,000 | 1,000,000 | 2,000,000 |
Netherlands | Unsecured loans | - | 518,476 | - | 518,476 |
Poland | Secured loans | 745 | 72,804 | - | 73,549 |
Slovakia | Secured loans | 5,800 | 93,737 | - | 99,537 |
Czech Republic | Secured loans | 600 | 2,400 | 36,400 | 39,400 |
Romania | Secured loans | 10,477 | 191,910 | 40,908 | 243,295 |
Accrued interest on loans and deferred loan costs | \u00a0 | (2,094) | (9,138) | (80) | (11,312) |
Accrued coupon on bonds | \u00a0 | 24,685 | - | - | 24,685 |
Deferred bond costs | \u00a0 | (2,666) | (6,663) | (1,372) | (10,701) |
Issue discount on bonds | \u00a0 | (3,453) | (7,944) | (1,164) | (12,561) |
Total | \u00a0 | 34,094 | 1,855,582 | 1,074,692 | 2,964,368 |
Interest bearing borrowings 31 Dec 2023 | Type | Payable in less than 1 year | Payable in 1-5 years | Payable over 5 years | Total |
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Netherlands | Unsecured fixed coupon bonds | 498,980 | 1,000,000 | 500,000 | 1,998,980 |
Netherlands | Unsecured loans | - | 73,521 | - | 73,521 |
Poland | Secured loans | 745 | 2,979 | 70,570 | 74,294 |
Slovakia | Secured loans | 6,475 | 23,200 | 76,337 | 106,012 |
Czech Republic | Secured loans | 600 | 2,400 | 35,848 | 38,848 |
Romania | Secured loans | 9,476 | 199,659 | 43,636 | 252,771 |
Accrued interest on loans and deferred loan costs | \u00a0 | (1,473) | (9,904) | (348) | (11,725) |
Accrued coupon on bonds | \u00a0 | 20,323 | - | - | 20,323 |
Deferred bond costs | \u00a0 | (2,459) | (5,486) | (616) | (8,561) |
Issue discount on bonds | \u00a0 | (3,434) | (7,491) | (786) | (11,711) |
Total | \u00a0 | 529,233 | 1,278,878 | 724,641 | 2,532,752 |
The Group successfully issued fixed coupon bonds as follows:
October 2019: \u20ac500 million of unsecured, 7-year Eurobonds. The bonds mature on 9 October 2026 and carry a 1.875% fixed coupon, with an issue price of 98.927%;
July 2020: \u20ac500 million of green unsecured, 7-year Eurobonds. The bonds mature on 14 July 2027 and carry a 3.375% fixed coupon, with an issue price of 98.172%;
January 2022: \u20ac500 million of green unsecured, 8-year Eurobonds. The bonds mature on 21 January 2030 and carry a 2.00% fixed coupon, with an issue price of 98.713%; and
October 2024: \u20ac500 million of green unsecured, 7-year Eurobonds. The bonds mature on 21 January 2032 and carry a
4.25% fixed coupon, with an issue price of 99.124%.
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates or equity prices will affect the Group\u2019s fair value or future cash flows of financial instruments. The objective of market risk management is to manage market risk exposures within acceptable parameters, while optimising returns. The carrying value of financial assets and liabilities approximates their fair value, except for the carrying value of bonds.
Group\u2019s current assets and liabilities are exposed to foreign currency risk on purchases and receivables denominated in Romanian leu (RON), Polish zloty (PLN), Bulgarian Lev (BGN), Hungarian forint (HUF), Serbian dinar (RSD), Czech crown (CZK) and South African rand (ZAR). Cash inflows received in other currencies than Euro are converted to Euro using the spot rate available on the collection date. The amount converted to Euro is the net amount of cash inflow in a foreign currency and the estimated cash outflow in the same currency. The Group applies this policy to control its currency exposures in respect of monetary assets and liabilities denominated in currencies other than EUR. Sensitivities of profit or loss to reasonably possible changes in exchange rates applied at the financial position date relative to the local currency of the respective Group entities, with all other variables such as interest rates held constant, are immaterial.
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to interest rate risk on loans, borrowings and cash balances held. Group policy is to substantially hedge this risk through the use of derivative financial instruments. As at 31 December 2024 and 31 December 2023, the Group held interest rate instruments in the form of interest rate swaps and interest rate caps, as further disclosed in Note 20.
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Bank loans | 962,945 | 533,721 |
Rate capped | 523,549 | 432,653 |
Rate swapped | 39,400 | 112,793 |
Variable rate1 | 411,308 | - |
Accrued interest on loans and deferred loan costs | (11,312) | (11,725) |
Loans and borrowings balances are subject to change over the year. This analysis assumes that all other variables, particularly foreign currency rates, remain constant. All sensitivity analysis calculations presented below are before tax.
The benchmark rate for the bank loans with an outstanding amount of \u20ac962,945 thousand as at 31 December 2024 (2023: \u20ac533,721 thousand) is Euribor 3 months; if this rate is less than zero, Euribor shall be deemed to be zero.
Loans and borrowings with fixed or swapped interest rates are not affected by market changes in interest rates.
A change of 50 basis points (bps) in interest rates would have increased/(decreased) equity and profit for the year as shown below. Calculations are based on the cash and loans and borrowings balances outstanding at 31 December 2024.
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Loans to participants in the Share Purchase Scheme | 890 | 3,451 | |
Loans and borrowings (variable or capped rate) | \u00a0 | (934,857) | (432,653) |
Total | \u00a0 | (933,967) | (429,202) |
31 Dec 2024 | Profit or loss 50bps increase | Profit or loss 50bps decrease | Equity 50bps increase | Equity 50bps decrease |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans to participants in the Share Purchase Scheme (including accrued interest) | 4 | (4) | 4 | (4) |
Loans and borrowings (variable or capped rate)1 | (1,532) | 1,957 | (1,532) | 1,957 |
Total | (1,528) | 1,953 | (1,528) | 1,953 |
A change of 100 basis points (bps) in interest rates would have increased/(decreased) equity and profit for the year as shown below. Calculations are based on the cash and loans and borrowings balances outstanding at 31 December 2023.
31 Dec 2023 | Profit or loss 100bps increase | Profit or loss 100bps decrease | Equity 100bps increase | Equity 100bps decrease |
|---|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans to participants in the Share Purchase Scheme (including accrued interest) | 35 | (35) | 35 | (35) |
Loans and borrowings (variable or capped rate)1 | - | - | - | - |
Total | 35 | (35) | 35 | (35) |
The net average interest rate of the Group\u2019s debt, including hedging and interest income from the placement of excess liquidity from early disbursement of the IFC loan, was approximately 2.7% during 2024 (2023: 2.5%). The gross average interest rate excluding the interest income from the placement of excess liquidity was 3%. Unsecured debt represented 87% of total debt as at 31 December 2024; the un-hedged balance represents 14% of the total outstanding debt and corresponds to the IFC loan.
The Group uses derivative instruments to hedge variable interest rate (Euribor) exposure. Their fair value is summarised below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Derivative financial assets \u2013 long-term | 5,392 | 12,241 |
Derivative financial assets \u2013 short-term | 4,270 | 9,327 |
Total | 9,662 | 21,568 |
The above financial assets consist of interest rate caps and fixed interest rate swaps which are not designated as cash flow hedges. The fair value was categorised in Level 2 of the fair value hierarchy.
The derivative financial assets classification to non-current or current sections of the Statement of financial position is driven by the contractual maturities of the instruments.
At 31 December 2024, \u20ac524 million of debt exposed to Euribor was hedged with interest rate caps and \u20ac39 million with interest rate swaps (Note 5.3.2).
", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19693-1": { "value": "To estimate the fair value of individual classes of financial instruments, the following methods and assumptions are used:
Cash and cash equivalents
The book value of cash approximates their fair value, as these financial instruments have a short maturity.
Receivables and payables
The book value of short-term receivables and payables approximates their fair value, as these financial instruments have a short maturity.
Short-term loans
The book value approximates their fair value, as these instruments have a floating interest rate and a short maturity.
Long-term loans
The fair value of long-term loans as at 31 December 2024 is \u20ac983,520 thousand (2023: \u20ac583,146 thousand). The valuation model of fair value of bank loans considers the present value of expected payments, discounted using risk adjusted discount rate. The Group has determined that all of its Interest-bearing loans and borrowings from financial institutions are classified within Level 2 of the fair value hierarchy. To determine the fair value of such instruments, management used a valuation technique in which all significant inputs were based on observable market data.
Bonds
The fair value of bonds outstanding as at 31 December 2024 is presented in Note 19.
Derivatives
The fair value of derivatives is based on fair value quotes from counterparty banks and are disclosed in Note 20.
The fair value of all financial instruments is substantially in line with their carrying amounts as reflected in the Statement of financial position, except for loans (as disclosed in Note 5.4) and bonds. For reference, as at 31 December 2024, the \u20ac500 million bonds issued in 2019 were trading on the market at 97.84% (31 December 2023: 91.22%), the \u20ac500 million bonds issued in July 2020 were trading on the market at 100.19% (31 December 2023: 94.43%), the \u20ac500 million bonds issued in January 2022 were trading on the market at 92.72% (31 December 2023: 80.25%) and the \u20ac500 million bonds issued in October 2024 were trading on the market at 102.46%.
The Group uses derivative instruments to hedge variable interest rate (Euribor) exposure. Their fair value is summarised below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Derivative financial assets \u2013 long-term | 5,392 | 12,241 |
Derivative financial assets \u2013 short-term | 4,270 | 9,327 |
Total | 9,662 | 21,568 |
The above financial assets consist of interest rate caps and fixed interest rate swaps which are not designated as cash flow hedges. The fair value was categorised in Level 2 of the fair value hierarchy.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i19695-1": { "value": "The primary objective of the Group\u2019s capital management is to ensure it complies with its quantitative banking covenants and maintains a strong credit rating. During the year, no changes were made in the objectives, policies or processes.
Capital is primarily monitored using the gearing ratio (Loan-to-value or \u201cLTV\u201d), which was 32.1% (31 December 2023: 32.2%). The Group\u2019s strategic LTV threshold is 35%. The ratio is computed as interest bearing debt less lease liabilities less cash, divided by investment property (including investment property held for sale) and excludes the right-of-use assets. Loan-to-value is a non IFRS measure.
The Group\u2019s policy is to maintain a strong capital base of equity so as to maintain investor, creditor and market confidence and to sustain future business development. In particular, the Group monitors the Debt/ Debt + Equity ratio, a non IFRS measure, calculated as interest bearing debt less lease liabilities less cash, divided by interest bearing debt less lease liabilities less cash and shareholders\u2019 equity. The Debt/ Debt + Equity ratio threshold of the Group is a maximum 40%. As at 31 December 2024, the Debt/ Debt + Equity ratio was 33.9% (31 December 2023: 34.1%). The Board of Directors also monitors the level of distributions to shareholders. Neither the Company, nor its subsidiaries, are subject to externally imposed capital requirements, except that the Group\u2019s subsidiaries are subject to compliance with bonds and bank borrowings\u2019 covenants, as presented in Note 19.
The Group ensures it retains comfortable levels of access to liquidity to finance the Group\u2019s ongoing operations and further investment opportunities.
Covenants
Debt service cover ratio (historical and prospective) of a minimum between 110% and 140%; and
Loan to value ratio of a maximum between 55% and 70%.
NEPI Rockcastle has complied with all financial covenants related to its unsecured green loans, unsecured committed revolving facilities and unsecured fixed coupon bonds during 2024 and 2023. The ratios calculated for all unsecured loans and bonds showed ample headroom compared to the covenants:
Covenants | Requirement | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Solvency Ratio | Maximum 0.60 | 0.38 | 0.38 |
Consolidated Coverage Ratio | Minimum 2:1 | 5.01 | 6.06 |
Unsecured Ratio | Minimum 150% | 261% | 269% |
Investment property is carried at fair value and is independently assessed on a semi-annual basis, as at 30 June and 31 December.
For the year ended 31 December 2024, the Group commissioned independent appraisal reports on its investment property from Colliers International, Cushman&Wakefield and Affiliate Partners and Jones Lang LaSalle (for the year ended 31 December 2023: Colliers International and Cushman&Wakefield and Affiliate Partners), all of whom are members of the Royal Institution of Chartered Surveyors (RICS). Valuations are prepared in accordance with the RICS Valuation \u2013 Global Standards 2021 (the \u201cRed Book\") and ANEVAR Valuation Standards - 2022 Edition which incorporate the International Valuation Standards (\u201cIVS\u201d)
All investment property in use is valued by the Income Method. For the years ended 31 December 2024 and 31 December 2023 respectively, the applied method used for all investment property in use was discounted cash flow (\u201cDCF\u201d).
DCF uses explicit assumptions regarding the benefits and liabilities of ownership over the asset\u2019s life, including an exit, or terminal, value. As an accepted method within the Income Method to valuation, the DCF method involves the projection of a series of cash flows onto a real property interest. To these projected cash flow series, an appropriate, market-derived discount rate is applied to establish the present value of cash inflows associated with the real property.
The duration of cash flow, and the specific timing of inflows and outflows, are determined by events such as rent reviews, lease renewal and related lease-up periods, re-letting, redevelopment or refurbishment. The appropriate duration is typically driven by market behaviour. In the case of investment property, periodic cash flow is typically estimated as gross income less vacancy, non-recoverable expenses, collection losses, lease incentives, maintenance costs, agent and commission fees, and other operating and management expenses. The series of periodic net cash inflows, combined with the estimated terminal value anticipated at the end of the projection period, is then discounted. For all investment property in use, the current use equates to the highest and best use.
The Group provides all information necessary for the valuations, including detailed tenancy schedules, comprising information on occupied and vacant units, unit areas and numbers, lease commencement and expiry dates, break options and indexation clauses. All properties are inspected by representatives of external valuers once a year.
The Group\u2019s valuers note in their valuation reports that wherever appropriate, sustainability and environmental matters are an integral part of the valuation approach. Sustainability is taken to mean the consideration of such matters as environment and climate change, health and well-being and corporate responsibility that can or do impact the valuation of an asset. In a valuation context, sustainability encompasses a wide range of physical, social, environmental, and economic factors that can affect value. The range of issues includes key environmental risks, such as energy efficiency and climate, as well as matters of design, configuration, accessibility, legislation, management, and fiscal considerations.
As at 31 December 2024, the investment property in use had an EPRA Vacancy Rate of 1.7% (31 December 2023: 2.2%). EPRA Vacancy Rate is a non-IFRS measure which is defined in section Other information, Glossary.
As compared to the valuations on 31 December 2023, the estimated rental values generally increased, supported by the good performance of the assets, with no significant changes in valuation yields.
The Group currently discloses fair values according to a \u2018fair value hierarchy\u2019 (as per IFRS 13) which categorises the inputs used in valuation techniques into three levels. The hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs. The fair value hierarchy is explained below:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: use of a model with inputs (other than quoted prices included within Level 1) that are directly, or indirectly, observable market data; and
Level 3: use of a model with inputs not based on observable market data.
The Group\u2019s investment property is categorised as Level 3. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There were no transfers between hierarchy levels during the year.
The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy of the Group\u2019s property portfolio, together with the impact of significant movements in these inputs on the fair value measurement, are detailed below:
Unobservable input | Impact on fair value of increase in input |
|---|---|
Estimated rental value | Increase |
Discount rate | Decrease |
Capitalisation rate for terminal value | Decrease |
Information relating to fair value measurement using significant unobservable inputs (Level 3) as at 31 December 2024 for retail properties is presented in the table below:
Segment | Valuation technique | Estimated market rental value | Discount rate | Capitalisation rate for terminal value |
|---|---|---|---|---|
| \u00a0 | \u00a0 | (yearly amount in \u2018000 \u20ac) | (%) | (%) |
Romania | Discounted cash flow | 323 - 27,509 (13,945)1 | 8.95% - 10.45%(9.73)1 | 6.75% - 8.25% (7.53)1 |
Poland | Discounted cash flow | 2,973 - 26,710 (17,530)1 | 7.80% - 10.20% (8.34)1 | 6.60% - 9.00% (7.08)1 |
Slovakia | Discounted cash flow | 3,287 - 12,855 (9,816)1 | 9.00% - 10.25% (9.12)1 | 7.00% - 8.25% (7.12)1 |
Hungary | Discounted cash flow | 19,617 - 20,949 (20,343)1 | 8.60% - 9.20% (8.87)1 | 6.60% - 7.20% (6.87)1 |
Bulgaria | Discounted cash flow | 17,224 - 28,872 (24,423)1 | 10.43% | 7.50% - 7.75% (7.60)1 |
Croatia | Discounted cash flow | 1,723 - 19,666 (18,281)1 | 9.75% | 7.50% - 7.75% (7.73)1 |
Czech Republic | Discounted cash flow | 6,850 - 6,974 (6,913)1 | 9.75% | 7.25% |
Lithuania | Discounted cash flow | 13,256 | 10.00% | 8.25% |
Information relating to fair value measurement using significant unobservable inputs (Level 3) as at 31 December 2023 for retail properties is presented in the table below:
Segment | Valuation technique | Estimated market rental value | Discount rate | Capitalisation rate for terminal value |
|---|---|---|---|---|
| \u00a0 | \u00a0 | (yearly amount in \u2018000 \u20ac) | (%) | (%) |
Romania | Discounted cash flow | 311 - 26,281 (13,128)1 | 8.95% - 10.45% (9.73)1 | 6.75% - 8.25% (7.53)1 |
Poland | Discounted cash flow | 2,817 - 23,746 (14,110)1 | 7.90% - 10.80% (8.72)1 | 5.80% - 8.70% (6.62)1 |
Slovakia | Discounted cash flow | 3,307 - 12,784 (9,734)1 | 9.10% - 10.35% (9.22)1 | 7.00% - 8.25% (7.12)1 |
Hungary | Discounted cash flow | 19,602 - 21,309 (20,515)1 | 8.75% - 9.00% (8.87)1 | 6.65% - 6.90% (6.77)1 |
Bulgaria | Discounted cash flow | 17,022 - 26,148 (22,514)1 | 10.30%1 | 7.50% -7.75% (7.60)1 |
Croatia | Discounted cash flow | 1,550 - 19,433 (18,138)1 | 9.60% - 9.85% (9.83)1 | 7.50% - 7.75% (7.73)1 |
Czech Republic | Discounted cash flow | 6,737 - 6,748 (6,743)1 | 9.35%1 | 7.25% |
Serbia | Discounted cash flow | 13,321 | 11.10% | 9.00% |
Lithuania | Discounted cash flow | 12,767 | 10.00% | 7.90% |
Portfolio valuation: sensitivity to changes in the discount rate, exit rate and rental income
The tables below present the change in the valuation of the shopping centre portfolio using different discount rate, exit rate and rental income assumptions than those used by the appraisers as at 31 December 2024:
Discount rate variance | ||||
|---|---|---|---|---|
Country | (50 bps) | (25 bps) | 25 bps | 50 bps |
Romania | 3.39% | 1.69% | -1.60% | -3.19% |
Poland | 3.15% | 1.24% | -2.25% | -3.50% |
Slovakia | 3.52% | 1.76% | -1.72% | -3.39% |
Hungary | 3.67% | 1.81% | -1.78% | -3.50% |
Bulgaria | 2.04% | 1.00% | -0.97% | -1.91% |
Croatia | 3.20% | 1.62% | -1.70% | -3.39% |
Czech Republic | 3.54% | 1.74% | -1.74% | -3.38% |
Lithuania | 3.30% | 1.65% | -1.65% | -3.24% |
Total | 3.22% | 1.49% | -1.81% | -3.25% |
Exit rate variance | ||||
|---|---|---|---|---|
Country | (50 bps) | (25 bps) | 25 bps | 50 bps |
Romania | 6.94% | 3.36% | -3.10% | -6.03% |
Poland | 7.76% | 3.73% | -3.47% | -6.71% |
Slovakia | 7.60% | 3.65% | -3.41% | -6.62% |
Hungary | 8.15% | 3.92% | -3.65% | -7.06% |
Bulgaria | 5.06% | 2.39% | -2.14% | -4.06% |
Croatia | 5.80% | 2.98% | -3.20% | -6.63% |
Czech Republic | 7.46% | 3.65% | -3.38% | -6.48% |
Lithuania | 6.41% | 3.05% | -2.93% | -5.68% |
Total | 7.09% | 3.43% | -3.21% | -6.24% |
Rental Income (ERV) | ||||
|---|---|---|---|---|
Country | -10% | -5% | 5% | 10% |
Romania | -9.99% | -4.98% | 5.03% | 10.04% |
Poland | -7.49% | -3.74% | 3.79% | 7.57% |
Slovakia | -8.53% | -4.27% | 4.23% | 8.48% |
Hungary | -8.33% | -4.17% | 4.16% | 8.33% |
Bulgaria | -7.27% | -3.65% | 3.67% | 7.37% |
Croatia | -7.42% | -3.73% | 3.69% | 7.39% |
Czech Republic | -8.27% | -4.14% | 4.14% | 8.27% |
Lithuania | -5.68% | -2.87% | 2.87% | 5.80% |
Total | -8.46% | -4.23% | 4.26% | 8.51% |
The fair value of all financial instruments is substantially in line with their carrying amounts as reflected in the Statement of financial position, except for loans (as disclosed in Note 5.4) and bonds. For reference, as at 31 December 2024, the \u20ac500 million bonds issued in 2019 were trading on the market at 97.84% (31 December 2023: 91.22%), the \u20ac500 million bonds issued in July 2020 were trading on the market at 100.19% (31 December 2023: 94.43%), the \u20ac500 million bonds issued in January 2022 were trading on the market at 92.72% (31 December 2023: 80.25%) and the \u20ac500 million bonds issued in October 2024 were trading on the market at 102.46%.
The Group uses derivative instruments to hedge variable interest rate (Euribor) exposure. Their fair value is summarised below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Derivative financial assets \u2013 long-term | 5,392 | 12,241 |
Derivative financial assets \u2013 short-term | 4,270 | 9,327 |
Total | 9,662 | 21,568 |
The above financial assets consist of interest rate caps and fixed interest rate swaps which are not designated as cash flow hedges. The fair value was categorised in Level 2 of the fair value hierarchy.
The derivative financial assets classification to non-current or current sections of the Statement of financial position is driven by the contractual maturities of the instruments.
At 31 December 2024, \u20ac524 million of debt exposed to Euribor was hedged with interest rate caps and \u20ac39 million with interest rate swaps (Note 5.3.2).
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Fair value adjustments of investment property in use | 183,942 | 168,185 | |
Fair value adjustments of investment property under development | 12,020 | (2,643) | |
Fair value adjustments of investment property held for sale | (170) | (330) | |
Fair value adjustments of right-of-use assets | (412) | (742) | |
Total | \u00a0 | 195,380 | 164,470 |
Other long-term assets are classified below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Loans to participants under the Share Purchase Scheme | 890 | 3,451 |
Intangible assets | 5,822 | 5,613 |
Non-current receivables | 4,648 | 2,498 |
Total1 | 11,360 | 11,562 |
Other long-term assets are classified below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Loans to participants under the Share Purchase Scheme | 890 | 3,451 |
Intangible assets | 5,822 | 5,613 |
Non-current receivables | 4,648 | 2,498 |
Total1 | 11,360 | 11,562 |
Other long-term assets are classified below:
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Loans to participants under the Share Purchase Scheme | 890 | 3,451 |
Intangible assets | 5,822 | 5,613 |
Non-current receivables | 4,648 | 2,498 |
Total1 | 11,360 | 11,562 |
Cash and cash equivalents by type | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 |
Current accounts | 350,366 | 258,371 |
Deposits | 98,000 | 80,000 |
Petty cash | 132 | 148 |
Total1 | 448,498 | 338,519 |
This section sets out an analysis of bonds and bank loans outstanding and the related movements for the periods presented.
in \u20ac\u00a0thousand | Bank loans | Bonds | Total1 |
|---|---|---|---|
Debt as at 31 December 2023 | 533,721 | 1,999,031 | 2,532,752 |
Cash repayments of principal | (17,297) | (498,980) | (516,277) |
Cash proceeds from bank loans or bonds | 446,107 | 500,000 | 946,107 |
Cash payments of interest on bank loans or coupon on bonds | (55,355) | (44,982) | (100,337) |
Interest expense1 | 55,029 | 49,344 | 104,373 |
Amortisation of capitalised borrowing costs | 3,213 | 2,622 | 5,835 |
Amortisation of bond discount | - | 3,529 | 3,529 |
Additional capitalised borrowing costs in the period | (2,473) | (4,761) | (7,234) |
Additional bond discount in the period | - | (4,380) | (4,380) |
Debt as at 31 December 2024 | 962,945 | 2,001,423 | 2,964,368 |
in \u20ac\u00a0thousand | Bank loans | Bonds | Total1 |
|---|---|---|---|
Debt as at 31 December 2022 | 557,901 | 1,992,971 | 2,550,872 |
Cash repayments of principal | (214,815) | - | (214,815) |
Cash proceeds from bank loans or bonds | 200,000 | - | 200,000 |
Cash payments of interest on bank loans or coupon on bonds | (28,428) | (44,982) | (73,410) |
Interest expense1 | 29,584 | 44,952 | 74,536 |
Amortisation of capitalised borrowing costs | 1,758 | 2,504 | 4,262 |
Amortisation of bond discount | - | 3,586 | 3,586 |
Additional capitalised borrowing costs in the period | (12,279) | - | (12,279) |
Debt as at 31 December 2023 | 533,721 | 1,999,031 | 2,532,752 |
Further details for the Group\u2019s loans and bonds are presented below:
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Carrying value of the lease liabilities - Opening Balance | \u00a0 | 56,520 | 37,200 |
Out of which short-term - Opening Balance | \u00a0 | 1,546 | 832 |
Additions to lease liabilities from acquired assets | 29,840 | - | |
Remeasurement of lease liability | \u00a0 | - | 20,062 |
Interest expense | 1,470 | 804 | |
Lease liability payment | \u00a0 | (1,881) | (1,546) |
Carrying value of the lease liabilities - Closing Balance | \u00a0 | 85,949 | 56,520 |
Out of which short-term - Closing Balance | \u00a0 | 2,890 | 1,546 |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
OPERATING ACTIVITIES | \u00a0 | \u00a0 | \u00a0 |
Profit after tax | \u00a0 | 587,565 | 476,801 |
Adjustments | \u00a0 | (56,592) | (12,760) |
Fair value adjustments of investment property | (195,380) | (164,470) | |
Foreign exchange loss | \u00a0 | 158 | 1,187 |
Gain on disposal of assets held for sale | (25,934) | (5,641) | |
Finance income | (19,907) | (6,891) | |
Finance costs | 100,144 | 69,052 | |
Bank charges, commissions, and fees | 4,381 | 3,297 | |
Fair value adjustments of derivatives | \u00a0 | 12,818 | 17,376 |
Deferred tax expense | 31,472 | 41,527 | |
Current tax expense | 30,563 | 28,334 | |
Depreciation expense for property, plant and equipment and amortization of intangibles | \u00a0 | 2,053 | 1,469 |
Share based payment expense | 3,040 | 2,000 | |
Changes in working capital | \u00a0 | 2,655 | (4,963) |
(Increase) in trade and other receivables | \u00a0 | (38,395) | (22,176) |
Increase in trade and other payables | \u00a0 | 28,011 | 13,785 |
Decrease in Inventory property | \u00a0 | 13,039 | 3,428 |
Net cash flow from operations | \u00a0 | 533,628 | 459,078 |
Securities
General security over the properties (fair values as at 31 December 2024), current assets, cash inflows from operating activities, accounts and receivables; and
General security over the shares in the property-owning entities.
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Property related payables | 79,110 | 65,674 |
Advances from tenants | 55,365 | 49,453 |
Advances from residential customers | 309 | 3,474 |
Payable for investment property and property, plant and equipment under construction | 22,927 | 17,892 |
Accrued administrative expenses | 10,243 | 14,192 |
Tenant security deposits | 13,289 | 2,824 |
Deferred consideration on acquisitions of subsidiaries and asset deals | 5,841 | 824 |
Total | 187,084 | 154,333 |
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Tenant security deposits | 30,109 | 35,011 |
Other long-term payables | 484 | 1,063 |
Total | 30,593 | 36,074 |
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Tenant security deposits | 30,109 | 35,011 |
Other long-term payables | 484 | 1,063 |
Total | 30,593 | 36,074 |
in \u20ac\u00a0thousand | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Tenant security deposits | 30,109 | 35,011 |
Other long-term payables | 484 | 1,063 |
Total | 30,593 | 36,074 |
Out of the above administrative expenses, audit fees are summarised below:
31 Dec 2024 | EY Accountants B.V. | Other EY network | Non-EY network |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Audit of financial statements | (475) | (1,911) | (31) |
Other assurance procedures | (345) | (104) | - |
Total | (820) | (2,015) | (31) |
31 Dec 2023 | EY Accountants B.V. | Other EY network | Non-EY network |
|---|---|---|---|
in \u20ac\u00a0thousand | \u00a0 | \u00a0 | \u00a0 |
Audit of financial statements | (356) | (1,889) | (21) |
Other assurance procedures | (62) | (74) | - |
Total | (418) | (1,963) | (21) |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Staff costs1 | \u00a0 | (12,908) | (11,890) |
Directors\u2019 remuneration | (4,551) | (4,233) | |
Advisory services | \u00a0 | (5,635) | (4,651) |
Audit and other assurance services | \u00a0 | (2,866) | (2,402) |
Companies\u2019 administration2 | \u00a0 | (2,710) | (5,118) |
Depreciation charge for Photovoltaic panels | (447) | - | |
Depreciation charge for other property, plant and equipment3 | (490) | (648) | |
Travel and accommodation | \u00a0 | (1,695) | (1,655) |
Stock exchange expenses | \u00a0 | (851) | (772) |
Share based payment expense | \u00a0 | (3,040) | (2,000) |
Total | \u00a0 | (35,193) | (33,369) |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Interest on Loan to participants under Share Purchase Scheme | \u00a0 | 67 | 96 |
Interest on bank deposits | \u00a0 | 19,840 | 6,795 |
Finance income | \u00a0 | 19,907 | 6,891 |
Bonds borrowing costs1 | (55,495) | (51,042) | |
Interest expense on bank borrowings | (58,242) | (31,343) | |
Interest rate derivatives settlements | \u00a0 | 12,454 | 11,950 |
Interest expense on borrowings from third parties | (1,763) | (3,214) | |
Interest expense on lease liabilities | (1,470) | (804) | |
Interest expense other borrowings | \u00a0 | (7) | - |
Interest expense capitalised on developments and inventory property2 | \u00a0 | 4,379 | 5,401 |
Finance costs | \u00a0 | (100,144) | (69,052) |
Bank charges, commissions, and fees | \u00a0 | (4,381) | (3,297) |
Total | \u00a0 | (84,618) | (65,458) |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Interest on Loan to participants under Share Purchase Scheme | \u00a0 | 67 | 96 |
Interest on bank deposits | \u00a0 | 19,840 | 6,795 |
Finance income | \u00a0 | 19,907 | 6,891 |
Bonds borrowing costs1 | (55,495) | (51,042) | |
Interest expense on bank borrowings | (58,242) | (31,343) | |
Interest rate derivatives settlements | \u00a0 | 12,454 | 11,950 |
Interest expense on borrowings from third parties | (1,763) | (3,214) | |
Interest expense on lease liabilities | (1,470) | (804) | |
Interest expense other borrowings | \u00a0 | (7) | - |
Interest expense capitalised on developments and inventory property2 | \u00a0 | 4,379 | 5,401 |
Finance costs | \u00a0 | (100,144) | (69,052) |
Bank charges, commissions, and fees | \u00a0 | (4,381) | (3,297) |
Total | \u00a0 | (84,618) | (65,458) |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Interest on Loan to participants under Share Purchase Scheme | \u00a0 | 67 | 96 |
Interest on bank deposits | \u00a0 | 19,840 | 6,795 |
Finance income | \u00a0 | 19,907 | 6,891 |
Bonds borrowing costs1 | (55,495) | (51,042) | |
Interest expense on bank borrowings | (58,242) | (31,343) | |
Interest rate derivatives settlements | \u00a0 | 12,454 | 11,950 |
Interest expense on borrowings from third parties | (1,763) | (3,214) | |
Interest expense on lease liabilities | (1,470) | (804) | |
Interest expense other borrowings | \u00a0 | (7) | - |
Interest expense capitalised on developments and inventory property2 | \u00a0 | 4,379 | 5,401 |
Finance costs | \u00a0 | (100,144) | (69,052) |
Bank charges, commissions, and fees | \u00a0 | (4,381) | (3,297) |
Total | \u00a0 | (84,618) | (65,458) |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Interest on Loan to participants under Share Purchase Scheme | \u00a0 | 67 | 96 |
Interest on bank deposits | \u00a0 | 19,840 | 6,795 |
Finance income | \u00a0 | 19,907 | 6,891 |
Bonds borrowing costs1 | (55,495) | (51,042) | |
Interest expense on bank borrowings | (58,242) | (31,343) | |
Interest rate derivatives settlements | \u00a0 | 12,454 | 11,950 |
Interest expense on borrowings from third parties | (1,763) | (3,214) | |
Interest expense on lease liabilities | (1,470) | (804) | |
Interest expense other borrowings | \u00a0 | (7) | - |
Interest expense capitalised on developments and inventory property2 | \u00a0 | 4,379 | 5,401 |
Finance costs | \u00a0 | (100,144) | (69,052) |
Bank charges, commissions, and fees | \u00a0 | (4,381) | (3,297) |
Total | \u00a0 | (84,618) | (65,458) |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Interest on Loan to participants under Share Purchase Scheme | \u00a0 | 67 | 96 |
Interest on bank deposits | \u00a0 | 19,840 | 6,795 |
Finance income | \u00a0 | 19,907 | 6,891 |
Bonds borrowing costs1 | (55,495) | (51,042) | |
Interest expense on bank borrowings | (58,242) | (31,343) | |
Interest rate derivatives settlements | \u00a0 | 12,454 | 11,950 |
Interest expense on borrowings from third parties | (1,763) | (3,214) | |
Interest expense on lease liabilities | (1,470) | (804) | |
Interest expense other borrowings | \u00a0 | (7) | - |
Interest expense capitalised on developments and inventory property2 | \u00a0 | 4,379 | 5,401 |
Finance costs | \u00a0 | (100,144) | (69,052) |
Bank charges, commissions, and fees | \u00a0 | (4,381) | (3,297) |
Total | \u00a0 | (84,618) | (65,458) |
in \u20ac\u00a0thousand | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
Interest on Loan to participants under Share Purchase Scheme | \u00a0 | 67 | 96 |
Interest on bank deposits | \u00a0 | 19,840 | 6,795 |
Finance income | \u00a0 | 19,907 | 6,891 |
Bonds borrowing costs1 | (55,495) | (51,042) | |
Interest expense on bank borrowings | (58,242) | (31,343) | |
Interest rate derivatives settlements | \u00a0 | 12,454 | 11,950 |
Interest expense on borrowings from third parties | (1,763) | (3,214) | |
Interest expense on lease liabilities | (1,470) | (804) | |
Interest expense other borrowings | \u00a0 | (7) | - |
Interest expense capitalised on developments and inventory property2 | \u00a0 | 4,379 | 5,401 |
Finance costs | \u00a0 | (100,144) | (69,052) |
Bank charges, commissions, and fees | \u00a0 | (4,381) | (3,297) |
Total | \u00a0 | (84,618) | (65,458) |
The calculation of basic and diluted earnings per share for the year ended 31 December 2024 was based on the profit attributable to equity holders of the parent of \u20ac587,565 thousand (31 December 2023: \u20ac476,801 thousand) and the weighted average number of shares.
in \u20ac\u00a0thousand, unless otherwise stated | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|
Profit for the year attributable to equity holders | 587,565 | 476,801 |
Basic weighted average number of shares | 670,058,874 | 633,150,875 |
Diluted weighted average number of shares | 671,468,377 | 634,211,475 |
Basic earnings per share (euro cents) attributable to equity holders | 87.69 | 75.31 |
Diluted earnings per share (euro cents) attributable to equity holders | 87.50 | 75.18 |
Weighted and diluted weighted average number of shares for basic and diluted earnings per share purposes are detailed below:
2024 | Event | Number of shares | Cumulative number of shares after equity-related transactions | % of period | Weighted average |
|---|---|---|---|---|---|
01/01/2024 | Opening balance | 660,826,020 | 660,826,020 | 79% | 521,418,887 |
15/10/2024 | Return of capital | 9,806,671 | 670,632,691 | 1% | 3,674,700 |
17/10/2024 | Issue of shares | 41,724,618 | 712,357,309 | 20% | 146,374,790 |
31/12/2024 | Diluted weighted average number of shares | \u00a0 | \u00a0 | \u00a0 | 671,468,377 |
| \u00a0 | Effect of unvested shares under LTSIP | \u00a0 | \u00a0 | \u00a0 | (1,409,503) |
| \u00a0 | Basic weighted average number of shares | \u00a0 | \u00a0 | \u00a0 | 670,058,874 |
2023 | Event | Number of shares | Cumulative number of shares after equity-related transactions | % of period | Weighted average |
|---|---|---|---|---|---|
01/01/2023 | Opening balance | 607,000,000 | 607,000,000 | 26% | 158,420,330 |
06/04/2023 | Return of capital | 28,830,268 | 635,830,268 | 50% | 319,661,920 |
06/10/2023 | Return of capital | 24,995,752 | 660,826,020 | 24% | 156,129,225 |
31/12/2023 | Diluted weighted average number of shares | \u00a0 | \u00a0 | \u00a0 | 634,211,475 |
| \u00a0 | Effect of unvested shares under LTSIP | \u00a0 | \u00a0 | \u00a0 | (1,060,600) |
| \u00a0 | Basic weighted average number of shares | \u00a0 | \u00a0 | \u00a0 | 633,150,875 |
The starting point is for headline earnings per share calculation are earnings as determined in IAS 33, excluding \u201cseparately identifiable re-measurements\u201d, net of related tax (both current and deferred) and non-controlling interest, other than remeasurements specifically included in headline earnings (referred to as included re-measurements), in terms of Circular 1/2023 issued by South African Institute of Chartered Accountants (SAICA).
The calculation of headline earnings per share for the year ended 31 December 2024 was based on headline earnings of \u20ac405,824 thousand (31 December 2023: of \u20ac333,780 thousand) and the weighted average number of shares.
Reconciliation of profit for the year to headline earnings | Note | 31 Dec 2024 | 31 Dec 2023 |
|---|---|---|---|
in \u20ac\u00a0thousand, unless otherwise stated | \u00a0 | \u00a0 | \u00a0 |
Profit for the year attributable to equity holders of the parent | \u00a0 | 587,565 | 476,801 |
Fair value adjustments of investment property | (195,380) | (164,470) | |
Gain on disposal of assets held for sale | (25,934) | (5,641) | |
Tax effects of adjustments for investment property and gain on disposal of assets held for sale | \u00a0 | 39,573 | 27,090 |
HEADLINE EARNINGS | \u00a0 | 405,824 | 333,780 |
Basic weighted average number of shares | \u00a0 | 670,058,874 | 633,150,875 |
Diluted weighted average number of shares | \u00a0 | 671,468,377 | 634,211,475 |
Headline earnings per share (euro cents) | \u00a0 | 60.57 | 52.72 |
Diluted headline earnings per share (euro cents) | \u00a0 | 60.44 | 52.63 |
The Group is subject to various taxes across all jurisdictions in which it operates. The calculation of tax charges and provisions involves a degree of estimation and judgment. There are transactions and calculations for which the relevant tax authorities have indicated different interpretations of the fiscal legislation compared to the Group\u2019s approach. When such discrepancies arise, the carrying amount of tax provisions and charges is determined based on the expected resolution of tax assessments and the stage of discussions or negotiations with the relevant tax authorities. Given the complexity of tax regulations, the final outcome of tax proceedings is often uncertain and may take several years to be resolved.
Several Group entities in Romania have recently been subject to tax inspections by the Romanian Tax Authorities (\u201cRTA\u201d).
For certain entities, the tax inspections have been finalized, resulting in additional tax liabilities totalling \u20ac5.55 million as of 31 December 2024. These liabilities arose from RTA\u2019s disallowance of deductibility of certain expenses, reflecting a position that differs from the Group\u2019s interpretation of applicable tax laws.
As the Group is not aware of the RTA\u2019s position being established as market practice in Romania or in other CEE countries where it operates, it intends to challenge the RTA\u2019s conclusions as and when appropriate. Out of the total \u20ac5.5 million tax liabilities imposed by the year end, \u20ac4.6 million have already been paid, with a corresponding tax receivable recognised based on management\u2019s assessment of the expected outcome of challenging the RTA position as noted above. The remaining amount of \u20ac0.9 million was paid in January 2025, following the same accounting treatment as above.
Ongoing tax audits are at various stages for other Romanian subsidiaries, but as of the publication date of these financial statements, they have not been finalized. No additional tax liabilities have been recorded in connection with these audits, as management believes further tax assessments are not warranted.
To assess potential tax contingencies, management has evaluated various scenarios using different sets of possible outcomes for tax assessments. Based on this analysis, the weighted average potential impact of additional tax liabilities imposed by authorities is estimated at \u20ac12.5 million.
The Group operates in a complex legal and regulatory environment, exposing it to various risks. It carefully evaluates all facts and assesses the implications that could have a material effect on the financial statements. To the extent the Group is subject to reviews, procedures, information requests and other assessments, including regulatory or tax matters, multiple outcomes are possible, which may result in further regulatory or tax investigations, litigations or sanctions.
The implementation of Pillar Two in 2024 across multiple jurisdictions, uncertainties in its wording, reliance on safe harbor provisions, and unclear charging mechanisms create challenges in assessing NEPI Rockcastle\u2019s (future) tax exposure. The Group continuously monitors its impact and has assessed its effect on the 2024 financial statements for each jurisdiction. While no impact is expected, uncertainties in interpretation of Pillar Two mean different outcomes are possible.
In 2025, the Group estimates to invest \u20ac302 million in development and capital expenditure related to its ongoing projects or new development opportunities (impacting investment property and property, plant and equipment), out of which only a portion is already contracted at reporting date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i24008-2": { "value": "The Group is subject to various taxes across all jurisdictions in which it operates. The calculation of tax charges and provisions involves a degree of estimation and judgment. There are transactions and calculations for which the relevant tax authorities have indicated different interpretations of the fiscal legislation compared to the Group\u2019s approach. When such discrepancies arise, the carrying amount of tax provisions and charges is determined based on the expected resolution of tax assessments and the stage of discussions or negotiations with the relevant tax authorities. Given the complexity of tax regulations, the final outcome of tax proceedings is often uncertain and may take several years to be resolved.
Several Group entities in Romania have recently been subject to tax inspections by the Romanian Tax Authorities (\u201cRTA\u201d).
For certain entities, the tax inspections have been finalized, resulting in additional tax liabilities totalling \u20ac5.55 million as of 31 December 2024. These liabilities arose from RTA\u2019s disallowance of deductibility of certain expenses, reflecting a position that differs from the Group\u2019s interpretation of applicable tax laws.
As the Group is not aware of the RTA\u2019s position being established as market practice in Romania or in other CEE countries where it operates, it intends to challenge the RTA\u2019s conclusions as and when appropriate. Out of the total \u20ac5.5 million tax liabilities imposed by the year end, \u20ac4.6 million have already been paid, with a corresponding tax receivable recognised based on management\u2019s assessment of the expected outcome of challenging the RTA position as noted above. The remaining amount of \u20ac0.9 million was paid in January 2025, following the same accounting treatment as above.
Ongoing tax audits are at various stages for other Romanian subsidiaries, but as of the publication date of these financial statements, they have not been finalized. No additional tax liabilities have been recorded in connection with these audits, as management believes further tax assessments are not warranted.
To assess potential tax contingencies, management has evaluated various scenarios using different sets of possible outcomes for tax assessments. Based on this analysis, the weighted average potential impact of additional tax liabilities imposed by authorities is estimated at \u20ac12.5 million.
The Group operates in a complex legal and regulatory environment, exposing it to various risks. It carefully evaluates all facts and assesses the implications that could have a material effect on the financial statements. To the extent the Group is subject to reviews, procedures, information requests and other assessments, including regulatory or tax matters, multiple outcomes are possible, which may result in further regulatory or tax investigations, litigations or sanctions.
The implementation of Pillar Two in 2024 across multiple jurisdictions, uncertainties in its wording, reliance on safe harbor provisions, and unclear charging mechanisms create challenges in assessing NEPI Rockcastle\u2019s (future) tax exposure. The Group continuously monitors its impact and has assessed its effect on the 2024 financial statements for each jurisdiction. While no impact is expected, uncertainties in interpretation of Pillar Two mean different outcomes are possible.
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i24008-3": { "value": "The Group is subject to various taxes across all jurisdictions in which it operates. The calculation of tax charges and provisions involves a degree of estimation and judgment. There are transactions and calculations for which the relevant tax authorities have indicated different interpretations of the fiscal legislation compared to the Group\u2019s approach. When such discrepancies arise, the carrying amount of tax provisions and charges is determined based on the expected resolution of tax assessments and the stage of discussions or negotiations with the relevant tax authorities. Given the complexity of tax regulations, the final outcome of tax proceedings is often uncertain and may take several years to be resolved.
Several Group entities in Romania have recently been subject to tax inspections by the Romanian Tax Authorities (\u201cRTA\u201d).
For certain entities, the tax inspections have been finalized, resulting in additional tax liabilities totalling \u20ac5.55 million as of 31 December 2024. These liabilities arose from RTA\u2019s disallowance of deductibility of certain expenses, reflecting a position that differs from the Group\u2019s interpretation of applicable tax laws.
As the Group is not aware of the RTA\u2019s position being established as market practice in Romania or in other CEE countries where it operates, it intends to challenge the RTA\u2019s conclusions as and when appropriate. Out of the total \u20ac5.5 million tax liabilities imposed by the year end, \u20ac4.6 million have already been paid, with a corresponding tax receivable recognised based on management\u2019s assessment of the expected outcome of challenging the RTA position as noted above. The remaining amount of \u20ac0.9 million was paid in January 2025, following the same accounting treatment as above.
Ongoing tax audits are at various stages for other Romanian subsidiaries, but as of the publication date of these financial statements, they have not been finalized. No additional tax liabilities have been recorded in connection with these audits, as management believes further tax assessments are not warranted.
To assess potential tax contingencies, management has evaluated various scenarios using different sets of possible outcomes for tax assessments. Based on this analysis, the weighted average potential impact of additional tax liabilities imposed by authorities is estimated at \u20ac12.5 million.
The Group operates in a complex legal and regulatory environment, exposing it to various risks. It carefully evaluates all facts and assesses the implications that could have a material effect on the financial statements. To the extent the Group is subject to reviews, procedures, information requests and other assessments, including regulatory or tax matters, multiple outcomes are possible, which may result in further regulatory or tax investigations, litigations or sanctions.
The implementation of Pillar Two in 2024 across multiple jurisdictions, uncertainties in its wording, reliance on safe harbor provisions, and unclear charging mechanisms create challenges in assessing NEPI Rockcastle\u2019s (future) tax exposure. The Group continuously monitors its impact and has assessed its effect on the 2024 financial statements for each jurisdiction. While no impact is expected, uncertainties in interpretation of Pillar Two mean different outcomes are possible.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i24013-1": { "value": "In 2025, the Group estimates to invest \u20ac302 million in development and capital expenditure related to its ongoing projects or new development opportunities (impacting investment property and property, plant and equipment), out of which only a portion is already contracted at reporting date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "title-blocktag-i24015-1": { "value": "Identity of related parties with whom material transactions have occurred
The Directors are related parties for the Group.
Material related party transactions
Fees paid to Directors, together with the performance bonus, during the current and previous year are detailed below. No other payments were made to Directors by NEPI Rockcastle, except reimbursements for travel and accommodation.
| \u00a0 | 31 Dec 2024 | 31 Dec 2023 | |||
|---|---|---|---|---|---|
in \u20ac\u00a0thousand | Directors\u2019 fees | Performance related remuneration | Directors\u2019 fees | Performance related remuneration | Reconciling differences between 2022 performance related remuneration paid vs. accrual |
R\u00fcdiger Dany | 675 | 1,067 | 675 | 1,009 | (3) |
Eliza Predoiu | 385 | 554 | 385 | 543 | (12) |
Marek Noetzel | 385 | 628 | 385 | 601 | (7) |
George Aase | 157 | - | 102 | - | - |
Antoine Dijkstra | 102 | - | 88 | - | - |
Andre van der Veer | 109 | - | 98 | - | - |
Andreas Klingen | 101 | - | 89 | - | - |
Steve Brown | 87 | - | 75 | - | - |
Andries de Lange | 77 | - | 63 | - | - |
Jonathan Lurie | 79 | - | 68 | - | - |
Ana Maria Mihaescu | 89 | - | 74 | - | - |
Jeanine Holscher1 | 56 | - | - | - | - |
Total | 2,302 | 2,249 | 2,102 | 2,153 | (22) |
Name of Director | Number of shares held as at 31 Dec 2024 | Number of shares held as at 31 Dec 20231 |
|---|---|---|
Marek Noetzel | 88,358 | 88,358 |
Total | 88,358 | 88,358 |
Name of Director | Number of shares unvested at 31 Dec 2024 | Number of shares unvested at 31 Dec 2023 |
|---|---|---|
R\u00fcdiger Dany | 399,740 | 271,983 |
Eliza Predoiu | 256,194 | 174,922 |
Marek Noetzel | 275,256 | 210,532 |
Total | 931,190 | 657,437 |
The share based payment expense related to the directors of the Group amounted to \u20ac1,325 thousand in 2024 (31 December 2023: \u20ac393 thousand).
The Directors of the Group hold 1,854,569 shares as at 31 December 2024 (31 December 2023: 1,304,296 shares), which represents 0.26% of the outstanding shares (31 December 2023: 0.2% of the outstanding shares). Out of the above-mentioned shareholding, 560,858 shares (31 December 2023: 343,052 shares) which represent 0.08% of the outstanding shares (31 December 2023: 0.05% of the outstanding shares) are held by the non-Executive Directors. There were no changes to the Director\u2019s interests from 31 December 2024 to the approval of the annual audited Consolidated Financial Statements, other than the shares awarded in March 2024, as detailed in the Remuneration section of this Annual Report, on pages . Other than as set out in note 37(a) above, none of the shares of the Director are subject to security, guarantee, collateral, and they are not encumbered in any way.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i24171-1": { "value": "The Directors are not aware of any subsequent events from 31 December 2024 and up to the date of signing these Consolidated Financial Statements which are likely to have a material effect on the financial information contained in this report.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:549300FMWM53K9ULYT15", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } } } }